Comprehensive Stock Comparison
Compare Pegasystems Inc. (PEGA) vs Shopify Inc. (SHOP) 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 | SHOP | 30.1% revenue growth vs PEGA's 16.6% |
| Value | PEGA | Lower P/E (16.2x vs 65.9x) |
| Quality / Margins | PEGA | 16.0% net margin vs SHOP's 10.7% |
| Stability / Safety | PEGA | Beta 1.43 vs SHOP's 2.23 |
| Dividends | PEGA | 0.2% yield; 1-year raise streak; SHOP pays no meaningful dividend |
| Momentum (1Y) | PEGA | +11.7% vs SHOP's +7.8% |
| Efficiency (ROA) | PEGA | 21.5% ROA vs SHOP's 8.1%, ROIC 27.5% vs 9.4% |
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.
Shopify is a comprehensive commerce platform that enables businesses of all sizes to create online stores, manage sales across multiple channels, and handle operations like payments, shipping, and inventory. It generates revenue primarily through subscription fees for its platform tiers — which account for about 30% of revenue — and merchant solutions like payment processing, shipping, and capital advances that make up the remaining 70%. The company's key advantage is its integrated ecosystem that combines easy-to-use store creation tools with a vast app marketplace and fulfillment network, creating high switching costs for merchants as they grow their businesses.
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 3 of 6 categories (Financial Metrics, Valuation Metrics). SHOP leads in 1 (Total Returns). 1 tied.
Financial Metrics (TTM)
SHOP is the larger business by revenue, generating $11.6B annually — 6.7x PEGA's $1.7B. PEGA is the more profitable business, keeping 16.0% of every revenue dollar as net income compared to SHOP's 10.7%. On growth, SHOP holds the edge at +30.6% YoY revenue growth, suggesting stronger near-term business momentum.
| Metric | PEGAPegasystems Inc. | SHOPShopify Inc. |
|---|---|---|
| RevenueTrailing 12 months | $1.7B | $11.6B |
| EBITDAEarnings before interest/tax | $342M | $1.5B |
| Net IncomeAfter-tax profit | $278M | $1.2B |
| Free Cash FlowCash after capex | $439M | $2.0B |
| Gross MarginGross profit ÷ Revenue | +75.7% | +48.1% |
| Operating MarginEBIT ÷ Revenue | +17.4% | +12.7% |
| Net MarginNet income ÷ Revenue | +16.0% | +10.7% |
| FCF MarginFCF ÷ Revenue | +25.4% | +17.4% |
| Rev. Growth (YoY)Latest quarter vs prior year | +17.3% | +30.6% |
| EPS Growth (YoY)Latest quarter vs prior year | +3.9% | -42.0% |
Valuation Metrics
At 20.5x trailing earnings, PEGA trades at a 84% valuation discount to SHOP's 128.4x P/E. On an enterprise value basis, PEGA's 27.8x EV/EBITDA is more attractive than SHOP's 104.1x.
| Metric | PEGAPegasystems Inc. | SHOPShopify Inc. |
|---|---|---|
| Market CapShares × price | $7.5B | $157.4B |
| Enterprise ValueMkt cap + debt − cash | $7.3B | $156.1B |
| Trailing P/EPrice ÷ TTM EPS | 20.53x | 128.44x |
| Forward P/EPrice ÷ next-FY EPS est. | 16.16x | 65.90x |
| PEG RatioP/E ÷ EPS growth rate | — | 4.38x |
| EV / EBITDAEnterprise value multiple | 27.77x | 104.11x |
| Price / SalesMarket cap ÷ Revenue | 4.27x | 13.62x |
| Price / BookPrice ÷ Book value/share | 10.26x | 11.69x |
| Price / FCFMarket cap ÷ FCF | 14.76x | 78.44x |
Profitability & Efficiency
PEGA delivers a 46.6% return on equity — every $100 of shareholder capital generates $47 in annual profit, vs $9 for SHOP. SHOP carries lower financial leverage with a 0.01x 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 SHOP's 6/9, reflecting strong financial health.
