Stock fact sheet · data as of
Pegasystems Inc. (PEGA): fair value, margin of safety and Wheel Score
Technology · Software - Application · United States · High Growth
Is PEGA undervalued?
PEGA has a margin of safety of 31%: the stock closed at 33.83 on 16 Oct 2026 against a GLS average fair value of 49.00. 4 of the 8 valuation models that produced a number sit above the price. Our screens treat a discount this large as a strong starting point for a cash-secured put, not as a verdict - the fair value is a model output, and a wide gap can mean the models are missing something the market knows.
There is a wide gap between DDM (2.98) and Payback Time (118.99). When the models are this far apart the "fair value" is really a range, and the margin of safety above should be read with that range in mind.
The nightly engine files PEGA under High Growth: revenue and earnings growing fast enough that the growth-based models carry the valuation.
Nine valuation models for PEGA
Each model turns the latest filed numbers into a value per share; the GLS fair value is the simple average of the ones that produce a positive number. The last two rows are shown for reference and never enter the average. The Quote page lets you switch any model off and add your own margin of safety.
| Model | Value | vs price | What it measures |
|---|---|---|---|
| DCF | - | - | Present value of the projected free cash flows, discounted at the cost of capital; no value tonight |
| Graham Number | 12.09 | -64% | The most a defensive investor pays for the earnings and book value per share |
| Graham Growth | 52.45 | +55% | Graham's growth formula: EPS × (8.5 + 2 × growth), adjusted for bond yields |
| Lynch | 18.59 | -45% | EPS × the earnings growth rate (PEG of 1), growth capped at 25% |
| GLS Growth | 118.64 | +251% | EPS compounded ten years at the blended growth rate, discounted back at 15% a year |
| 10 Cap | 46.75 | +38% | Owner's earnings (operating cash flow less maintenance capex) capitalised at 10% |
| Payback Time | 118.99 | +252% | Eight years of compounded free cash flow: the price at which the business pays for itself |
| DDM | 2.98 | -91% | Dividend discount model: next year's dividend ÷ (10% − 3% growth); needs a dividend |
| EPV | 21.53 | -36% | Earnings power value: current EPS capitalised at 9% with no growth |
| Zombie (liquidation) | 0.8140 | -98% | Current assets less all liabilities, per share: the balance-sheet floor. Not in the average |
| Wall St target | 36.40 | +8% | Analysts' average 12-month price target. Not in the average |
Quality and financial health
Pegasystems Inc. scores 7 of 9 on the Piotroski F-score, the nine yes/no tests of profitability, leverage and efficiency on the latest annual accounts - a strong reading that passes the Sunday Scan's "6 or more" rule with room to spare. On durability PEGA scores 6.8/10 on the GLS Moat - a middle reading; the Scorecard on the Quote page's Financials tab shows which ten-year lines are steady and which are not.
Returns on capital are high - ROIC 45.6%, ROE 50.0%, ROA 24.1% - with debt at 0.10 times equity and a free-cash-flow yield of 9.0%.
The dividend yield is 0.60% with a payout ratio of 6% - a small yield that leaves most of the earnings in the business. Revenue comes mainly from Pega Cloud 51%, Subscription License 20%, Maintenance 18% (quarter Q2 FY2026).
Institutional ownership scores 7/10, insider activity 2/10 and Congressional trading 5/10 on the GLS smart-money scales.
| Piotroski F-score | 7 / 9 | ROIC | 45.6% |
|---|---|---|---|
| GLS Moat | 6.8 / 10 | ROE | 50.0% |
| Debt / equity | 0.10 | ROA | 24.1% |
| Free-cash-flow yield | 9.0% | Payout ratio | 6% |
| Institutions | 7 / 10 | Insiders · Congress | 2 · 5 / 10 |
Wheel Score 87: Prime
With a Wheel Score of 87, Pegasystems Inc. sits in the Prime band - price, quality and premium all line up for the wheel strategy. The parts: Value 25/25, Health 16/20, Moat 10/15, Premium 17/20, Stability 19/20. A high score is a ranking, not a signal: it says nothing about timing, the earnings date or your position size.
Implied volatility is 70% on the near-the-money contracts 20-60 days out - above the 60% ceiling of the sweet spot. Premiums are large, but the Wheel Score tapers the Premium points (17 of 20) because volatility this high usually comes with a reason. Chain open interest is 9,661 contracts across all expiries - enough for the wheel at normal size.
