Pega’s stock rose 14.13 percent yesterday, according to Nasdaq’s market data.
Normally, only a big announcement or earnings result would have such a sudden impact on share prices.
Yet, the CRM provider owes these significant gains to the positive coverage from a single analyst, according to Motley Fool.
Daniel Ives, Senior Equities Research Analyst at Wedbush Securities, changed his rating of the stock from ‘neutral’ to ‘outperform’, with an increased one-year stock price target of $65, 15 dollars higher than previously.
The analyst did so after noting Pega's swelling subscription revenues and growing margins from its SaaS services. The latter reflects a hike in its sales performance.
Meanwhile, his report also highlights how the $2BN judgment against Pegasystems - following a lawsuit from Appian - has mostly been accounted for in Pegasystems’ stock. Ives stated:
Pega will have to likely pay a small settlement at the end of the day that is significantly less than the original judgment… ending the nightmare this lawsuit has caused.
Yet, perhaps the most interesting part of the reasoning for Ives' upgraded rating of Pega was its developing "AI story" - with an emphasis on automation.
At PegaWorld iNspire 2023, the company’s flagship technology event, Liz Miller, VP and Principal Analyst at Constellation Research, and Alan Trefler, Founder and CEO at Pegasystems, discussed this strategy.
In asking Trefler, what he was most excited about over the next two years, Miller recalls his response:
