DA Davidson on Thursday revised down its 12-month price target for Pegasystems (NASDAQ:PEGA) to $60.00 from $85.00, while keeping a Buy rating on the enterprise software vendor. The change comes despite what the firm described as "strong 4Q results" that included sustained acceleration in Cloud ACV (Annual Contract Value) growth for a fourth straight quarter.
At the time of the report, Pegasystems shares were trading at $40.99, placing the stock well below the newly stated target and below InvestingPro's Fair Value assessment. The company also retains a Piotroski Score of 9, a metric DA Davidson and other observers note as indicative of strong underlying financials.
DA Davidson highlighted Pegasystems' recent operating performance, citing 16.61% revenue growth over the last twelve months and gross profit margins of 75.86%. The research note attributed that momentum to "continued high demand from customers in PEGA's business transformation capabilities," signaling that core solutions remain a primary driver of revenue and profitability.
The firm pointed to the Blueprint product as a notable contributor to customer retention and net new demand trends, while acknowledging the product's go-to-market motion is still in early stages. DA Davidson said these elements could provide upside to long-term targets as adoption progresses, and added that recent quarterly results and the company's initial guidance came in "well above" its expectations, strengthening the firm's confidence in Pegasystems' growth trajectory toward those targets.
Pegasystems reported fourth-quarter 2025 results that exceeded Wall Street forecasts. The company posted earnings per share of $0.76 versus an expected $0.73, and revenue of $504.32 million compared with consensus of $492.92 million. Those beats on the top and bottom lines were noted across coverage, though analysts' subsequent reactions varied.
Citizens' analyst lowered a price target on Pegasystems to $58.00 from $78.00 but kept a Market Outperform rating, citing concerns about growth. By contrast, Barclays moved to upgrade the stock to Overweight from Equalweight and reduced its price target to $48.00 from $67.00. Barclays emphasized Pegasystems' strong position in complex business process software and suggested the business may remain less exposed to shifts from generative AI developments.
These divergent broker actions underscore a split in market views: some firms are trimming targets while retaining optimistic ratings, and others are raising ratings but lowering targets, reflecting different assessments of the sustainability and pace of Pegasystems' growth and commercialization potential.
Investors and market participants are left to weigh Pegasystems' recent outperformance and margin profile against questions around longer-term growth durability and the early-stage commercialization of new products such as Blueprint.