Analyzing MAM Software Group (MAMS) and Pegasystems (PEGA)

MAM Software Group (NASDAQ: MAMS) and Pegasystems (NASDAQ:PEGA) are both computer and technology companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, analyst recommendations, risk, earnings, institutional ownership, profitability and dividends.

Volatility and Risk

MAM Software Group has a beta of -0.01, meaning that its share price is 101% less volatile than the S&P 500. Comparatively, Pegasystems has a beta of 1.26, meaning that its share price is 26% more volatile than the S&P 500.

Profitability

This table compares MAM Software Group and Pegasystems’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
MAM Software Group 12.46% 40.12% 14.75%
Pegasystems 5.67% 9.86% 5.34%

Earnings & Valuation

This table compares MAM Software Group and Pegasystems’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
MAM Software Group $31.60 million 3.01 $4.57 million $0.35 21.57
Pegasystems $750.27 million 5.19 $26.98 million $0.55 90.91

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

Insider & Institutional Ownership

30.4% of MAM Software Group shares are held by institutional investors. Comparatively, 45.7% of Pegasystems shares are held by institutional investors. 32.5% of MAM Software Group shares are held by insiders. Comparatively, 53.6% of Pegasystems shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company 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%. MAM Software Group does not pay a dividend. Pegasystems pays out 21.8% of its earnings in the form of a dividend.

Analyst Ratings

This is a breakdown of current recommendations for MAM Software Group and Pegasystems, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
MAM Software Group 0 1 0 0 2.00
Pegasystems 0 0 4 0 3.00

MAM Software Group presently has a consensus target price of $8.50, indicating a potential upside of 12.58%. Pegasystems has a consensus target price of $61.75, indicating a potential upside of 23.50%. Given Pegasystems’ stronger consensus rating and higher probable upside, analysts clearly believe Pegasystems is more favorable than MAM Software Group.

Summary

Pegasystems beats MAM Software Group on 12 of the 16 factors compared between the two stocks.

About MAM Software Group

MAM Software Group, Inc. (MAM) is a technology holding company. The Company is a provider of cloud-based business and on premise management solutions for the auto parts, tires and vertical distribution industries. Its segments include MAM UK and MAM NA. It operates through three subsidiaries: MAM Software, Inc. (MAM NA), MAM Software Limited (MAM Ltd.) and Origin Software Solutions Ltd. (Origin) (MAM Ltd. and Origin are collectively referred to as MAM UK). The Company provides software, information and related services to businesses engaged in the automotive aftermarket in the United States, Canada, the United Kingdom and Ireland. In the United Kingdom Market, it also provides management solutions to businesses involved in the wholesale of construction materials. Its products and services include business management systems, information products, online services, and customer support and consulting and training.

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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