Pegasystems Inc. (PEGA) shares closed at $50.96 on August 12, 2023, marking a 16% decline from the 52-week high of $60.96 reached on July 30. Since reporting Q2 2025 results on July 22, PEGA shares have inched up by 0.1%, lagging behind the broader Zacks Computer & Technology sector, which has grown by 3%. In Q2 2025, Pegasystems noted a 25% year-over-year surge in Pega Cloud Annual Contract Value (ACV) to $71 million, indicating strong demand for its AI-powered solutions. Despite reporting a projected Q3 2025 earnings estimate of 18 cents per share—a 5.3% year-on-year decline—the revenue consensus stands at $355 million, reflecting 9.2% growth.
Pegasystems has experienced stiff competition from major players like Microsoft and Oracle, contributing to its underperformance. The company is also preparing for a seasonally slower third quarter concerning net new ACV and free cash flow. With its current Zacks Rank standing at #3 (Hold), investors may consider waiting for a more favorable entry point. Additionally, PEGA’s shares are currently trading with a Price/EBITDA ratio of 24.06, indicating a relatively high valuation compared to its sector counterparts.
