Financial Review: Pegasystems (NASDAQ:PEGA) & LM Funding America (NASDAQ:PWCM)

LM Funding America (NASDAQ:PWCM) and Pegasystems (NASDAQ:PEGA) are both technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, valuation, profitability, risk, dividends and earnings.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
LM Funding America	$8.85 million	0.13	-$26.92 million	($60.51)	-0.01
Pegasystems	$1.75 billion	3.18	$393.44 million	$1.61	21.07

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

Institutional and Insider Ownership

22.7% of LM Funding America shares are owned by institutional investors. Comparatively, 46.9% of Pegasystems shares are owned by institutional investors. 15.0% of LM Funding America shares are owned by company insiders. Comparatively, 48.4% of Pegasystems shares are owned 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.

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
LM Funding America	1	0	0	0	1.00
Pegasystems	2	7	6	0	2.27

Pegasystems has a consensus target price of $45.73, suggesting a potential upside of 34.77%. Given Pegasystems’ stronger consensus rating and higher possible upside, analysts clearly believe Pegasystems is more favorable than LM Funding America.

Risk & Volatility

LM Funding America has a beta of 2.33, suggesting that its stock price is 133% more volatile than the S&P 500. Comparatively, Pegasystems has a beta of 0.89, suggesting that its stock price is 11% less volatile than the S&P 500.

Profitability

This table compares LM Funding America and Pegasystems’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
LM Funding America	-413.92%	-132.69%	-78.02%
Pegasystems	16.86%	35.22%	15.55%

Summary

Pegasystems beats LM Funding America on 13 of the 14 factors compared between the two stocks.

About LM Funding America

LM Funding America, Inc. operates as a cryptocurrency mining and specialty finance company. It operates through two segments, Specialty Finance and Mining Operations. The company also engages in Bitcoin mining operations; and provides funding to nonprofit community associations. The company was founded in 2008 and is based in Tampa, Florida.

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.