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

Dividends

Pegasystems pays an annual dividend of $0.12 per share and has a dividend yield of 0.2%. Sohu.com does not pay a dividend. Pegasystems pays out 54.5% of its earnings in the form of a dividend.

Volatility and Risk

Pegasystems has a beta of 1, meaning that its share price has a similar volatility profile to the S&P 500.Comparatively, Sohu.com has a beta of 1.03, meaning that its share price is 3% more volatile than the S&P 500.

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Pegasystems $840.58 million 5.85 $32.93 million $0.22 284.32
Sohu.com $1.86 billion 0.45 -$554.52 million ($8.77) -2.46

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

Insider & Institutional Ownership

45.6% of Pegasystems shares are held by institutional investors. Comparatively, 70.0% of Sohu.com shares are held by institutional investors. 52.9% of Pegasystems shares are held by company insiders. Comparatively, 21.1% of Sohu.com shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Pegasystems -0.43% 0.01% N/A
Sohu.com -27.38% -19.39% -10.29%

Analyst Ratings

This is a breakdown of current recommendations and price targets for Pegasystems and Sohu.com, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Pegasystems 0 0 4 0 3.00
Sohu.com 0 1 0 0 2.00

Pegasystems currently has a consensus target price of $71.25, indicating a potential upside of 13.91%. Sohu.com has a consensus target price of $57.00, indicating a potential upside of 164.01%. Given Sohu.com’s higher possible upside, analysts clearly believe Sohu.com is more favorable than Pegasystems.

Summary

Pegasystems beats Sohu.com on 10 of the 15 factors compared between the two stocks.

Pegasystems Company Profile

Pegasystems Inc. develops, markets, licenses, and supports software applications for marketing, sales automation, customer service, and operations in the United States and internationally. It provides Pega Platform, an application development product for clients to build and extend their own applications. The company offers customer engagement applications, including Pega Marketing that enable enterprises to enhance customer acquisition and experiences across inbound, outbound, and paid media channels; Pega sales automation to automate and manage the sales process from prospecting to product fulfillment; and Pega customer service to anticipate customer needs, connect customers, the right people and systems, and automate or intelligently guide customer interactions to evolve the customer service experience and to allow enterprises to deliver interactions across channels and enhance employee productivity. It also provides digital process automation products, such as industry-specific software applications that include real-time, omni-channel AI; end-to-end robotic automation; journey-centric rapid delivery; software that writes your software; and unified future-proof platform for businesses with robust capabilities to automate industry-specific business processes. In addition, the company offers Pega Cloud that provides production, development, and testing services to accelerate the development and deployment of Pega applications and the Pega Platform, as well as guidance and implementation, technical support, and instructor-led and online training services. It primarily markets its software and services to financial services, healthcare, manufacturing and high tech, communications and media, insurance, government, consumer services, life sciences, and other markets through a direct sales force, as well as through partnerships with technology providers and application developers. Pegasystems Inc. was founded in 1983 and is headquartered in Cambridge, Massachusetts.

Sohu.com Company Profile

Sohu.com Inc. provides online media, search, and game services on personal computers (PCs), mobile devices, and tablets in the People's Republic of China. The company operates sohu.com, which provides online news and information; Sohu News APP, a mobile phone application, as well as m.sohu.com mobile portal; tv.sohu.com that offers online video content and service, as well as Sohu Video APP, a mobile phone application; and focus.cn, which provides online real estate information and services. It also offers paid subscription services, interactive broadcasting services, and sub-licensing of purchased video content to third parties. The company's search and search-related business provides Sogou Search, which makes information accessible for Chinese Internet users; Sogou Input Method, a cloud-based Chinese language input software for PC and mobile users; Sogou Browser for Web navigation; Sogou Web Directory, a content aggregation and distribution platform; and Sogou Translation to deliver language translation, as well as offers pay-for-click and other online advertising services for advertisers. In addition, its online game business offers PC games, mobile games, and Web games to game players. Further, the company's platform channel business operates 17173.com Website, a game information portal; RaidCall, which provides online music and entertainment services; and MoboTap that offers software applications for PCs and mobile devices through the Dolphin Browser, a gateway to a host of user activities on mobile devices, as well as online card and board games. Additionally, it provides Internet value-added services; and cinema advertising services. The company was formerly known as Internet Technologies China Incorporated and changed its name to Sohu.com Inc. in September 1999. Sohu.com Inc. was founded in 1996 and is headquartered in Beijing, the People's Republic of China.

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