Volume runs at 4.5M shares a day on a market cap of $5.6B, with a beta of 0.89; the Stability part of the Wheel Score gives that 19 of 20.
| Part | Points | From | |
|---|---|---|---|
| Value | 25 / 25 | 31% margin of safety | |
| Health | 16 / 20 | Piotroski 7/9 | |
| Moat | 10 / 15 | moat 6.8/10 | |
| Premium | 17 / 20 | implied volatility 70% | |
| Stability | 19 / 20 | 4.5M shares/day, $5.6B cap, beta 0.89 |
The Wheel Score ranks ~7,400 US stocks for selling cash-secured puts and covered calls; it is updated nightly and is not a recommendation. The walkthrough lesson shows how the score fits into a trade, start to finish.
Upcoming events
Pegasystems Inc. reports earnings on 20 Oct 2026 (after the close) - inside the 14-day window the Sunday Scan avoids, because a put sold now would carry the report's gap risk.
Earnings, dividend, IPO, split and economic calendars for the whole market, filterable to your watchlists.
Similar stocks in Software - Application
The 12 companies below are the closest to Pegasystems Inc. by market cap within the Software - Application industry, each with its own fact sheet; the Compare page puts up to eight of them side by side.
| Stock | Close | Fair value | MoS | Wheel | Mkt cap |
|---|---|---|---|---|---|
| OCTV Octave Intelligence plc | 20.68 | 126.50 | +84% | 45Weak | $5.6B |
| RNG RingCentral, Inc. | 75.20 | 61.20 | -23% | 65Good | $5.5B |
| NIQ NIQ Global Intelligence Plc | 18.94 | 54.11 | +65% | 45Weak | $5.6B |
| DLB Dolby Laboratories, Inc. | 60.83 | 52.79 | -15% | 63Fair | $5.7B |
| KVYO Klaviyo, Inc. | 18.09 | 6.29 | -188% | 50Fair | $5.4B |
| NAVN Navan, Inc. | 25.20 | 3.13 | -705% | 45Weak | $6.2B |
| OTEX Open Text Corporation | 25.83 | 121.03 | +79% | 94Prime | $6.3B |
| BLSH Bullish | 31.87 | 13.11 | -143% | 45Weak | $4.8B |
| LYFT Lyft, Inc. | 17.16 | 194.22 | +91% | 80Prime | $6.5B |
| DAVE Dave Inc. | 369.00 | 610.25 | +40% | 68Good | $4.7B |
| CVLT Commvault Systems, Inc. | 158.91 | 49.00 | -224% | 58Fair | $6.6B |
| YOU Clear Secure, Inc. | 44.31 | 61.36 | +28% | 86Prime | $4.6B |
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Start free See the Sunday ScanQuestions about PEGA
Is PEGA undervalued right now?
By the GLS models, yes: at 33.83 the stock is 31% below the average fair value of 49.00 (data as of 16 Oct 2026). Whether the discount is deserved is the question to research next.
What is the Wheel Score of PEGA and what does it mean?
PEGA scores 87 out of 100 (Prime). The Wheel Score blends the margin of safety (25 points), Piotroski health (20), the GLS moat (15), the option premium on offer (20) and trading stability (20) into one number that ranks stocks for the wheel strategy - selling cash-secured puts, then covered calls if assigned. 80 and above is Prime, 65-79 Good, 50-64 Fair, under 50 Weak.
What is the GLS fair value for PEGA?
49.00 per share as of 16 Oct 2026 - the simple average of the 8 valuation models (out of nine: DCF, Graham Number, Graham Growth, Lynch, GLS Growth, 10 Cap, Payback Time, DDM and EPV) that produced a positive value. The models run every night on the latest filings; the Quote page lets you switch any of them off and add a margin of safety of your own.
When does Pegasystems Inc. report earnings next?
The next earnings report is due on 20 Oct 2026 (after the close), 4 days from the data date of 16 Oct 2026. The Calendars page lists every upcoming report with its time of day.
Does PEGA have listed options, and how liquid are they?
Yes. The nightly snapshot found 236 listed contracts with 9,661 open interest across all expiries and implied volatility of 70% on the near-the-money contracts. The Options scanner lists the cash-secured put and covered call set-ups with premium and annualised yield worked out.