Pegasystems (NASDAQ:PEGA) stock was assigned a Hold Rating by JMP Securities analyst Patrick Walravens despite the release of PEGA’s impressive third-quarter results yesterday. The stock gained about 3% in yesterday’s extended trading session. The analyst is concerned about the slowing growth of the Pega Cloud annual contract value (ACV) for the second consecutive quarter.
The business software company’s Q3 adjusted earnings of $0.44 per share surpassed analysts’ estimates of about $0.01 and compared favorably with a loss of $0.34 per share in the prior-year quarter. Meanwhile, the company’s revenues rose by 24% year-over-year to $334.6 million and remained above analysts’ expectations of $296.7 million.
Walravens is looking forward to Pegasystems’ earnings call (to be held on October 26, before the market opens) for an update on the decelerating total ACV. In the just reported quarter, ACV grew by 12% year-over-year compared with 13% in the previous quarter and 14% in the first quarter of 2023.
Is PEGA a Good Buy?
Overall, Wall Street analysts are sidelined on PEGA stock. It has received four Buys, seven Holds, and one Sell recommendation for a Hold consensus rating. Meanwhile, the average Pegasystems stock price target of $56.33 implies 47.8% upside potential from current levels.
