Pegasystems Shares Popped: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Pegasystems (Nasdaq: PEGA  ) rose as much as 19% during intraday trading today after it reported third-quarter revenue that significantly outpaced Wall Street's expectations.

So what: For the quarter, Pegasystems booked $95.4 million in revenue versus the $90.4 million analysts expected. Per-share earnings came in at $0.26, equal to the Wall Street consensus.

Now what: The beat is significant in part because of the competition. Pegasystems' business process management software competes with offerings from larger and better-funded peers such as Tibco (Nasdaq: TIBX  ) , Oracle (Nasdaq: ORCL  ) , and Microsoft (Nasdaq: MSFT  ) . That Pegasystems is swimming (and winning) in this competitive sea is enough to explain today's rally. Mix in a history of responsible growth marked by high returns on capital, and you've got what could be a multibagger in the making.

Interested in more info on Pegasystems? Add it to your watchlist here by clicking here.

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Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team. He owned shares of Oracle at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. You can also get his insights delivered directly to your RSS reader. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool owns shares of Microsoft and Oracle and is also on Twitter as @TheMotleyFool. Its disclosure policy is at least 10% better than other disclosure policies.


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