Financial Survey: Pegasystems (NASDAQ:PEGA) and Progress Software (NASDAQ:PRGS)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Pegasystems	22.54%	38.86%	18.27%
Progress Software	7.48%	43.90%	8.28%

Insider and Institutional Ownership

46.9% of Pegasystems shares are held by institutional investors. 49.7% of Pegasystems shares are held by company insiders. Comparatively, 3.4% of Progress Software shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Volatility & Risk

Pegasystems has a beta of 1.06, meaning that its share price is 6% more volatile than the S&P 500. Comparatively, Progress Software has a beta of 0.57, meaning that its share price is 43% less volatile than the S&P 500.

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Pegasystems	0	2	9	1	2.92
Progress Software	1	1	4	0	2.50

Pegasystems currently has a consensus target price of $67.60, indicating a potential upside of 55.69%. Progress Software has a consensus target price of $64.60, indicating a potential upside of 106.46%. Given Progress Software’s higher probable upside, analysts plainly believe Progress Software is more favorable than Pegasystems.

Earnings & Valuation

This table compares Pegasystems and Progress Software”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Pegasystems	$1.75 billion	4.20	$393.44 million	$2.13	20.38
Progress Software	$977.83 million	1.35	$73.13 million	$1.66	18.85

Pegasystems has higher revenue and earnings than Progress Software. Progress Software 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 Progress Software on 13 of the 15 factors compared between the two stocks.

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.

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.