Pegasystems (PEGA) continues to be an "under-the-radar" artificial intelligence play with its strength in automating processes for enterprises, Wedbush said in a Tuesday note.
The company is positioned for another quarter of strong growth in annual contract value underpinned by the success of its Blueprint agentic AI product, which continues to gain traction, Wedbush analysts said. The product is still in the early stages of reaching its potential, with less than 20% of large enterprise application in the cloud, the analysts said.
Blueprint fast-tracks the digital transformation of legacy applications and results in faster development cycles, which is timely considering that more users are looking to deploy generative AI agents easily, quickly, and at scale, the analysts said. They added that the product makes it easier for new customers to enter the Pega ecosystem, which should help boost growth in annual contract value moving forward.
Pegasystems' updated go-to-market strategy with Blueprint as its featured selling point will add more recurring revenue streams, which will result in stronger margins and free cash flow generation, according to the note.
Pegasystems is reporting its Q4 earnings after market close on Feb. 10.
Wedbush maintained the company's stock rating at outperform and price target at $75.
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