| Metric | PEGAPegasystems Inc. | SHOPShopify Inc. |
|---|---|---|
| ROE (TTM)Return on equity | +46.6% | +9.1% |
| ROA (TTM)Return on assets | +21.5% | +8.1% |
| ROICReturn on invested capital | +27.5% | +9.4% |
| ROCEReturn on capital employed | +33.4% | +11.0% |
| Piotroski ScoreFundamental quality 0–9 | 8 | 6 |
| Debt / EquityFinancial leverage | 0.08x | 0.01x |
| Net DebtTotal debt minus cash | -$152M | -$1.4B |
| Cash & Equiv.Liquid assets | $212M | $1.5B |
| Total DebtShort + long-term debt | $61M | $188M |
| Interest CoverageEBIT ÷ Interest expense | 112.43x | — |
Total Returns (with DRIP)
A $10,000 investment in SHOP five years ago would be worth $9,216 today (with dividends reinvested), compared to $6,478 for PEGA. Over the past 12 months, PEGA leads with a +11.7% total return vs SHOP's +7.8%. The 3-year compound annual growth rate (CAGR) favors SHOP at 43.2% vs PEGA's 23.8% — a key indicator of consistent wealth creation.
| Metric | PEGAPegasystems Inc. | SHOPShopify Inc. |
|---|---|---|
| YTD ReturnYear-to-date | -21.9% | -23.2% |
| 1-Year ReturnPast 12 months | +11.7% | +7.8% |
| 3-Year ReturnCumulative with dividends | +89.5% | +193.5% |
| 5-Year ReturnCumulative with dividends | -35.2% | -7.8% |
| 10-Year ReturnCumulative with dividends | +265.1% | +5294.6% |
| CAGR (3Y)Annualised 3-year return | +23.8% | +43.2% |
Risk & Volatility
PEGA is the less volatile stock with a 1.43 beta — it tends to amplify market swings less than SHOP's 2.23 beta. A beta below 1.0 means the stock typically moves less than the S&P 500.
| Metric | PEGAPegasystems Inc. | SHOPShopify Inc. |
|---|---|---|
| Beta (5Y)Sensitivity to S&P 500 | 1.43x | 2.23x |
| 52-Week HighHighest price in past year | $68.10 | $182.19 |
| 52-Week LowLowest price in past year | $29.84 | $69.84 |
| % of 52W HighCurrent price vs 52-week peak | +64.2% | +66.3% |
| RSI (14)Momentum oscillator 0–100 | 49.5 | 48.7 |
| Avg Volume (50D)Average daily shares traded | 1.7M | 10.0M |
Analyst Outlook
Wall Street rates PEGA as "Buy" and SHOP as "Buy". Consensus price targets imply 36.8% upside for SHOP (target: $165) 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 | PEGAPegasystems Inc. | SHOPShopify Inc. |
|---|---|---|
| Analyst RatingConsensus buy/hold/sell | Buy | Buy |
| Price TargetConsensus 12-month target | $58.25 | $165.16 |
| # AnalystsCovering analysts | 23 | 63 |
| Dividend YieldAnnual dividend ÷ price | +0.2% | — |
| Dividend StreakConsecutive years of raises | 1 | — |
| Dividend / ShareAnnual DPS | $0.08 | — |
| Buyback YieldShare repurchases ÷ mkt cap | +0.2% | 0.0% |
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% |
| Shopify Inc. (SHOP) | 100 | 270.68 | +170.7% |
Shopify Inc. (SHOP) returned -8% over 5 years vs Pegasystems Inc. (PEGA)'s -35%.
Chart 2Revenue Growth — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| Pegasystems Inc. (PEGA) | $750M | $1.7B | +132.7% |
| Shopify Inc. (SHOP) | $389M | $11.6B | +2868.2% |
Pegasystems Inc.'s revenue grew from $750M (2016) to $1.7B (2025) — a 9.8% CAGR. Shopify Inc.'s revenue grew from $389M (2016) to $11.6B (2025) — a 45.8% CAGR.
