Rosenblatt Reiterates Buy Rating on Pegasystems (NASDAQ:) with $90 Price Target Ahead of Q3 Results - InvestingPro Insights
Rosenblatt has reaffirmed its positive outlook on Pegasystems (NASDAQ:), maintaining a Buy rating and setting a price target of $90.00. The firm's optimism is based on the upcoming release of the company's third-quarter results for the period ending September 30th, expected to be disclosed on October 23rd after the market closes.
Rosenblatt has adjusted its forecasts for Pegasystems for fiscal years 2024 and 2025, citing a steady process automation application spending environment in North America as a key driver. The firm highlights Pegasystems' ongoing Digital Transformation programs among existing customers who have yet to fully utilize the company's offerings as a growth catalyst.
The transition to Pega Cloud and the increase in the cloud segment's Annual Contract Value (ACV) by 19% year-over-year in the second quarter, now representing 45% of Total ACV, are significant factors in Pegasystems' performance. Additionally, the company's workflow automation initiatives, supported by the growing traction with Pega GenAI Blueprint, are expected to contribute to its success.
In recent news, Pegasystems Inc. reported strong financial results, with a 13% year-over-year increase in ACV exceeding $1.3 billion and free cash flow reaching $218 million, 62% of the $350 million target for 2024. The Virginia Court of Appeals overturning a $2 billion verdict against Pegasystems has resulted in analyst upgrades, with Loop Capital, JMP Securities, JPMorgan, and RBC Capital all raising their price targets for the company.
Market analysis shows upgrades from William Blair, Loop Capital, JMP Securities, and JPMorgan, reflecting the positive sentiment towards Pegasystems. The company's revenue growth of 15.43% over the last twelve months and 17.73% quarterly growth in Q2 2024 align well with Rosenblatt's optimistic view.
InvestingPro Tips suggest that Pegasystems may be undervalued based on its low P/E ratio relative to near-term earnings growth, with a PEG ratio of 0.24. The company's strong financial health, including 19 consecutive years of dividend payments and a high return of 63.59% over the last year, supports its solid market performance.
For a more in-depth analysis, InvestingPro offers 13 additional tips on Pegasystems to help investors gain a better understanding of the company's financial position and market potential.
In conclusion, Pegasystems' positive outlook, strong financial metrics, and market performance make it an attractive investment opportunity. Investors should consider the company's growth prospects, market position, and analyst recommendations before making any investment decisions.