Pegasystems Inc. (PEGA): a likely value trap?

Avoid — this is the second straight quarterly miss with decelerating growth, so "cheap" trailing numbers are already stale.

⚠ TRAP Fundamentals63/100

Fell 23% in 4 trading day(s) — now $25.35

Why PEGA dropped

PEGA fell after missing both revenue and EPS estimates in Q2 2026 (reported after market close July 21), continuing a pattern that started with an even worse Q1 miss; management and analysts point to slowing contract growth tied to shifts in the AI software market.

Fwd P/E 8.3Op margin 4.6%Rev growth 9.4%Debt/equity 10.2%Analyst upside 129.6%

How this scored 63/100

✅ Passes all 4 hard checks — profitable, cash-generative, and financially survivable.

✅ Makes money Net profit margin 18.7%

✅ Generates cash Free cash flow $519M

✅ Not drowning in debt Debt/equity 10.2% (limit 200%)

✅ Can pay its bills Current ratio 1.1 (needs 1+)

Bar length shows how much each metric is worth — a 10-point metric is twice as wide as a 5-point one. Hover any row for what it means.

Profitability Does it actually make money? 17/25

Operating margin 4.6% 2/9

Net profit margin 18.7% 7/8

Return on equity 54.7% 8/8

Growth Is it getting bigger, or dying? 12/25

Revenue growth 9.4% 4/9

Earnings growth -52.9% 0/8

Expected profit change 64.3% 8/8

Value Is it cheap right now? 17/25

Forward P/E 8.3 10/10

PEG ratio 3.6 0/8

Analyst target upside 129.6% 7/7

Balance sheet Will it survive? 17/25

Debt / equity 10.2% 10/10

Current ratio 1.1 0/8

Free cash flow $519M 7/7

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Analysis generated by SmartStonks's AI from public fundamentals and news, first flagged 2026-07-22. Research only — not financial advice.