TubeMogul (NASDAQ: TUBE) and Pegasystems (NASDAQ:PEGA) are both technology companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, institutional ownership, analyst recommendations, risk, valuation, dividends and profitabiliy.

Analyst Ratings

This is a breakdown of recent ratings for TubeMogul and Pegasystems, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TubeMogul 0 9 3 0 2.25
Pegasystems 0 1 4 0 2.80

TubeMogul presently has a consensus price target of $13.70, suggesting a potential downside of 2.14%. Pegasystems has a consensus price target of $58.00, suggesting a potential downside of 4.61%. Given TubeMogul’s higher possible upside, analysts clearly believe TubeMogul is more favorable than Pegasystems.

Dividends

Pegasystems pays an annual dividend of $0.12 per share and has a dividend yield of 0.2%. TubeMogul does not pay a dividend. Pegasystems pays out 23.1% of its earnings in the form of a dividend.

Earnings and Valuation

This table compares TubeMogul and Pegasystems’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
TubeMogul N/A N/A N/A ($0.72) -19.44
Pegasystems $794.66 million 5.90 $81.36 million $0.52 116.93

Pegasystems has higher revenue and earnings than TubeMogul. TubeMogul is trading at a lower price-to-earnings ratio than Pegasystems, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

TubeMogul has a beta of 3.47, meaning that its share price is 247% more volatile than the S&P 500. Comparatively, Pegasystems has a beta of 1.46, meaning that its share price is 46% more volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
TubeMogul -22.16% -39.25% -17.28%
Pegasystems 5.26% 14.77% 7.89%

Institutional and Insider Ownership

60.6% of TubeMogul shares are owned by institutional investors. Comparatively, 44.1% of Pegasystems shares are owned by institutional investors. 22.2% of TubeMogul shares are owned by insiders. Comparatively, 53.6% of Pegasystems shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

Pegasystems beats TubeMogul on 9 of the 13 factors compared between the two stocks.

About TubeMogul

TubeMogul, Inc. provides software for brand advertising. The Company’s software platform is used by advertisers to plan, buy, measure and optimize their global brand advertising. Its self-serve software platform enables advertisers to buy advertisement inventory across various advertising channels, including linear television, video-on-demand, connected television, digital video, digital display and social media. By integrating programmatic technologies and disparate sources of inventory within a single platform, it enables the customers to launch advertising campaigns onto digital devices and televisions. Its customers are primarily brands and the advertising agencies that serve them. Brands refer to companies, or product lines within companies, that control advertising budgets for a single marketing brand or a group of marketing brands. Agency trading desks, advertisement networks and publishers also use its platform.

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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