Pegasystems (PEGA)
Market Price (8/10/2026): $32.73 | Market Cap: $5.4 BilSector: Information Technology | Industry: Application Software
Pegasystems (PEGA)
Market Price (8/10/2026): $32.73Market Cap: $5.4 BilSector: Information TechnologyIndustry: Application Software
Investment Highlights Why It Matters Detailed financial logic regarding cash flow yields vs trend-riding momentum.
Attractive yieldTotal YieldTotal Yield = Earnings Yield + Dividend Yield, Earnings Yield = Net Income / Market Cap Dividend Yield = Total Dividends / Market Cap is 6.4%, FCF Yield is 9.1% Attractive cash flow generationCFO/Rev LTMCash Flow from Operations / Revenue (Sales), Last Twelve Months (LTM) is 30%, FCF/Rev LTMFree Cash Flow / Revenue (Sales), Last Twelve Months (LTM) is 28% Valuation becoming less expensiveP/S 6M Chg %Price/Sales change over 6 months. Declining P/S indicates valuation has become less expensive. is -26% Megatrend and thematic driversMegatrends include Artificial Intelligence, Cloud Computing, and Automation & Robotics. Themes include AI Software Platforms, Show more. | Weak multi-year price returns2Y Excs Rtn is -47%, 3Y Excs Rtn is -42% | Key risksPEGA key risks include [1] ongoing legal challenges and [2] its dependence on key industries susceptible to economic and regulatory changes. |
| Attractive yieldTotal YieldTotal Yield = Earnings Yield + Dividend Yield, Earnings Yield = Net Income / Market Cap Dividend Yield = Total Dividends / Market Cap is 6.4%, FCF Yield is 9.1% |
| Attractive cash flow generationCFO/Rev LTMCash Flow from Operations / Revenue (Sales), Last Twelve Months (LTM) is 30%, FCF/Rev LTMFree Cash Flow / Revenue (Sales), Last Twelve Months (LTM) is 28% |
| Valuation becoming less expensiveP/S 6M Chg %Price/Sales change over 6 months. Declining P/S indicates valuation has become less expensive. is -26% |
| Megatrend and thematic driversMegatrends include Artificial Intelligence, Cloud Computing, and Automation & Robotics. Themes include AI Software Platforms, Show more. |
| Weak multi-year price returns2Y Excs Rtn is -47%, 3Y Excs Rtn is -42% |
| Key risksPEGA key risks include [1] ongoing legal challenges and [2] its dependence on key industries susceptible to economic and regulatory changes. |
Qualitative Assessment
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Pegasystems (PEGA) stock has lost about 10% since 4/30/2026 because of the following key factors:
1. Pegasystems reported a significant miss in its fiscal Q2 2026 earnings, impacting investor confidence. The company announced its Q2 2026 financial results on July 21, 2026, reporting adjusted earnings per share (EPS) of $0.35, which fell short of analysts' consensus estimates of $0.43 by $0.08. Additionally, revenue for the quarter was $420.72 million, missing expectations of $427.38 million. Cloud revenue, specifically, reached $214 million, falling below the $220 million consensus and decelerating to 28% year-over-year growth from 36% in the prior quarter.
2. Slowed Annual Contract Value (ACV) growth, attributed to "unprecedented changes in the AI market," led to client decision delays. Management stated that "unprecedented changes in the AI market caused clients to delay their purchasing decisions," which "significantly slowed" the company's ACV growth rate during the six months ended June 30, 2026. Total ACV increased 7% year-over-year to $1.620 billion, below the consensus estimate of $1.658 billion and a deceleration from 12% growth in the previous quarter and 17% in fiscal Q4 2025. CEO Alan Trefler further noted at PegaWorld 2026 in June that "there's still an enormous amount of confusion here, and it's going to take months and quarters for the confusion to abate," indicating a prolonged impact on client purchasing patterns.
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Pegasystems (PEGA) stock has lost about 10% since 4/30/2026 because of the following key factors:
1. Pegasystems reported a significant miss in its fiscal Q2 2026 earnings, impacting investor confidence. The company announced its Q2 2026 financial results on July 21, 2026, reporting adjusted earnings per share (EPS) of $0.35, which fell short of analysts' consensus estimates of $0.43 by $0.08. Additionally, revenue for the quarter was $420.72 million, missing expectations of $427.38 million. Cloud revenue, specifically, reached $214 million, falling below the $220 million consensus and decelerating to 28% year-over-year growth from 36% in the prior quarter.
2. Slowed Annual Contract Value (ACV) growth, attributed to "unprecedented changes in the AI market," led to client decision delays. Management stated that "unprecedented changes in the AI market caused clients to delay their purchasing decisions," which "significantly slowed" the company's ACV growth rate during the six months ended June 30, 2026. Total ACV increased 7% year-over-year to $1.620 billion, below the consensus estimate of $1.658 billion and a deceleration from 12% growth in the previous quarter and 17% in fiscal Q4 2025. CEO Alan Trefler further noted at PegaWorld 2026 in June that "there's still an enormous amount of confusion here, and it's going to take months and quarters for the confusion to abate," indicating a prolonged impact on client purchasing patterns.
3. Multiple analyst downgrades and reduced price targets followed the disappointing financial results and market outlook. Following the fiscal Q2 2026 earnings report and the company's commentary on market conditions, several financial firms adjusted their ratings and price targets for PEGA. Citizens JMP downgraded Pegasystems from "outperform" to "market perform" on July 22, 2026. Citigroup also lowered its rating from "market outperform" to "market perform" around the same date. Additionally, Loop Capital Markets downgraded PEGA from Buy to Hold and significantly reduced its price target from $55 to $25 on July 23, 2026.
4. A significant insider sale exceeding $5 million occurred during the period. On May 19, 2026, Rifat Akgonul, Pegasystems' Chief Product Officer, executed an insider sell of PEGA stock totaling $5.7 million. This notable transaction by a key executive occurred within the period of the stock's decline.
