The truth is that if you invest for long enough, you're going to end up with some losing stocks. But the last three years have been particularly tough on longer term Pegasystems Inc. (NASDAQ:PEGA) shareholders. Sadly for them, the share price is down 67% in that time. Furthermore, it's down 23% in about a quarter. That's not much fun for holders.

So let's have a look and see if the longer term performance of the company has been in line with the underlying business' progress.

View our latest analysis for Pegasystems

Because Pegasystems made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

Over three years, Pegasystems grew revenue at 9.6% per year. That's a fairly respectable growth rate. That contrasts with the weak share price, which has fallen 19% compounded, over three years. To be frank we're surprised to see revenue growth and share price growth diverge so strongly. So this is one stock that might be worth investigating further, or even adding to your watchlist.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

Pegasystems is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. You can see what analysts are predicting for Pegasystems in this interactive graph of future profit estimates.

A Different Perspective

It's good to see that Pegasystems has rewarded shareholders with a total shareholder return of 37% in the last twelve months. That's including the dividend. Notably the five-year annualised TSR loss of 4% per year compares very unfavourably with the recent share price performance. This makes us a little wary, but the business might have turned around its fortunes. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. For instance, we've identified 1 warning sign for Pegasystems that you should be aware of.

Of course Pegasystems may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.