10 Best Beaten Down Software Stocks With the Highest Upside Potential

4. Pegasystems Inc. (NASDAQ:PEGA)

J.P. Morgan analyst Alexei Gogolev reduced the firm’s price target on Pegasystems Inc. (NASDAQ:PEGA) from $74 to $64 on February 13. However, he reiterated his Buy rating on the stock. The firm’s price target implies a further 52.4% upside from the current levels.

In addition to J.P. Morgan, RBC Capital also lowered its price target on Pegasystems Inc. (NASDAQ:PEGA) on February 11. The firm reduced its price target on the stock from $80 to $65 while keeping an Outperform rating. The firm said that the company’s initial guidance for fiscal year 2026 is cautious. The company has the potential to beat these estimates throughout the year, backed by strong sales, increased cloud migration, new partner investments, and continued momentum for its Blueprint platform.

Pegasystems Inc. (NASDAQ:PEGA) announced its fourth-quarter earnings on February 11. As reported, Total ACV rose 17% as compared to the previous year, while Pega Cloud ACV grew 33% year-over-year. The company completed significant buybacks and dividend payments during the quarter and paid down a large portion of its debt. Free cash flow for the quarter reached $491 million, exceeding the guidance. For 2026, Pegasystems Inc. (NASDAQ:PEGA) expects total revenue of $2 billion and total ACV growth of 15%. The company is projected to generate $575 million in free cash flow during the year.

Pegasystems Inc. (NASDAQ:PEGA) hosts, develops, licenses, markets, and supports enterprise software. The company operates across the United Kingdom, the United States, Africa, the rest of the Americas, the Asia-Pacific, the rest of Europe, and the Middle East. It mainly serves the government, healthcare, financial services, manufacturing & high tech, communications & media, insurance, and consumer industries.