Dougherty Cuts Price Target, Estimates on Pegasystems (PEGA) Following Earnings, New Guidance
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Price: $31.88 -1.36%
Rating Summary:
11 Buy, 11 Hold, 0 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 12 | Down: 23 | New: 22
Rating Summary:
11 Buy, 11 Hold, 0 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 12 | Down: 23 | New: 22
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Dougherty & Company is reiterating its Buy rating on shares of Pegasystems (NASDAQ: PEGA), but is cutting its price target from $42 to $31.
The company released its third quarter results below expectations with both sales and earnings missing. The firm notes the miss was due to a 30.5 percent year over year decline in total license revenue. Lower than expected perpetual license revenue was the main driver.
An analyst at Dougherty & Company comments, "The company indicated that delays in signing deals due to macro uncertainty and the mix shift in license revenue toward term license led to the significant license revenue shortfall. Given that term license signings were also down 38 percent and up only 11 percent sequentially, we believe that deal slippage was the main culprit behind the company missing estimates by a wide margin."
Management slashed its FY11 sales and EPS guidance from $435 million and $1.15 to $410 million and $0.61. The company does forecast sales growth of 22 percent for FY12 as it sees revenues exceeding $500 million.
Dougherty & Company is cutting its Q4 sales and EPS estimates from $127.9 million and $0.47 to $105 million and $0.05. For FY11 and FY12, the firm reduced its sales estimates from $447.9 million and $509.1 million to $410 million and $500 million. EPS for the two years is currently forecasted to be $0.61 and $1.22, down from $1.15 and $1.40.
For an analyst ratings summary and ratings history on Pegasystems click here. For more ratings news on Pegasystems click here.
Shares of Pegasystems closed at $37.04 yesterday.
The company released its third quarter results below expectations with both sales and earnings missing. The firm notes the miss was due to a 30.5 percent year over year decline in total license revenue. Lower than expected perpetual license revenue was the main driver.
An analyst at Dougherty & Company comments, "The company indicated that delays in signing deals due to macro uncertainty and the mix shift in license revenue toward term license led to the significant license revenue shortfall. Given that term license signings were also down 38 percent and up only 11 percent sequentially, we believe that deal slippage was the main culprit behind the company missing estimates by a wide margin."
Management slashed its FY11 sales and EPS guidance from $435 million and $1.15 to $410 million and $0.61. The company does forecast sales growth of 22 percent for FY12 as it sees revenues exceeding $500 million.
Dougherty & Company is cutting its Q4 sales and EPS estimates from $127.9 million and $0.47 to $105 million and $0.05. For FY11 and FY12, the firm reduced its sales estimates from $447.9 million and $509.1 million to $410 million and $500 million. EPS for the two years is currently forecasted to be $0.61 and $1.22, down from $1.15 and $1.40.
For an analyst ratings summary and ratings history on Pegasystems click here. For more ratings news on Pegasystems click here.
Shares of Pegasystems closed at $37.04 yesterday.
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