Comprehensive Stock Comparison
Compare Pegasystems Inc. (PEGA) vs SAP SE (SAP) 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 | PEGA | 16.6% revenue growth vs SAP's 3.4% |
| Value | PEGA | Lower P/E (16.2x vs 27.8x) |
| Quality / Margins | SAP | 19.9% net margin vs PEGA's 16.0% |
| Stability / Safety | SAP | Beta 0.86 vs PEGA's 1.43 |
| Dividends | SAP | 1.3% yield, 2-year raise streak, vs PEGA's 0.2% |
| Momentum (1Y) | PEGA | +11.7% vs SAP's -25.8% |
| Efficiency (ROA) | PEGA | 21.5% ROA vs SAP's 10.4%, ROIC 27.5% vs 16.1% |
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
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.
SAP is a global enterprise software company that provides business applications, technology platforms, and cloud services for organizations worldwide. It generates revenue primarily through software licenses and cloud subscriptions — with cloud services now representing over 40% of total revenue — along with consulting and support services. The company's key advantage is its deep integration across business functions — from finance to supply chain to HR — creating switching costs and network effects within its large enterprise customer base.
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
PEGA leads in 4 of 6 categories (Financial Metrics, Valuation Metrics). SAP leads in 2 (Risk & Volatility, Analyst Outlook).
Financial Metrics (TTM)
SAP is the larger business by revenue, generating $36.7B annually — 21.2x PEGA's $1.7B. Profitability is closely matched — net margins range from 19.9% (SAP) to 16.0% (PEGA). On growth, PEGA holds the edge at +17.3% YoY revenue growth, suggesting stronger near-term business momentum.
| Metric | PEGAPegasystems Inc. | SAPSAP SE |
|---|---|---|
| RevenueTrailing 12 months | $1.7B | $36.7B |
| EBITDAEarnings before interest/tax | $342M | $11.5B |
| Net IncomeAfter-tax profit | $278M | $7.3B |
| Free Cash FlowCash after capex | $439M | $8.4B |
| Gross MarginGross profit ÷ Revenue | +75.7% | +73.3% |
| Operating MarginEBIT ÷ Revenue | +17.4% | +27.0% |
| Net MarginNet income ÷ Revenue | +16.0% | +19.9% |
| FCF MarginFCF ÷ Revenue | +25.4% | +22.9% |
| Rev. Growth (YoY)Latest quarter vs prior year | +17.3% | +2.3% |
| EPS Growth (YoY)Latest quarter vs prior year | +3.9% | +14.7% |
Valuation Metrics
At 20.5x trailing earnings, PEGA trades at a 28% valuation discount to SAP's 28.5x P/E. On an enterprise value basis, SAP's 17.8x EV/EBITDA is more attractive than PEGA's 27.8x.
| Metric | PEGAPegasystems Inc. | SAPSAP SE |
|---|---|---|
| Market CapShares × price | $7.5B | $234.7B |
| Enterprise ValueMkt cap + debt − cash | $7.3B | $234.5B |
| Trailing P/EPrice ÷ TTM EPS | 20.53x | 28.52x |
| Forward P/EPrice ÷ next-FY EPS est. | 16.16x | 27.77x |
| PEG RatioP/E ÷ EPS growth rate | — | 4.32x |
| EV / EBITDAEnterprise value multiple | 27.77x | 17.84x |
| Price / SalesMarket cap ÷ Revenue | 4.27x | 5.63x |
| Price / BookPrice ÷ Book value/share | 10.26x | 4.44x |
| Price / FCFMarket cap ÷ FCF | 14.76x | 25.07x |
Profitability & Efficiency
PEGA delivers a 46.6% return on equity — every $100 of shareholder capital generates $47 in annual profit, vs $16 for SAP. PEGA carries lower financial leverage with a 0.08x debt-to-equity ratio, signaling a more conservative balance sheet compared to SAP's 0.18x. On the Piotroski fundamental quality scale (0–9), SAP scores 9/9 vs PEGA's 8/9, reflecting strong financial health.
