Pegasystems (NASDAQ:PEGA) Shares Down 4.3% After Earnings Miss

Pegasystems Inc. (NASDAQ:PEGA)’s stock price traded down 4.3% during mid-day trading on Wednesday following a weaker than expected earnings announcement. The stock traded as low as $34.51 and last traded at $34.6540. 1,170,249 shares traded hands during mid-day trading, a decline of 51% from the average daily volume of 2,395,006 shares. The stock had previously closed at $36.23.

The technology company reported $0.35 EPS for the quarter, missing the consensus estimate of $0.45 by ($0.10). Pegasystems had a net margin of 18.66% and a return on equity of 32.21%. The firm had revenue of $393.36 million during the quarter, compared to the consensus estimate of $421.06 million. During the same quarter in the prior year, the business posted $0.30 earnings per share. Pegasystems’s revenue for the quarter was up 3.1% compared to the same quarter last year.

Pegasystems Dividend Announcement

The firm also recently announced a quarterly dividend, which was paid on Thursday, October 15th. Investors of record on Thursday, October 1st were given a dividend of $0.03 per share. The ex-dividend date was Thursday, October 1st. This represents a $0.12 annualized dividend and a yield of 0.3%. Pegasystems’s dividend payout ratio (DPR) is currently 6.78%.

Key Pegasystems News

Here are the key news stories impacting Pegasystems this week:

• Positive Sentiment: Pega Cloud momentum remained strong. Pega Cloud annual contract value rose 20% to $976 million, while total ACV increased 6% to $1.65 billion. Cloud represented 59% of total ACV, supporting the company’s recurring-revenue transition. Pega Cloud ACV Grows 20% in Q3 2026
• Positive Sentiment: Management reiterated its AI opportunity. Pegasystems said it is incorporating models from providers including Anthropic, OpenAI and Google into its platform while emphasizing governance, security and predictable costs. Investors may view this positioning as supportive of future demand for its enterprise software. Pegasystems Posts Lower Profit in 3Q Amid AI Changes
• Neutral Sentiment: Revenue growth was modest but positive. Third-quarter revenue rose 3.1% year over year to $393.4 million. The company generated $304.3 million in operating cash flow during the first nine months, providing financial support for continued investment. Pegasystems Q3 Revenue Rises 3% to $393.4 Million
• Negative Sentiment: Third-quarter results missed expectations. Adjusted EPS was $0.35 versus the $0.45 consensus estimate, while revenue of $393.4 million fell short of the roughly $421.1 million forecast. The miss indicates that near-term growth is slowing and explains the initial negative reaction in some trading reports. Pegasystems Misses Q3 Earnings and Revenue Estimates
• Negative Sentiment: Profitability deteriorated sharply. GAAP net income fell 68% year over year to $14.1 million, with GAAP EPS declining to $0.08 from $0.25. Investors also noted that reported insider activity showed sales and no purchases during the past six months, although such transactions do not necessarily indicate a change in business fundamentals.

Analyst Ratings Changes

A number of equities research analysts have weighed in on PEGA shares. Rosenblatt Securities reissued a “buy” rating and set a $47.00 target price on shares of Pegasystems in a report on Thursday, October 15th. KeyCorp downgraded shares of Pegasystems from an “overweight” rating to a “sector weight” rating in a research note on Wednesday, July 22nd. Barclays reaffirmed an “overweight” rating and set a $43.00 price target (up from $39.00) on shares of Pegasystems in a research note on Tuesday, October 13th. Weiss Ratings upgraded shares of Pegasystems from a “hold (c)” rating to a “hold (c+)” rating in a report on Thursday, October 15th. Finally, Loop Capital cut shares of Pegasystems from a “buy” rating to a “hold” rating and reduced their price objective for the stock from $55.00 to $25.00 in a research note on Thursday, July 23rd. Five equities research analysts have rated the stock with a Buy rating, nine have issued a Hold rating and one has issued a Sell rating to the company. Based on data from MarketBeat, Pegasystems presently has a consensus rating of “Hold” and an average price target of $45.64.

Insider Activity

In other news, insider Kerim Akgonul sold 7,000 shares of the business’s stock in a transaction that occurred on Friday, September 11th. The shares were sold at an average price of $36.03, for a total value of $252,210.00. Following the transaction, the insider owned 104,804 shares in the company, valued at approximately $3,776,088.12. The trade was a 6.26% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this link. 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 in the company, valued at $3,406,198.25. This trade represents a 29.39% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Insiders have sold a total of 53,672 shares of company stock worth $1,921,657 in the last 90 days. 48.40% of the stock is owned by company insiders.

Hedge Funds Weigh In On Pegasystems

Hedge funds have recently bought and sold shares of the company. Nisa Investment Advisors LLC boosted its position in Pegasystems by 26.4% during the third quarter. Nisa Investment Advisors LLC now owns 1,547 shares of the technology company’s stock valued at $52,000 after acquiring an additional 323 shares during the last quarter. Alpine Bank Wealth Management acquired a new stake in Pegasystems during the 3rd quarter worth about $27,000. Vontobel Holding Ltd. grew its holdings in Pegasystems by 87.0% during the 3rd quarter. Vontobel Holding Ltd. now owns 13,623 shares of the technology company’s stock worth $453,000 after acquiring an additional 6,339 shares during the period. TD Waterhouse Canada Inc. grew its holdings in Pegasystems by 37.2% during the 3rd quarter. TD Waterhouse Canada Inc. now owns 4,637 shares of the technology company’s stock worth $160,000 after acquiring an additional 1,257 shares during the period. Finally, Copeland Capital Management LLC raised its position in shares of Pegasystems by 26.4% in the 3rd quarter. Copeland Capital Management LLC now owns 1,777,785 shares of the technology company’s stock worth $59,165,000 after acquiring an additional 370,824 shares in the last quarter. Institutional investors own 46.89% of the company’s stock.

Pegasystems Trading Down 4.3%

The company has a 50-day moving average price of $34.94 and a two-hundred day moving average price of $34.40. The stock has a market capitalization of $5.70 billion, a P/E ratio of 19.62 and a beta of 0.89.

About Pegasystems

Pegasystems Inc is a software company that develops enterprise applications for customer engagement, workflow automation and business process management. Its technology helps organizations manage customer interactions, automate repetitive work, coordinate complex processes and make data-driven decisions across departments and channels.

The company’s portfolio includes Pega Platform, a low-code application development and workflow platform, along with solutions for customer service, sales automation, marketing, decisioning and artificial intelligence.