Pegasystems (NASDAQ:PEGA) Shares Down 4.3% Following Weak Earnings

Pegasystems Inc. (NASDAQ:PEGA) was down 4.3% on Wednesday following a weaker than expected earnings announcement. The stock traded as low as $34.51 and last traded at $34.6540. Approximately 1,170,249 shares were traded 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 earnings per share for the quarter, missing the consensus estimate of $0.45 by ($0.10). The firm had revenue of $393.36 million during the quarter, compared to the consensus estimate of $421.06 million. Pegasystems had a net margin of 18.66% and a return on equity of 32.21%. Pegasystems’s quarterly revenue was up 3.1% compared to the same quarter last year. During the same period in the prior year, the business posted $0.30 earnings per share.

Pegasystems Announces Dividend

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

Pegasystems News Summary

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.

Wall Street Analysts Forecast Growth

Several brokerages have issued reports on PEGA. Loop Capital downgraded Pegasystems from a “buy” rating to a “hold” rating and cut their price target for the company from $55.00 to $25.00 in a report on Thursday, July 23rd. UBS Group downgraded shares of Pegasystems to a “sell” rating in a report on Wednesday. Royal Bank Of Canada set a $35.00 price objective on shares of Pegasystems and gave the company an “outperform” rating in a report on Thursday, July 23rd. Citizens Jmp cut shares of Pegasystems from an “outperform” rating to a “market perform” rating in a report on Wednesday, July 22nd. Finally, DA Davidson downgraded Pegasystems from a “buy” rating to a “neutral” rating and set a $32.00 target price on the stock. in a research report on Monday, September 28th. Five equities research analysts have rated the stock with a Buy rating, nine have issued a Hold rating and one has given a Sell rating to the company. According to MarketBeat.com, the company presently has an average rating of “Hold” and an average target price of $45.64.

Insider Activity

In related news, CFO Kenneth Stillwell sold 39,627 shares of Pegasystems stock in a transaction that occurred on Friday, September 11th. The shares were sold at an average price of $35.77, for a total value of $1,417,457.79. Following the transaction, the chief financial officer directly owned 95,225 shares of the company’s stock, valued at $3,406,198.25. This trade represents a 29.39% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which is available through this link. Also, Director Dianne Ledingham sold 1,000 shares of the business’s stock in a transaction that occurred on Thursday, October 1st. The shares were sold at an average price of $34.15, for a total transaction of $34,150.00. Following the transaction, the director owned 38,280 shares of the company’s stock, valued at approximately $1,307,262. This represents a 2.55% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last three months, insiders sold 53,672 shares of company stock worth $1,921,657. 48.40% of the stock is owned by company insiders.

Institutional Investors Weigh In On Pegasystems

Large investors have recently modified their holdings of the business. GAMMA Investing LLC increased its holdings in shares of Pegasystems by 21.6% during the third quarter. GAMMA Investing LLC now owns 1,597 shares of the technology company’s stock worth $53,000 after buying an additional 284 shares in the last quarter. State of Michigan Retirement System lifted its stake in shares of Pegasystems by 1.4% in the 1st quarter. State of Michigan Retirement System now owns 22,000 shares of the technology company’s stock valued at $936,000 after acquiring an additional 300 shares during the last quarter. Nisa Investment Advisors LLC boosted its holdings in shares of Pegasystems by 26.4% during the 3rd 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 in the last quarter. Diversified Trust Co boosted its holdings in shares of Pegasystems by 3.2% during the 1st quarter. Diversified Trust Co now owns 11,364 shares of the technology company’s stock valued at $484,000 after acquiring an additional 350 shares in the last quarter. Finally, Oregon Public Employees Retirement Fund boosted its holdings in shares of Pegasystems by 2.2% during the 1st quarter. Oregon Public Employees Retirement Fund now owns 18,700 shares of the technology company’s stock valued at $796,000 after acquiring an additional 400 shares in the last quarter. Institutional investors and hedge funds own 46.89% of the company’s stock.

Pegasystems Trading Down 4.3%

The firm has a market cap of $5.70 billion, a P/E ratio of 19.62 and a beta of 0.89. The business has a 50-day moving average of $34.94 and a two-hundred day moving average of $34.40.

Pegasystems Company Profile

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.