Pegasystems (PEGA) & Model N (NYSE:MODN) Head to Head Contrast

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

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Pegasystems $750.27 million 5.22 $26.98 million $0.59 85.25
Model N $131.17 million 3.57 -$39.54 million ($1.38) -11.52

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

Profitability

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

Net Margins Return on Equity Return on Assets
Pegasystems 5.67% 9.86% 5.34%
Model N -30.15% -55.26% -17.57%

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Pegasystems and Model N, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Pegasystems 0 1 4 0 2.80
Model N 0 2 3 0 2.60

Pegasystems presently has a consensus target price of $61.75, indicating a potential upside of 22.76%. Model N has a consensus target price of $18.00, indicating a potential upside of 13.21%. Given Pegasystems’ stronger consensus rating and higher possible upside, equities research analysts plainly believe Pegasystems is more favorable than Model N.

Insider & Institutional Ownership

45.8% of Pegasystems shares are owned by institutional investors. Comparatively, 65.5% of Model N shares are owned by institutional investors. 53.6% of Pegasystems shares are owned by insiders. Comparatively, 18.9% of Model N shares are owned 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.

Volatility and Risk

Pegasystems has a beta of 1.25, indicating that its share price is 25% more volatile than the S&P 500. Comparatively, Model N has a beta of 1.17, indicating that its share price is 17% more volatile than the S&P 500.

Dividends

Pegasystems pays an annual dividend of $0.12 per share and has a dividend yield of 0.2%. Model N does not pay a dividend. Pegasystems pays out 20.3% of its earnings in the form of a dividend.

Summary

Pegasystems beats Model N on 14 of the 16 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.

Model N Company Profile

Model N, Inc. is a provider of revenue management solutions for life science and technology companies. The Company’s solutions enable its customers to maximize revenues and reduce revenue compliance risk by transforming their revenue life cycle from a series of tactical, disjointed operations into a strategic end-to-end process. The Company’s solutions include Revenue Enterprise Cloud, Revenue Intelligence Cloud and Revvy Revenue Management. The Company provides solutions that span the organizational and operational boundaries of functions, such as sales, marketing and finance, and serve as a system of record for revenue management processes, including pricing, contracts, rebates, incentives and regulatory compliance. The Company’s application suites are designed to work with enterprise resource planning (ERP) and customer relationship management (CRM) applications. The Company also offers implementation services, managed services, strategic services and customer support.

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