PEGA Rises 5% in a Month: Is the Stock a Must Have for Your Portfolio?

Pegasystems PEGA shares have climbed 5.4% in a month, underperforming the broader Zacks Computer and Technology sector and Zacks Computer Software industry’s appreciation of 8.8% and 12.4%, respectively.

PEGA shares are suffering from stiff competition in the enterprise automation space from the likes of ServiceNow NOW, Oracle ORCL and Microsoft MSFT. Over the past month, Pegasystems shares have underperformed Microsoft, ServiceNow and Oracle’s appreciation of 15.1%, 11.3% and 7.1%, respectively.

Can a Strong Portfolio Aid PEGA’s Prospects? 

Pegasystems is benefiting from strong demand for its GenAI Blueprint solution. Blueprint is an agent that leverages AI to combine the company’s best practices as well as clients’ and partners’ knowledge to design enterprise workflow applications. Pega Blueprint is faster as compared with the traditional app design process. PEGA’s Gen AI blueprint is being widely adopted by tech giants like Accenture, Cognizant, Infosys, Capgemini, TCS and Wipro for client engagements.

PEGA’s initiative to add new features strengthens Blueprint’s capability. Users can now interact with Blueprint workflows or even chat with them in phone calls. Being an agentic AI, Blueprint can create a new account or fix a bad charge on users’ statements. Pegasystems notes that more than 1000 new Blueprints are now being created weekly using GenAI Blueprint. The launch of the Blueprint for Government Efficiency Toolkit is a noteworthy development in this regard.

Pegasystems Inc. Price and Consensus

Pegasystems Inc. price-consensus-chart | Pegasystems Inc. Quote

PEGA’s Customer Decision Hub (CDH), which uses statistical AI and predictive analytics to enable personalized interactions, has been a key catalyst. With the help of CDH, enterprises are able to deliver context-based customer interactions and are generating automatic next-best actions across channels. As enterprises remain keen on adopting AI, a deeper penetration of the company’s products is expected to drive its top-line growth.

In first-quarter 2025, PEGA saw a 13% year-over-year rise in annual contract value (ACV) to $1.45 billion. It noted 23% year-on-year growth in Cloud ACV to $701 million. Revenues for the first quarter of 2025 increased 44% year over year to $475.6 million, beating the Zacks Consensus Estimate by 33.6%.

PEGA’s Earnings Estimates Trend Shows Positive Movement

The Zacks Consensus Estimate for 2025 earnings is currently pegged at $3.26 per share, up 5.2% over the past 60 days and indicating 7.59% growth from the figure reported in 2024.

The consensus mark for 2025 revenues is pegged at $1.61 billion, indicating 7.35% growth over 2024’s reported figure.

Conclusion

Although PEGA shares have underperformed industry and peers in the past month, we believe an innovative portfolio makes the stock attractive for investors in the near term.

Pegasystems currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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