Pegasystems Inc. Common Stock (PEGA)

FairStock Score: 55/100 — STEADY

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

As a Buffett/Graham-style investor, I start with the business and the price. Pegasystems sells enterprise software for customer decisioning and service. The financials are mixed. In fiscal Q2 2026, the quarter ended 2026-06-30, revenue was $420.7M and net income was $13.3M, or $0.08 diluted EPS. That compares with fiscal Q2 2025 revenue of $384.5M and net income of $30.1M, or $0.17 diluted EPS, so sales rose but profit fell sharply. For FY2025, revenue was $1.7B and net income was $393.4M, or $2.13 diluted EPS. FY2024 was $1.5B revenue and $99.2M net income, so FY2025 was much stronger. Trailing free cash flow is $492.5M, an 8.7% FCF yield on the $5.7B market cap. Debt is low (D/E 0.13), Altman Z-score is 5.01, and ROE is 54.69%. But ROCE is only 9.07%, P/B is 10.08, and the Graham Number is $11.62 versus the $34.38 close, a -195.87% margin of safety. The P/E of 19.53 and EV/EBITDA of 25.87 are not Graham cheap. FairStock calls it a TURNAROUND, and Piotroski is 5/9. I see a decent cash-generating enterprise software firm with a narrowish moat, but the latest margin compression and rich asset-based valuation mean the price already assumes recovery. I would want evidence that profit decline is temporary before calling it a bargain.

In plain English: Pegasystems sells software that helps large companies decide how to treat customers and handle service. The business is profitable and produces cash, but its latest profit was much lower than a year earlier, and the stock price is high compared with the company's accounting value and a conservative value estimate. So it does not look like a bargain by old-fashioned value tests.

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Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q2 2026 10-Q (period ended 2026-06-30) · fiscal Q1 2026 10-Q (period ended 2026-03-31) · fiscal Q3 2025 10-Q (period ended 2025-09-30) · fiscal Q2 2025 10-Q (period ended 2025-06-30) · FY2025 10-K (period ended 2025-12-31) · FY2024 10-K (period ended 2024-12-31) · FY2023 10-K (period ended 2023-12-31)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer