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Pegasystems (PEGA) Surges 14.1%: Is This an Indication of Further Gains?

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Pegasystems (PEGA - Free Report) shares rallied 14.1% in the last trading session to close at $55.90. 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 4.2% gain over the past four weeks.

Shares of Pegasystems have largely gained owing to the recent optimism surrounding its growth prospects. The company is likely to benefit from a solid momentum in its cloud business and AI focus. Healthy subscription-based recurring revenues and higher margins from cloud-based services are likely to buoy PEGA’s top-line growth. In addition, continued market traction for Pegasystems Cloud is expected to be a significant tailwind.

The availability of Pega Cloud solutions on Google Cloud (as a fully managed as-a-service offering) makes it one of the few Software-as-a-Service (SaaS) providers to offer a multi-cloud SaaS approach. This offers Pega Cloud clients a highly scalable and secure cloud solution for AI-powered decisioning making and workflow automation solutions.

This business software company is expected to post quarterly earnings of $0.05 per share in its upcoming report, which represents a year-over-year change of +113.2%. Revenues are expected to be $309.61 million, up 12.9% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Pegasystems, the consensus EPS estimate for the quarter has been revised 0.7% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate 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 >>>>

Pegasystems is part of the Zacks Computer - Software industry. PTC Inc. (PTC - Free Report) , another stock in the same industry, closed the last trading session 1.5% lower at $138.25. PTC has returned -0.5% in the past month.

For PTC Inc., the consensus EPS estimate for the upcoming report has changed +0.6% over the past month to $1.01. This represents a change of +4.1% from what the company reported a year ago. PTC Inc. currently has a Zacks Rank of #2 (Buy).

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