Dynatrace (NYSE:DT – Get Free Report) and Pegasystems (NASDAQ:PEGA – Get Free Report) are both technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, profitability, risk, earnings and valuation.
Risk & Volatility
Dynatrace has a beta of 0.76, suggesting that its share price is 24% less volatile than the S&P 500. Comparatively, Pegasystems has a beta of 0.94, suggesting that its share price is 6% less volatile than the S&P 500.
Insider & Institutional Ownership
94.3% of Dynatrace shares are owned by institutional investors. Comparatively, 46.9% of Pegasystems shares are owned by institutional investors. 0.7% of Dynatrace shares are owned by insiders. Comparatively, 48.4% of Pegasystems shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Profitability
This table compares Dynatrace and Pegasystems’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Dynatrace | 7.42% | 12.73% | 7.17% |
| Pegasystems | 16.86% | 35.22% | 15.55% |
Earnings & Valuation
This table compares Dynatrace and Pegasystems”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Dynatrace | $2.02 billion | 6.30 | $162.67 million | $0.54 | 82.06 |
| Pegasystems | $1.75 billion | 2.94 | $393.44 million | $1.61 | 19.50 |
Pegasystems has lower revenue, but higher earnings than Dynatrace. Pegasystems is trading at a lower price-to-earnings ratio than Dynatrace, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a summary of recent ratings for Dynatrace and Pegasystems, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Dynatrace | 0 | 8 | 24 | 0 | 2.75 |
| Pegasystems | 2 | 7 | 6 | 0 | 2.27 |
Dynatrace presently has a consensus target price of $62.00, suggesting a potential upside of 39.92%. Pegasystems has a consensus target price of $45.73, suggesting a potential upside of 45.67%. Given Pegasystems’ higher possible upside, analysts clearly believe Pegasystems is more favorable than Dynatrace.
Summary
Pegasystems beats Dynatrace on 8 of the 14 factors compared between the two stocks.
About Dynatrace
Dynatrace, Inc. provides a software intelligence platform for monitoring and managing complex digital environments. Its platform helps organizations observe applications, infrastructure, cloud services and user experiences, and analyze performance and operational data. The company’s offerings include application and infrastructure monitoring, log management, digital experience monitoring, application security and business analytics. Dynatrace also incorporates artificial intelligence and automation to help identify the causes of problems and support responses to them.
About Pegasystems
Pegasystems Inc. develops enterprise software that helps organizations automate business processes and manage customer interactions. Its offerings are used to design and coordinate workflows across areas such as customer service, sales, operations and compliance. The company’s Pega Infinity platform includes low-code application development, workflow automation, customer relationship management and artificial intelligence capabilities. These tools help businesses build and update applications and connect processes across their operations.
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