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Stock Movement Drivers
Fundamental Drivers
The -10.3% change in PEGA stock from 4/30/2026 to 8/9/2026 was primarily driven by a -7.5% change in the company's P/E Multiple.| (LTM values as of) | 4302026 | 8092026 | Change |
|---|---|---|---|
| Stock Price ($) | 36.51 | 32.74 | -10.3% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 1,700 | 1,736 | 2.1% |
| Net Income Margin (%) | 20.0% | 18.7% | -6.9% |
| P/E Multiple | 18.1 | 16.7 | -7.5% |
| Shares Outstanding (Mil) | 169 | 166 | 1.9% |
| Cumulative Contribution | -10.3% |
Market Drivers
4/30/2026 to 8/9/2026| Return | Correlation | |
|---|---|---|
| PEGA | -10.3% | |
| Market (SPY) | 7.6% | 3.9% |
| Sector (XLK) | 17.8% | -10.6% |
Fundamental Drivers
The -24.9% change in PEGA stock from 1/31/2026 to 8/9/2026 was primarily driven by a -37.5% change in the company's P/E Multiple.| (LTM values as of) | 1312026 | 8092026 | Change |
|---|---|---|---|
| Stock Price ($) | 43.62 | 32.74 | -24.9% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 1,732 | 1,736 | 0.2% |
| Net Income Margin (%) | 16.0% | 18.7% | 16.3% |
| P/E Multiple | 26.8 | 16.7 | -37.5% |
| Shares Outstanding (Mil) | 171 | 166 | 3.0% |
| Cumulative Contribution | -24.9% |
Market Drivers
1/31/2026 to 8/9/2026| Return | Correlation | |
|---|---|---|
| PEGA | -24.9% | |
| Market (SPY) | 12.1% | 14.1% |
| Sector (XLK) | 30.8% | 4.7% |
Fundamental Drivers
The -44.1% change in PEGA stock from 7/31/2025 to 8/9/2026 was primarily driven by a -63.1% change in the company's P/E Multiple.| (LTM values as of) | 7312025 | 8092026 | Change |
|---|---|---|---|
| Stock Price ($) | 58.55 | 32.74 | -44.1% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 1,676 | 1,736 | 3.6% |
| Net Income Margin (%) | 13.1% | 18.7% | 42.0% |
| P/E Multiple | 45.4 | 16.7 | -63.1% |
| Shares Outstanding (Mil) | 171 | 166 | 3.1% |
| Cumulative Contribution | -44.1% |
Market Drivers
7/31/2025 to 8/9/2026| Return | Correlation | |
|---|---|---|
| PEGA | -44.1% | |
| Market (SPY) | 23.4% | 20.4% |
| Sector (XLK) | 43.7% | 13.6% |
Fundamental Drivers
The 25.0% change in PEGA stock from 7/31/2023 to 8/9/2026 was primarily driven by a 34.5% change in the company's Total Revenues ($ Mil).| (LTM values as of) | 7312023 | 8092026 | Change |
|---|---|---|---|
| Stock Price ($) | 26.20 | 32.74 | 25.0% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 1,291 | 1,736 | 34.5% |
| P/S Multiple | 3.4 | 3.1 | -7.3% |
| Shares Outstanding (Mil) | 166 | 166 | 0.3% |
| Cumulative Contribution | 25.0% |
Market Drivers
7/31/2023 to 8/9/2026| Return | Correlation | |
|---|---|---|
| PEGA | 25.0% | |
| Market (SPY) | 74.9% | 36.7% |
| Sector (XLK) | 114.7% | 30.7% |
Price Returns Compared
| 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | Total [1] | |
|---|---|---|---|---|---|---|---|
| Returns | |||||||
| PEGA Return | -16% | -69% | 43% | 91% | 28% | -47% | -52% |
| Peers Return | 12% | -34% | 57% | 28% | -1% | -18% | 20% |
| S&P 500 Return | 27% | -19% | 24% | 23% | 16% | 13% | 105% |
Monthly Win Rates [3] | |||||||
| PEGA Win Rate | 33% | 8% | 58% | 58% | 67% | 38% | |
| Peers Win Rate | 53% | 27% | 62% | 63% | 42% | 42% | |
| S&P 500 Win Rate | 75% | 42% | 67% | 75% | 67% | 50% | |
Max Drawdowns [4] | |||||||
| PEGA Max Drawdown | -31% | -73% | -33% | -18% | -44% | -57% | |
| Peers Max Drawdown | -28% | -43% | -20% | -23% | -34% | -43% | |
| S&P 500 Max Drawdown | -5% | -25% | -10% | -8% | -19% | -9% | |
[1] Cumulative total returns since the beginning of 2021
[2] Peers: CRM, NOW, APPN, MSFT, ORCL. See PEGA Returns vs. Peers.
[3] Win Rate = % of calendar months in which monthly returns were positive
[4] Max drawdown represents maximum peak-to-trough decline within a year
[5] 2026 data is for the year up to 8/7/2026 (YTD)
How Low Can It Go
| Event | PEGA | S&P 500 |
|---|---|---|
| 2025 US Tariff Shock | ||
| % Loss | -25.8% | -18.8% |
| % Gain to Breakeven | 34.8% | 23.1% |
| Time to Breakeven | 15 days | 79 days |
| Summer-Fall 2023 Five Percent Yield Shock | ||
| % Loss | -30.1% | -9.5% |
| % Gain to Breakeven | 43.1% | 10.5% |
| Time to Breakeven | 113 days | 24 days |
| 2022 Inflation Shock & Fed Tightening | ||
| % Loss | -72.4% | -24.5% |
| % Gain to Breakeven | 261.7% | 32.4% |
| Time to Breakeven | 840 days | 427 days |
| 2020 COVID-19 Crash | ||
| % Loss | -37.9% | -33.7% |
| % Gain to Breakeven | 61.0% | 50.9% |
| Time to Breakeven | 61 days | 140 days |
| Q4 2018 Fed Policy Error / Growth Scare | ||
| % Loss | -26.7% | -19.2% |
| % Gain to Breakeven | 36.5% | 23.8% |
| Time to Breakeven | 62 days | 105 days |
| 2015-2016 China Devaluation / Global Growth Scare | ||
| % Loss | -23.3% | -12.2% |
| % Gain to Breakeven | 30.3% | 13.9% |
| Time to Breakeven | 83 days | 62 days |
In The Past
Pegasystems's stock fell -25.8% during the 2025 US Tariff Shock. Such a loss loss requires a 34.8% gain to breakeven.
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| Event | PEGA | S&P 500 |
|---|---|---|
| 2025 US Tariff Shock | ||
| % Loss | -25.8% | -18.8% |
| % Gain to Breakeven | 34.8% | 23.1% |
| Time to Breakeven | 15 days | 79 days |
| Summer-Fall 2023 Five Percent Yield Shock | ||
| % Loss | -30.1% | -9.5% |
| % Gain to Breakeven | 43.1% | 10.5% |
| Time to Breakeven | 113 days | 24 days |
| 2022 Inflation Shock & Fed Tightening | ||
| % Loss | -72.4% | -24.5% |
| % Gain to Breakeven | 261.7% | 32.4% |
| Time to Breakeven | 840 days | 427 days |
| 2020 COVID-19 Crash | ||
| % Loss | -37.9% | -33.7% |
| % Gain to Breakeven | 61.0% | 50.9% |
| Time to Breakeven | 61 days | 140 days |
| Q4 2018 Fed Policy Error / Growth Scare | ||
| % Loss | -26.7% | -19.2% |
| % Gain to Breakeven | 36.5% | 23.8% |
| Time to Breakeven | 62 days | 105 days |
| 2015-2016 China Devaluation / Global Growth Scare | ||
| % Loss | -23.3% | -12.2% |
| % Gain to Breakeven | 30.3% | 13.9% |
| Time to Breakeven | 83 days | 62 days |
| 2011 US Debt Ceiling Crisis & European Contagion | ||
| % Loss | -34.8% | -17.9% |
| % Gain to Breakeven | 53.3% | 21.8% |
| Time to Breakeven | 772 days | 123 days |
| 2008-2009 Global Financial Crisis | ||
| % Loss | -26.0% | -53.4% |
| % Gain to Breakeven | 35.2% | 114.4% |
| Time to Breakeven | 42 days | 1085 days |
In The Past
Pegasystems's stock fell -25.8% during the 2025 US Tariff Shock. Such a loss loss requires a 34.8% gain to breakeven.
Preserve Wealth
Limiting losses and compounding gains is essential to preserving wealth.
Asset Allocation
Actively managed asset allocation strategies protect wealth. Learn more.
About Pegasystems (PEGA)
Pegasystems Inc. (PEGA) is a global software company that develops, markets, and supports enterprise applications designed to help large organizations enhance customer engagement and automate complex digital processes. Its flagship offering, Pega Infinity, is a unified software platform that brings together these crucial business capabilities.
