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.

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