Is Pegasystems, Inc. overvalued or undervalued?

As of 24 April 2025, Pegasystems, Inc. has moved from a very attractive to an attractive valuation grade. The company is currently considered overvalued based on its high P/E ratio of 44, which significantly exceeds the industry average. Other notable ratios include a Price to Book Value of 14.35 and an EV to EBITDA of 28.79, indicating that the stock may not be justified at its current price level.
In comparison with peers, Pegasystems' P/E ratio of 43.0850 is higher than CACI International, Inc. at 39.8393, which is rated fair, and significantly lower than Guidewire Software, Inc., which is deemed expensive at a P/E of 233.6913. The company's recent stock performance has been poor, with a year-to-date return of -46.41%, contrasting sharply with the S&P 500's gain of 2.44% over the same period, reinforcing the view that Pegasystems is overvalued at its current price of 49.95.