Pegasystems (NASDAQ:PEGA) & Blackbaud (NASDAQ:BLKB) Financial Analysis

Blackbaud (NASDAQ:BLKB) and Pegasystems (NASDAQ:PEGA) are both mid-cap computer and technology companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, analyst recommendations, risk, profitability, earnings, valuation and dividends.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Blackbaud	-22.57%	137.13%	5.46%
Pegasystems	16.05%	43.49%	18.42%

Analyst Ratings

This is a summary of recent ratings and recommmendations for Blackbaud and Pegasystems, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Blackbaud	1	3	0	0	1.75
Pegasystems	0	2	9	0	2.82

Blackbaud presently has a consensus price target of $73.00, indicating a potential upside of 17.91%. Pegasystems has a consensus price target of $70.05, indicating a potential upside of 20.20%. Given Pegasystems’ stronger consensus rating and higher possible upside, analysts plainly believe Pegasystems is more favorable than Blackbaud.

Risk & Volatility

Blackbaud has a beta of 1.07, meaning that its share price is 7% more volatile than the S&P 500. Comparatively, Pegasystems has a beta of 1.08, meaning that its share price is 8% more volatile than the S&P 500.

Insider and Institutional Ownership

94.2% of Blackbaud shares are owned by institutional investors. Comparatively, 46.9% of Pegasystems shares are owned by institutional investors. 2.0% of Blackbaud shares are owned by company insiders. Comparatively, 50.1% of Pegasystems shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Blackbaud and Pegasystems”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Blackbaud	$1.16 billion	2.56	-$283.17 million	($5.20)	-11.91
Pegasystems	$1.50 billion	6.61	$99.19 million	$1.49	39.11

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

Summary

Pegasystems beats Blackbaud on 12 of the 14 factors compared between the two stocks.

About Blackbaud

Blackbaud, Inc. provides cloud software solutions to nonprofits, foundations, education institutions, and healthcare organizations in the United States and internationally. The company offers fundraising and engagement solutions, such as Blackbaud Raiser's Edge NXT, Blackbaud CRM, Blackbaud eTapestry, Blackbaud Luminate Online, Blackbaud TeamRaiser, JustGiving, Blackbaud Fundraiser Performance Management, Blackbaud Guided Fundraising, and Blackbaud Altru; and financial management solutions comprising Blackbaud Financial Edge NXT, Blackbaud Tuition Management, and Blackbaud Financial Aid and Billing Management. It also provides grant and award management solutions, consisting of Blackbaud Grantmaking and Blackbaud Award Management; education solutions, such as Blackbaud Student Information System, Blackbaud Learning Management System, Blackbaud Enrollment Management System, and Blackbaud School Website System; social responsibility solutions, which includes YourCause GrantsConnect and YourCause CSRconnect, and EVERFI; Blackbaud Merchant Services and Blackbaud Purchase Cards payment services; and Blackbaud's Intelligence for Good solutions, as well as Data Health, Insights, and Performance solutions and services. The company sells its solutions and related services through its direct sales force. Blackbaud, Inc. was founded in 1981 and is headquartered in Charleston, South Carolina.

About Pegasystems

Pegasystems Inc. develops, markets, licenses, hosts, and supports enterprise software in the United States, rest of the Americas, the United Kingdom, rest of Europe, the Middle East, Africa, and the Asia-Pacific. The company provides Pega Infinity, a software portfolio comprising of Pega Customer Decision Hub, a real-time AI-powered decision engine to enhance customer acquisition and experiences across inbound, outbound, and paid media channels; Pega Customer Service to anticipate customer needs, connect customers to people and systems, and automate customer interactions to evolve the customer service experience, as well as to allow enterprises to deliver interactions across channels and enhance employee productivity; and Pega Platform, an intelligent automation software for increasing efficiency of clients’ processes and workflows. It also offers Situational Layer Cake that organizes logic into layers that map to the unique dimensions of a client’s business, such as customer types, lines of business, geographies, etc.; Pega Express Methodology and low code that connects enterprise data and systems to customer experience channels; Pega Cloud that allows clients to develop, test, and deploy applications; Pega Catalyst, which helps clients to transform and prototype their customer journeys; Pega Academy, which offers instructor-led and online training to its employees, clients, and partners; and global service assurance and client support services. It primarily markets its software and services to financial services, healthcare, communications and media, government, insurance, manufacturing and high tech, and consumer services markets through a direct sales force, as well as partnerships with technology providers and application developers. Pegasystems Inc. was incorporated in 1983 and is headquartered in Cambridge, Massachusetts.