The company offers a range of key products, including customer engagement applications such as Pega Customer Decision Hub, which optimizes customer acquisition and experiences across various channels, and Pega Sales Automation, designed to streamline and manage the sales process. Pega Customer Service provides intelligent automation to anticipate customer needs and improve service delivery. Pegasystems also offers the Pega Platform for application development and Pega Cloud for hosting and deploying client applications.
Pegasystems primarily markets its software and services to large enterprises across a broad spectrum of industries. Its main customer segments include financial services, life sciences, healthcare, communications and media, government, insurance, manufacturing and high tech, and consumer services. The company utilizes a direct sales force and strategic partnerships to reach its global clientele.
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Here are 1-2 brief analogies to describe Pegasystems:
- Like Salesforce, but with a powerful underlying AI that automates complex customer interactions and drives real-time decision-making across all channels.
- A highly specialized ServiceNow for customer engagement and core business operations, focused on intelligent automation and personalized experiences.
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- Pega Platform: An application development product for clients.
- Pega Infinity: A software platform that unifies customer engagement and digital process automation.
- Pega Customer Decision Hub: Enhances customer acquisition and experiences across inbound, outbound, and paid media channels.
- Pega Sales Automation: Automates and manages the sales process for enterprises.
- Pega Customer Service: Anticipates customer needs, automates interactions, and enhances employee productivity for customer service.
- Intelligent Automation Software: Provides software designed for automating various business processes.
- Pega Cloud: An Internet-based infrastructure for developing, testing, and deploying applications and the Pega Platform.
- Pega Academy: Offers instructor-led and online training to employees, clients, and partners.
- Technical & Implementation Services: Provides guidance, implementation, and technical support services to clients.
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Pegasystems Inc. (PEGA) primarily sells its enterprise software applications and services to other companies.
Based on the provided background information, specific names of individual customer companies are not listed. However, the company primarily markets its software and services to major customers within the following industry categories:
- Financial Services
- Life Sciences
- Healthcare
- Communications and Media
- Government
- Insurance
- Manufacturing and High Tech
- Consumer Services
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Major Suppliers:
- Amazon.com, Inc. (AMZN)
- Microsoft Corporation (MSFT)
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Alan Trefler, Founder and Chief Executive Officer
Alan Trefler founded Pegasystems in 1983 at the age of 27. Before establishing Pegasystems, he served as a senior project manager for Casher Associates Inc. from 1978 to 1980 and subsequently led the development of a funds transfer product at TMI Systems from 1980 to 1983. A chess master, he co-championed the 1975 World Open Chess Championship, and his collegiate involvement in tournament chess at Dartmouth College, where he earned a degree in Economics and Computer Science, led to his development of early AI systems. Trefler is the author of the best-selling book "Build for Change" and holds multiple patents for Pega's distinctive architecture. In 1996, he co-founded the Trefler Foundation with his wife, Pam, dedicated to improving educational outcomes.
Ken Stillwell, Chief Operating Officer and Chief Financial Officer
Ken Stillwell joined Pegasystems in July 2016 and was promoted to Chief Operating Officer in April 2021. He brings over 25 years of financial leadership experience in high-growth technology organizations. Prior to Pegasystems, Stillwell served as Senior Vice President and Chief Financial Officer at Dynatrace, and as EVP/CFO at SOVOS, a financial and compliance software as a service (SaaS) company. He also held the role of divisional CFO at PTC, a publicly traded software company, for five years. Stillwell is a Certified Public Accountant, holding an undergraduate degree in business and economics from the University of Pittsburgh and a Master's in accounting and finance from the University of South Carolina. He currently serves as a Board Member at Sovos and a Trustee at The Rivers School.
Don Schuerman, Chief Technology Officer and Vice President of Product Marketing
Don Schuerman is the Chief Technology Officer and Vice President of Product Marketing at Pegasystems, a position he has held since January 2014, having joined the company in August 1997 as a Software Services Consultant. With over 20 years of experience, he specializes in delivering enterprise software solutions for Fortune 500 organizations, focusing on digital transformation, mobility, analytics, business process management, cloud, and CRM. Schuerman has led significant enterprise software implementations and provided technology and architecture consulting to senior executives at major corporations, including American Express, Citibank, JP Morgan Chase, and BP. He holds a Bachelor of Science degree in Physics and Philosophy from Boston College.
Katherine Parente, Chief People Officer
Katherine Parente serves as the Chief People Officer at Pegasystems.
Kerim Akgonul, Chief Product Officer
Kerim Akgonul holds the position of Chief Product Officer at Pegasystems.
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Intense Competition: Pegasystems operates in a rapidly evolving and fiercely competitive landscape across business process management (BPM), customer relationship management (CRM), and low-code application development. The company faces significant challenges from major platform vendors such as Salesforce, ServiceNow, Microsoft, Oracle, and SAP, who leverage their scale, ecosystems, and existing enterprise relationships. This intense competition puts constant pressure on Pegasystems' pricing power and market share.
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Litigation Risk: Pegasystems has been involved in significant trade secret litigation with Appian Corp. While an earlier multibillion-dollar judgment against Pegasystems was reversed and the case remanded for a new trial, the ongoing nature of this litigation represents a material financial and legal risk.
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Challenges with Cloud Transition and Revenue Volatility: The company's strategic shift to a recurring revenue, cloud-centric model, particularly with its Pega Cloud offerings, has been a central theme. While this transition aims to improve revenue predictability, it has historically created lumpiness in reported GAAP revenue and pressured near-term profitability. There is an ongoing risk that the adoption of its cloud solutions and new offerings like Pega Blueprint might take longer than anticipated, which could further impact financial forecasts.
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Pegasystems Inc. (PEGA) operates within several significant addressable markets for its core products and services.
Pega Platform (Low-Code Development Platform)
The global low-code development platform market was valued at approximately USD 24.8 billion in 2023 and is projected to grow to about USD 167.0 billion by 2030, at a compound annual growth rate (CAGR) of 31.4% from 2024 to 2030. Another estimate places the market at USD 35.2 billion in 2025, with a projection to reach USD 236.9 billion by 2035, growing at a CAGR of 21.0%. North America is a leading region in this market, holding a 45% share in 2023 and approximately 32.6% of the revenue in 2024.
Pega Infinity (Customer Engagement and Digital Process Automation Platform)
Pega Infinity unifies customer engagement and digital process automation. Therefore, its addressable market encompasses both of these segments.
Customer Engagement Solutions:
The global customer engagement solutions market was estimated at USD 23.45 billion in 2023 and is projected to reach USD 50.03 billion by 2030, with a CAGR of 11.8% from 2024 to 2030. Other estimates for the global market include USD 29.39 billion in 2025, projected to reach USD 86.39 billion by 2035, with a CAGR of 11.38% from 2026 to 2035. North America held a significant share of this market, accounting for 71.5% in 2023 and approximately 40% in 2025.
Digital Process Automation (DPA):
The global digital process automation market was valued at USD 12.4 billion in 2021 and is projected to grow to USD 42.7 billion by 2031, at a CAGR of 13.2% from 2022 to 2031. More recent figures indicate the global market size was USD 15.15 billion in 2024 and is poised to grow to USD 43.39 billion by 2033, at a CAGR of 12.4% from 2026 to 2033. North America was the largest region in the digital process automation market in 2025. The U.S. Digital Process Automation Market alone was valued at USD 4.55 billion in 2025 and is expected to reach USD 11.39 billion by 2035.
