Pegasystems (PEGA)
Market Price (10/28/2026): $35.325 | Market Cap: $5.8 BilSector: Information Technology | Industry: Application Software
Pegasystems (PEGA)
Market Price (10/28/2026): $35.325Market Cap: $5.8 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 5.4%, FCF Yield is 7.6% Attractive cash flow generationCFO/Rev LTMCash Flow from Operations / Revenue (Sales), Last Twelve Months (LTM) is 26%, FCF/Rev LTMFree Cash Flow / Revenue (Sales), Last Twelve Months (LTM) is 25% Stock buyback supportStock Buyback 3Y Total is 1.0 Bil 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 -29% | 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 5.4%, FCF Yield is 7.6% |
| Attractive cash flow generationCFO/Rev LTMCash Flow from Operations / Revenue (Sales), Last Twelve Months (LTM) is 26%, FCF/Rev LTMFree Cash Flow / Revenue (Sales), Last Twelve Months (LTM) is 25% |
| Stock buyback supportStock Buyback 3Y Total is 1.0 Bil |
| 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 -29% |
| 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 gained about 20% since 6/30/2026 because of the following key factors:
1. Continued strong growth in Pega Cloud and Annual Contract Value (ACV) despite overall revenue and earnings misses.
Pegasystems saw Pega Cloud revenue increase by 19% year-over-year in fiscal Q3 2026, reaching 59% of the total Annual Contract Value (ACV). Total ACV itself grew 6% year-over-year (7% in constant currency) to $1.65 billion, with Q3 2026 recording the strongest ACV additions for the year. This performance highlighted successful cloud adoption and recurring revenue growth, which are key metrics for investor confidence in software companies. Although the company reported missing analyst estimates for both revenue and adjusted earnings per share in fiscal Q2 2026 and fiscal Q3 2026, the strength in cloud metrics and ACV growth provided a counter-narrative for investors.
2. Enhanced market recognition and strategic positioning in the Artificial Intelligence (AI) sector.
Pegasystems gained significant industry recognition during the period, being named a Leader in The Forrester Wave™: AI Platforms, Q3 2026 (announced August 7, 2026), and a Leader in the Gartner® Magic Quadrant™ for Business Orchestration and Automation Technology (September 21, 2026). This external validation of its AI capabilities and platform likely boosted investor confidence in the company's long-term strategy and ability to capitalize on the growing AI market, positioning it favorably within a high-growth technological trend.
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Pegasystems (PEGA) stock has gained about 20% since 6/30/2026 because of the following key factors:
1. Continued strong growth in Pega Cloud and Annual Contract Value (ACV) despite overall revenue and earnings misses.
Pegasystems saw Pega Cloud revenue increase by 19% year-over-year in fiscal Q3 2026, reaching 59% of the total Annual Contract Value (ACV). Total ACV itself grew 6% year-over-year (7% in constant currency) to $1.65 billion, with Q3 2026 recording the strongest ACV additions for the year. This performance highlighted successful cloud adoption and recurring revenue growth, which are key metrics for investor confidence in software companies. Although the company reported missing analyst estimates for both revenue and adjusted earnings per share in fiscal Q2 2026 and fiscal Q3 2026, the strength in cloud metrics and ACV growth provided a counter-narrative for investors.
2. Enhanced market recognition and strategic positioning in the Artificial Intelligence (AI) sector.
Pegasystems gained significant industry recognition during the period, being named a Leader in The Forrester Wave™: AI Platforms, Q3 2026 (announced August 7, 2026), and a Leader in the Gartner® Magic Quadrant™ for Business Orchestration and Automation Technology (September 21, 2026). This external validation of its AI capabilities and platform likely boosted investor confidence in the company's long-term strategy and ability to capitalize on the growing AI market, positioning it favorably within a high-growth technological trend.
3. Positive analyst sentiment and indication of undervaluation contributed to a recovery from a 52-week low.
Ahead of the fiscal Q3 2026 earnings report, Rosenblatt Securities reaffirmed a "Buy" rating on Pegasystems and maintained a $47 price target on October 15, 2026, with analysts raising earnings estimates. The stock had hit a 52-week low of $25.10 on July 22, 2026, shortly after the end of fiscal Q2 2026. The subsequent upward movement, leading to the 20% gain, was further supported by an assessment on October 20, 2026, that the stock's price of $36.23 was 16.2% below its GF Value™ estimate of $43.21, suggesting it was undervalued. This combination of supportive analyst ratings and a perceived undervaluation likely fueled investor buying and the stock's recovery.
