Globant (GLOB) vs. Pegasystems (PEGA) Critical Survey

Globant (NYSE: GLOB) and Pegasystems (NASDAQ:PEGA) 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%. Globant does not pay a dividend. Pegasystems pays out 54.5% of its earnings in the form of a dividend.

Volatility and Risk

Globant has a beta of 0.61, meaning that its share price is 39% less volatile than the S&P 500. Comparatively, Pegasystems has a beta of 1.01, meaning that its share price is 1% more volatile than the S&P 500.

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Globant $413.44 million 4.64 $30.53 million $0.88 62.14
Pegasystems $840.58 million 5.80 $32.93 million $0.22 281.82

Pegasystems has higher revenue and earnings than Globant. Globant 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

67.4% of Globant shares are held by institutional investors. Comparatively, 45.8% of Pegasystems shares are held by institutional investors. 52.9% of Pegasystems 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 Globant and Pegasystems’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Globant 7.32% 13.11% 9.59%
Pegasystems 2.12% 3.62% 2.10%

Analyst Ratings

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Globant 0 3 5 0 2.63
Pegasystems 0 0 5 0 3.00

Globant currently has a consensus target price of $48.14, indicating a potential downside of 11.96%. Pegasystems has a consensus target price of $68.40, indicating a potential upside of 10.32%. Given Pegasystems’ stronger consensus rating and higher possible upside, analysts clearly believe Pegasystems is more favorable than Globant.

Summary

Pegasystems beats Globant on 9 of the 15 factors compared between the two stocks.

Globant Company Profile

Globant S.A., a technology services company, provides services related to application development, testing, infrastructure management, and application maintenance worldwide. The company offers machine learning, pattern recognition, natural language understanding, future of organizations, customer insight, behavioral change, product innovation, design thinking, product management discovery and delivery, and product coaching services. It also provides process appraisal, automated, process evolution, delivery management, agile consultancy, management consulting, user experience, visual and service, industrial design, mobile engineering, fast prototyping, and mobile and product strategy services. In addition, the company offers game engineering and experience, digital platform, virtual and augmented reality, graphics engineering, 3D and 2D art, e-Sports, data architecture, data science, distributed platform, data integration, data visualization, and blockchain services. Further, it provides Internet of things experience and consultancy, platform, hardware integration, content management system, e-learning, video content production, OTT, and Cloud Ops Studio services. Additionally, the company offers functional testing, load and performance testing, mobile testing, test automation, large scale Web applications, hybrid and cross-compiled development, accessibility, API management, micro, complex architecture, software archaeology, IT service management, and software evolution services, as well as services over platforms. It serves medium- to large-sized companies operating in media and entertainment, professional services, technology and telecommunications, travel and hospitality, banks, financial services and insurance, and consumer, and retail and manufacturing industries. The company was formerly known as IT Outsourcing S.L. and changed its name to Globant S.A. in December 2012. Globant S.A. was founded in 2003 and is based in Luxembourg.

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.

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