Rosenblatt cuts Pegasystems stock price target on weaker growth outlook

Rosenblatt has reduced its price target for Pegasystems Inc. (NASDAQ:PEGA) stock to $43 from $47, while maintaining a Buy rating. The company's stock is currently trading at $34.99, down nearly 39% year-to-date. The downgrade is attributed to weaker growth outlook due to AI-driven buyer indecision and longer approval cycles, particularly in financial services, which have slowed deal closures.

Pegasystems has taken steps to improve execution, including go-to-market and reporting structure changes, and now anticipates fiscal 2026 annual contract value growth between the year-to-date level and 10%, down from the previous 15% target. The firm remains optimistic about Pegasystems' fourth-quarter pipeline, which is considered large and mature, supporting growth in the first half of 2027.

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