Bullish indicating open at $55-$60, IPO prices at $37
On Tuesday, Citi analysts reaffirmed a Buy rating and maintained a $116.00 price target on Pegasystems stock (NASDAQ: NASDAQ:PEGA), representing potential upside from the current price of $96.96. According to InvestingPro data, analyst targets for PEGA range from $78.12 to $125.00, with a strong consensus recommendation of 1.79. The decision follows insights gained from Pegasystems’ annual user conference and investor session held recently in Las Vegas.
The analysts expressed increased clarity and confidence in Pegasystems’ Blueprint/GenAI strategy, which aims to drive legacy application transformation and generate new business through partnerships. This confidence appears well-founded, as InvestingPro data shows impressive revenue growth of 14.29% in the last twelve months, supported by robust gross profit margins of 75.74%. Conversations with customers and partners highlighted a growing willingness to adopt the Blueprint strategy, indicating increased interest compared to the previous year.
During the investor session, Pegasystems outlined plans to significantly increase free cash flow (FCF), aiming to double it from 2024 to 2028, reaching $700 million under a consistent low-teen annual contract value (ACV) growth framework. This marks an increase from the prior $500 million target for 2027.
Additionally, Pegasystems updated its calendar year 2025 guidance, raising revenue expectations by $100 million and earnings per share (EPS) by $0.84, reflecting strong first-quarter performance. However, the company did not alter its ACV or FCF projections.
Citi analysts reiterated their Buy rating with heightened confidence in the adoption of the Blueprint strategy and the potential for increased FCF, underscoring the positive outlook for Pegasystems’ growth trajectory.
In other recent news, Pegasystems has reported several developments of interest to investors. Citizens JMP analysts have raised the price target for Pegasystems from $110 to $125, maintaining a Market Outperform rating after attending the PegaWorld 2025 conference. This suggests a positive outlook for the company, reflecting its potential to outperform the market. At the same conference, Pegasystems introduced enhancements to its Pega Blueprint capabilities, aimed at modernizing legacy systems with advanced AI features. The company also unveiled the Pega Agentic Process Fabric, a service designed to improve automation by orchestrating AI agents and systems. Additionally, Pegasystems announced new AI enhancements to its Pega App Studio, which are expected to streamline application development. Furthermore, Pegasystems is set to join the S&P MidCap 400, replacing Nordstrom (NYSE:JWN), which is being acquired. This inclusion is likely to increase the company’s visibility and attract interest from index funds. These recent developments highlight Pegasystems’ ongoing efforts to innovate and expand its market presence.
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