Pegasystems (NASDAQ: PEGA) is one of 97 publicly-traded companies in the “Enterprise Software” industry, but how does it contrast to its peers? We will compare Pegasystems to related businesses based on the strength of its profitability, analyst recommendations, earnings, valuation, institutional ownership, risk and dividends.

Valuation & Earnings

This table compares Pegasystems and its peers top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Pegasystems $803.64 million $75.15 million 97.46
Pegasystems Competitors $1.27 billion $348.09 million 36.11

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

Profitability

This table compares Pegasystems and its peers’ 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 -24.76% -210.47% -7.65%

Institutional & Insider Ownership

44.5% of Pegasystems shares are owned by institutional investors. Comparatively, 60.0% of shares of all “Enterprise Software” companies are owned by institutional investors. 53.6% of Pegasystems shares are owned by company insiders. Comparatively, 23.0% of shares of all “Enterprise Software” companies are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

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.

Analyst Ratings

This is a summary of current ratings and price targets for Pegasystems and its peers, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Pegasystems 0 1 4 0 2.80
Pegasystems Competitors 345 2057 3908 107 2.59

Pegasystems currently has a consensus target price of $61.75, suggesting a potential upside of 3.87%. As a group, “Enterprise Software” companies have a potential upside of 2.28%. Given Pegasystems’ stronger consensus rating and higher probable upside, analysts plainly believe Pegasystems is more favorable than its peers.

Volatility & Risk

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

Summary

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

Pegasystems Company Profile

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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