Customer Engagement Applications (Pega Customer Decision Hub, Pega Sales Automation, Pega Customer Service)
These applications fall under the broader Customer Relationship Management (CRM) market.
Customer Relationship Management (CRM):
The global customer relationship management market size was valued at USD 112.91 billion in 2025 and is expected to reach USD 320.99 billion by 2034, registering a CAGR of 12.40% from 2026 to 2034. Another projection places the global CRM market at USD 90.10 billion in 2025, reaching USD 304.03 billion by 2035, with a CAGR of 12.93% from 2026 to 2035. North America accounted for the largest CRM market share of 31.70% in 2025 and the United States alone accounts for 37% of CRM software spending.
Intelligent Automation Software
The global intelligent automation market size was recorded at USD 10.59 billion in 2021 and is projected to reach USD 51.58 billion by 2033, growing at a CAGR of 14.1% from 2025 to 2033. Another source indicates the global intelligent automation market is projected to grow from USD 16.62 billion in 2024 to USD 54.86 billion by 2032, at a CAGR of 16.10%. North America holds a significant share, accounting for 39.20% of the global market revenue in 2025.
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Here are 3-5 expected drivers of future revenue growth for Pegasystems (PEGA) over the next 2-3 years:
- Growth of Pega Cloud and Cloud Adoption: A primary driver of future revenue growth for Pegasystems is the continued expansion and adoption of its Pega Cloud offerings. The company is strategically focused on migrating clients to the cloud, with a goal for Pega Cloud to account for a significant portion of its overall Annual Contract Value (ACV) in the coming years. Pega Cloud ACV demonstrated strong growth in 2025, increasing approximately 30-33%, and is projected to continue growing above 30% in 2026. This shift to a cloud-first, subscription-driven model is also expected to enhance recurring revenue and improve gross margins.
- AI-driven Innovation, particularly Generative AI (GenAI) and Agentic AI: Pegasystems is heavily investing in artificial intelligence, with a strong focus on Generative AI (GenAI) and agentic AI capabilities embedded within its Pega Infinity platform. The Pega GenAI Blueprint strategy is expected to unlock significant monetization potential by accelerating application development and enabling clients to envision and build new applications faster. New agentic AI enhancements to Pega Infinity App Studio are designed to guide developers through application creation, enhance workflow optimization, and boost productivity, thereby driving enterprise transformation.
- Expansion of Client Engagement and New Customer Acquisition: Pegasystems aims to deepen and expand its relationships with existing clients while also acquiring new customers, particularly within Global 2000 accounts. The company is targeting new logos and expanding into horizontal use cases, such as customer service in utilities. This "land-and-expand" strategy involves embedding Pega deeply into clients' core operations through vertical-specific workflows and pursuing multi-year transformation programs.
- Product-Led Growth and Packaged Industry Applications: Revenue growth will also be driven by scaling Pega Cloud for AI-powered customer decisioning, case management, and workflow orchestration. Pegasystems plans to expand its packaged industry applications, such as next-best-action solutions for banking and claims/underwriting solutions for insurance, to meet specific sector needs. The low-code and intelligent automation markets are forecasted to experience significant growth, creating tailwinds for Pega's product roadmap.
- Strategic Partnerships and Ecosystem Expansion: Deepening routes to market through strategic partnerships with systems integrators (e.g., Accenture, Capgemini, TCS, Cognizant, Infosys) and hyperscalers (e.g., AWS, Azure, Google Cloud) is a key driver. These collaborations are intended to accelerate cloud migrations and facilitate co-selling of regulated-industry deals, expanding Pega's market reach and accelerating its growth.
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Share Repurchases
- Pegasystems repurchased $498 million in shares in 2025.
- The annual share buybacks for Pegasystems were $499.689 million in 2025 and $68.057 million in 2024.
- In February 2026, the board authorized an additional $1 billion in share buyback capacity, extending the program to June 30, 2027.
Share Issuance
- Shareholders approved an increase in authorized common shares from 200 million to 400 million in June 2025, in conjunction with a two-for-one forward stock split.
- Pegasystems' shares outstanding increased by 3.08% to 0.185 billion in 2025 from 0.179 billion in 2024.
Capital Expenditures
- Pegasystems invested $6.0 million in capital expenditures in Q4 2025.
- Capital expenditures were $14.5 million in 2025, with estimated expenditures of $19.23 million for 2026 and $20.72 million for 2027.
- Capital expenditures are primarily focused on funding long-term assets and infrastructure.
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Peer Comparisons
| Peers to compare with: |
Financials
| Median | |
|---|---|
| Name | |
| Mkt Price | 135.95 |
| Mkt Cap | 86.4 |
| Rev LTM | 28,780 |
| Op Inc LTM | 5,523 |
| FCF LTM | 2,532 |
| FCF 3Y Avg | 2,107 |
| CFO LTM | 10,264 |
| CFO 3Y Avg | 9,069 |
Growth & Margins
| Median | |
|---|---|
| Name | |
| Rev Chg LTM | 17.6% |
