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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Pegasystems Inc. (XNAS:PEGA) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
PEGA
Name:
PEGASYSTEMS INC. (XNAS:PEGA)
Sector:
8.46M
Industry:
Software�Application
CEO:
Mr. Alan Trefler
Total Employees:
6,133
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -105.21% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF PEGASYSTEMS INC.(PEGA) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND SOFTWARE�APPLICATION INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
35.66
One Month Price Target:
$35.85
Six Month Price Target :
$36.81
Likely Price in One Year's Time:
Ticker:
$37.96
Likely Trading Range Today Under (Normal Volatility)
$35.46
Price Upper limit ($) :
$35.82
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$33.43
This week:
$30.68
This month :
$25.7
Other Primary facts
Market Cap:
2.90B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
81.95M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
10.9%
-20.75%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$46.01
$41.36
$25.31
$29.96
Medium risk (<10%) entry points
Buy Call
Sell Call
$39.84
Buy Put:
Sell Put:
$38.85
$31.47
$32.47
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
PEGA
Sharpe Ratio:
-2.38%
Comparison:
PEGA, is amongst the top 40% stocks with lowest risk-adjusted returns
Sharpe ratio is -346.85% lower than the industry
& is -204.39% lower than the market/S&P 500 average
Average Returns/Yield of
PEGA
Daily returns:
-0.06%
Weekly returns:
-0.31%
Monthly returns:
-1.26%
Yearly returns:
9.94%
Comparison of returns:
Average annual returns/yield (last 3 years) is -251.64% below industry average
Classification:
PEGA, is amongst the top 40% lowest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.25
Statistical test of Returns:
PEGA has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.01%
Weekly Volatility:
6.73%
Monthly Volatility:
13.46%
Yearly Volatility:
46.64%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
2.01%
Volatility in last five trading days has been -33.20% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-6.25%
Weekly VaR:
-13.97%
Monthly VaR:
-27.93%
How Much Can the price of
PEGA
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-25%
Worst case (decline):
>85%
This translates to price declining to:
$26.59
This translates to price declining to:
$5.35
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
PEGA is a 97.15% riskier investment compared to the market/S&P 500 & is 68.90% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -16.24% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
PEGA
Beta in relation to market/S&P 500--0.96
Expected beta in 1 year's time:
0.59
Expected beta in 3 year's time:
0.834
Unlevered (debt free) Beta:
0.527
Beta in relation to Nasdaq (XNAS):
0.718
Beta in relation to all global stocks::
0.808
Beta Comparison & Analysis
Beta of competitors/peers::
1.157
Beta is -16.98% lower than peers
Average Industry Beta:
1.335
Beta is -28.05% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
-
-
Alpha provided | Alpha Analysis
Alpha provided:
-0.248
Alpha is 950.45% above industry average alpha yield
Alpha is -1579% below the market average
Analysis of Cost of Capital of
PEGA
Equity cost of capital:
0.097
Equity cost of capital is -20.86% below industry mean WACC
Unlevered (without debt) cost of capital:
5.34%
Before-tax cost of debt:
1.17%
After-tax cost of debt:
0.92%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
0.92%
WACC is -35.94% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$15.55
Revenue growth rate per share of (3Y):
7.19
Annual revenue growth rate is -74.19% below industry average
EPS:
-$0.74
Expected Annual growth rate of EPS (3Y):
-12.26%
Expected future EPS growth rate is -144.82% lower than the Software�Application industry
Free cash flow (FCF) per share:
$0.20
Balance sheet equity growth per share: -0.10%
Equity growth rate per share is -106.64% lower than the industry
Debt per share
$8.32
EBITDA per share
-$1.00
Valuation Analysis Today of
PEGA
P/E Ratio:
879.2
P/E Ratio of Competitors/Peers:
43.57
P/E ratio is 1917.98% higher than main peers & is 395.05% higher than the industry
-
PEGA is -127.13% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $12.21
Present value of the expected future dividends only: $1.23
P/S (Price to Sales ratio):
2.29
Price to sales ratio is -80.01% below the industry mean
P/B (Price to book value ratio):
7.19
Price to free cash flow: 174.55
Price to free cash flow ratio is 136.86% higher than the industry
Net income growth rate (3Y):
-673.17%
