Pegasystems

PEGA

Software - Application · Technology

Also trades as: 0KGS.L

Price

$33.56

-0.05 (-0.15%)

Market Cap

$5.52B

Exchange

NASDAQ

Winston Score

Winston is curious

A decent business — some strong pillars, some weaker.

Data as of Aug 23, 2026 · filings through Jun 30, 2026

How the score breaks down

Quality

Strong

Growth

Good

Cash Flow

Exceptional

Stability

Good

Valuation

Strong

Dividends

Weak

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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.

Growth Profile

For growth stock investors

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

↓ Declining

Insider ownership declining — could be dilution or selling

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.

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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

N/A

Data not available

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)

17.7x

Fair value — P/E 17.7

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

+4.1

GROWING

Earnings expected to grow meaningfully — cheaper on forward P/E (17.7 → 13.5)

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Dividends

Dividend

Dividend Yield

0.36%

Small dividend — 0.36% yield

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

Dividend record

Dividend Growth

+0.0%

Dividend flat

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