Pegasystems stock price target raised to $80 from $70 at RBC Capital

Investing.com - RBC Capital raised its price target on Pegasystems (NASDAQ:PEGA) to $80 from $70 on Wednesday, maintaining an Outperform rating on the software company’s shares. The stock, currently trading at $65.23 with a market cap of $11.1 billion, has shown strong momentum with a 55% gain over the past six months according to InvestingPro data.

The price target increase follows Pegasystems’ third-quarter results, which exceeded consensus estimates across all metrics. The strong performance sent the company’s shares up approximately 11% during intraday trading, while the iShares Expanded Tech-Software Sector ETF (IGV) declined about 1%. InvestingPro analysis shows the company maintaining impressive gross profit margins of 75.5% and revenue growth of 12.5% in the last twelve months.

RBC Capital cited strong sales execution as a key factor potentially driving future upside to estimates. The firm specifically highlighted momentum in Pegasystems’ Blueprint offering, which is helping to accelerate cloud migration among customers.

The investment bank also noted new partner investments as a positive catalyst for the company’s growth prospects. These partnerships appear to be strengthening Pegasystems’ market position in the enterprise software space.

RBC Capital described Pegasystems as having an "underappreciated GenAI strategy" and maintained that the company’s shares offer a "favorable risk/reward" profile for investors.

In other recent news, Pegasystems reported strong third-quarter financial results, exceeding Wall Street expectations. The company achieved earnings per share of $0.30, surpassing the forecast of $0.20, and reported revenue of $381.35 million, beating the expected $351.54 million. This performance was driven by a 17% year-over-year revenue growth, with cloud revenue increasing by 28% to $184.5 million. Pegasystems’ strong results have prompted analyst upgrades and increased price targets. Rosenblatt Securities raised its price target for Pegasystems to $70.00, maintaining a Buy rating, while DA Davidson upgraded the stock from Neutral to Buy and set a new price target of $85.00. These upgrades reflect optimism about Pegasystems’ sustainable Cloud Annual Contract Value growth. The company’s robust performance in the cloud sector is seen as a key driver of its recent success.

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