Citizens reaffirms Pegasystems stock rating on strong Q3 results

Investing.com - Citizens has reiterated its Market Outperform rating and $78.00 price target on Pegasystems (NASDAQ:PEGA), a company with a market capitalization of $9.76 billion, following the company’s third-quarter 2025 earnings report released Tuesday. According to InvestingPro data, the stock is trading near its 52-week high of $61.00, reflecting strong market confidence.

Pegasystems reported non-GAAP earnings per share of $0.34, significantly exceeding the consensus estimate of $0.20. The company achieved an operating margin of 15.2%, outperforming the expected 12.6%. InvestingPro analysis shows the company maintains a GREAT financial health score of 3.26, with strong profitability metrics and cash flow generation capabilities.

Revenue reached $381 million, representing 17% year-over-year growth and surpassing the consensus forecast of $345 million. Total Annual Contract Value (ACV) grew to $1.557 billion, up 14% compared to the same period last year.

Pega Cloud ACV increased by 27% year-over-year to $815 million, though this marked a slight deceleration from the 28% growth recorded in the previous quarter. The consensus estimate for Pega Cloud ACV had been $763 million.

The company generated free cash flow of $52.3 million, substantially higher than the consensus projection of $36.4 million. Pegasystems plans to hold its earnings call Wednesday morning at 8 a.m. ET.

In other recent news, Pegasystems Inc. reported third-quarter earnings that exceeded analyst expectations, highlighting the company’s strong performance. The enterprise software company posted adjusted earnings of $0.30 per share, surpassing the analyst consensus of $0.20. Revenue for the quarter reached $381.35 million, which exceeded expectations of $351.54 million and marked a 17% increase from the same quarter last year. This growth was driven by a 27% rise in Pega Cloud’s annual contract value and ongoing momentum from its AI strategy. These results reflect Pegasystems’ ability to capitalize on its cloud and AI offerings. The company’s strong performance in these areas has been a key factor in its recent success. While Pegasystems’ shares rose slightly following the announcement, the focus remains on its financial results and strategic growth.

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