Pegasystems Inc

PEGA: XNAS (USA)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	$93.00	Ptr	Lxhnzcrj

Pegasystems Earnings: Pega Cloud Adoption Is Good, While 2024 Is More Back-End-Loaded

Dan Romanoff , Verushka Shetty

Apr 25, 2024

We maintain our $65 fair value estimate for no-moat Pegasystems after the firm reported first-quarter results below both our own expectations and FactSet consensus. While weak term license sales weighed on top-line growth in the quarter, we are encouraged with the strong momentum in Pega Cloud. We think the firm's artificial intelligence investments will enable long-term growth by creating more use-cases and thereby greater customer adoption for the Pega platform. Management made no changes to its 2024 outlook, leaving our near-term estimates intact. We see some upside to shares but continue to prefer our wide-moat names with less controversy.

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