Analyzing The Descartes Systems Group (DSGX) & Pegasystems (PEGA)
The Descartes Systems Group (NASDAQ: DSGX) and Pegasystems (NASDAQ:PEGA) are both mid-cap computer and technology companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, profitability, institutional ownership, dividends, earnings, analyst recommendations and valuation.
Institutional and Insider Ownership
79.1% of The Descartes Systems Group shares are owned by institutional investors. Comparatively, 44.6% of Pegasystems shares are owned by institutional investors. 0.3% of The Descartes Systems Group shares are owned by company insiders. Comparatively, 53.6% of Pegasystems shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
This is a summary of current ratings and recommmendations for The Descartes Systems Group and Pegasystems, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|The Descartes Systems Group||0||2||7||0||2.78|
The Descartes Systems Group currently has a consensus price target of $30.63, suggesting a potential upside of 11.77%. Pegasystems has a consensus price target of $61.75, suggesting a potential upside of 9.58%. Given The Descartes Systems Group’s higher possible upside, research analysts clearly believe The Descartes Systems Group is more favorable than Pegasystems.
This table compares The Descartes Systems Group and Pegasystems’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|The Descartes Systems Group||11.80%||5.78%||4.99%|
Pegasystems pays an annual dividend of $0.12 per share and has a dividend yield of 0.2%. The Descartes Systems Group does not pay a dividend. Pegasystems pays out 19.7% of its earnings in the form of a dividend.
Earnings & Valuation
This table compares The Descartes Systems Group and Pegasystems’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|The Descartes Systems Group||$209.38 million||9.94||$70.06 million||$0.33||83.03|
|Pegasystems||$803.64 million||5.44||$75.15 million||$0.61||92.38|
Pegasystems has higher revenue and earnings than The Descartes Systems Group. The Descartes Systems Group is trading at a lower price-to-earnings ratio than Pegasystems, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
The Descartes Systems Group has a beta of 0.58, meaning that its stock price is 42% less volatile than the S&P 500. Comparatively, Pegasystems has a beta of 1.46, meaning that its stock price is 46% more volatile than the S&P 500.
Pegasystems beats The Descartes Systems Group on 10 of the 16 factors compared between the two stocks.
About The Descartes Systems Group
Descartes Systems Group Inc (Descartes) is a Canada-based global provider of federated network and global logistics technology solutions that help its customers make and receive shipments and manage related resources. The Company’s network-based solutions, which primarily consist of services and software, connect people to their trading partners and enable business document exchange (bookings, bills of lading, status messages); regulatory compliance and customs filing; route and resource planning, execution and monitoring; access and leverage global trade and restricted party data; inventory and asset visibility; rate and transportation management, and warehouse operations. The Company’s solutions include Logistics Technology Platform that fuses the Descartes Global Logistics Network (Descartes GLN); customs and regulatory compliance; routing, mobile and telematics; global logistics network services; transportation management, and broker and forwarder enterprise systems.
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.
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