Bullish indicating open at $55-$60, IPO prices at $37
On Tuesday, Needham analysts raised the price target for Pegasystems stock (NASDAQ: NASDAQ:PEGA) to $112 from $101, maintaining a Buy rating. This decision follows several announcements made during Pegasystems’ PegaWorld conference and Investor Day held on Monday. According to InvestingPro data, analyst targets for PEGA now range from $78.12 to $125, with the stock currently trading at $100.49.
At the event, Pegasystems unveiled new AI-related products and adjusted its fiscal year 2025 revenue guidance by approximately 6% to $1.7 billion, up from $1.6 billion. This revision reflects a year-over-year growth of 13.6%, attributed largely to a revenue beat in the first quarter and increased confidence in the company’s pipeline, despite broader economic challenges. The company has demonstrated strong execution with impressive gross profit margins of 75.74% and current revenue growth of 14.29%, as reported by InvestingPro.
Pegasystems typically provides only annual guidance without quarterly updates. The improved outlook has prompted Needham analysts to slightly increase their forecasts, citing the growing momentum of Pegasystems’ Blueprint initiative and successful partnerships with Global System Integrators (GSI).
The analysts expect these factors to drive more workloads over the coming year, contributing to the decision to adjust the price target. Pegasystems’ strategic moves in the AI sector and its positive revenue outlook have bolstered confidence in its future performance.
In other recent news, Pegasystems has updated its financial projections, raising both revenue and earnings per share expectations based on strong first-quarter performance. This update was announced during the company’s annual PegaWorld conference, where Pegasystems also revealed enhancements to its Gen AI Blueprint capabilities, aimed at modernizing legacy technology processes. The company has expanded its target market significantly, now including over 10,000 companies, up from 1,000, and is projecting its total addressable market to grow substantially by 2029. Analysts from Citi, JPMorgan, and William Blair have maintained their positive ratings on Pegasystems, citing confidence in the Blueprint strategy and the potential for increased free cash flow. DA Davidson has raised the stock price target to $95, while Citizens JMP increased it to $125, reflecting optimism based on insights from the conference. Pegasystems’ management has set ambitious goals for sustainable growth, including a target of $700 million in free cash flow over the next three to five years. The company’s strategy also includes new partnerships and pricing strategies to capitalize on the expanded market. Pegasystems’ recent innovations and strategic updates continue to draw positive attention from analysts and investors alike.
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