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Stock Movement Drivers
Fundamental Drivers
The 18.4% change in PEGA stock from 6/30/2026 to 10/27/2026 was primarily driven by a 32.8% change in the company's P/E Multiple.| (LTM values as of) | 6302026 | 10272026 | Change |
|---|---|---|---|
| Stock Price ($) | 29.84 | 35.32 | 18.4% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 1,700 | 1,748 | 2.8% |
| Net Income Margin (%) | 20.0% | 16.9% | -15.9% |
| P/E Multiple | 14.8 | 19.6 | 32.8% |
| Shares Outstanding (Mil) | 169 | 164 | 3.1% |
| Cumulative Contribution | 18.4% |
Market Drivers
6/30/2026 to 10/27/2026| Return | Correlation | |
|---|---|---|
| PEGA | 18.4% | |
| Market (SPY) | 3.1% | 2.9% |
| Sector (XLK) | -0.5% | -21.0% |
Fundamental Drivers
The -16.6% change in PEGA stock from 3/31/2026 to 10/27/2026 was primarily driven by a -25.2% change in the company's Net Income Margin (%).| (LTM values as of) | 3312026 | 10272026 | Change |
|---|---|---|---|
| Stock Price ($) | 42.34 | 35.32 | -16.6% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 1,746 | 1,748 | 0.1% |
| Net Income Margin (%) | 22.5% | 16.9% | -25.2% |
| P/E Multiple | 18.3 | 19.6 | 7.3% |
| Shares Outstanding (Mil) | 170 | 164 | 3.8% |
| Cumulative Contribution | -16.6% |
Market Drivers
3/31/2026 to 10/27/2026| Return | Correlation | |
|---|---|---|
| PEGA | -16.6% | |
| Market (SPY) | 18.7% | 8.6% |
| Sector (XLK) | 42.8% | -6.3% |
Fundamental Drivers
The -38.2% change in PEGA stock from 9/30/2025 to 10/27/2026 was primarily driven by a -55.7% change in the company's P/E Multiple.| (LTM values as of) | 9302025 | 10272026 | Change |
|---|---|---|---|
| Stock Price ($) | 57.15 | 35.32 | -38.2% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 1,676 | 1,748 | 4.3% |
| Net Income Margin (%) | 13.1% | 16.9% | 28.3% |
| P/E Multiple | 44.3 | 19.6 | -55.7% |
| Shares Outstanding (Mil) | 171 | 164 | 4.3% |
| Cumulative Contribution | -38.2% |
Market Drivers
9/30/2025 to 10/27/2026| Return | Correlation | |
|---|---|---|
| PEGA | -38.2% | |
| Market (SPY) | 16.5% | 17.5% |
| Sector (XLK) | 35.0% | 8.6% |
Fundamental Drivers
The 64.3% change in PEGA stock from 9/30/2023 to 10/27/2026 was primarily driven by a 35.4% change in the company's Total Revenues ($ Mil).| (LTM values as of) | 9302023 | 10272026 | Change |
|---|---|---|---|
| Stock Price ($) | 21.50 | 35.32 | 64.3% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 1,291 | 1,748 | 35.4% |
| P/S Multiple | 2.8 | 3.3 | 19.6% |
| Shares Outstanding (Mil) | 166 | 164 | 1.4% |
| Cumulative Contribution | 64.3% |
Market Drivers
9/30/2023 to 10/27/2026| Return | Correlation | |
|---|---|---|
| PEGA | 64.3% | |
| Market (SPY) | 86.2% | 35.2% |
| Sector (XLK) | 135.3% | 27.8% |
Price Returns Compared
| 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | Total [1] | |
|---|---|---|---|---|---|---|---|
| Returns | |||||||
| PEGA Return | -16% | -69% | 43% | 91% | 28% | -38% | -44% |
| Peers Return | 12% | -34% | 57% | 28% | -1% | 4% | 52% |
| S&P 500 Return | 27% | -19% | 24% | 23% | 16% | 11% | 103% |
Monthly Win Rates [3] | |||||||
| PEGA Win Rate | 33% | 8% | 58% | 58% | 67% | 40% | |
| Peers Win Rate | 53% | 27% | 62% | 63% | 42% | 44% | |
| S&P 500 Win Rate | 75% | 42% | 67% | 75% | 67% | 40% | |
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 10/27/2026 (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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Asset Allocation
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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.
