The 10-second takeaway
For the quarter ended March 31 (Q1), Pegasystems missed slightly on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue grew. Non-GAAP earnings per share grew significantly. GAAP earnings per share increased significantly.
Margins expanded across the board.
Pegasystems booked revenue of $116.2 million. The six analysts polled by S&P Capital IQ hoped for revenue of $118.5 million on the same basis. GAAP reported sales were the same as the prior-year quarter's.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.33. The six earnings estimates compiled by S&P Capital IQ averaged $0.21 per share. Non-GAAP EPS of $0.33 for Q1 were 43% higher than the prior-year quarter's $0.23 per share. GAAP EPS of $0.23 for Q1 were 130% higher than the prior-year quarter's $0.10 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 67.6%, 500 basis points better than the prior-year quarter. Operating margin was 11.1%, 580 basis points better than the prior-year quarter. Net margin was 7.8%, 420 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $115.1 million. On the bottom line, the average EPS estimate is $0.17.
Next year's average estimate for revenue is $509.0 million. The average EPS estimate is $1.18.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 155 members out of 175 rating the stock outperform, and 20 members rating it underperform. Among 44 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 38 give Pegasystems a green thumbs-up, and six 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 $33.00.
Software and computerized services are being consumed in radically different ways, on new and increasingly mobile devices. Many old leaders will be left behind. Whether or not Pegasystems makes the coming cut, you should check out the company that Motley Fool analysts expect to lead the pack in "The Next Trillion-dollar Revolution." Click here for instant access to this free report.
- Add Pegasystems to My Watchlist.
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. The Motley Fool recommends 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.