Pegasystems Focusing on Larger and Existing Customers as Well as Profitability; FVE Stable at $104

At Pegasystems' investor day, key topics discussed included the current environment, product portfolio, sales strategy, sales partners, and the company's financial evolution according to the rule of 40. Purposefully absent from the event was a discussion of the recent legal decision that went against the company and awarded $2 billion to Appian. We see no changes to our long-term thinking and thus maintain our fair value estimate of $104 per share for this narrow moat name. Should the firm hit its new operating targets for 2025, we see material upside to our estimates. That said, given the selloff in software stocks, including Pegasystems, we view shares as attractive but would prefer ServiceNow and Salesforce at these levels.