Contrasting PTC (NASDAQ:PTC) & Pegasystems (NASDAQ:PEGA)

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

Institutional and Insider Ownership

95.1% of PTC shares are held by institutional investors. Comparatively, 46.9% of Pegasystems shares are held by institutional investors. 0.3% of PTC shares are held by company insiders. Comparatively, 49.7% of Pegasystems shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
PTC	27.05%	23.02%	12.81%
Pegasystems	16.05%	43.49%	18.42%

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PTC	0	5	12	0	2.71
Pegasystems	0	2	9	0	2.82

PTC currently has a consensus target price of $205.92, suggesting a potential upside of 20.06%. Pegasystems has a consensus target price of $70.05, suggesting a potential upside of 20.90%. Given Pegasystems’ stronger consensus rating and higher possible upside, analysts clearly believe Pegasystems is more favorable than PTC.

Volatility and Risk

PTC has a beta of 1.01, meaning that its stock price is 1% more volatile than the S&P 500. Comparatively, Pegasystems has a beta of 1.08, meaning that its stock price is 8% more volatile than the S&P 500.

Valuation and Earnings

This table compares PTC and Pegasystems”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
PTC	$2.74 billion	7.45	$741.03 million	$6.14	27.93
Pegasystems	$1.73 billion	5.68	$99.19 million	$1.49	38.89

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

About PTC

PTC Inc. operates as software company in the Americas, Europe, and the Asia Pacific. The company provides Windchill, a suite that manages all aspects of the product development lifecycle(PLM) that provides real-time information sharing, dynamic data visualization, collaborate across geographically distributed teams, and enabling manufacturers to elevate product development, manufacturing, and field service processes; ThingWorx, a platform for Industrial Internet of Things; ServiceMax, a field service management solutions enable companies to asset uptime with optimized in-person and remote service and technician productivity with mobile tools. and deliver metrics; and Arena, a SaaS PLM solution enables product teams to collaborate virtually to share product and quality information with internal teams and supply chain partners and deliver products to customers. It offers Codebeamer, an application lifecycle management for products and software development; Servigistics, a service parts management solution; and FlexPLM, a solution provides retailers with a single platform for merchandising and line planning, materials management, sampling, and others. In addition, it offers Kepware, a portfolio of industrial connectivity solutions helps companies connect diverse automation devices and software applications; Creo, a 3D CAD technology enables the digital design, testing, and modification of product models; and Onshape, a cloud product development platform that delivers computer-aided design with data management tools. Further, it offers Vuforia, an augmented reality (AR) technology enables the visualization of digital information in a physical context and the creation of AR enabling companies to drive results in manufacturing, service, engineering, and operations; and Arbortext, a dynamic publishing solution streamlines how organizations create, manage, and publish technical documentation. PTC Inc. was incorporated in 1985 and is headquartered in Boston, Massachusetts.

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.