Chart 3Net Margin Trend — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| Pegasystems Inc. (PEGA) | 3.6% | 22.5% | +526.5% |
| Shopify Inc. (SHOP) | -9.1% | 10.7% | +217.3% |
Pegasystems Inc.'s net margin went from 4% (2016) to 23% (2025). Shopify Inc.'s net margin went from -9% (2016) to 11% (2025).
Chart 4P/E Ratio History — 7 Years
| Stock | 2017 | 2025 | Change |
|---|---|---|---|
| Pegasystems Inc. (PEGA) | 39.6 | 28 | -29.3% |
| Shopify Inc. (SHOP) | 435.4 | 171.2 | -60.7% |
Pegasystems Inc. has traded in a 28x–374x P/E range over 5 years; current trailing P/E is ~21x. Shopify Inc. has traded in a 61x–435x P/E range over 4 years; current trailing P/E is ~128x.
Chart 5EPS Growth — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| Pegasystems Inc. (PEGA) | 0.17 | 2.13 | +1152.9% |
| Shopify Inc. (SHOP) | -0.04 | 0.94 | +2332.8% |
Pegasystems Inc.'s EPS grew from $0.17 (2016) to $2.13 (2025) — a 32% CAGR. Shopify Inc.'s EPS grew from $-0.04 (2016) to $0.94 (2025).
Chart 6Free Cash Flow — 5 Years
Pegasystems Inc. generated $505M FCF in 2025 (+1663% vs 2021). Shopify Inc. generated $2B FCF in 2025 (+314% vs 2021).
PEGA vs SHOP: Frequently Asked Questions
9 questions · data-driven answers · updated daily
01Is PEGA or SHOP 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 SHOP?
On trailing P/E, Pegasystems Inc. (PEGA) is the cheapest at 20.5x versus Shopify Inc. at 128.4x. On forward P/E, Pegasystems Inc. is actually cheaper at 16.2x.
03Which is the better long-term investment — PEGA or SHOP?
Over the past 5 years, Shopify Inc. (SHOP) delivered a total return of -7.8%, compared to -35.2% for Pegasystems Inc. (PEGA). A $10,000 investment in SHOP five years ago would be worth approximately $9K today (assuming dividends reinvested). Over 10 years, the gap is even starker: SHOP returned +52.9% versus PEGA's +265.1%. 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 SHOP?
By beta (market sensitivity over 5 years), Pegasystems Inc. (PEGA) is the lower-risk stock at 1.43β versus Shopify Inc.'s 2.23β — meaning SHOP is approximately 56% more volatile than PEGA relative to the S&P 500. On balance sheet safety, Shopify Inc. (SHOP) carries a lower debt/equity ratio of 1% versus 8% for Pegasystems Inc. — giving it more financial flexibility in a downturn.
05Which has better profit margins — PEGA or SHOP?
Pegasystems Inc. (PEGA) is the more profitable company, earning 22.5% net margin versus 10.7% for Shopify 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 12.7% for SHOP. 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 SHOP more undervalued right now?
On forward earnings alone, Pegasystems Inc. (PEGA) trades at 16.2x forward P/E versus 65.9x for Shopify Inc. — 49.7x cheaper on a one-year earnings basis. Analyst consensus price targets imply the most upside for SHOP: 36.8% to $165.16.
07Which pays a better dividend — PEGA or SHOP?
In this comparison, PEGA (0.2% yield) pays a dividend. SHOP does not pay a meaningful dividend and should not be held primarily for income.
08Is PEGA or SHOP 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). Shopify Inc. (SHOP) carries a higher beta of 2.23 — meaning larger drawdowns in market downturns, which matters significantly when you cannot wait years for a recovery. Both have compounded well over 10 years (PEGA: +265.1%, SHOP: +52.9%), 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 SHOP?
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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