Comprehensive Stock Comparison
Compare Freshworks Inc. (FRSH) vs Pegasystems Inc. (PEGA) Stock
Analyze side-by-side fundamentals, valuation, growth, and profitability to decide which stock is the better buy.
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Quick Verdict
| Category | Winner | Why |
|---|---|---|
| Growth | FRSH | 20.8% revenue growth vs PEGA's 16.6% |
| Value | FRSH | Lower P/E (13.7x vs 16.2x) |
| Quality / Margins | FRSH | 21.9% net margin vs PEGA's 16.0% |
| Stability / Safety | FRSH | Beta 1.31 vs PEGA's 1.43, lower leverage |
| Dividends | PEGA | 0.2% yield; 1-year raise streak; FRSH pays no meaningful dividend |
| Momentum (1Y) | PEGA | +11.7% vs FRSH's -54.2% |
| Efficiency (ROA) | PEGA | 21.5% ROA vs FRSH's 11.5%, ROIC 27.5% vs -17.8% |
Who Each Stock Is For
Income & stability
Growth exposure
Long-term compounding (10Y)
Sleep-well-at-night portfolio
Defensive / Recession hedge
Business Model
What each company does and how it makes money
Freshworks provides cloud-based customer engagement software for businesses of all sizes. It generates revenue primarily through subscription fees for its suite of products — including Freshdesk for customer support (~40% of revenue), Freshsales for CRM (~30%), and other tools for marketing and IT service management. The company's key advantage is its unified, user-friendly platform that integrates multiple business functions, allowing customers to avoid the complexity of managing separate point solutions from different vendors.
Pegasystems is a software company that provides enterprise applications and platforms for customer engagement and business process automation. It generates revenue primarily through software licensing and cloud subscriptions — with its Pega Platform and Pega Infinity solutions — along with related consulting and support services. The company's key advantage is its unified low-code platform that combines customer relationship management, artificial intelligence, and process automation into a single system, creating switching costs for enterprise clients.
Revenue Breakdown by Segment
How each company's revenue is distributed across its business units
Financial Metrics Comparison
Side-by-side fundamentals across 2 stocks. BestLagging
Financial Scorecard
FRSH leads in 2 of 6 categories (Financial Metrics, Valuation Metrics). PEGA leads in 2 (Profitability & Efficiency, Total Returns). 1 tied.
Financial Metrics (TTM)
PEGA is the larger business by revenue, generating $1.7B annually — 2.1x FRSH's $839M. FRSH is the more profitable business, keeping 21.9% of every revenue dollar as net income compared to PEGA's 16.0%.
| Metric | FRSHFreshworks Inc. | PEGAPegasystems Inc. |
|---|---|---|
| RevenueTrailing 12 months | $839M | $1.7B |
| EBITDAEarnings before interest/tax | $30M | $342M |
| Net IncomeAfter-tax profit | $184M | $278M |
| Free Cash FlowCash after capex | $232M | $439M |
| Gross MarginGross profit ÷ Revenue | +85.0% | +75.7% |
| Operating MarginEBIT ÷ Revenue | +1.6% | +17.4% |
| Net MarginNet income ÷ Revenue | +21.9% | +16.0% |
| FCF MarginFCF ÷ Revenue | +27.7% | +25.4% |
| Rev. Growth (YoY)Latest quarter vs prior year | +14.5% | +17.3% |
| EPS Growth (YoY)Latest quarter vs prior year | +10.3% | +3.9% |
Valuation Metrics
| Metric | FRSHFreshworks Inc. | PEGAPegasystems Inc. |
|---|---|---|
| Market CapShares × price | $2.4B | $7.5B |
| Enterprise ValueMkt cap + debt − cash | $1.8B | $7.3B |
| Trailing P/EPrice ÷ TTM EPS | -24.44x | 20.53x |
| Forward P/EPrice ÷ next-FY EPS est. | 13.75x | 16.16x |
| PEG RatioP/E ÷ EPS growth rate | — | — |
| EV / EBITDAEnterprise value multiple | — | 27.77x |
| Price / SalesMarket cap ÷ Revenue | 3.29x | 4.27x |
| Price / BookPrice ÷ Book value/share | 2.07x | 10.26x |
| Price / FCFMarket cap ÷ FCF | 16.25x | 14.76x |
Profitability & Efficiency
PEGA delivers a 46.6% return on equity — every $100 of shareholder capital generates $47 in annual profit, vs $18 for FRSH. FRSH carries lower financial leverage with a 0.03x debt-to-equity ratio, signaling a more conservative balance sheet compared to PEGA's 0.08x. On the Piotroski fundamental quality scale (0–9), PEGA scores 8/9 vs FRSH's 5/9, reflecting strong financial health.
