Benzinga - by Benzinga Insights, Benzinga Staff Writer.
On May 1, a recent SEC filing unveiled that Richard H Jones, Director at Pegasystems (NASDAQ:PEGA) made an insider sell.
What Happened: A Form 4 filing from the U.S. Securities and Exchange Commission on Wednesday showed that Jones sold 10,000 shares of Pegasystems. The total transaction amounted to $608,800.
Monitoring the market, Pegasystems's shares down by 3.1% at $58.73 during Thursday's morning.
Discovering Pegasystems: A Closer Look Founded in 1983, Pegasystems provides a suite of solutions for customer engagement and business process management. The company's key offering is the Pega Infinity platform, which combines business process management, or BPM, with customer relationship management, or CRM, applications. The company focuses on enterprise-size customers, specifically within the financial, insurance, and healthcare verticals.
Pegasystems's Financial Performance Revenue Growth: Pegasystems displayed positive results in 3 months. As of 31 March, 2024, the company achieved a solid revenue growth rate of approximately 1.44%. This indicates a notable increase in the company's top-line earnings. When compared to others in the Information Technology sector, the company faces challenges, achieving a growth rate lower than the average among peers.
Exploring Profitability:
- Gross Margin: The company excels with a remarkable gross margin of 71.33%, indicating superior cost efficiency and profitability compared to its industry peers.
- Earnings per Share (EPS): Pegasystems's EPS reflects a decline, falling below the industry average with a current EPS of -0.14.
Market Valuation:
- Price to Earnings (P/E) Ratio: With a lower-than-average P/E ratio of 72.21, the stock indicates an attractive valuation, potentially presenting a buying opportunity.
- Price to Sales (P/S) Ratio: The Price to Sales ratio is 3.6, which is lower than the industry average. This suggests a possible undervaluation based on sales performance.
- EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): Pegasystems's EV/EBITDA ratio stands at 42.36, surpassing industry benchmarks. This places the company in a position with a higher-than-average market valuation.
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Why Insider Transactions Are Key in Investment Decisions Emphasizing the importance of a comprehensive approach, considering insider transactions is valuable, but it's crucial to evaluate them in conjunction with other investment factors.
Within the legal framework, an "insider" is defined as any officer, director, or beneficial owner holding more than ten percent of a company's equity securities as per Section 12 of the Securities Exchange Act of 1934. This includes executives in the c-suite and major hedge funds. These insiders are mandated to disclose their transactions through a Form 4 filing, to be submitted within two business days of the transaction.
The initiation of a new purchase by a company insider serves as a strong indication that they expect the stock to rise.
However, insider sells may not always signal a bearish view and can be influenced by various factors.
A Closer Look at Important Transaction Codes Surveying the realm of stock transactions, investors often give prominence to those unfolding in the open market, systematically detailed in Table I of the Form 4 filing. A P in Box 3 indicates a purchase, while S signifies a sale. Transaction code C denotes the conversion of an option, and transaction code A denotes a grant, award, or other acquisition of securities from the company.
Check Out The Full List Of Pegasystems's Insider Trades.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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