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Pegasystems Inc PEGA

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Model Transition Update at Investor Briefing Inspires Confidence; FVE Up to $127

Dan Romanoff, CPA Equity Analyst

Analyst Note

| Dan Romanoff, CPA |

Narrow-moat Pegasystems held an investor briefing where the discussion ranged from pending product enhancements, to strategy, to progress on its transition to the cloud.  The company has developed momentum with upside to investor expectations for the second quarter and surpassing the halfway point on its path to converting to a cloud model, which we think should continue in the coming quarters. Today’s update gives us more confidence in the medium outlook and we therefore are raising our fair value estimate to $127 per share, from $113. Despite our higher valuation, we see shares as fairly valued. Still, we think a large market combined with improving metrics will be inviting to investors, especially since the company trades a discount to the average software company on a price/sales multiple basis.

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Company Profile

Business Description

Founded in 1983, Pegasystems provides a suite of solutions for customer engagement and business process automation. The company’s key offering is the Pega Infinity platform, which combines business process automation with customer engagement applications.

One Rogers Street
Cambridge, MA, 02142-1209
T +1 617 374-9600
Sector Technology
Industry Software - Application
Most Recent Earnings Jun 30, 2020
Fiscal Year End Dec 31, 2020
Stock Type Distressed
Employees 5,155