Pegasystems (NASDAQ:PEGA) and Its Competitors Critical Survey

Pegasystems (NASDAQ: PEGA) is one of 97 public companies in the “Enterprise Software” industry, but how does it weigh in compared to its competitors? We will compare Pegasystems to similar companies based on the strength of its risk, institutional ownership, analyst recommendations, earnings, dividends, profitability and valuation.

Analyst Recommendations

This is a summary of recent ratings and price targets for Pegasystems and its competitors, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Pegasystems 0 1 4 0 2.80
Pegasystems Competitors 349 2065 3932 107 2.59

Pegasystems presently has a consensus target price of $61.75, suggesting a potential upside of 7.02%. As a group, “Enterprise Software” companies have a potential upside of 1.80%. Given Pegasystems’ stronger consensus rating and higher probable upside, analysts clearly believe Pegasystems is more favorable than its competitors.

Insider & Institutional Ownership

44.5% of Pegasystems shares are held by institutional investors. Comparatively, 60.3% of shares of all “Enterprise Software” companies are held by institutional investors. 53.6% of Pegasystems shares are held by company insiders. Comparatively, 22.5% of shares of all “Enterprise Software” companies are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Risk & Volatility

Pegasystems has a beta of 1.48, indicating that its share price is 48% more volatile than the S&P 500. Comparatively, Pegasystems’ competitors have a beta of 1.13, indicating that their average share price is 13% more volatile than the S&P 500.

Dividends

Pegasystems pays an annual dividend of $0.12 per share and has a dividend yield of 0.2%. Pegasystems pays out 19.7% of its earnings in the form of a dividend. As a group, “Enterprise Software” companies pay a dividend yield of 0.8% and pay out 26.9% of their earnings in the form of a dividend.

Earnings & Valuation

This table compares Pegasystems and its competitors top-line revenue, earnings per share and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Pegasystems $803.64 million $75.15 million 94.59
Pegasystems Competitors $1.27 billion $348.09 million 34.83

Pegasystems’ competitors have higher revenue and earnings than Pegasystems. Pegasystems is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Profitability

This table compares Pegasystems and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Pegasystems 6.17% 13.06% 7.04%
Pegasystems Competitors -24.74% -210.58% -7.69%

Summary

Pegasystems beats its competitors on 10 of the 15 factors compared.

About Pegasystems

Pegasystems Inc. develops, markets, licenses and supports software applications for marketing, sales and onboarding, and customer service needs. The Company also offers software applications built on the Pega platform. Its software is designed to assist clients in building, deploying and evolving enterprise applications. Its applications and platform intersect with and encompass several traditional software markets, including Customer Relationship Management (CRM); Business Process Management (BPM); Business Rules Management Systems (BRMS); Dynamic Case Management (DCM); Decision Management, which includes Predictive and Adaptive analytics, and the Vertical Specific Software (VSS) market of industry solutions and packaged applications. It provides implementation, consulting, training, technical support and hosting services to facilitate the use of its software. The Company offers its services to financial, healthcare, insurance, manufacturing, life sciences and other markets.

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