Net income growth rate is -375.69% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: -4.32%
Dividend yeild: 0.34%
Previous Dividend: $0.03
Previous adjusted dividend: $0.03
Previous Dividend: $0.12
-
-
Average dividend payment (long-term): $0.03
Average dividend increase/decrease (growth rate) % per period: 0.00%
Expected next dividend payment date: 13/10/2022
Expected next dividend record date: 29/09/2022
Expected next dividend declaration date: 14/09/2022
Previous dividend payment date: 15/07/2022
Previous dividend record date: 07/01/2022
Previous dividend declaration date: 16/06/2022
Dividend History:
2022-06-30--$0.03
2021-12-31--$0.03
2021-06-30--$0.03
2022-03-31--$0.03
2021-09-30--$0.03
2021-03-31--$0.03
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
167.74%
Net debt to equity ratio:
136.28%
Debt to assets ratio:
44.34%
Net debt to assets ratio:
36.02%
Debt-to-asset ratio is -19.19% below industry average
Ability to repay debt:
Interest coverage ratio:
-10.23
Interest coverage ratio is -119.25% less than industry average
Looking forward:
Debt growth rate:
18.76%
Annual debt growth is -98% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.442
Statistical significance of correlation:
PEGA has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.503
Stock price is -12.03% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.503
Correlation of price movement with Nasdaq (^IXIC):
-0.067
Covariance of price movement with the market:
-0.117
Kurtosis
6.868
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.997
Returns are left (negative) skewed; mean returns are lower than median and mode returns
Fundamental Analysis & Dupont Analysis of
PEGA
Gross Profit Margin Ratio:
291%
Operating Profit Margin Ratio:
-6.10%
Operating profit margin is -68.18% lower than the industry
Net Profit Margin Ratio:
291%
Effective Tax Rate:
50.95%
Effective tax rate is 93.17% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
-13.97%
Return on equity (ROE) is 6.79% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
-3.69%
Return on assets (ROA) is -3.87% lower than the industry
Financial Leverage:
1.8x
Current Ratio:
1.85
Current ratio is -38.31% below industry average
Cash Conversion Cycle (days):
38.5
Cash conversion cycle is -59.42% below industry average
The remaining useful life of property plant & equipment is: 7.0 years
Stock based compensation to net income ratio:
-49.69%
In-depth Efficiency Analysis
Revenue generated per employee:
207.8K
Each employee generates -40% less revenue than industry average revenue per employee
EBITDA generated per employee:
- 13.4K
Each employee generates -224% less EBITDA than industry average revenue per employee
Profit generated per employee:
- 9.3K
Each employee generates -47% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
1.4K
Each employee generates -118% less free cash flow than industry average revenue per employee
Assets/Capital per employee
119.8K
Each employee generates -118% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 9.98%
Growth rate in R&D investment/expenditure is 552.57% higher than the industry
Competitors/Peer firms of
PEGA
GDS HOLDINGS LIMITED (XNAS:GDS)
FLEX LTD. (XNAS:FLEX)
WIX.COM LTD (XNAS:WIX)
BRKS
MARQETA, INC. (XNAS:MQ)
II-VI INCORPORATED (XNAS:IIVI)
Lumentum Holdings Inc. (XNAS:LITE)
CONCENTRIX CORPORATION (XNAS:CNXC)
SILICON LABORATORIES INC. (XNAS:SLAB)
Current Analyst Ratings
Strong buy�4%
Buy�13%
Hold�4%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
1.27B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
342.11M
932.35M
269.68M
101.00M
740.38M
639.38M
-
1.01B
758.00K
8.02M
25.76M
- 82034.00K
- 77713.00K
- 56802.00K
- 115814.00K
- 59012.00K
- 56802.00K
Statement of Cash Flow
Date:
Period:
4.17M
Differed Income Tax :
- 9295.00K
Stock Based Compensation :
28.23M
Change in Working Capital :
- 55332.00K
Accounts Receivables:
-
Other Working Capital:
-
Other Non-Cash Items:
47.72M
Net Cash Provided by Operating Activities:
15.12M
Investments in PP&E:
- 6657.00K
Net Acquisitions:
-
Purchases of Investments:
- 33690.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
132.77M
199.40M
332.17M
436.68M
-
34.96M
803.81M
115.82M
82.03M
13.09M
-
188.16M
335.58M
734.67M
-
1.54B
18.63M
4.86M
-
290.87M
120.66M
435.02M
682.14M
8.05M
696.80M
-
1.13B
818.00K
273.62M
- 9536.0K
141.77M
March 31, 2022 at 6:00:00 AM
1.35B
406.67M
1.54B
-
686.99M
554.2M
34.27M
-
- 6082.00K
-
-
- 35910.00K
- 2454.00K
2.45M
- 35918.00K
- 310.00K
- 27194.00K
132.77M
159.97M
15.12M
- 6657.00K
8.46M
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
PEGA
2023
2024
2025
2026
2027
$38.08
$40.54
$43.16
$45.94
$48.91