Peer Outperformance in Application Software
| Ticker | Name | Rev Growth 3Y Avg | P/E | 1Y | 3Y | 5Y | 5Y Gap |
|---|---|---|---|---|---|---|---|
| PEGA | Pegasystems | 9.1% | 19.6x | -46.7% | 72.5% | -42.4% | — |
| ACIW | ACI Worldwide | 9.9% | 24.6x | 8.9% | 176.8% | 80.9% | +123pp |
| BOX | Box | 6.6% | 44.7x | 30.0% | 76.6% | 65.5% | +108pp |
| PTC | PTC | 12.9% | 18.2x | -4.3% | 43.0% | 55.7% | +98pp |
| MANH | Manhattan Associates | 10.0% | 65.4x | 24.3% | 24.1% | 30.3% | +73pp |
| SSNC | SS&C Technologies | 6.8% | 22.1x | -4.8% | 71.7% | 15.1% | +58pp |
| Industry | Names | 1Y med | 3Y med | 5Y med | Top 3 by 5Y |
|---|---|---|---|---|---|
| Electronic Manufacturing Services | 10 | 31.6% | 137.9% | 237.0% | TTMI 538% · FLEX 521% · JBL 375% |
| Technology Distributors | 9 | 44.5% | 96.5% | 94.8% | AVT 187% · SNX 165% · CNXN 118% |
| Semiconductor Materials & Equipment | 28 | 54.0% | 81.5% | 78.3% | AXTI 579% · KLAC 374% · LRCX 358% |
| Communications Equipment | 36 | 4.9% | 83.3% | 74.5% | LITE 973% · AAOI 901% · ANET 643% |
| Electronic Components | 26 | 0.5% | 70.7% | 58.0% | CLS 2722% · BELFA 1262% · APH 332% |
| Technology Hardware, Storage & Peripherals | 21 | 18.1% | 109.1% | 29.4% | DELL 913% · SMCI 894% · WDC 823% |
| Semiconductors | 55 | 10.4% | 48.4% | 23.5% | MU 1294% · NVDA 795% · AVGO 615% |
| Internet Services & Infrastructure | 6 | 2.5% | 54.5% | 3.4% | GDDY 53% · VRSN 46% · DOCN 11% |
| Electronic Equipment & Instruments | 27 | -9.7% | 28.3% | -4.8% | PI 213% · OSIS 112% · KEYS 90% |
| IT Consulting & Other Services | 30 | -30.6% | -2.1% | -28.9% | CHRN 460163% · APLD 296% · ADEA 175% |
| Systems Software | 69 | -11.1% | 36.3% | -45.2% | ZETA 303% · CRWD 284% · FTNT 189% |
| Application Software ← | 126 | -19.4% | -2.8% | -46.0% | PLTR 693% · FROG 209% · AGYS 176% |
Latest Trefis Analyses
Research & Analysis
Invest in Strategies
Wealth Management
Peer Comparisons
| Peers to compare with: |
Financials
| Median | |
|---|---|
| Name | |
| Mkt Price | 143.14 |
| Mkt Cap | 5.8 |
| Rev LTM | 14,732 |
| Op Inc LTM | 1,680 |
| FCF LTM | 4,571 |
| FCF 3Y Avg | 3,809 |
| CFO LTM | 5,308 |
| CFO 3Y Avg | 4,628 |
Growth & Margins
| Median | |
|---|---|
| Name | |
| Rev Chg LTM | 17.8% |
| Rev Chg 3Y Avg | 16.1% |
| Rev Chg Q | 17.7% |
| QoQ Delta Rev Chg LTM | 4.3% |
| Op Inc Chg LTM | 12.8% |
| Op Inc Chg 3Y Avg | 55.3% |
| Op Mgn LTM | 12.3% |
| Op Mgn 3Y Avg | 13.8% |
| QoQ Delta Op Mgn LTM | -0.0% |
| CFO/Rev LTM | 35.8% |
| CFO/Rev 3Y Avg | 34.1% |
| FCF/Rev LTM | 25.3% |
| FCF/Rev 3Y Avg | 25.3% |
Valuation
| Median | |
|---|---|
| Name | |
| Mkt Cap | 5.8 |
| P/S | 4.5 |
| P/Op Inc | 25.5 |
| P/EBIT | 23.4 |
| P/E | 19.6 |
| P/CFO | 12.5 |
| Total Yield | 5.4% |
| Dividend Yield | 0.3% |
| FCF Yield 3Y Avg | 5.9% |
| D/E | 0.1 |
| Net D/E | 0.0 |
Returns
| Median | |
|---|---|
| Name | |
| 1M Rtn | 4.0% |
| 3M Rtn | 34.0% |
| 6M Rtn | 28.7% |
| 12M Rtn | -11.9% |
| 3Y Rtn | 37.3% |
| 1M Excs Rtn | 6.7% |
| 3M Excs Rtn | 26.3% |
| 6M Excs Rtn | 21.9% |
| 12M Excs Rtn | -23.3% |
| 3Y Excs Rtn | -42.6% |
Comparison Analyses
Price Behavior
| Market Price | $35.32 | |
| Market Cap ($ Bil) | 5.8 | |
| First Trading Date | 07/19/1996 | |
| Distance from 52W High | -46.7% | |
| 50 Days | 200 Days | |
| DMA Price | $35.20 | $37.28 |
| DMA Trend | up | down |
| Distance from DMA | 0.3% | -5.3% |
| 3M | 1YR | |
| Volatility | 42.8% | 51.1% |
| Downside Capture | 64.09 | 182.46 |
| Upside Capture | 138.59 | 85.96 |
