Reviewing Pegasystems (PEGA) and Apptio (APTI)

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

Profitability

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

Net Margins Return on Equity Return on Assets
Pegasystems 6.17% 13.06% 7.04%
Apptio -17.36% -41.76% -15.95%

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Pegasystems $803.64 million 5.76 $75.15 million $0.61 97.79
Apptio $174.10 million 4.28 -$22.22 million ($1.19) -15.66

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

Dividends

Pegasystems pays an annual dividend of $0.12 per share and has a dividend yield of 0.2%. Apptio does not pay a dividend. Pegasystems pays out 19.7% of its earnings in the form of a dividend.

Analyst Recommendations

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Pegasystems 0 1 4 0 2.80
Apptio 0 2 7 0 2.78

Pegasystems currently has a consensus price target of $61.75, suggesting a potential upside of 3.52%. Apptio has a consensus price target of $23.33, suggesting a potential upside of 25.25%. Given Apptio’s higher possible upside, analysts plainly believe Apptio is more favorable than Pegasystems.

Institutional & Insider Ownership

44.5% of Pegasystems shares are owned by institutional investors. Comparatively, 45.3% of Apptio shares are owned by institutional investors. 53.6% of Pegasystems shares are owned by insiders. Comparatively, 43.2% of Apptio shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

Pegasystems beats Apptio on 10 of the 14 factors compared between the two stocks.

Pegasystems Company Profile

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.

Apptio Company Profile

Apptio, Inc. is a provider of technology business management (TBM) solutions. The Company’s cloud-based platform and software as a service (SaaS) applications enable information technology (IT) leaders to analyze, optimize and plan technology investments, and benchmark the financial and operational performance against peers. It operates in the United States, the United Kingdom, Germany, Denmark, the Netherlands, Australia, Canada, France and Singapore. Its TBM solutions consist of a cloud-based platform and SaaS applications, which include Cost Transparency, IT Benchmarking, Business Insights, Bill of IT and IT Planning. It serves a range of industries, including financial services, professional services, technology, energy, consumer goods, manufacturing, healthcare, media, retail and transportation, as well as federal and state government agencies. Its cloud-based data and analytics platform aggregates, cleanses and correlates customer data from a range of disparate sources.

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