| Rev Chg 3Y Avg | 13.4% |
| Rev Chg Q | 18.4% |
| QoQ Delta Rev Chg LTM | 4.3% |
| Op Inc Chg LTM | 19.5% |
| Op Inc Chg 3Y Avg | 54.5% |
| Op Mgn LTM | 16.6% |
| Op Mgn 3Y Avg | 16.9% |
| QoQ Delta Op Mgn LTM | 0.2% |
| CFO/Rev LTM | 35.8% |
| CFO/Rev 3Y Avg | 36.3% |
| FCF/Rev LTM | 24.3% |
| FCF/Rev 3Y Avg | 25.0% |
Valuation
| Median | |
|---|---|
| Name | |
| Mkt Cap | 86.4 |
| P/S | 3.5 |
| P/Op Inc | 21.4 |
| P/EBIT | 19.7 |
| P/E | 18.8 |
| P/CFO | 12.1 |
| Total Yield | 5.6% |
| Dividend Yield | 0.5% |
| FCF Yield 3Y Avg | 4.5% |
| D/E | 0.2 |
| Net D/E | 0.1 |
Returns
| Median | |
|---|---|
| Name | |
| 1M Rtn | 17.0% |
| 3M Rtn | 13.5% |
| 6M Rtn | 13.8% |
| 12M Rtn | -23.8% |
| 3Y Rtn | 23.6% |
| 1M Excs Rtn | 13.8% |
| 3M Excs Rtn | 5.7% |
| 6M Excs Rtn | 1.0% |
| 12M Excs Rtn | -49.0% |
| 3Y Excs Rtn | -51.4% |
Comparison Analyses
Price Behavior
| Market Price | $32.74 | |
| Market Cap ($ Bil) | 5.4 | |
| First Trading Date | 07/19/1996 | |
| Distance from 52W High | -50.8% | |
| 50 Days | 200 Days | |
| DMA Price | $31.61 | $44.20 |
| DMA Trend | down | down |
| Distance from DMA | 3.6% | -25.9% |
| 3M | 1YR | |
| Volatility | 56.6% | 51.4% |
| Downside Capture | 115.03 | 170.54 |
| Upside Capture | 51.50 | 80.30 |
| Correlation (SPY) | 4.5% | 19.1% |
| 1M | 2M | 3M | 6M | 1Y | 3Y | |
|---|---|---|---|---|---|---|
| Beta | -1.08 | 0.01 | -0.00 | 0.52 | 0.79 | 1.24 |
| Up Beta | -3.82 | -1.53 | -1.18 | -0.38 | 0.21 | 1.17 |
| Down Beta | -4.36 | -0.53 | -0.33 | -0.81 | 0.18 | 1.11 |
| Up Capture | 103% | 22% | 2% | 72% | 61% | 192% |
| Bmk +ve Days | 11 | 22 | 35 | 67 | 138 | 427 |
| Stock +ve Days | 13 | 19 | 29 | 60 | 120 | 390 |
| Down Capture | 73% | 116% | 98% | 159% | 144% | 108% |
| Bmk -ve Days | 11 | 21 | 28 | 59 | 114 | 326 |
| Stock -ve Days | 9 | 24 | 34 | 66 | 130 | 360 |
[1] Upside and downside betas calculated using positive and negative benchmark daily returns respectively
Based On 1-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with PEGA | |
|---|---|---|---|---|
| PEGA | -43.2% | 51.8% | -0.91 | - |
| Sector ETF (XLK) | 43.7% | 25.9% | 1.36 | 12.9% |
| Equity (SPY) | 23.3% | 12.8% | 1.36 | 19.6% |
| Gold (GLD) | 28.5% | 28.4% | 0.87 | -1.3% |
| Commodities (DBC) | 32.9% | 19.8% | 1.32 | -12.4% |
| Real Estate (VNQ) | 14.2% | 13.8% | 0.72 | 21.4% |
| Bitcoin (BTCUSD) | -43.7% | 43.0% | -1.21 | 21.7% |
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Based On 5-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with PEGA | |
|---|---|---|---|---|
| PEGA | -12.3% | 52.4% | -0.06 | - |
| Sector ETF (XLK) | 20.5% | 25.8% | 0.71 | 39.9% |
| Equity (SPY) | 13.5% | 17.2% | 0.61 | 44.2% |
| Gold (GLD) | 18.6% | 18.6% | 0.81 | 1.1% |
| Commodities (DBC) | 8.2% | 19.6% | 0.31 | 3.0% |
| Real Estate (VNQ) | 2.3% | 18.9% | 0.02 | 36.5% |
| Bitcoin (BTCUSD) | 9.0% | 53.0% | 0.36 | 22.4% |
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Based On 10-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with PEGA | |
|---|---|---|---|---|
| PEGA | 9.1% | 44.5% | 0.35 | - |
| Sector ETF (XLK) | 24.6% | 24.9% | 0.89 | 49.5% |
| Equity (SPY) | 15.4% | 17.9% | 0.73 | 51.1% |
| Gold (GLD) | 12.1% | 16.2% | 0.61 | 2.3% |
| Commodities (DBC) | 7.4% | 18.0% | 0.33 | 11.5% |
| Real Estate (VNQ) | 4.8% | 20.7% | 0.20 | 40.0% |
| Bitcoin (BTCUSD) | 58.4% | 66.2% | 0.98 | 15.3% |
Smart multi-asset allocation framework can stack odds in your favor. Learn How
Returns Analyses
Earnings Returns History
Updated 7/30/2026| Forward Returns | |||
|---|---|---|---|
| Earnings Date | 1D Returns | 5D Returns | 21D Returns |
| 7/21/2026 | -16.0% | -4.6% | |
| 4/21/2026 | -4.6% | -8.5% | -12.5% |
| 2/10/2026 | -11.9% | 3.8% | -1.2% |
| 10/21/2025 | 15.0% | 14.8% | -5.3% |
| 7/22/2025 | 13.9% | 18.6% | 1.8% |
| 4/22/2025 | 28.8% | 32.6% | 44.8% |
| 2/12/2025 | -19.6% | -23.2% | -32.1% |
| 10/23/2024 | 14.7% | 17.2% | 28.4% |
| ... | |||
| SUMMARY STATS | |||
| # Positive | 14 | 13 | 12 |
| # Negative | 11 | 12 | 12 |
| Median Positive | 11.3% | 14.1% | 11.3% |
| Median Negative | -10.6% | -7.7% | -12.7% |
| Max Positive | 35.7% | 32.6% | 44.8% |
| Max Negative | -19.6% | -23.2% | -32.1% |
| Forward Returns | |||
|---|---|---|---|
| Earnings Date | 1D Returns | 5D Returns | 21D Returns |
| 7/21/2026 | -16.0% | -4.6% | |
| 4/21/2026 | -4.6% | -8.5% | -12.5% |
| 2/10/2026 | -11.9% | 3.8% | -1.2% |
| 10/21/2025 | 15.0% | 14.8% | -5.3% |
| 7/22/2025 | 13.9% | 18.6% | 1.8% |
| 4/22/2025 | 28.8% | 32.6% | 44.8% |
| 2/12/2025 | -19.6% | -23.2% | -32.1% |
| 10/23/2024 | 14.7% | 17.2% | 28.4% |
| 7/24/2024 | 12.8% | 14.1% | 10.0% |
| 4/24/2024 | 0.3% | 2.9% | 3.0% |
| 2/14/2024 | 35.7% | 27.6% | 22.3% |
| 10/25/2023 | 7.2% | 15.4% | 37.2% |
| 7/26/2023 | -10.6% | -8.1% | -12.8% |
| 4/26/2023 | 3.5% | -2.3% | 3.0% |
| 2/15/2023 | 18.0% | 10.3% | 9.6% |
| 10/26/2022 | 9.7% | 2.0% | 12.6% |
| 7/27/2022 | -15.4% | -15.2% | -22.0% |
| 4/28/2022 | 6.9% | -2.1% | -29.6% |
| 2/16/2022 | -15.6% | -16.7% | -18.4% |
| 10/27/2021 | -4.9% | -2.1% | -7.7% |
| 7/28/2021 | -7.0% | -7.4% | -1.7% |
| 4/28/2021 | -1.3% | -8.2% | -6.6% |
| 2/17/2021 | 1.0% | -1.7% | -20.7% |
| 10/28/2020 | -1.3% | 0.8% | 9.9% |
| 7/28/2020 | 9.8% | 11.6% | 24.5% |
| SUMMARY STATS | |||
| # Positive | 14 | 13 | 12 |
| # Negative | 11 | 12 | 12 |
| Median Positive | 11.3% | 14.1% | 11.3% |
| Median Negative | -10.6% | -7.7% | -12.7% |
| Max Positive | 35.7% | 32.6% | 44.8% |
| Max Negative | -19.6% | -23.2% | -32.1% |
SEC Filings
Expand for More| Report Date | Filing Date | Filing |
