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Pegasystems

PEGA
70
Software - Application · Technology
Also trades as: 0KGS.L GBP 0.35 (+1.13%)
Price
$34.35
-0.25 (-0.72%)
Market Cap
$5.65B
Exchange
NASDAQ
Winston Score
70
Winston is happy
A high-quality business with solid fundamentals.
Data as of Oct 8, 2026 · filings through Jun 30, 2026

§How the score breaks down

Quality
Strong
22/30
Growth
Good
10/20
Cash Flow
Exceptional
10/10
Stability
Strong
8/10
Valuation
Strong
7/10
Ownership
Good
10/15
Dividends
Good
3/5

70 of 100 counted points = Winston Score 70.

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Share count rising — dilution

+13.5% over 4y

The company has issued more shares over this period, which dilutes each existing shareholder’s stake.

Diluted shares outstanding: 162.8M (2021) → 184.8M (2025)

§Winston Score History

The full picture

Pegasystems makes software that helps large companies automate their business processes and manage customer service. Its main products include tools for customer relationship management (CRM), intelligent automation, and AI-powered decision-making. Big banks, insurance companies, healthcare organizations, and government agencies are its core customers.

Pegasystems earns most of its revenue through software subscriptions and licenses, with a growing shift toward recurring annual contract revenue. The company operates globally, with significant business in North America and Europe, and generates around $1.4 billion in annual revenue. Its competitive moat comes from deep integration into complex enterprise workflows, which makes it costly and disruptive for customers to switch to a rival platform. The main growth driver is demand for AI-powered automation tools, but the company faces stiff competition from larger players like Salesforce and ServiceNow, which have greater resources and broader market reach.

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Growth Profile

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+9.4% YoY

YoY Growth Rate

Slow revenue growth

EPS Growth

-55.6% YoY

YoY Growth Rate

Earnings declining

R&D Spend

$313M/ year

→ Flat (+5% vs prior year)

17.9% of revenue

In line with sector average (15%)

Steady R&D investment year-over-year

Insider Activity

45.9%ownership

→ Flat

Insider ownership roughly steady over the past year

Cash Position

Cash flow positive

$362M cash & investments

Quarterly Free Cash Flow

↑ Burn rate improving

Company generates more cash than it spends — no dilution risk from fundraising

Growth context

Pegasystems is growing revenue at 9% year-over-year. The Winston Score measures business quality today — these growth metrics show what could matter tomorrow.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

Every number that matters to educated investors.

Each metric is explained in plain language so you know exactly what you're looking at. Start your free trial now.

Quality

Profit per sale
Gross Margin
74.3%
Premium pricing power — 74.3% gross margin
Profit after running costs
Operating Margin
4.0%
Thin — 4.0% operating margin
Return on the money invested
ROCE
30.8%
Exceptional — 30.8% return on capital

ROIC above 25%. Every dollar invested in the business earns more than 25 cents back per year.

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Growth

Sales growth
Sales YoY
+3.6%
Slow sales growth (+3.6% YoY)
Profit growth
EPS YoY
+47.7%
Earnings growing fast (+47.7% YoY)

Earnings growing 25%+ a year. The compounder zone.

How steady the profit is
EPS Consistency
4/8 quarters
Earnings inconsistent quarter-to-quarter

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Cash Flow

Profit that turns into cash
Cash Conversion
158%
Turns 158% of profit into real cash
Spare cash per sale
FCF Margin
28.3%
Converts sales into free cash efficiently (28.3%)

Free cash flow margin above 20%. Out of every $100 in sales, more than $20 is real cash they keep.

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Stability

What it owes vs what it owns
Debt / Equity
0.80
Moderate — manageable debt (0.80)
Covers its interest
Interest Cover
1027.48x
Comfortably covers interest (1027.5x)

Interest coverage above 8. Profits cover interest many times over.

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Valuation

Price vs profit
P/E Ratio (TTM)
18.1x
Fair value — P/E 18.1

P/E in the normal range. Price is roughly $15 for every $1 of yearly profit.

Cheaper or dearer next year
P/E vs Forward
+3.0
GROWING
Earnings expected to grow meaningfully — cheaper on forward P/E (18.1 → 15.1)

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Dividends

Dividend
Dividend Yield
0.92%
Small dividend — 0.92% yield

Modest yield. The bulk of any return needs to come from price appreciation.

Dividend record
Dividend Growth
+44.2%
Dividend growing fast (44.2% YoY)

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