Analyzing Phunware (NASDAQ:PHUN) and Pegasystems (NASDAQ:PEGA)

Phunware (NASDAQ:PHUN) and Pegasystems (NASDAQ:PEGA) are both computer and technology companies, but which is the better stock? We will compare the two companies based on the strength of their dividends, earnings, analyst recommendations, risk, profitability, valuation and institutional ownership.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Phunware and Pegasystems, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Phunware	0	1	2	0	2.67
Pegasystems	0	3	8	1	2.83

Phunware presently has a consensus target price of $13.00, suggesting a potential upside of 239.87%. Pegasystems has a consensus target price of $97.64, suggesting a potential upside of 10.87%. Given Phunware’s higher possible upside, equities research analysts clearly believe Phunware is more favorable than Pegasystems.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Phunware	$4.83 million	15.97	-$52.78 million	N/A	N/A
Pegasystems	$1.43 billion	5.27	$67.81 million	$1.37	64.28

Pegasystems has higher revenue and earnings than Phunware.

Risk and Volatility

Phunware has a beta of 2.22, suggesting that its stock price is 122% more volatile than the S&P 500. Comparatively, Pegasystems has a beta of 1.11, suggesting that its stock price is 11% more volatile than the S&P 500.

Profitability

This table compares Phunware and Pegasystems’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Phunware	-867.61%	-244.22%	-119.14%
Pegasystems	8.29%	37.83%	10.18%

Institutional & Insider Ownership

7.6% of Phunware shares are owned by institutional investors. Comparatively, 46.9% of Pegasystems shares are owned by institutional investors. 1.2% of Phunware shares are owned by insiders. Comparatively, 50.1% of Pegasystems shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

Pegasystems beats Phunware on 10 of the 13 factors compared between the two stocks.

About Phunware

Phunware, Inc., together with its subsidiaries, provides integrated software platform that equips companies with the products, solutions, and services to engage, manage, and monetize their mobile application portfolios in the United States and internationally. The company's products and services include mobile software and application transaction solutions comprise integration of software development kit (SDK) licenses, which consists of analytics that offers data related to application use and engagement; content management that allows application administrators to create and manage app content in a cloud-based portal; alerts, notifications, and messaging, which enables brands to send messages; marketing automation that enables location-triggered messages and workflow; advertising; and location-based services, such as mapping, navigation, wayfinding, workflow, asset management, and policy enforcement. It is also involved in the integration of its SDK licenses into existing applications maintained by its customers, as well as custom application development and support services; and provision of cloud-based vertical solutions for healthcare, retail, sports, aviation, real estate, hospitality, education, and other applications, as well as application transactions, including re-occurring and one-time transactional media purchases for application discovery, user acquisition and audience building, audience engagement, and audience monetization. Phunware, Inc. was founded in 2009 and is headquartered in Austin, Texas.

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.