| Metric | PEGAPegasystems Inc. | SAPSAP SE |
|---|---|---|
| ROE (TTM)Return on equity | +46.6% | +16.2% |
| ROA (TTM)Return on assets | +21.5% | +10.4% |
| ROICReturn on invested capital | +27.5% | +16.1% |
| ROCEReturn on capital employed | +33.4% | +18.3% |
| Piotroski ScoreFundamental quality 0–9 | 8 | 9 |
| Debt / EquityFinancial leverage | 0.08x | 0.18x |
| Net DebtTotal debt minus cash | -$152M | -$149M |
| Cash & Equiv.Liquid assets | $212M | $8.2B |
| Total DebtShort + long-term debt | $61M | $8.1B |
| Interest CoverageEBIT ÷ Interest expense | 112.43x | 8.94x |
Total Returns (with DRIP)
A $10,000 investment in SAP five years ago would be worth $17,166 today (with dividends reinvested), compared to $6,478 for PEGA. Over the past 12 months, PEGA leads with a +11.7% total return vs SAP's -25.8%. The 3-year compound annual growth rate (CAGR) favors PEGA at 23.8% vs SAP's 22.4% — a key indicator of consistent wealth creation.
| Metric | PEGAPegasystems Inc. | SAPSAP SE |
|---|---|---|
| YTD ReturnYear-to-date | -21.9% | -14.9% |
| 1-Year ReturnPast 12 months | +11.7% | -25.8% |
| 3-Year ReturnCumulative with dividends | +89.5% | +83.4% |
| 5-Year ReturnCumulative with dividends | -35.2% | +71.7% |
| 10-Year ReturnCumulative with dividends | +265.1% | +193.8% |
| CAGR (3Y)Annualised 3-year return | +23.8% | +22.4% |
Risk & Volatility
SAP is the less volatile stock with a 0.86 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.
| Metric | PEGAPegasystems Inc. | SAPSAP SE |
|---|---|---|
| Beta (5Y)Sensitivity to S&P 500 | 1.43x | 0.86x |
| 52-Week HighHighest price in past year | $68.10 | $313.28 |
| 52-Week LowLowest price in past year | $29.84 | $189.22 |
| % of 52W HighCurrent price vs 52-week peak | +64.2% | +64.3% |
| RSI (14)Momentum oscillator 0–100 | 49.5 | 45.3 |
| Avg Volume (50D)Average daily shares traded | 1.7M | 2.4M |
Analyst Outlook
Wall Street rates PEGA as "Buy" and SAP as "Buy". Consensus price targets imply 106.1% upside for SAP (target: $415) vs 33.2% for PEGA (target: $58). For income investors, SAP offers the higher dividend yield at 1.31% vs PEGA's 0.19%.
| Metric | PEGAPegasystems Inc. | SAPSAP SE |
|---|---|---|
| Analyst RatingConsensus buy/hold/sell | Buy | Buy |
| Price TargetConsensus 12-month target | $58.25 | $415.33 |
| # AnalystsCovering analysts | 23 | 43 |
| Dividend YieldAnnual dividend ÷ price | +0.2% | +1.3% |
| Dividend StreakConsecutive years of raises | 1 | 2 |
| Dividend / ShareAnnual DPS | $0.08 | $2.24 |
| Buyback YieldShare repurchases ÷ mkt cap | +0.2% | +0.9% |
Historical Charts
Charts are rendered on first load. Hover for details.
Chart 1Total Return — 5 Years (Rebased to 100)
| Stock | Mar 20 | Feb 26 | Change |
|---|---|---|---|
| Pegasystems Inc. (PEGA) | 100 | 96.35 | -3.6% |
| SAP SE (SAP) | 100 | 163.78 | +63.8% |
SAP SE (SAP) returned +72% over 5 years vs Pegasystems Inc. (PEGA)'s -35%. A $10,000 investment in SAP 5 years ago would be worth $17,166 today (including dividends reinvested).
Chart 2Revenue Growth — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| Pegasystems Inc. (PEGA) | $750M | $1.7B | +132.7% |
| SAP SE (SAP) | $22.1B | $35.3B | +60.2% |
Pegasystems Inc.'s revenue grew from $750M (2016) to $1.7B (2025) — a 9.8% CAGR. SAP SE's revenue grew from $22.1B (2016) to $35.3B (2025) — a 5.4% CAGR.