| Metric | FRSHFreshworks Inc. | PEGAPegasystems Inc. |
|---|---|---|
| ROE (TTM)Return on equity | +17.8% | +46.6% |
| ROA (TTM)Return on assets | +11.5% | +21.5% |
| ROICReturn on invested capital | -17.8% | +27.5% |
| ROCEReturn on capital employed | -11.9% | +33.4% |
| Piotroski ScoreFundamental quality 0–9 | 5 | 8 |
| Debt / EquityFinancial leverage | 0.03x | 0.08x |
| Net DebtTotal debt minus cash | -$582M | -$152M |
| Cash & Equiv.Liquid assets | $620M | $212M |
| Total DebtShort + long-term debt | $38M | $61M |
| Interest CoverageEBIT ÷ Interest expense | — | 112.43x |
Total Returns (with DRIP)
A $10,000 investment in PEGA five years ago would be worth $6,478 today (with dividends reinvested), compared to $1,645 for FRSH. Over the past 12 months, PEGA leads with a +11.7% total return vs FRSH's -54.2%. The 3-year compound annual growth rate (CAGR) favors PEGA at 23.8% vs FRSH's -19.4% — a key indicator of consistent wealth creation.
| Metric | FRSHFreshworks Inc. | PEGAPegasystems Inc. |
|---|---|---|
| YTD ReturnYear-to-date | -32.6% | -21.9% |
| 1-Year ReturnPast 12 months | -54.2% | +11.7% |
| 3-Year ReturnCumulative with dividends | -47.7% | +89.5% |
| 5-Year ReturnCumulative with dividends | -83.6% | -35.2% |
| 10-Year ReturnCumulative with dividends | -83.6% | +265.1% |
| CAGR (3Y)Annualised 3-year return | -19.4% | +23.8% |
Risk & Volatility
FRSH is the less volatile stock with a 1.31 beta — it tends to amplify market swings less than PEGA's 1.43 beta. A beta below 1.0 means the stock typically moves less than the S&P 500. PEGA currently trades 64.2% from its 52-week high vs FRSH's 45.4% drawdown — a narrower gap to the peak suggests stronger recent price momentum.
| Metric | FRSHFreshworks Inc. | PEGAPegasystems Inc. |
|---|---|---|
| Beta (5Y)Sensitivity to S&P 500 | 1.31x | 1.43x |
| 52-Week HighHighest price in past year | $17.21 | $68.10 |
| 52-Week LowLowest price in past year | $6.79 | $29.84 |
| % of 52W HighCurrent price vs 52-week peak | +45.4% | +64.2% |
| RSI (14)Momentum oscillator 0–100 | 40.1 | 49.5 |
| Avg Volume (50D)Average daily shares traded | 4.6M | 1.7M |
Analyst Outlook
Wall Street rates FRSH as "Buy" and PEGA as "Buy". Consensus price targets imply 46.2% upside for FRSH (target: $11) vs 33.2% for PEGA (target: $58). PEGA is the only dividend payer here at 0.19% yield — a key consideration for income-focused portfolios.
| Metric | FRSHFreshworks Inc. | PEGAPegasystems Inc. |
|---|---|---|
| Analyst RatingConsensus buy/hold/sell | Buy | Buy |
| Price TargetConsensus 12-month target | $11.43 | $58.25 |
| # AnalystsCovering analysts | 18 | 23 |
| Dividend YieldAnnual dividend ÷ price | — | +0.2% |
| Dividend StreakConsecutive years of raises | — | 1 |
| Dividend / ShareAnnual DPS | — | $0.08 |
| Buyback YieldShare repurchases ÷ mkt cap | +0.6% | +0.2% |
Historical Charts
Charts are rendered on first load. Hover for details.
Chart 1Total Return — 5 Years (Rebased to 100)
| Stock | Sep 21 | Feb 26 | Change |
|---|---|---|---|
| Freshworks Inc. (FRSH) | 100 | 22.42 | -77.6% |
| Pegasystems Inc. (PEGA) | 100 | 67.75 | -32.3% |
Pegasystems Inc. (PEGA) returned -35% over 5 years vs Freshworks Inc. (FRSH)'s -84%.
Chart 2Revenue Growth — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| Freshworks Inc. (FRSH) | $127M | $720M | +467.8% |
| Pegasystems Inc. (PEGA) | $750M | $1.7B | +132.7% |
Pegasystems Inc.'s revenue grew from $750M (2016) to $1.7B (2025) — a 9.8% CAGR.
Chart 3Net Margin Trend — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| Freshworks Inc. (FRSH) | 2.1% | -13.2% | -734.1% |
| Pegasystems Inc. (PEGA) | 3.6% | 22.5% | +526.5% |
Pegasystems Inc.'s net margin went from 4% (2016) to 23% (2025).
