Barclays Cuts Pegasystems, Descartes Systems to Underweight, Jamf Upgraded to Overweight

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By Sam Boughedda

Barclays analysts moved Pegasystems (NASDAQ:PEGA) and Descartes Systems Group (NASDAQ:DSGX) to Underweight from Equal Weight due to stock-specific reasons and upgraded Jamf Holding (NASDAQ:JAMF) to Overweight in a note to clients.

Barclays cut the price target of Pegasystems to $25 from $50 per share while also trimming Descartes' price target to $60 from $72 per share. Jamf's price target was raised to $28 from $26 per share.

The analysts explained that Pegasystems has the overhang of the $2 billion legal case, while Descartes Systems has strong exposure to slowing trade volumes.

"We believe the legal impact stemming from the verdict against Pega is mostly embedded in shares but are taking more of a contrarian view at this junction when downgrading the shares. Ultimately, we think when taken together, the points below make it difficult to invest in Pega over the near or medium-term vs. other software names (IGV basket) that have cleaner narratives, leading to relative underperformance for Pega shares," the analysts wrote.

On Descartes, they stated that the company has heavy exposure to the global trade outlook. "We can see all the signs that volumes are slowing but shares are still trading at a premium to its peers. We think there likely could be a reset here," explained the analysts

Finally, commenting on Jamf, they said it has "demonstrated solid growth and cash flow margins since going public in July 2020."

"Its dependency on the Apple (NASDAQ:AAPL) eco-system and competitive chatter (VMware (NYSE:VMW), MobileIron (NASDAQ:MOBL)) held shares back versus peers. However, the competitive situation is now dramatically easier with no pure-play, focused public players left. Furthermore, JAMF has significantly broadened its offering by adding security etc. and ~18x CY24 EV/FCF for ~25% revenue growth and ~22% FCF margins looks attractive," the analysts concluded.