Chart 3Net Margin Trend — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| Pegasystems Inc. (PEGA) | 3.6% | 22.5% | +526.5% |
| SAP SE (SAP) | 16.5% | 19.9% | +20.6% |
Pegasystems Inc.'s net margin went from 4% (2016) to 23% (2025). SAP SE's net margin went from 17% (2016) to 20% (2025).
Chart 4P/E Ratio History — 9 Years
| Stock | 2017 | 2025 | Change |
|---|---|---|---|
| Pegasystems Inc. (PEGA) | 39.6 | 28 | -29.3% |
| SAP SE (SAP) | 33.5 | 40.6 | +21.2% |
Pegasystems Inc. has traded in a 28x–374x P/E range over 5 years; current trailing P/E is ~21x. SAP SE has traded in a 29x–93x P/E range over 9 years; current trailing P/E is ~29x.
Chart 5EPS Growth — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| Pegasystems Inc. (PEGA) | 0.17 | 2.13 | +1152.9% |
| SAP SE (SAP) | 3.03 | 5.99 | +97.7% |
Pegasystems Inc.'s EPS grew from $0.17 (2016) to $2.13 (2025) — a 32% CAGR. SAP SE's EPS grew from $3.03 (2016) to $5.99 (2025) — a 8% CAGR.
Chart 6Free Cash Flow — 5 Years
Pegasystems Inc. generated $505M FCF in 2025 (+1663% vs 2021). SAP SE generated $8B FCF in 2025 (+44% vs 2021).
PEGA vs SAP: Frequently Asked Questions
9 questions · data-driven answers · updated daily
01Is PEGA or SAP 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 Pegasystems Inc. (PEGA) a "Buy" — based on 23 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 — PEGA or SAP?
On trailing P/E, Pegasystems Inc. (PEGA) is the cheapest at 20.5x versus SAP SE at 28.5x. On forward P/E, Pegasystems Inc. is actually cheaper at 16.2x.
03Which is the better long-term investment — PEGA or SAP?
Over the past 5 years, SAP SE (SAP) delivered a total return of +71.7%, compared to -35.2% for Pegasystems Inc. (PEGA). A $10,000 investment in SAP five years ago would be worth approximately $17K today (assuming dividends reinvested). Over 10 years, the gap is even starker: PEGA returned +265.1% versus SAP's +193.8%. 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 — PEGA or SAP?
By beta (market sensitivity over 5 years), SAP SE (SAP) is the lower-risk stock at 0.86β versus Pegasystems Inc.'s 1.43β — meaning PEGA is approximately 67% more volatile than SAP relative to the S&P 500. On balance sheet safety, Pegasystems Inc. (PEGA) carries a lower debt/equity ratio of 8% versus 18% for SAP SE — giving it more financial flexibility in a downturn.
05Which has better profit margins — PEGA or SAP?
Pegasystems Inc. (PEGA) is the more profitable company, earning 22.5% net margin versus 19.9% for SAP SE — meaning it keeps 22.5% of every revenue dollar as bottom-line profit. Operating margin tells a similar story: SAP leads at 28.0% versus 15.1% for PEGA. At the gross margin level — before operating expenses — PEGA leads at 75.9%, 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 PEGA or SAP more undervalued right now?
On forward earnings alone, Pegasystems Inc. (PEGA) trades at 16.2x forward P/E versus 27.8x for SAP SE — 11.6x cheaper on a one-year earnings basis. Analyst consensus price targets imply the most upside for SAP: 106.1% to $415.33.
07Which pays a better dividend — PEGA or SAP?
All stocks in this comparison pay dividends. SAP SE (SAP) offers the highest yield at 1.3%, versus 0.2% for Pegasystems Inc. (PEGA).
08Is PEGA or SAP better for a retirement portfolio?
For long-horizon retirement investors, SAP SE (SAP) is the stronger choice — it scores higher on the combination of lower volatility, dividend reliability, and long-term compounding (low volatility (β 0.86), 1.3% yield, +193.8% 10Y return). Both have compounded well over 10 years (SAP: +193.8%, PEGA: +265.1%), 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 PEGA and SAP?
Both stocks operate in the Technology sector, making this a peer-level intra-sector comparison — the same macro tailwinds and headwinds will affect both. SAP pays a dividend while PEGA does not, making them suitable for different income and tax situations. 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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