| Correlation (S&P 500) | 13.1% | 18.7% |
| 1M | 2M | 3M | 6M | 1Y | 3Y | |
|---|---|---|---|---|---|---|
| Beta | 0.15 | 0.93 | 0.12 | 0.38 | 0.73 | 1.22 |
| Up Beta | -1.04 | 0.53 | -0.92 | -0.57 | 0.16 | 1.16 |
| Down Beta | -1.58 | -0.97 | -2.90 | -0.24 | 0.21 | 1.10 |
| Up Capture | 8% | 150% | 135% | 45% | 62% | 205% |
| Bmk +ve Days | 6 | 16 | 27 | 66 | 132 | 424 |
| Stock +ve Days | 8 | 20 | 33 | 57 | 120 | 393 |
| Down Capture | 135% | 87% | 82% | 145% | 136% | 108% |
| Bmk -ve Days | 16 | 26 | 37 | 60 | 120 | 328 |
| Stock -ve Days | 14 | 22 | 31 | 69 | 131 | 356 |
[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 | -46.5% | 51.1% | -1.05 | - |
| Sector ETF (XLK) | 29.7% | 26.7% | 0.94 | 8.2% |
| Equity (SPY) | 14.6% | 12.7% | 0.79 | 17.7% |
| Gold (GLD) | -1.4% | 28.5% | -0.06 | -1.7% |
| Commodities (DBC) | 47.3% | 20.6% | 1.76 | -13.7% |
| Real Estate (VNQ) | 3.8% | 13.9% | 0.02 | 19.5% |
| Bitcoin (BTCUSD) | -27.9% | 43.4% | -0.63 | 21.0% |
Smart multi-asset allocation framework can stack odds in your favor. Learn How
Based On 5-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with PEGA | |
|---|---|---|---|---|
| PEGA | -11.3% | 53.0% | -0.04 | - |
| Sector ETF (XLK) | 19.9% | 26.0% | 0.68 | 38.0% |
| Equity (SPY) | 12.8% | 17.1% | 0.56 | 43.2% |
| Gold (GLD) | 17.6% | 18.9% | 0.75 | 0.8% |
| Commodities (DBC) | 9.2% | 19.5% | 0.35 | 2.8% |
| Real Estate (VNQ) | 1.0% | 18.9% | -0.06 | 36.0% |
| Bitcoin (BTCUSD) | 4.5% | 51.6% | 0.27 | 22.4% |
Smart multi-asset allocation framework can stack odds in your favor. Learn How
Based On 10-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with PEGA | |
|---|---|---|---|---|
| PEGA | 9.4% | 44.9% | 0.36 | - |
| Sector ETF (XLK) | 24.4% | 25.1% | 0.88 | 48.3% |
| Equity (SPY) | 15.5% | 17.9% | 0.73 | 50.5% |
| Gold (GLD) | 12.0% | 16.4% | 0.60 | 2.1% |
| Commodities (DBC) | 8.2% | 18.1% | 0.37 | 11.1% |
| Real Estate (VNQ) | 5.2% | 20.7% | 0.21 | 39.8% |
| Bitcoin (BTCUSD) | 62.2% | 66.2% | 1.02 | 15.4% |
Smart multi-asset allocation framework can stack odds in your favor. Learn How
Returns Analyses
Earnings Returns History
Updated 10/28/2026| Forward Returns | |||
|---|---|---|---|
| Earnings Date | 1D Returns | 5D Returns | 21D Returns |
| 10/20/2026 | -2.9% | -2.5% | |
| 7/21/2026 | -16.0% | -4.6% | 9.6% |
| 4/21/2026 | -4.6% | -8.5% | -12.5% |
| 2/10/2026 | 2.8% | 6.4% | 4.2% |
| 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 | 2.7% | -18.5% | -34.0% |
| ... | |||
| SUMMARY STATS | |||
| # Positive | 14 | 12 | 13 |
| # Negative | 11 | 13 | 11 |
| Median Positive | 7.5% | 15.1% | 10.0% |
| Median Negative | -4.6% | -7.4% | -12.8% |
| Max Positive | 28.8% | 32.6% | 44.8% |
| Max Negative | -16.0% | -23.2% | -34.0% |
| Forward Returns | |||
|---|---|---|---|
| Earnings Date | 1D Returns | 5D Returns | 21D Returns |
| 10/20/2026 | -2.9% | -2.5% | |
| 7/21/2026 | -16.0% | -4.6% | 9.6% |
| 4/21/2026 | -4.6% | -8.5% | -12.5% |
| 2/10/2026 | 2.8% | 6.4% | 4.2% |
| 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 | 2.7% | -18.5% | -34.0% |
| 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 | 4.8% | 30.1% | 29.4% |
| 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 | 7.9% | 18.5% | 18.7% |
| 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 | -3.4% | -23.2% | -22.8% |
| 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 | -2.9% | -3.4% | -17.7% |
| 10/28/2020 | -1.3% | 0.8% | 9.9% |
| SUMMARY STATS | |||
| # Positive | 14 | 12 | 13 |
| # Negative | 11 | 13 | 11 |
