Pegasystems (NASDAQ:PEGA) Shares Gap Down - What's Next?

Key Points

• Pegasystems shares opened lower, falling from a prior close of $36.84 to $34.95 before trading around $35.49. The stock has a market capitalization of approximately $5.94 billion.
• Analyst sentiment is mixed, with five Buy, seven Hold and one Sell rating; the consensus rating is Hold with an average price target of $47.40. Recent analysts have lowered targets, including Loop Capital’s reduction to $25.
• The company’s latest quarterly results missed expectations, reporting $0.35 in EPS versus $0.43 expected and revenue of $420.72 million versus $427.38 million estimated. Pegasystems declared a quarterly dividend of $0.03, while company insiders have sold approximately $1.81 million of stock over the past 90 days.

Pegasystems Inc. (NASDAQ:PEGA - Get Free Report) shares gapped down before the market opened on Thursday . The stock had previously closed at $36.84, but opened at $34.95. Pegasystems shares last traded at $35.4870, with a volume of 283,850 shares changing hands.

Wall Street Analyst Weigh In

PEGA has been the subject of several research analyst reports. DA Davidson set a $32.00 price objective on Pegasystems and gave the stock a "buy" rating in a report on Friday, July 24th. Loop Capital downgraded Pegasystems from a "buy" rating to a "hold" rating and decreased their target price for the company from $55.00 to $25.00 in a report on Thursday, July 23rd. Rosenblatt Securities dropped their price target on Pegasystems from $58.00 to $47.00 and set a "buy" rating for the company in a research note on Thursday, July 23rd. Barclays reaffirmed an "overweight" rating and issued a $39.00 price target (down from $48.00) on shares of Pegasystems in a research note on Thursday, July 23rd. Finally, Zacks Research cut shares of Pegasystems from a "hold" rating to a "strong sell" rating in a report on Tuesday, August 25th. Five investment analysts have rated the stock with a Buy rating, seven have given a Hold rating and one has given a Sell rating to the stock. According to data from MarketBeat, the company has an average rating of "Hold" and an average price target of $47.40.

Pegasystems Trading Down 1.9%

The stock's fifty day moving average price is $33.10 and its 200 day moving average price is $35.91. The stock has a market cap of $5.94 billion, a P/E ratio of 20.42 and a beta of 0.89.

Pegasystems (NASDAQ:PEGA - Get Free Report) last issued its quarterly earnings results on Tuesday, July 21st. The technology company reported $0.35 EPS for the quarter, missing analysts' consensus estimates of $0.43 by ($0.08). Pegasystems had a return on equity of 32.21% and a net margin of 18.66%.The company had revenue of $420.72 million during the quarter, compared to the consensus estimate of $427.38 million. During the same period in the prior year, the firm earned $0.28 earnings per share. The business's revenue for the quarter was up 9.4% compared to the same quarter last year. As a group, sell-side analysts forecast that Pegasystems Inc. will post 1.66 earnings per share for the current year.

Pegasystems Announces Dividend

The company also recently declared a quarterly dividend, which will be paid on Thursday, October 15th. Investors of record on Thursday, October 1st will be paid a $0.03 dividend. The ex-dividend date is Thursday, October 1st. This represents a $0.12 dividend on an annualized basis and a yield of 0.3%. Pegasystems's payout ratio is presently 6.78%.

Insider Activity at Pegasystems

In related news, CAO Efstathios A. Kouninis sold 1,063 shares of the firm's stock in a transaction that occurred on Thursday, September 3rd. The shares were sold at an average price of $38.75, for a total transaction of $41,191.25. Following the completion of the sale, the chief accounting officer owned 1,164 shares of the company's stock, valued at $45,105. This trade represents a 47.73% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. Also, CFO Kenneth Stillwell sold 39,627 shares of the business's stock in a transaction that occurred on Friday, September 11th. The stock was sold at an average price of $35.77, for a total transaction of $1,417,457.79. Following the completion of the transaction, the chief financial officer owned 95,225 shares of the company's stock, valued at approximately $3,406,198.25. The trade was a 29.39% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. In the last ninety days, insiders have sold 50,690 shares of company stock valued at $1,812,829. 48.40% of the stock is owned by insiders.

Institutional Inflows and Outflows

Several hedge funds have recently modified their holdings of PEGA. BlackRock Inc. bought a new stake in Pegasystems in the 2nd quarter worth about $286,923,000. North Peak Capital Management LLC grew its stake in shares of Pegasystems by 2.3% in the fourth quarter. North Peak Capital Management LLC now owns 2,400,065 shares of the technology company's stock worth $143,332,000 after acquiring an additional 53,564 shares during the period. Geode Capital Management LLC grew its stake in shares of Pegasystems by 26.6% in the fourth quarter. Geode Capital Management LLC now owns 2,344,266 shares of the technology company's stock worth $140,020,000 after acquiring an additional 492,760 shares during the period. First Trust Advisors LP raised its holdings in shares of Pegasystems by 44.4% during the first quarter. First Trust Advisors LP now owns 2,048,599 shares of the technology company's stock valued at $87,188,000 after purchasing an additional 630,023 shares during the last quarter. Finally, Fisher Asset Management LLC boosted its holdings in Pegasystems by 3.0% in the fourth quarter. Fisher Asset Management LLC now owns 1,170,377 shares of the technology company's stock worth $69,895,000 after purchasing an additional 33,643 shares during the last quarter. Hedge funds and other institutional investors own 46.89% of the company's stock.

About Pegasystems

Pegasystems Inc develops enterprise software for customer engagement, workflow automation and business process management. Its solutions help organizations manage customer service, sales, marketing, operations and back-office processes across digital and traditional channels.

The company's product portfolio includes Pega Platform, a low-code application development and automation platform; Pega Customer Service and Pega Sales; Pega Customer Decision Hub for real-time, personalized customer engagement; and tools for case management, robotic process automation and artificial intelligence.

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