Marin Software (NASDAQ:MRIN – Get Free Report) and Pegasystems (NASDAQ:PEGA – Get Free Report) are both business services companies, but which is the superior investment? We will compare the two businesses based on the strength of their risk, valuation, analyst recommendations, profitability, earnings, dividends and institutional ownership.
Profitability
This table compares Marin Software and Pegasystems’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Marin Software | -71.93% | -77.89% | -53.26% |
| Pegasystems | 6.63% | 32.09% | 9.45% |
Risk & Volatility
Marin Software has a beta of 0.4, suggesting that its stock price is 60% less volatile than the S&P 500. Comparatively, Pegasystems has a beta of 1.14, suggesting that its stock price is 14% more volatile than the S&P 500.
Valuation and Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Marin Software | $16.71 million | 0.17 | -$21.92 million | ($3.93) | -0.23 |
| Pegasystems | $1.64 billion | 5.38 | $99.19 million | $2.06 | 50.14 |
Pegasystems has higher revenue and earnings than Marin Software. Marin Software is trading at a lower price-to-earnings ratio than Pegasystems, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a summary of current ratings for Marin Software and Pegasystems, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Marin Software | 0 | 0 | 0 | 0 | 0.00 |
| Pegasystems | 0 | 3 | 9 | 0 | 2.75 |
Pegasystems has a consensus target price of $100.27, suggesting a potential downside of 2.92%. Given Pegasystems’ stronger consensus rating and higher possible upside, analysts clearly believe Pegasystems is more favorable than Marin Software.
Institutional and Insider Ownership
9.4% of Marin Software shares are held by institutional investors. Comparatively, 46.9% of Pegasystems shares are held by institutional investors. 9.3% of Marin Software shares are held by company insiders. Comparatively, 49.7% of Pegasystems shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Summary
Pegasystems beats Marin Software on 14 of the 14 factors compared between the two stocks.
About Marin Software
Marin Software Incorporated, together with its subsidiaries, provides enterprise marketing software for advertisers and agencies in the United States, the United Kingdom, and internationally. It offers MarinOne, a search, social, and eCommerce advertising platform, as well as self-serves solutions and managed services. The company markets and sells its solutions to advertisers directly, and through advertising agencies that use its platform on behalf of their customers. Marin Software Incorporated was incorporated in 2006 and is headquartered in San Francisco, California.
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.
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