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Pegasystems (PEGA) Dips More Than Broader Markets: What You Should Know

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Pegasystems (PEGA - Free Report) closed at $70.01 in the latest trading session, marking a -0.99% move from the prior day. This change lagged the S&P 500's daily loss of 0.23%. Elsewhere, the Dow lost 0.01%, while the tech-heavy Nasdaq lost 0.05%.

Prior to today's trading, shares of the business software company had gained 8.92% over the past month. This has outpaced the Computer and Technology sector's gain of 4.13% and the S&P 500's gain of 3.16% in that time.

Investors will be hoping for strength from PEGA as it approaches its next earnings release, which is expected to be May 7, 2019. In that report, analysts expect PEGA to post earnings of $0.11 per share. This would mark a year-over-year decline of 54.17%. Our most recent consensus estimate is calling for quarterly revenue of $236.35 million, up 0.5% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $0.47 per share and revenue of $966.29 million, which would represent changes of -26.56% and +8.38%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for PEGA. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. PEGA is currently a Zacks Rank #1 (Strong Buy).

Investors should also note PEGA's current valuation metrics, including its Forward P/E ratio of 149.39. This represents a premium compared to its industry's average Forward P/E of 31.36.

Investors should also note that PEGA has a PEG ratio of 18.67 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Computer - Software industry currently had an average PEG ratio of 2.19 as of yesterday's close.

The Computer - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 12, putting it in the top 5% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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