Critical Survey: Progress Software (NASDAQ:PRGS) vs. Microsoft (NASDAQ:MSFT)

Progress Software (NASDAQ:PRGS) and Microsoft (NASDAQ:MSFT) are both computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, profitability, analyst recommendations, institutional ownership, earnings, valuation and risk.

Profitability

This table compares Progress Software and Microsoft’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Progress Software	6.63%	43.72%	8.47%
Microsoft	36.15%	32.44%	18.20%

Risk and Volatility

Progress Software has a beta of 0.68, meaning that its share price is 32% less volatile than the S&P 500. Comparatively, Microsoft has a beta of 1.04, meaning that its share price is 4% more volatile than the S&P 500.

Valuation & Earnings

This table compares Progress Software and Microsoft”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Progress Software	$753.41 million	2.65	$68.44 million	$1.31	35.34
Microsoft	$281.72 billion	13.37	$101.83 billion	$13.64	37.15

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

Institutional & Insider Ownership

71.1% of Microsoft shares are held by institutional investors. 3.6% of Progress Software shares are held by insiders. Comparatively, 0.0% of Microsoft shares are held by 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.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Progress Software and Microsoft, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Progress Software	0	2	4	0	2.67
Microsoft	0	2	29	1	2.97

Progress Software presently has a consensus target price of $73.33, indicating a potential upside of 58.42%. Microsoft has a consensus target price of $612.54, indicating a potential upside of 20.89%. Given Progress Software’s higher probable upside, equities analysts plainly believe Progress Software is more favorable than Microsoft.

Summary

Microsoft beats Progress Software on 12 of the 15 factors compared between the two stocks.

About Progress Software

Progress Software Corporation develops, deploys, and manages business applications in the United States and internationally. The company offers OpenEdge, an application development platform for running business-critical applications; Chef, a DevOps/DevSecOps automation software; Developer Tools that consists of software development tooling collection, including .NET and JavaScript UI components for web, desktop and mobile applications, reporting and report management tools, and automated testing and mocking tools; Kemp LoadMaster, an application delivery and security product offering cloud-native, and virtual and hardware load balancers; and Sitefinity, a digital experience platform foundation delivering intelligent and ROI-driving tools for marketers. It also provides MOVEit, a managed file transfer software for managing and controlling the movement of sensitive files and securing them both at-rest and in-transit; DataDirect, a secure data connectivity tools for Relational, NoSQL, Big Data and SaaS data sources; WhatsUp Gold, a network infrastructure monitoring software providing complete visibility of all network devices, servers, virtual machines, and cloud and wireless environments to find and fix network problems; Flowmon, a network security and visibility product with automated response across hybrid cloud ecosystems; Corticon, a decision automation platform to transform user experiences by streamlining and automating complex business rules; MarkLogic, a data agility platform to connect data and metadata; and Semaphore, a Semantic AI platform. The company offers project management, implementation, custom software development, programming, and other services, as well as web-enable applications; and training services. It sells its products to end users, independent software vendors, original equipment manufacturers, system integrators, value added resellers, and distributors. The company was founded in 1981 and is headquartered in Burlington, Massachusetts.

About Microsoft

Microsoft Corporation develops and supports software, services, devices and solutions worldwide. The Productivity and Business Processes segment offers office, exchange, SharePoint, Microsoft Teams, office 365 Security and Compliance, Microsoft viva, and Microsoft 365 copilot; and office consumer services, such as Microsoft 365 consumer subscriptions, Office licensed on-premises, and other office services. This segment also provides LinkedIn; and dynamics business solutions, including Dynamics 365, a set of intelligent, cloud-based applications across ERP, CRM, power apps, and power automate; and on-premises ERP and CRM applications. The Intelligent Cloud segment offers server products and cloud services, such as azure and other cloud services; SQL and windows server, visual studio, system center, and related client access licenses, as well as nuance and GitHub; and enterprise services including enterprise support services, industry solutions, and nuance professional services. The More Personal Computing segment offers Windows, including windows OEM licensing and other non-volume licensing of the Windows operating system; Windows commercial comprising volume licensing of the Windows operating system, windows cloud services, and other Windows commercial offerings; patent licensing; and windows Internet of Things; and devices, such as surface, HoloLens, and PC accessories. Additionally, this segment provides gaming, which includes Xbox hardware and content, and first- and third-party content; Xbox game pass and other subscriptions, cloud gaming, advertising, third-party disc royalties, and other cloud services; and search and news advertising, which includes Bing, Microsoft News and Edge, and third-party affiliates. The company sells its products through OEMs, distributors, and resellers; and directly through digital marketplaces, online, and retail stores. The company was founded in 1975 and is headquartered in Redmond, Washington.