6. Pegasystems Inc. (NASDAQ:PEGA)
Short Interest: 1.56%
Number of Hedge Fund Holders: 27
Pegasystems (NASDAQ:PEGA) develops, licenses, markets, hosts, and supports enterprise software to build agility in organizations and businesses and make them more adaptable to change. The company’s Pega Infinity software portfolio connects customers and enterprises across channels in real time.
The company’s platform and applications cross with several software markets, application development platforms, and the Vertical-Specific Software market of packaged applications and industry solutions. Some of the application development platforms include Digital Process Automation, Customer Relationship Management, Business Process Management, Workflow, and Dynamic Case Management. The application development platforms include Robotic Process Automation, Multi-experience Development Platforms, Decision Management, and Business Rules Management Systems. Pegasystems offers a multitude of services and support through three groups: Global Client Success, Pega Academy, and Global Service Assurance groups.
The company is on the path to accomplishing its financial goals while delivering breakthrough technology innovation. It holds a competitive advantage in the industry due to its center at architecture and systematic approach to generative AI and statistical AI. The company’s newest offerings, especially the Pega GenAI Blueprint, encompass many of these advancements. Over the last months, it created tens of thousands of Pega Blueprints, identifying growth opportunities and creating momentum for Pega Cloud, which plays a role in monetization. According to the company, Pega Blueprints is essentially altering how it engages, sells, and delivers to its clients.
Pegasystems (NASDAQ:PEGA) has taken a Gen-AI approach to its improvements. It has added GenAI capabilities to assist its customers. IT and business teams who plan and design their application through the platform can leverage these capabilities to expedite the design phase, use AI to stimulate best practice thinking in applications, and inject best practices and ideas. Similarly, developers can use the Pega GenAI Autopilot to turn Blueprints into live applications, providing contextual guidance and assistance throughout the development journey. The company has also introduced the Pega Gen AI Socrates, a GenAI tutor that can conduct personalized and tailored dialogues with its students to help them learn Pega skills.
Apart from groundbreaking innovations and improvements, the company is running on solid financials. Free cash flow reached $218 million in the first half of 2024, growing by 119% year over year and making a record for the company. The growth was driven by two primary factors: continued improvement in sales execution and continued focus on operational discipline. The stock is trading at a forward P/E of 23.63 at a 0.46% premium to its sector. It received a Buy from William Blair, and JMP Securities upgraded the stock to a Buy. Its current price target of $67.29 implies an upside of 25.58% from current levels. 27 hedge funds hold stakes in the stock as of Q2 2024. Pegasystems (NASDAQ:PEGA) takes the sixth spot on our list of the worst adtech stocks to buy now.
