The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Pegasystems beat expectations on revenue and met expectations on earnings per share.
Compared to the prior-year quarter, revenue improved significantly and GAAP loss per share dropped.
Margins improved across the board.
Pegasystems logged revenue of $115.3 million. The seven analysts polled by S&P Capital IQ wanted to see net sales of $104.7 million on the same basis. GAAP reported sales were 29% higher than the prior-year quarter's $89.3 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
Non-GAAP EPS came in at -$0.03. The two earnings estimates compiled by S&P Capital IQ anticipated -$0.03 per share on the same basis. GAAP EPS were -$0.04 for Q4 compared to -$0.13 per share for the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 63.1%, 350 basis points better than the prior-year quarter. Operating margin was 3.2%, 480 basis points better than the prior-year quarter. Net margin was -1.6%, 370 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $112.0 million. On the bottom line, the average EPS estimate is $0.13.
Next year's average estimate for revenue is $500.0 million. The average EPS estimate is $0.91.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 166 members out of 183 rating the stock outperform, and 17 members rating it underperform. Among 55 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 52 give Pegasystems a green thumbs-up, and three give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Pegasystems is outperform, with an average price target of $36.33.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Motley Fool newsletter services have recommended buying shares of Pegasystems. Try any of our Foolish newsletter services free for 30 days. 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 has a disclosure policy.