On Wednesday, Pegasystems Inc . (NASDAQ:PEGA) stock received an upgraded rating from JMP Securities, moving from Market Perform to Market Outperform. Alongside this upgrade, the firm has set a new price target for Pegasystems shares at $85.00.
The decision to raise the company's stock rating followed a significant legal development. The Virginia Court of Appeals recently reversed a jury verdict that had previously ordered Pegasystems to pay approximately $2 billion to Appian (NASDAQ:APPN) Corporation (NASDAQ:APPN) in a case concerning the alleged misappropriation of trade secrets. The case has been remanded for a new trial.
The reversal of the jury verdict appears to have positively influenced JMP Securities' outlook on Pegasystems. This development has led to a reassessment of the company's stock by the firm, culminating in the elevated rating and price target.
Pegasystems, a software company that develops digital transformation applications, had been facing financial uncertainty due to the substantial jury verdict. The latest court decision, however, has provided the company with an opportunity to defend its position once more, potentially impacting its financial outlook and market performance.
In other recent news, Pegasystems Inc. has experienced significant developments both legally and financially. The Court of Appeals of Virginia has overturned a previous verdict against Pegasystems, leading to a new trial in their lawsuit with Appian Corp . This development is seen as a positive outcome, potentially removing a major uncertainty that had been affecting the company.
In terms of financial performance, Pegasystems reported robust second-quarter results, with a 13% year-over-year increase in annual contract value (ACV) in constant currency, exceeding $1.3 billion. The company's free cash flow reached $218 million, a substantial 62% of Pega's $350 million target for 2024.
JPMorgan and RBC Capital have responded to these developments by raising their price targets for Pegasystems to $83 and $90 respectively, while maintaining positive ratings on the company. These adjustments reflect the company's ongoing growth and profitability, as well as the potential for growth through Generative AI. The legal and financial developments are expected to provide a clearer outlook for the company's future.
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