Analyzing Ringcentral (NYSE:RNG) and Pegasystems (PEGA)
Ringcentral (NYSE: RNG) and Pegasystems (NASDAQ:PEGA) are both mid-cap computer and technology companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, earnings, valuation, institutional ownership, risk, analyst recommendations and profitabiliy.
This table compares Ringcentral and Pegasystems’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Pegasystems pays an annual dividend of $0.12 per share and has a dividend yield of 0.2%. Ringcentral does not pay a dividend. Pegasystems pays out 23.1% of its earnings in the form of a dividend.
Institutional & Insider Ownership
71.2% of Ringcentral shares are held by institutional investors. Comparatively, 44.8% of Pegasystems shares are held by institutional investors. 14.5% of Ringcentral shares are held by insiders. Comparatively, 53.6% of Pegasystems shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Earnings & Valuation
This table compares Ringcentral and Pegasystems’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Ringcentral||$432.57 million||5.06||-$12.96 million||($0.39)||-90.00|
|Pegasystems||$794.66 million||5.76||$81.36 million||$0.52||114.14|
Pegasystems has higher revenue and earnings than Ringcentral. Ringcentral 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
Ringcentral has a beta of 0.83, suggesting that its share price is 17% less volatile than the S&P 500. Comparatively, Pegasystems has a beta of 1.46, suggesting that its share price is 46% more volatile than the S&P 500.
This is a breakdown of recent ratings for Ringcentral and Pegasystems, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Ringcentral presently has a consensus price target of $38.17, suggesting a potential upside of 8.74%. Pegasystems has a consensus price target of $58.00, suggesting a potential downside of 2.27%. Given Ringcentral’s stronger consensus rating and higher probable upside, equities analysts clearly believe Ringcentral is more favorable than Pegasystems.
Pegasystems beats Ringcentral on 10 of the 15 factors compared between the two stocks.
RingCentral, Inc. is a provider of software-as-a-service (SaaS) solutions for businesses to support modern communications. The Company’s cloud-based business communications solutions provide a single user identity across multiple locations and devices, including smartphones, tablets, personal computers (PCs) and desk phones, and allow for communication across multiple channels, including high definition (HD) voice, video, short messaging service (SMS), messaging and collaboration, conferencing, online meetings, and fax. The Company’s products include RingCentral Office, RingCentral Professional, RingCentral Fax, RingCentral Contact Center and RingCentral Glip. RingCentral Office is a multi-user, enterprise-grade communications solution. RingCentral Professional is an inbound call routing subscription with additional text and fax capabilities targeting smaller deployments, and RingCentral Fax is an Internet fax subscription that permits sending and receiving faxes over the Internet.
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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