| Median Positive | 7.5% | 15.1% | 10.0% |
| Median Negative | -4.6% | -7.4% | -12.8% |
| Max Positive | 28.8% | 32.6% | 44.8% |
| Max Negative | -16.0% | -23.2% | -34.0% |
SEC Filings
Expand for More| Report Date | Filing Date | Filing |
|---|---|---|
| 09/30/2026 | 10/20/2026 | 10-Q |
| 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 |
| Report Date | Filing Date | Filing |
|---|---|---|
| 09/30/2026 | 10/20/2026 | 10-Q |
| 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 |
Insider Activity
Updated 10/5/2026| # | Owner | Title | Holding | Action | Filing Date | Price | Shares | Transacted Value | Value of Held Shares | Form |
|---|---|---|---|---|---|---|---|---|---|---|
| 1 | Ledingham, Dianne | Dianne Ledingham Family Legacy Trust | Sell | 10052026 | 34.15 | 1,000 | 34,150 | 1,307,262 | Form | |
| 2 | Kouninis, Efstathios A | SVP, Chief Accounting Officer | Direct | Sell | 9172026 | 37.35 | 982 | 36,678 | 37,686 | Form |
| 3 | Ledingham, Dianne | Dianne Ledingham Family Legacy Trust | Sell | 9172026 | 38.00 | 1,000 | 38,000 | 1,492,640 | Form | |
| 4 | Akgonul, Rifat Kerim | Chief Product Officer | Direct | Sell | 9152026 | 36.03 | 7,000 | 252,210 | 3,776,088 | Form |
| 5 | Stillwell, Kenneth | COO, CFO | Direct | Sell | 9152026 | 35.77 | 39,627 | 1,417,438 | 3,406,151 | Form |
| # | Owner | Title | Holding | Action | Filing Date | Price | Shares | Transacted Value | Value of Held Shares | Form |
|---|---|---|---|---|---|---|---|---|---|---|
| 1 | Ledingham, Dianne | Dianne Ledingham Family Legacy Trust | Sell | 10052026 | 34.15 | 1,000 | 34,150 | 1,307,262 | Form | |
| 2 | Kouninis, Efstathios A | SVP, Chief Accounting Officer | Direct | Sell | 9172026 | 37.35 | 982 | 36,678 | 37,686 | Form |
| 3 | Ledingham, Dianne | Dianne Ledingham Family Legacy Trust | Sell | 9172026 | 38.00 | 1,000 | 38,000 | 1,492,640 | Form | |
| 4 | Akgonul, Rifat Kerim | Chief Product Officer | Direct | Sell | 9152026 | 36.03 | 7,000 | 252,210 | 3,776,088 | Form |
| 5 | Stillwell, Kenneth | COO, CFO | Direct | Sell | 9152026 | 35.77 | 39,627 | 1,417,438 | 3,406,151 | Form |
| 6 | Kouninis, Efstathios A | SVP, Chief Accounting Officer | Direct | Sell | 9032026 | 38.75 | 1,063 | 41,191 | 45,105 | Form |
| 7 | Kouninis, Efstathios A | SVP, Chief Accounting Officer | Direct | Sell | 9022026 | 36.50 | 1,012 | 36,938 | 36,828 | Form |
| 8 | Akgonul, Rifat Kerim | Chief Product Officer | Direct | Sell | 8262026 | 33.99 | 3,000 | 101,966 | 3,672,448 | Form |
| 9 | Kouninis, Efstathios A | SVP, Chief Accounting Officer | Direct | Sell | 8112026 | 33.10 | 860 | 28,466 | 33,398 | Form |
| 10 | Kouninis, Efstathios A | SVP, Chief Accounting Officer | Direct | Sell | 8112026 | 32.30 | 860 | 27,778 | 60,369 | Form |
| 11 | Kouninis, Efstathios A | SVP, Chief Accounting Officer | Direct | Sell | 6182026 | 32.31 | 750 | 24,235 | 76,778 | Form |
| 12 | Kouninis, Efstathios A | SVP, Chief Accounting Officer | Direct | Sell | 6022026 | 36.99 | 750 | 27,742 | 79,307 | Form |
| 13 | Kouninis, Efstathios A | SVP, Chief Accounting Officer | Direct | Sell | 6022026 | 34.75 | 750 | 26,062 | 100,566 | Form |
| 14 | Akgonul, Rifat Kerim | Chief Product Officer | Direct | Sell | 5202026 | 33.35 | 4,545 | 151,576 | 3,570,784 | Form |
| 15 | Stillwell, Kenneth | COO, CFO | Direct | Sell | 5062026 | 36.45 | 8,383 | 305,560 | 3,955,991 | Form |
| 16 | Stillwell, Kenneth | COO, CFO | Direct | Sell | 4032026 | 43.17 | 1,000 | 43,170 | 4,685,326 | Form |