|---|---|---|
| 06/30/2026 | 07/21/2026 | 10-Q |
| 03/31/2026 | 04/21/2026 | 10-Q |
| 12/31/2025 | 02/10/2026 | 10-K |
| 09/30/2025 | 10/21/2025 | 10-Q |
| 06/30/2025 | 07/22/2025 | 10-Q |
| 03/31/2025 | 04/22/2025 | 10-Q |
| 12/31/2024 | 02/12/2025 | 10-K |
| 09/30/2024 | 10/23/2024 | 10-Q |
| 06/30/2024 | 07/24/2024 | 10-Q |
| 03/31/2024 | 04/24/2024 | 10-Q |
| 12/31/2023 | 02/14/2024 | 10-K |
| 09/30/2023 | 10/25/2023 | 10-Q |
| 06/30/2023 | 07/26/2023 | 10-Q |
| 03/31/2023 | 04/26/2023 | 10-Q |
| 12/31/2022 | 02/15/2023 | 10-K |
| 09/30/2022 | 10/26/2022 | 10-Q |
| Report Date | Filing Date | Filing |
|---|---|---|
| 06/30/2026 | 07/21/2026 | 10-Q |
| 03/31/2026 | 04/21/2026 | 10-Q |
| 12/31/2025 | 02/10/2026 | 10-K |
| 09/30/2025 | 10/21/2025 | 10-Q |
| 06/30/2025 | 07/22/2025 | 10-Q |
| 03/31/2025 | 04/22/2025 | 10-Q |
| 12/31/2024 | 02/12/2025 | 10-K |
| 09/30/2024 | 10/23/2024 | 10-Q |
| 06/30/2024 | 07/24/2024 | 10-Q |
| 03/31/2024 | 04/24/2024 | 10-Q |
| 12/31/2023 | 02/14/2024 | 10-K |
| 09/30/2023 | 10/25/2023 | 10-Q |
| 06/30/2023 | 07/26/2023 | 10-Q |
| 03/31/2023 | 04/26/2023 | 10-Q |
| 12/31/2022 | 02/15/2023 | 10-K |
| 09/30/2022 | 10/26/2022 | 10-Q |
| 06/30/2022 | 07/27/2022 | 10-Q |
| 03/31/2022 | 04/28/2022 | 10-Q |
| 12/31/2021 | 02/16/2022 | 10-K |
| 09/30/2021 | 10/27/2021 | 10-Q |
| 06/30/2021 | 07/28/2021 | 10-Q |
| 03/31/2021 | 04/28/2021 | 10-Q |
| 12/31/2020 | 02/17/2021 | 10-K |
| 09/30/2020 | 10/28/2020 | 10-Q |
| 06/30/2020 | 07/28/2020 | 10-Q |
| 03/31/2020 | 04/29/2020 | 10-Q |
| 12/31/2019 | 02/12/2020 | 10-K |
| 09/30/2019 | 11/07/2019 | 10-Q |
Insider Activity
Updated 6/18/2026| # | Owner | Title | Holding | Action | Filing Date | Price | Shares | Transacted Value | Value of Held Shares | Form |
|---|---|---|---|---|---|---|---|---|---|---|
| 1 | Kouninis, Efstathios A | SVP, Chief Accounting Officer | Direct | Sell | 6182026 | 32.31 | 750 | 24,235 | 76,778 | Form |
| 2 | Kouninis, Efstathios A | SVP, Chief Accounting Officer | Direct | Sell | 6022026 | 36.99 | 750 | 27,742 | 79,307 | Form |
| 3 | Kouninis, Efstathios A | SVP, Chief Accounting Officer | Direct | Sell | 6022026 | 34.75 | 750 | 26,062 | 100,566 | Form |
| 4 | Akgonul, Rifat Kerim | Chief Product Officer | Direct | Sell | 5202026 | 33.35 | 4,545 | 151,576 | 3,570,784 | Form |
| 5 | Stillwell, Kenneth | COO, CFO | Direct | Sell | 5062026 | 36.45 | 8,383 | 305,560 | 3,955,991 | Form |
| # | Owner | Title | Holding | Action | Filing Date | Price | Shares | Transacted Value | Value of Held Shares | Form |
|---|---|---|---|---|---|---|---|---|---|---|
| 1 | Kouninis, Efstathios A | SVP, Chief Accounting Officer | Direct | Sell | 6182026 | 32.31 | 750 | 24,235 | 76,778 | Form |
| 2 | Kouninis, Efstathios A | SVP, Chief Accounting Officer | Direct | Sell | 6022026 | 36.99 | 750 | 27,742 | 79,307 | Form |
| 3 | Kouninis, Efstathios A | SVP, Chief Accounting Officer | Direct | Sell | 6022026 | 34.75 | 750 | 26,062 | 100,566 | Form |
| 4 | Akgonul, Rifat Kerim | Chief Product Officer | Direct | Sell | 5202026 | 33.35 | 4,545 | 151,576 | 3,570,784 | Form |
| 5 | Stillwell, Kenneth | COO, CFO | Direct | Sell | 5062026 | 36.45 | 8,383 | 305,560 | 3,955,991 | Form |
| 6 | Stillwell, Kenneth | COO, CFO | Direct | Sell | 4032026 | 43.17 | 1,000 | 43,170 | 4,685,326 | Form |
| 7 | Akgonul, Rifat Kerim | Chief Product Officer | Direct | Sell | 3172026 | 43.39 | 7,594 | 329,504 | 4,834,904 | Form |
| 8 | Trefler, Leon | Chief of Clients and Markets | Direct | Sell | 3122026 | 44.76 | 6,700 | 299,858 | 5,297,739 | Form |
| 9 | Stillwell, Kenneth | COO, CFO | Direct | Sell | 3122026 | 44.81 | 44,000 | 1,971,640 | 4,889,802 | Form |
| 10 | Akgonul, Rifat Kerim | Chief Product Officer | Direct | Sell | 3032026 | 43.84 | 7,000 | 306,904 | 4,382,684 | Form |
| 11 | Stillwell, Kenneth | COO, CFO | Direct | Sell | 3032026 | 43.37 | 1,000 | 43,370 | 5,833,959 | Form |
| 12 | Trefler, Alan | C.E.O. & Chairman | Direct | Sell | 2192026 | 45.03 | 17,930 | 807,388 | 1,995,719,783 | Form |
| 13 | Trefler, Alan | C.E.O. & Chairman | Direct | Sell | 2192026 | 45.12 | 11,742 | 529,799 | 2,000,517,565 | Form |
| 14 | Akgonul, Rifat Kerim | Chief Product Officer | Direct | Sell | 2172026 | 43.16 | 7,000 | 302,155 | 4,570,915 | Form |
| 15 | Stillwell, Kenneth | COO, CFO | Direct | Sell | 2032026 | 43.69 | 1,000 | 43,690 | 5,324,937 | Form |
| 16 | Trefler, Alan | C.E.O. & Chairman | Direct | Sell | 1232026 | 49.56 | 45,000 | 2,230,310 | 2,198,067,232 | Form |
| 17 | Trefler, Alan | C.E.O. & Chairman | Direct | Sell | 1232026 | 49.02 | 45,000 | 2,205,957 | 2,176,272,131 | Form |
| 18 | Stillwell, Kenneth | COO, CFO | Direct | Sell | 1062026 | 59.99 | 4,000 | 239,960 | 7,371,571 | Form |
| 19 | Trefler, Alan | C.E.O. & Chairman | Direct | Sell | 12192025 | 58.68 | 45,000 | 2,640,802 | 2,626,462,332 | Form |
| 20 | Trefler, Alan | C.E.O. & Chairman | Direct | Sell | 12192025 | 58.13 | 45,000 | 2,615,765 | 2,604,177,364 | Form |
| 21 | Akgonul, Rifat Kerim | Chief Product Officer | Direct | Sell | 12092025 | 60.19 | 4,000 | 240,760 | 6,792,141 | Form |
| 22 | Stillwell, Kenneth | COO, CFO | Direct | Sell | 12092025 | 57.87 | 14,405 | 833,602 | 7,616,767 | Form |
| 23 | Trefler, Alan | C.E.O. & Chairman | Direct | Sell | 11072025 | 58.67 | 45,000 | 2,640,287 | 2,631,155,611 | Form |
| 24 | Trefler, Alan | C.E.O. & Chairman | Direct | Sell | 11072025 | 60.03 | 45,000 | 2,701,459 | 2,694,816,774 | Form |
| 25 | Stillwell, Kenneth | COO, CFO | Direct | Sell | 11052025 | 62.18 | 11,442 | 711,464 | 7,948,221 | Form |
