JPMorgan Reiterates Overweight Rating on Pegasystems (PEGA)

JPMorgan analyst Mark Murphy reiterated an Overweight rating and $101.00 price target on Pegasystems (NASDAQ: PEGA).

The analyst comments "Yesterday, we attended Pegasystems' Investor Day in Las Vegas held alongside PegaWorld 2025, its annual user conference. In addition to various product announcements, the main highlight of the user conference was the enhancements around its Gen AI Blueprint capabilities that now enable enterprises the ability to transform legacy technology processes in a relatively short period of time. The company showed with only a few directions how Blueprint can now do a lot of the heavy lifting, including modernizing the workflow, designing the data model and the personas, as well as creating a preview of what the product would look like across various channels. As part of its investor day, Pegasystems updated its long-term model around its FCF targets, in addition to revising its 2025 revenue guidance upward. Pegasystems also referenced material efficiency improvements in its sales organization driven by Blueprint, allowing it to double the client facing time of its sales reps. This efficiency improvement in the sales org, along with a new motion with partners (partners building blueprints with their IP), is allowing Pegasystems to expand the number of companies it's going after to the F10,000 vs. focusing on the F1,000 prior. Overall, we walk away positive given the rapid innovation cadence around its Gen AI strategy, especially as it moves toward prosecuting a legacy modernization opportunity, in addition to its solid strength in FCF generation."

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Shares of Pegasystems closed at $96.96 yesterday.

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