Skillz (NYSE:SKLZ) vs. Pegasystems (NASDAQ:PEGA) Head-To-Head Review

Skillz (NYSE:SKLZ) and Pegasystems (NASDAQ:PEGA) are both consumer discretionary companies, but which is the superior business? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, institutional ownership, dividends, risk, earnings and valuation.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Skillz	-40.87%	-38.95%	-20.10%
Pegasystems	6.63%	32.09%	9.45%

Institutional & Insider Ownership

19.4% of Skillz shares are owned by institutional investors. Comparatively, 46.9% of Pegasystems shares are owned by institutional investors. 30.4% of Skillz shares are owned by company insiders. Comparatively, 50.1% of Pegasystems shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Skillz	0	1	1	0	2.50
Pegasystems	0	3	9	0	2.75

Skillz presently has a consensus target price of $10.75, suggesting a potential upside of 141.57%. Pegasystems has a consensus target price of $97.27, suggesting a potential upside of 42.34%. Given Skillz’s higher possible upside, research analysts clearly believe Skillz is more favorable than Pegasystems.

Earnings and Valuation

This table compares Skillz and Pegasystems”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Skillz	$95.47 million	0.81	-$101.36 million	($2.71)	-1.64
Pegasystems	$1.50 billion	3.92	$99.19 million	$1.01	67.66

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

Risk & Volatility

Skillz has a beta of 2.75, suggesting that its stock price is 175% more volatile than the S&P 500. Comparatively, Pegasystems has a beta of 1.22, suggesting that its stock price is 22% more volatile than the S&P 500.

Summary

Pegasystems beats Skillz on 12 of the 14 factors compared between the two stocks.

About Skillz

Skillz Inc. operates a mobile game platform in the United States and internationally. The company primarily develops and supports a proprietary online-hosted technology platform that enables independent game developers to host tournaments and provide competitive gaming activity to end-users. The company distributes games through direct app download from its website, as well as through third-party platforms. Skillz Inc. was founded in 2012 and is based 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.