| 26 | Kouninis, Efstathios A | SVP, Chief Accounting Officer | Direct | Sell | 10282025 | 67.25 | 4,425 | 297,581 | 13,854 | Form |
| 27 | Stillwell, Kenneth | COO, CFO | Direct | Sell | 10282025 | 66.40 | 17,171 | 1,140,154 | 8,487,646 | Form |
| 28 | Trefler, Leon | Chief of Clients and Markets | Direct | Sell | 10272025 | 63.40 | 14,865 | 942,441 | 7,531,857 | Form |
| 29 | Kouninis, Efstathios A | SVP, Chief Accounting Officer | Direct | Sell | 10272025 | 65.50 | 3,993 | 261,542 | 13,493 | Form |
| 30 | Trefler, Alan | C.E.O. & Chairman | Direct | Sell | 10232025 | 64.23 | 45,000 | 2,890,159 | 2,885,943,798 | Form |
| 31 | Trefler, Alan | C.E.O. & Chairman | Direct | Sell | 10232025 | 56.73 | 45,000 | 2,552,800 | 2,551,628,863 | Form |
| 32 | Trefler, Alan | C.E.O. & Chairman | Direct | Sell | 9192025 | 58.30 | 45,000 | 2,623,565 | 2,624,985,296 | Form |
| 33 | Kouninis, Efstathios A | SVP of Finance & CAO | Direct | Sell | 9162025 | 59.00 | 2,544 | Form | ||
| 34 | Kouninis, Efstathios A | SVP of Finance & CAO | Direct | Sell | 9122025 | 57.50 | 252 | Form | ||
| 35 | Weber, Larry | Direct | Sell | 9112025 | 56.98 | 2,636 | 150,199 | 605,811 | Form | |
| 36 | Kouninis, Efstathios A | SVP of Finance & CAO | Direct | Sell | 9092025 | 57.62 | 332 | 19,130 | 14,520 | Form |
| 37 | Akgonul, Rifat Kerim | Chief Product Officer | Direct | Sell | 9092025 | 56.97 | 4,000 | 227,889 | 4,028,902 | Form |
| 38 | Kouninis, Efstathios A | SVP of Finance & CAO | Direct | Sell | 9092025 | 55.00 | 235 | 12,925 | 18,260 | Form |
| 39 | Akgonul, Rifat Kerim | Chief Product Officer | Direct | Sell | 9042025 | 54.08 | 5,000 | 270,400 | 3,915,662 | Form |
| 40 | Akgonul, Rifat Kerim | Chief Product Officer | Direct | Sell | 9042025 | 53.40 | 2,000 | 106,802 | 4,133,504 | Form |
| 41 | Kouninis, Efstathios A | VP of Finance & CAO | Direct | Sell | 8272025 | 123.50 | 453 | 55,946 | 247 | Form |
| 42 | Trefler, Alan | C.E.O. & Chairman | Direct | Sell | 8072025 | 57.35 | 45,000 | 2,580,750 | 1,887,772,286 | Form |
| 43 | Trefler, Alan | C.E.O. & Chairman | Direct | Sell | 8072025 | 57.49 | 45,000 | 2,587,013 | 1,894,940,776 | Form |
| 44 | Stillwell, Kenneth | COO, CFO | Direct | Sell | 8052025 | 58.19 | 11,147 | 648,644 | 6,975,119 | Form |
| 45 | Stillwell, Kenneth | COO, CFO | Direct | Sell | 8052025 | 57.71 | 4,000 | 230,854 | 6,918,002 | Form |
| 46 | Kouninis, Efstathios A | SVP of Finance & CAO | Direct | Sell | 7292025 | 59.65 | 582 | Form | ||
| 47 | Akgonul, Rifat Kerim | Chief Product Officer | Direct | Sell | 7282025 | 57.82 | 9,879 | 571,204 | 4,542,339 | Form |
| 48 | Trefler, Alan | C.E.O. & Chairman | Direct | Sell | 7142025 | 51.75 | 45,000 | 2,328,607 | 1,707,991,746 | Form |
| 49 | Trefler, Alan | C.E.O. & Chairman | Direct | Sell | 7112025 | 53.34 | 45,000 | 2,400,300 | 1,762,977,251 | Form |
| 50 | Stillwell, Kenneth | COO, CFO | Direct | Sell | 7032025 | 52.64 | 4,000 | 210,570 | 2,597,907 | Form |
| 51 | Trefler, Alan | C.E.O. & Chairman | Direct | Sell | 6232025 | 100.83 | 31,500 | 3,176,003 | 1,716,845,395 | Form |
| 52 | Trefler, Alan | C.E.O. & Chairman | Direct | Sell | 6182025 | 101.04 | 31,500 | 3,182,828 | 1,723,717,659 | Form |
| 53 | Higgins, John Gerard | Chief, Client &Partner Success | Direct | Sell | 6132025 | 102.23 | 11,830 | 1,209,381 | 1,943,699 | Form |
| 54 | Kouninis, Efstathios A | SVP of Finance & CAO | Direct | Sell | 6092025 | 103.00 | 598 | 61,594 | 17,098 | Form |
| 55 | Kouninis, Efstathios A | SVP of Finance & CAO | Direct | Sell | 6032025 | 100.50 | 116 | 11,658 | 15,578 | Form |
| 56 | Stillwell, Kenneth | COO, CFO | Direct | Sell | 6032025 | 97.48 | 2,000 | 194,960 | 2,309,106 | Form |
Investor Activity (13F)
Updated Aug 10, 2026Active managers (13F portfolio over $250M, at least 3 holdings) with a position over $5M that is either over 10% of their portfolio or held in a concentrated book of 50 or fewer total positions. Index/ETF, sovereign, bank, community-bank and charitable/donor-advised filers are excluded.
PEGA Trade Sentinel
Neutral / Watch
CONVICTION RATIONALE
The company's core growth metric, Annual Contract Value, has decelerated sharply to 7% from 17% last year. Management has acknowledged its 2026 guidance is at risk. While its predictable AI cost model is a clear differentiator, it is not yet translating into competitive wins against larger peers, creating significant uncertainty.
STOCK ARCHETYPE
Enterprise SaaS(Number of Customers) x (Volume of Workflows/Cases) x (Price per Unit of Work) Increasing scale and operating leverage on the Pega Cloud platform as more customers adopt the service, combined with disciplined operating expense management.
INVESTMENT THESIS
Pega's strategy is that its fixed-cost AI model will attract large enterprises concerned with volatile, token-based pricing from competitors.
- Pega Cloud ACV now represents 57% of total ACV.
- The company offers its Agentic AI with no variable per-token cost.
- Remaining Performance Obligations (backlog) grew 10% to $2.019 billion.
- Subscription services carry an 81% gross margin.
PRIMARY RISK
Core growth has slowed sharply, with Total ACV growth falling to 7% from 17% last year. This lags key competitors and puts the company's full-year guidance out of reach.
- Total ACV growth slowed to 7% in Q2 2026 from 17% in FY2025.
- Pega Cloud ACV growth moderated to 22% from 33% in FY2025.
- Management stated recovering the first-half ACV shortfall will be 'very difficult'.
