Bullish indicating open at $55-$60, IPO prices at $37
On Wednesday, KeyBanc analysts reaffirmed their Overweight rating and $112.00 price target for Pegasystems stock (NASDAQ: NASDAQ:PEGA), which is currently trading at $100.02. According to InvestingPro data, the stock has delivered an impressive 77.2% return over the past year. The decision followed the firm’s participation in Pegasystems’ annual customer conference, PegaWorld 2025, held earlier this week.
The analysts noted that the Blueprint tool had a significant impact on reducing the early phase of deal cycles. They observed that partners reported two main benefits of Blueprint: a reduction in time and effort required to communicate Pega’s value to customers, and an increase in sales capacity to explore additional opportunities. This efficiency is reflected in the company’s strong financial performance, with a robust gross profit margin of 75.7% and revenue growth of 14.3% in the last twelve months.
KeyBanc analysts expressed confidence that Pegasystems will leverage these efficiency gains and enhance its ability to secure new clients and expand margins over the near to medium term. The discussions with existing customers about potential incremental expansion opportunities were also positive.
The analysts highlighted that the efficiency improvements and broader partner engagement support Pegasystems’ medium-term free cash flow compound annual growth rate (CAGR) of 15-20%. This growth outlook underpinned their decision to maintain the Overweight rating.
The reaffirmed rating and price target reflect the analysts’ increased confidence in Pegasystems’ growth prospects in the near to medium term, following insights gained from the recent event.
In other recent news, Pegasystems has been making notable strides following its PegaWorld conference and Investor Day. The company has adjusted its fiscal year 2025 revenue guidance to $1.7 billion, reflecting a 6% increase from the previous forecast of $1.6 billion, which translates to a year-over-year growth of 13.6%. This revision comes after a strong first-quarter performance and increased confidence in the company’s business pipeline. Analyst firms Rosenblatt and Needham have responded by raising their price targets for Pegasystems stock to $112, maintaining their Buy ratings. DA Davidson also adjusted its price target to $95, though they kept a Neutral rating.
During the conference, Pegasystems introduced new AI-related products and enhancements to its Blueprint offering, which has been pivotal in expanding its target market from 1,000 to over 10,000 companies. William Blair analysts reiterated their Outperform rating, citing Pegasystems’ strategic initiatives and ambitious targets for sustainable growth and cash flow. Additionally, JPMorgan maintained their Overweight rating and $101 price target, highlighting advancements in Pegasystems’ Gen AI Blueprint capabilities, which modernize legacy technology processes. The company’s efforts to forge new partnerships and enhance its sales organization have been emphasized as key components of its growth strategy.
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