Yahoo Finance Pegasystems Inc. Released Earnings Last Week And Analysts Lifted Their Price Target To US$106
It's been a pretty great week for Pegasystems Inc. (NASDAQ:PEGA) shareholders, with its shares surging 12% to US$98.88 in the week since its latest annual results. It looks like the results were pretty good overall. While revenues of US$911m were in line with analyst predictions, statutory losses were much smaller than expected, with Pegasystems losing US$1.14 per share. This is an important time for investors, as they can track a company's performance in its report, look at what top analysts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
View our latest analysis for Pegasystems
Taking into account the latest results, the current consensus from Pegasystems's seven analysts is for revenues of US$1.09b in 2020, which would reflect a decent 20% increase on its sales over the past 12 months. Statutory losses are forecast to balloon 31% to US$0.80 per share. Yet prior to the latest earnings, analysts had been forecasting revenues of US$1.04b and losses of US$0.64 per share in 2020. While next year's revenue estimates increased, there was also a large cut to EPS expectations, suggesting the consensus has a bit of a mixed view of these results.
The average analyst price target rose 12% to US$106, even though analysts have been updating their forecasts to show higher revenues and higher forecast losses. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Pegasystems at US$120 per share, while the most bearish prices it at US$92.00. Still, with such a tight range of estimates, it suggests analysts have a pretty good idea of what they think the company is worth.
It can also be useful to step back and take a broader view of how analyst forecasts compare to Pegasystems's performance in recent years. It's clear from the latest estimates that Pegasystems's rate of growth is expected to accelerate meaningfully, with forecast 20% revenue growth noticeably faster than its historical growth of 8.4%p.a. over the past five years. Compare this with other companies in the same market, which are forecast to grow their revenue 12% next year. It seems obvious that, while the growth outlook is brighter than the recent past, analysts also expect Pegasystems to grow faster than the wider market.
The Bottom Line
Pleasantly, analysts also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider market. There was also a nice increase in the price target, with analysts feeling that the intrinsic value of the business is improving.
With that in mind, we wouldn't be too quick to come to a conclusion on Pegasystems. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Pegasystems analysts - going out to 2024, and you can see them free on our platform here.
We also provide an overview of the Pegasystems Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
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