| 17 | Akgonul, Rifat Kerim | Chief Product Officer | Direct | Sell | 3172026 | 43.39 | 7,594 | 329,504 | 4,834,904 | Form |
| 18 | Trefler, Leon | Chief of Clients and Markets | Direct | Sell | 3122026 | 44.76 | 6,700 | 299,858 | 5,297,739 | Form |
| 19 | Stillwell, Kenneth | COO, CFO | Direct | Sell | 3122026 | 44.81 | 44,000 | 1,971,640 | 4,889,802 | Form |
| 20 | Akgonul, Rifat Kerim | Chief Product Officer | Direct | Sell | 3032026 | 43.84 | 7,000 | 306,904 | 4,382,684 | Form |
| 21 | Stillwell, Kenneth | COO, CFO | Direct | Sell | 3032026 | 43.37 | 1,000 | 43,370 | 5,833,959 | Form |
| 22 | Trefler, Alan | C.E.O. & Chairman | Direct | Sell | 2192026 | 45.03 | 17,930 | 807,388 | 1,995,719,783 | Form |
| 23 | Trefler, Alan | C.E.O. & Chairman | Direct | Sell | 2192026 | 45.12 | 11,742 | 529,799 | 2,000,517,565 | Form |
| 24 | Akgonul, Rifat Kerim | Chief Product Officer | Direct | Sell | 2172026 | 43.16 | 7,000 | 302,155 | 4,570,915 | Form |
| 25 | Stillwell, Kenneth | COO, CFO | Direct | Sell | 2032026 | 43.69 | 1,000 | 43,690 | 5,324,937 | Form |
| 26 | Trefler, Alan | C.E.O. & Chairman | Direct | Sell | 1232026 | 49.56 | 45,000 | 2,230,310 | 2,198,067,232 | Form |
| 27 | Trefler, Alan | C.E.O. & Chairman | Direct | Sell | 1232026 | 49.02 | 45,000 | 2,205,957 | 2,176,272,131 | Form |
| 28 | Stillwell, Kenneth | COO, CFO | Direct | Sell | 1062026 | 59.99 | 4,000 | 239,960 | 7,371,571 | Form |
| 29 | Trefler, Alan | C.E.O. & Chairman | Direct | Sell | 12192025 | 58.68 | 45,000 | 2,640,802 | 2,626,462,332 | Form |
| 30 | Trefler, Alan | C.E.O. & Chairman | Direct | Sell | 12192025 | 58.13 | 45,000 | 2,615,765 | 2,604,177,364 | Form |
| 31 | Akgonul, Rifat Kerim | Chief Product Officer | Direct | Sell | 12092025 | 60.19 | 4,000 | 240,760 | 6,792,141 | Form |
| 32 | Stillwell, Kenneth | COO, CFO | Direct | Sell | 12092025 | 57.87 | 14,405 | 833,602 | 7,616,767 | Form |
| 33 | Trefler, Alan | C.E.O. & Chairman | Direct | Sell | 11072025 | 58.67 | 45,000 | 2,640,287 | 2,631,155,611 | Form |
| 34 | Trefler, Alan | C.E.O. & Chairman | Direct | Sell | 11072025 | 60.03 | 45,000 | 2,701,459 | 2,694,816,774 | Form |
| 35 | Stillwell, Kenneth | COO, CFO | Direct | Sell | 11052025 | 62.18 | 11,442 | 711,464 | 7,948,221 | Form |
| 36 | Kouninis, Efstathios A | SVP, Chief Accounting Officer | Direct | Sell | 10282025 | 67.25 | 4,425 | 297,581 | 13,854 | Form |
| 37 | Stillwell, Kenneth | COO, CFO | Direct | Sell | 10282025 | 66.40 | 17,171 | 1,140,154 | 8,487,646 | Form |
| 38 | Trefler, Leon | Chief of Clients and Markets | Direct | Sell | 10272025 | 63.40 | 14,865 | 942,441 | 7,531,857 | Form |
| 39 | Kouninis, Efstathios A | SVP, Chief Accounting Officer | Direct | Sell | 10272025 | 65.50 | 3,993 | 261,542 | 13,493 | Form |
| 40 | Trefler, Alan | C.E.O. & Chairman | Direct | Sell | 10232025 | 64.23 | 45,000 | 2,890,159 | 2,885,943,798 | Form |
| 41 | Trefler, Alan | C.E.O. & Chairman | Direct | Sell | 10232025 | 56.73 | 45,000 | 2,552,800 | 2,551,628,863 | Form |
Investor Activity (13F)
Updated Oct 28, 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
Pegasystems presents a high-risk, high-reward scenario. While its strategic Pega Cloud business shows strong momentum with 20% ACV growth, this is overshadowed by admitted execution failures, decelerating overall growth, and a material litigation overhang with a retrial scheduled for January 2027. A neutral stance is warranted until there is clear evidence the new go-to-market strategy is working.