- Operating expenses grew 13.2% year-over-year while revenue grew 3.6%.
| KPI | Status | Rationale |
|---|---|---|
| Total Annual Contract Value (ACV) Growth | 8% in constant currency for the quarter ended June 30, 2026. - Decelerating | The deceleration is significant. Management attributes the slowdown to 'unprecedented change in the software market' related to AI, which has created 'significant buyer uncertainty' and longer deal cycles, as well as internal execution issues and a back-half weighted renewal portfolio. |
| Pega Cloud ACV Growth | 22% in constant currency for the quarter ended June 30, 2026. - Decelerating | As the company's primary growth driver, this deceleration is a key factor in the overall slowdown. Management notes this growth 'reflects the continued expansion of our cloud business' but acknowledges the moderation and attributes it to the same market-wide purchasing delays. |
| Remaining Performance Obligations (Backlog) | $2.019 billion (June 30, 2026) | Represents expected future revenue from existing non-cancellable contracts, providing visibility into future revenue streams. |
AI Strategy vs. Market Reality
BULL VIEW
Pega's predictable cost model is the right long-term strategy for risk-averse enterprises, and the current slowdown is a temporary market-wide pause before a flight to quality and predictability.
CORE TENSION
Can Pega's 'no token tax' model re-accelerate its 22% Pega Cloud ACV growth against ServiceNow's 21.5% platform growth and superior AI momentum?
PREVAILING SENTIMENT
The latest evidence favors the bears. The sharp slowdown in Pega's growth and management's admission of a 'very difficult' path ahead suggest the strategy is not yet working.
BEAR VIEW
The sharp deceleration to 7% ACV growth shows Pega is losing to larger rivals like ServiceNow, and its niche strategy is failing to overcome their scale and market power in a confused market.
| Timeline | Event & Metric To Watch |
|---|---|
9/1/2026 | Negative Peer Read-Throughs Watch: Commentary from Salesforce (CRM) and Oracle (ORCL) on sales cycles, AI-related deal delays, and enterprise IT spending. |
9/7/2026 | Oracle Earnings Report Watch: Peer Oracle (ORCL) is scheduled to report earnings. |
September 18, 2026 | Defamation Suit Motions Deadline Watch: In the Pegasystems v. Appian Defamation Litigation, briefing on Daubert motions is expected to be completed. |
10/19/2026 | Disappointing Q3 Earnings Report Watch: ACV growth figures, any revision to full-year outlook, and commentary on sales cycle elongation. |
11/4/2026 | Appian Earnings Report Watch: Peer Appian (APPN) is scheduled to report earnings. |
November 2026 | Adverse Legal Developments Watch: Court filings, pre-trial motions, and media coverage related to the defamation trial against Appian. |
November 2026 | Defamation Suit Jury Trial Watch: A jury trial is currently scheduled in the Pegasystems v. Appian Defamation Litigation. |
January 11, 2027 | Appian Retrial Commences Watch: The retrial in the Appian Corp. v. Pegasystems litigation is set to commence. |
February 2027 | Shareholder Lawsuit Trial Watch: A trial is scheduled for the PS Lit Recovery / Eminence Fund shareholder lawsuits. |
June 30, 2027 | Share Repurchase Program Expiration Watch: The company's share repurchase program is scheduled to expire. |
| Date | Event | Stock Impact |
|---|---|---|
2026-07-22 | Q2 2026 Results and Slowdown Details: The company reported Q2 2026 results, with management citing a significant slowdown in ACV growth due to buyer uncertainty. The stock had a two-day reaction of -16.0%. | -15.9% $30.94 -> $26.01 |
2026-07-14 | Pega Infinity 26 Released Details: The company announced the general availability of Pega Infinity 26, its AI product suite designed to help enterprises scale AI with predictable outcomes and costs. | -2.1% $31.94 -> $31.28 |
2026-06-08 | PegaWorld AI Product Push Details: At its PegaWorld conference, the company announced new AI capabilities, including an integration with AWS and a pricing model that eliminates per-token charges for its agentic workflows. | -1.6% $34.68 -> $34.13 |
2026-04-22 | Q1 2026 Results Reported Details: The company reported its Q1 2026 results, after which the stock had a two-day reaction of -10.0% versus 1.0% for the S&P 500. | -10.3% $39.25 -> $35.21 |
2026-02-11 | Q4 2025 Results Reported Details: The company reported its Q4 and full-year 2025 results. The stock had a two-day reaction of -6.0% around the earnings call. | -5.7% $42.96 -> $40.52 |
2026-02-10 | Share Repurchase Program Expanded Details: The Board of Directors increased the authorized share repurchase amount and extended the program's expiration date to June 30, 2027. | -9.3% $41.77 -> $37.87 |
2026-01-08 | Appian Verdict Reversed Details: The Supreme Court of Virginia affirmed a lower court's ruling that reversed a judgment and ordered a new trial in the Appian trade secrets case. | -4.8% $60.76 -> $57.84 |
Position Sizing
4% - 6%
NORMAL POSITION
Sizing is volatility-based: PEGA trades at roughly 54% annualized options-implied volatility versus about 15% for the S&P 500 (3.6x the market), around the 63rd percentile of its own trailing year. A 4% - 6% position keeps a single-name swing of that size within a diversified portfolio's risk budget.
Diversification Alternatives
NOW - ServiceNow
Platform ConsolidatorServiceNow offers exposure to the enterprise AI theme at a much larger scale, with trailing-twelve-month revenue of $14.7 billion versus Pega's $1.7 billion, and more consistent growth.
CRM - Salesforce
Market Leader ScaleSalesforce provides massive distribution access and a higher operating margin of 21.9% compared to Pega's 11.3%, reflecting significant scale and efficiency advantages.
Pega is a disciplined enterprise software provider betting that as the AI market matures, customers will favor its 'predictable outcomes at predictable costs' model over competitors' more volatile, token-based pricing.
Pega positions its AI strategy as structurally different from competitors. It uses AI heavily at 'design time' with its Blueprint tool to create optimized, governed workflows. These workflows then run efficiently at 'run time' without incurring expensive, variable token costs for every transaction. This approach is designed to appeal to large, regulated enterprises that prioritize predictability, governance, and control over the 'AI chaos' of unconstrained agentic systems or brittle, AI-generated code.
Major enterprise wins, particularly in regulated industries like finance and healthcare, where customers explicitly cite Pega's predictable cost model and governance features as the reason for choosing them over a large competitor.
Evidence that large enterprises are broadly adopting competitor approaches (e.g., run-time AI reasoning or massive code generation) and are successfully managing the costs and risks, indicating Pega's differentiated approach is not a compelling factor.
Short-term stock price volatility related to broad market concerns about the 'SaaSpocalypse' or AI disruption without specific evidence of Pega losing deals due to its architecture.
Repricing Catalyst
A market-wide shift in enterprise AI spending from experimentation to a focus on ROI and total cost of ownership, which would validate Pega's core value proposition and could re-accelerate growth.
Pegasystems — Investor Video Playlist
Industry Resources
| Information Technology Resources |
| TechCrunch |
| Wired |
| CIO |
| MIT Technology Review |
| Gartner Insights |
| Ars Technica |
| Application Software Resources |
| Capterra |
| Software Advice |
| InfoWorld |
External Quote Links
| Y Finance | Barrons |
| TradingView | Morningstar |
| SeekingAlpha | ValueLine |
| Motley Fool | Robinhood |
| CNBC | Etrade |
| MarketWatch | Unusual Whales |
| YCharts | Perplexity Finance |
| FinViz |
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