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FINWIRES

Research Alert: CFRA Maintains Buy Rating On Shares Of Pegasystems Inc.

-- CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:

We maintain our target price at $44, based on a forward P/E of 16x our 2026 EPS forecast of $2.75, below its three-year average. We increase our 2026 EPS estimate to $2.75 from $2.74 but lower our 2027 EPS projection to $3.15 from $3.22. PEGA reported mixed Q1 2026 results, with total revenue of $430M declining 10% Y/Y, missing consensus, while non-GAAP EPS of $0.46 missed by $0.23, primarily due to a 49% decline in subscription license revenue and higher legal expenses. However, Pega Cloud revenue surged 36% to $205M (now 48% of total revenue), and Pega Cloud ACV accelerated 29% Y/Y to $907M (27% on a constant currency basis), reflecting momentum in the cloud transition. We anticipate stronger 2H 2026 on a favorable renewal mix, strong new logo pipeline, and traction with Blueprint. We see opportunities to convert existing legacy systems to Blueprint-enabled cloud solutions and expect Pega Cloud growth in the 30%-plus range.

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