Chart 4P/E Ratio History — 5 Years
| Stock | 2017 | 2025 | Change |
|---|---|---|---|
| Pegasystems Inc. (PEGA) | 39.6 | 28 | -29.3% |
Pegasystems Inc. has traded in a 28x–374x P/E range over 5 years; current trailing P/E is ~21x.
Chart 5EPS Growth — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| Freshworks Inc. (FRSH) | 0.16 | -0.32 | -300.0% |
| Pegasystems Inc. (PEGA) | 0.17 | 2.13 | +1152.9% |
Pegasystems Inc.'s EPS grew from $0.17 (2016) to $2.13 (2025) — a 32% CAGR.
Chart 6Free Cash Flow — 5 Years
Freshworks Inc. generated $146M FCF in 2024 (+6131% vs 2021). Pegasystems Inc. generated $505M FCF in 2025 (+1663% vs 2021).
FRSH vs PEGA: Frequently Asked Questions
9 questions · data-driven answers · updated daily
01Is FRSH or PEGA a better buy right now?
Pegasystems Inc. (PEGA) offers the better valuation at 20.5x trailing P/E (16.2x forward), making it the more compelling value choice. Analysts rate Freshworks Inc. (FRSH) a "Buy" — based on 18 analyst ratings — the highest consensus in this comparison. The "better buy" depends entirely on your goals: growth investors should weight revenue trajectory, value investors should weight P/E and PEG, and income investors should weight dividend yield and streak.
02Which has the better valuation — FRSH or PEGA?
On forward P/E, Freshworks Inc. is actually cheaper at 13.7x — notably different from the trailing picture, reflecting expected earnings growth.
03Which is the better long-term investment — FRSH or PEGA?
Over the past 5 years, Pegasystems Inc. (PEGA) delivered a total return of -35.2%, compared to -83.6% for Freshworks Inc. (FRSH). A $10,000 investment in PEGA five years ago would be worth approximately $6K today (assuming dividends reinvested). Over 10 years, the gap is even starker: PEGA returned +265.1% versus FRSH's -83.6%. Past returns do not guarantee future results, and the stock with the higher historical return may already have its best growth priced in.
04Which is safer — FRSH or PEGA?
By beta (market sensitivity over 5 years), Freshworks Inc. (FRSH) is the lower-risk stock at 1.31β versus Pegasystems Inc.'s 1.43β — meaning PEGA is approximately 9% more volatile than FRSH relative to the S&P 500. On balance sheet safety, Freshworks Inc. (FRSH) carries a lower debt/equity ratio of 3% versus 8% for Pegasystems Inc. — giving it more financial flexibility in a downturn.
05Which has better profit margins — FRSH or PEGA?
Pegasystems Inc. (PEGA) is the more profitable company, earning 22.5% net margin versus -13.2% for Freshworks Inc. — meaning it keeps 22.5% of every revenue dollar as bottom-line profit. Operating margin tells a similar story: PEGA leads at 15.1% versus -19.2% for FRSH. At the gross margin level — before operating expenses — FRSH leads at 84.3%, reflecting greater pricing power or product mix advantage. Stronger margins indicate durable pricing power, lower cost of revenue, or higher mix of software/services. They are one of the clearest signs of business quality.
06Is FRSH or PEGA more undervalued right now?
On forward earnings alone, Freshworks Inc. (FRSH) trades at 13.7x forward P/E versus 16.2x for Pegasystems Inc. — 2.4x cheaper on a one-year earnings basis. Analyst consensus price targets imply the most upside for FRSH: 46.2% to $11.43.
07Which pays a better dividend — FRSH or PEGA?
In this comparison, PEGA (0.2% yield) pays a dividend. FRSH does not pay a meaningful dividend and should not be held primarily for income.
08Is FRSH or PEGA better for a retirement portfolio?
For long-horizon retirement investors, Pegasystems Inc. (PEGA) is the stronger choice — it scores higher on the combination of lower volatility, dividend reliability, and long-term compounding (+265.1% 10Y return). Both have compounded well over 10 years (PEGA: +265.1%, FRSH: -83.6%), confirming both are viable long-term holds — but the lower-volatility option typically results in less emotional selling during corrections. Retirement portfolios generally favour predictability over maximum returns. Consult a financial advisor before making allocation decisions.
09What are the main differences between FRSH and PEGA?
Both stocks operate in the Technology sector, making this a peer-level intra-sector comparison — the same macro tailwinds and headwinds will affect both. These fundamental differences mean investors should not choose between them on a single metric — the "better stock" depends entirely on which of these characteristics aligns with your investment strategy.
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