Pegasystems (PEGA) closed at $74.22 in the latest trading session, marking a +0.75% move from the prior day. This change outpaced the S&P 500's 0.22% loss on the day. Meanwhile, the Dow lost 0.22%, and the Nasdaq, a tech-heavy index, lost 0.23%.
Prior to today's trading, shares of the business software company had gained 14.01% over the past month. This has outpaced the Computer and Technology sector's gain of 6.02% and the S&P 500's gain of 4.87% in that time.
PEGA will be looking to display strength as it nears its next earnings release, which is expected to be May 7, 2019. The company is expected to report EPS of $0.11, down 54.17% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $236.35 million, up 0.5% from the prior-year quarter.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $0.47 per share and revenue of $966.29 million. These totals would mark changes of -26.56% and +8.38%, respectively, from last year.
Investors should also note any recent changes to analyst estimates for PEGA. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. PEGA is holding a Zacks Rank of #1 (Strong Buy) right now.
In terms of valuation, PEGA is currently trading at a Forward P/E ratio of 155.64. Its industry sports an average Forward P/E of 31.19, so we one might conclude that PEGA is trading at a premium comparatively.
Meanwhile, PEGA's PEG ratio is currently 19.46. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Computer - Software industry currently had an average PEG ratio of 2.26 as of yesterday's close.
The Computer - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 17, which puts it in the top 7% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
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