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Pegasystems (PEGA) to Report Q1 Earnings: What's in Store?

Pegasystems Inc. PEGA is scheduled to report first-quarter 2019 results on May 7.

In the last reported quarter, the company delivered earnings of 36 cents per share, surpassing the Zacks Consensus Estimate by 20%. However, the figure declined 20% from the year-ago quarter.

Revenues of $256.4 million increased 0.7% on a year-over-year basis, outpacing the Zacks Consensus Estimate by 1.8%.

What to Expect in Q1

For the first quarter of fiscal 2019, the Zacks Consensus Estimate for revenues is currently pegged at $236.35 million, suggesting an improvement of 0.5% from the year-ago reported figure.

The consensus estimates for earnings is pegged at 11 cents, indicating a decline of 54.2% from the year-ago quarter. The bottom-line estimates have remained unchanged over the past 30 days.

Pegasystems Inc. Price and EPS Surprise

Pegasystems Inc. Price and EPS Surprise | Pegasystems Inc. Quote

Let’s see how things are shaping up prior to this announcement.

Factors Likely to Influence Q1 Results

Pegasystems’ strategic efforts to strengthen its cloud-based offerings with AI, automation and robotics driven enhancements are likely to bolster adoption, consequently favoring the top line in first quarter.

Growing demand for the company’s software as a service (SaaS) solutions including customer relationship management (or CRM), Business Process Management (or BPM) digital process automation (or DPA) and robotics, among others, is expected to positively impact the to-be-reported quarter results. The growing clout of enterprises embracing digital transformation is likely to be a tailwind, in this regard.

Further, strong focus on product innovation and introducing new products is expected to provide the company a competitive edge against its peers, which in turn is likely to impact the top line in the to-be-reported quarter.

The company has rolled out Pega Infinity, a comprehensive digital transformation suite with latest embedded capabilities, the incremental adoption of which is expected to be reflected positively in the upcoming results. Recently, Pegasystems announced availability of its latest healthcare solutions, comprising Pega Customer Service for Healthcare, Pega Marketing, and Pega Care Management, as part of its Pega Infinity suite.

Moreover, the introduction of Cloud Choice has enabled the company to bolster adoption of Pega Cloud, the momentum of which is anticipated to reflect in the upcoming quarterly release.

Also, the recent Infruid Labs acquisition is expected to enhance Pegasystems’ CRM and DPA offerings with robust interactive visualization capabilities. The acquisition synergies and bolstered adoption from enhanced capabilities is likely to favor first-quarter results.

Additionally, the company’s solutions are winning awards and industry-wide recognition, from the likes of analyst firms including Gartner, Forrester, Ovum, to mention a few, which is improving its brand reputation.

These aforesaid factors are helping Pegasystems to win new customers. However, increasing investments on product enhancements and other growth strategies are likely to limit margin expansion at least in the near term.

What the Zacks Model Unveils

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Sell-rated stocks (Zacks Rank #4 or 5) are best avoided.

Pegasystems carries a Zacks Rank #3 and an Earnings ESP of 0.00%, which makes surprise prediction difficult. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks with Favorable Combination

Here are a few stocks that are worth considering as our model shows that these have the right combination of elements to deliver an earnings beat in the upcoming releases.

Fujifilm Holdings Corp. FUJIY has an Earnings ESP of +20.55% and a Zacks Rank #1. The company is slated to report fourth-quarter 2019 results on May 8. You can see the complete list of today’s Zacks #1 Rank stocks here.

Synopsys, Inc. SNPS has an Earnings ESP of +1.15% and a Zacks Rank #1. The company is expected to report second-quarter 2019 results on May 22.

Agilent Technologies, Inc. A has an Earnings ESP of +2.10% and a Zacks Rank #2. The company is scheduled to report second-quarter 2019 results on May 14.

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Pegasystems Inc. (PEGA): Free Stock Analysis Report
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