The pentagon is pointing in clockwise direction at each step.
The alphabets are also moving in cyclic order as shown in the figure below.
The next step will be:
The Pentagon will face towards the left.
The alphabet at the top left will be V and the alphabet at the bottom right will be W.
Now we consider the given options:
Option 1) The pattern is correct.
Option 2) The position of alphabet is wrong, and face of pentagon is pointing in wrong direction.
Option 3) Face of pentagon is pointing in wrong direction
Option 4) The position of alphabets is wrong.
Hence the correct answer is option 1)
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