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NEW YORK (TheStreet) -- Pegasystems(PEGA) - Get Report has been upgraded by TheStreet Ratings from Hold to Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate PEGASYSTEMS INC (PEGA) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Software industry average. The net income increased by 29.2% when compared to the same quarter one year prior, rising from $15.56 million to $20.10 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 10.4%. Since the same quarter one year prior, revenues rose by 10.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- PEGA has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, PEGA has a quick ratio of 1.61, which demonstrates the ability of the company to cover short-term liquidity needs.
- Net operating cash flow has significantly increased by 159.37% to $1.62 million when compared to the same quarter last year. In addition, PEGASYSTEMS INC has also vastly surpassed the industry average cash flow growth rate of -1.08%.
- The gross profit margin for PEGASYSTEMS INC is currently very high, coming in at 75.29%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, PEGA's net profit margin of 11.90% significantly trails the industry average.
- You can view the full analysis from the report here: PEGA Ratings Report