STOCK ARCHETYPE
Enterprise SaaS(Number of Customers) x (Workflows/Cases per Customer) x (Price per Case/Workflow) Mix shift from negative-margin consulting services to high-margin, recurring Pega Cloud subscriptions.
INVESTMENT THESIS
Evidence suggests a turnaround is possible but not yet visible, hinging entirely on a new sales strategy.
- The strategic Pega Cloud business continues to grow, with ACV up 20% year-over-year.
- Pega Cloud backlog increased 25% in constant currency, providing future revenue visibility.
- Total backlog of remaining performance obligations grew 15%.
- Management reports entering Q4 with the 'strongest pipeline' it has ever had.
PRIMARY RISK
The company missed all key 2026 guidance metrics amid slowing growth, while a potential $1.36 billion liability from a January 2027 retrial threatens its financial stability.
- Total ACV growth decelerated to 7% in Q3 2026, down from 14% for full-year 2025.
- Management lowered full-year 2026 ACV growth expectations to below 10%, from 15% initially.
- Operating margin compressed to 12.3% from 17.5% a year ago as expenses outpaced revenue.
- A retrial where the opposing party seeks up to $1.36 billion in damages is set for January 2027.
| KPI | Status | Rationale |
|---|---|---|
| Annual Contract Value (ACV) Growth | 7% constant currency growth in Q3 2026 - Decelerating | The year-over-year growth rate for total ACV has slowed significantly through 2026. Management attributes this to execution challenges and a more complex buying environment, with clients subjecting large technology investments to greater scrutiny. While sequential net new ACV additions improved in Q3, it was not enough to reverse the broader deceleration in the year-over-year growth rate. |
| Remaining Performance Obligations (Backlog) Growth | 15% constant currency growth as of September 30, 2026 - Decelerating | While the overall backlog growth has slowed from the prior year, the Pega Cloud component remains strong, with management reporting on the latest earnings call that Pega Cloud backlog increased 25% year-over-year in constant currency. This indicates the strategic part of the business continues to build future revenue. |
| Total Annual Contract Value (ACV) | (as of September 30, 2026) | Represents the annualized value of active contracts and is considered the best indicator of underlying business momentum and future recurring revenue. |
| Pega Cloud ACV Growth (Constant Currency) | 20% (Year-over-year as of September 30, 2026) | Measures the growth of the company's strategic cloud hosting business, which is the primary engine for overall growth. |
Cloud Momentum vs. Litigation and Execution Drag
BULL VIEW
Bulls focus on 20% Pega Cloud ACV growth and 25% cloud backlog growth, seeing a deeply undervalued asset temporarily obscured by manageable execution issues and legal noise.
CORE TENSION
Can 20% Pega Cloud growth offset decelerating total ACV and a legal risk that the market has punished with a -16% post-earnings drop?
PREVAILING SENTIMENT
The latest evidence favors caution. Management lowered its full-year ACV growth outlook to below 10% and acknowledged that 'execution has not kept up.'
