The maker of business and human resources management systems crushed the market in 2017, rising 31% versus the S&P 500's 19%. The good times kept on rolling in early 2018 as Pegasystems beat analyst expectations across the board in February's fourth-quarter report.
Sales increased 20% year over year to land at $239.5 million, comfortably ahead of Wall Street's $208 million target. On the bottom line, adjusted earnings fell 27% to $0.27 per share, but still smashed your average analyst's $0.15 projection.
Going forward, Pegasystems aims to decrease the average length of its customer contracts in an attempt to accelerate the renewal process. The company's products are also moving deeper and deeper into the cloud, shoring up unstable profit margins and clearing the way for the aforementioned contract-shortening ambition.
Looking back at a 44% gain over the last 52 weeks, Pegasystems shares are trading at a lofty 95 times trailing earnings today. I'm content to watch this ticker from the sidelines until a better buy-in window presents itself. Earnings surprises have been hit or miss in recent quarters, so I wouldn't be surprised to see share prices taking a temporary dive in the reasonably near future.