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Pegasystems Inc. (0KGS.L)

Company Dividend Discount ModelIndustry: Software - ServicesSector: Technology

Valuation Snapshot

Stable Growth$17.19 - $28.25$22.11
Multi-Stage$19.92 - $21.85$20.87
Blended Fair Value$21.49
Current Price$57.50
Upside-62.63%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS1.46%4.02%0.050.050.050.050.050.050.050.050.050.05
YoY Growth--2.36%1.32%0.75%1.38%1.50%0.57%1.67%1.12%-0.22%33.75%
Dividend Yield--0.16%0.17%0.22%0.13%0.09%0.14%0.15%0.16%0.22%0.39%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)277.95
(-) Cash Dividends Paid (M)12.88
(=) Cash Retained (M)265.07
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)55.5934.7420.85
Cash Retained (M)265.07265.07265.07
(-) Cash Required (M)-55.59-34.74-20.85
(=) Excess Retained (M)209.48230.33244.23
(/) Shares Outstanding (M)186.59186.59186.59
(=) Excess Retained per Share1.121.231.31
LTM Dividend per Share0.070.070.07
(+) Excess Retained per Share1.121.231.31
(=) Adjusted Dividend1.191.301.38
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate2.02%3.02%4.02%
Fair Value$17.19$22.11$28.25
Upside / Downside-70.11%-61.55%-50.87%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)277.95286.36295.02303.94313.13322.60332.28
Payout Ratio4.63%21.71%38.78%55.85%72.93%90.00%92.50%
Projected Dividends (M)12.8862.16114.41169.76228.36290.34307.36

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate2.02%3.02%4.02%
Year 1 PV (M)56.4256.9857.53
Year 2 PV (M)94.2796.1298.00
Year 3 PV (M)126.96130.73134.58
Year 4 PV (M)155.03161.19167.54
Year 5 PV (M)178.92187.86197.15
PV of Terminal Value (M)3,105.973,261.203,422.58
Equity Value (M)3,717.563,894.084,077.38
Shares Outstanding (M)186.59186.59186.59
Fair Value$19.92$20.87$21.85
Upside / Downside-65.35%-63.70%-62.00%

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