BEAR VIEW
Bears see a company that has missed all 2026 targets, with decelerating ACV growth to 7%, and faces a potentially crippling $1.36 billion legal judgment in January 2027.
| Timeline | Event & Metric To Watch |
|---|---|
November 6 and December 18, 2026 | Appian Litigation Pre-Trial Rulings Watch: Court orders on motions that could limit evidence or arguments, altering the perceived risk of the January trial. |
November 6 and December 18, 2026 | Appian Litigation Pretrial Hearing Watch: A pretrial motion hearing is scheduled in the Appian trade secret litigation. |
November 30, 2026 | Defamation Trial Begins Watch: A jury trial is scheduled to begin in the defamation litigation between Pegasystems and Appian. |
12/1/2026 | Peer Earnings Confirm Market Slowdown Watch: Commentary from Salesforce (CRM) and Oracle (ORCL) on enterprise demand, deal scrutiny, and sales cycle elongation. |
12/8/2026 | Oracle Earnings Report Watch: Peer Oracle (ORCL) is scheduled to report earnings. |
January 11, 2027 | Appian Retrial Catalyst Watch: Trial commencement, daily headlines from the proceedings, and any potential settlement announcements before or during the trial. |
January 11, 2027 | Appian Retrial Commences Watch: A retrial is scheduled to commence in the Appian trade secret litigation. |
1/26/2027 | ServiceNow and Microsoft Earnings Watch: Peers ServiceNow (NOW) and Microsoft (MSFT) are scheduled to report earnings. |
February 4, 2027 | Credit Facility Expiration Watch: The company's senior secured revolving credit facility is scheduled to expire. |
2/8/2027 | Disappointing Q4 Results and Guidance Watch: Full-year 2026 ACV growth results and initial full-year 2027 guidance for ACV, revenue, and free cash flow. |
| Date | Event | Stock Impact |
|---|---|---|
2026-10-21 | Q3 Results and Go-To-Market Shakeup Details: The company reported Q3 results with latest-quarter revenue growth of 3.1%. Management announced operational changes and a new regional go-to-market model to improve execution. | -2.9% $36.23 -> $35.18 |
2026-08-14 | Special Dividend from Litigation Settlement Details: The company announced a special cash dividend of $7 million, or approximately $0.083 per share, related to the settlement of a derivative lawsuit. | -4.6% $33.37 -> $31.85 |
2026-08-06 | Forrester Names Pega AI Leader Details: An independent research firm named Pega a Leader in its AI Platforms report for Q3 2026, citing its comprehensive platform. | +2.9% $31.70 -> $32.63 |
2026-07-22 | Q2 Earnings Miss and Stock Plunge Details: The company reported Q2 results and discussed market disruption and buyer confusion. The two-day stock reaction was -16.0%. | -15.9% $30.83 -> $25.92 |
2026-06-08 | PegaWorld AI Strategy Unveiled Details: At its annual conference, the company announced clients could run agentic workflows without paying per token, shifting heavy AI reasoning to design time. | -1.6% $34.56 -> $34.01 |
2026-04-22 | Q1 Earnings Miss and Stock Drop Details: The company reported weaker than expected Q1 results. The two-day stock reaction around the earnings call was -10.0%. | -10.3% $39.12 -> $35.09 |
Position Sizing
4% - 6%
NORMAL POSITION
Sizing is volatility-based: PEGA trades at roughly 44% annualized realized (three-month) volatility versus about 11% for the S&P 500 (4.0x the market). A 4% - 6% position keeps a single-name swing of that size within a diversified portfolio's risk budget.
Diversification Alternatives
NOW - ServiceNow
High-Growth AI PlatformServiceNow demonstrates stronger growth momentum, reporting 21.5% constant currency growth in its remaining performance obligations and positioning itself as the 'AI control tower for the enterprise'.
CRM - Salesforce
Scale and ProfitabilityWith revenue 25.1 times larger than Pegasystems and a 21.5% operating margin, Salesforce offers exposure to enterprise software with greater scale, market power, and demonstrated profitability.
Pegasystems is a bet on enterprises choosing governed, predictable, and cost-effective AI over the 'chaotic' and expensive token-based models of competitors.
In a confused AI market, Pega offers a 'recipe' for enterprise AI, not just 'ingredients'. Its Blueprint tool uses AI at design time to reimagine workflows, while its Infinity platform executes them predictably at scale with no variable token costs. This 'harness for AI' approach is designed to appeal to large, regulated organizations that prioritize governance, reliability, and cost control over pure experimentation.
Announcements of large enterprise wins for legacy modernization projects, evidence of accelerated sales cycles from the new go-to-market model, and strong growth in partner-led implementations.
Evidence of customers choosing to build their own AI workflow systems, major competitors successfully launching similar 'governed AI' platforms with predictable pricing, or a significant negative outcome in the Appian litigation.
General market commentary about the 'SaaSpocalypse' or the death of enterprise software, and short-term stock price volatility unrelated to fundamental execution.
Repricing Catalyst
Successful execution of the recently implemented go-to-market changes, leading to a re-acceleration of ACV growth and demonstrating that its differentiated AI strategy can capture market share despite buyer uncertainty.
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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