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Pegasystems (PEGA) Moves 3.7% Higher: Will This Strength Last?

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Pegasystems (PEGA - Free Report) shares rallied 3.7% in the last trading session to close at $119. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 19.7% loss over the past four weeks.

The increase in share price can be attributed to improving top-line growth prospects of Pegasystems, driven by the ongoing digital transformation. The company is benefiting from strong cloud growth. Markedly, in 2020, Pega Cloud annual contract value grew more than 50% year over year to $267 million. Moreover, Pega Cloud backlog increased more than 40% year over year.

Further, Pegasystems’ recent hiring of John Higgins, Judy Buchholz and Joaquin Reixa reflects plans to strengthen its sales and service delivery. Markedly, John Higgins has been appointed as head of global consulting and client success. Judy Buchholz has been appointed as head of commercial sales for the Americas, while Joaquin Reixa has joined as head of sales for EMEA.

Price and Consensus

Price Consensus Chart for Pegasystems

This business software company is expected to post quarterly earnings of $0.02 per share in its upcoming report, which represents a year-over-year change of -60%. Revenues are expected to be $294.5 million, up 10.9% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Pegasystems, the consensus EPS estimate for the quarter has been revised 20% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on PEGA going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

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