In the fast-evolving software application industry, Pegasystems Inc. and monday.com Ltd. stand out as innovative leaders shaping enterprise solutions. Both companies deliver cutting-edge platforms that drive digital transformation and operational efficiency, targeting overlapping markets like customer engagement and work management. This comparison will explore their strategies and growth potential to help you identify which company offers the most compelling investment opportunity in 2026. Let’s dive in and uncover the best fit for your portfolio.
Table of contents
Companies Overview
I will begin the comparison between Pegasystems Inc. and monday.com Ltd. by providing an overview of these two companies and their main differences.
Pegasystems Inc. Overview
Pegasystems Inc. focuses on developing and supporting enterprise software applications globally, including in the Americas, Europe, Middle East, Africa, and Asia-Pacific. Its core offerings include the Pega Platform for application development and Pega Infinity for customer engagement and digital process automation. Pegasystems serves diverse industries such as financial services, healthcare, government, and manufacturing, aiming to enhance customer experiences and operational efficiency.
monday.com Ltd. Overview
monday.com Ltd. is a cloud-based software company headquartered in Tel Aviv, Israel, providing Work OS, a modular visual work operating system. Its platform enables users to build applications and tools for marketing, CRM, project management, and software development. Serving a global client base across organizations, educational institutions, and government entities, monday.com emphasizes flexibility and collaboration in work management solutions.
Key similarities and differences
Both companies operate in the software application industry with a global reach, targeting enterprise clients. Pegasystems concentrates on integrated customer engagement and process automation platforms, while monday.com specializes in customizable, cloud-based work management software. Pegasystems has a longer market presence since 1983, compared to monday.com’s establishment in 2012, and operates with roughly double the employee base.
Income Statement Comparison
The table below presents a side-by-side comparison of key income statement metrics for Pegasystems Inc. and monday.com Ltd. for the fiscal year 2024, highlighting their financial performance indicators.
| Metric | Pegasystems Inc. (PEGA) | monday.com Ltd. (MNDY) |
|---|---|---|
| Market Cap | 8.9B | 6.5B |
| Revenue | 1.50B | 972M |
| EBITDA | 185M | 58M |
| EBIT | 149M | 40M |
| Net Income | 99M | 32M |
| EPS | 0.58 | 0.65 |
| Fiscal Year | 2024 | 2024 |
Income Statement Interpretations
Pegasystems Inc.
Pegasystems Inc. exhibited steady revenue growth from 2020 to 2024, increasing from 1.02B to 1.50B USD, with net income recovering from negative figures to 99M USD in 2024. Gross margin remained strong and favorable at 73.91%, while net margin improved to 6.63%. The latest year showed moderate revenue growth of 4.5%, alongside significant net income and EPS gains, reflecting operational improvements.
monday.com Ltd.
monday.com Ltd. demonstrated rapid revenue expansion, surging from 161M USD in 2020 to 972M USD in 2024, with net income turning positive at 32M USD after years of losses. The company maintained a very high gross margin of 89.33%, though net margin was modest at 3.33%. In 2024, revenue and net income growth accelerated markedly, supported by strong margin improvements and a substantial jump in EPS.
Which one has the stronger fundamentals?
Both companies show favorable income statement trends, but Pegasystems displays more consistent profitability with a balanced margin profile and steady net income growth. monday.com’s fundamentals are marked by rapid expansion and improving margins but remain less stable historically. Pegasystems’ stronger net margin and more mature earnings suggest comparatively stronger fundamentals at this stage.
Financial Ratios Comparison
The table below presents a side-by-side comparison of key financial ratios for Pegasystems Inc. and monday.com Ltd. based on their most recent fiscal year data (2024).
| Ratios | Pegasystems Inc. (PEGA) | monday.com Ltd. (MNDY) |
|---|---|---|
| ROE | 16.9% | 3.14% |
| ROIC | 7.4% | -1.73% |
| P/E | 80.1 | 363 |
| P/B | 13.6 | 11.4 |
| Current Ratio | 1.23 | 2.66 |
| Quick Ratio | 1.23 | 2.66 |
| D/E | 0.94 | 0.10 |
| Debt-to-Assets | 31.1% | 6.3% |
| Interest Coverage | 18.1 | 0 |
| Asset Turnover | 0.85 | 0.58 |
| Fixed Asset Turnover | 14.4 | 7.13 |
| Payout Ratio | 10.3% | 0% |
| Dividend Yield | 0.13% | 0% |
Interpretation of the Ratios
Pegasystems Inc.
Pegasystems shows a slightly favorable overall ratio profile, with strong return on equity (16.94%) and interest coverage (21.87), indicating solid profitability and debt servicing ability. However, high price-to-earnings (80.12) and price-to-book (13.57) ratios suggest overvaluation risks. The company pays a modest dividend yield of 0.13%, supported by free cash flow but with a payout that may limit growth flexibility.
monday.com Ltd.
monday.com presents a neutral ratios profile with several unfavorable profitability indicators, including low net margin (3.33%), return on equity (3.14%), and negative return on invested capital (-1.73%). Liquidity and leverage ratios are favorable, reflecting strong short-term financial health and low debt. The company does not pay dividends, focusing instead on reinvestment and growth strategies typical of a high-growth tech firm.
Which one has the best ratios?
Pegasystems offers a more balanced and slightly favorable ratio set, especially in profitability and coverage metrics, compared to monday.com’s neutral stance with weaker profitability but stronger liquidity. Pegasystems’ higher valuation multiples may imply greater risk, while monday.com’s focus on growth aligns with its lack of dividends and higher liquidity ratios.
Strategic Positioning
This section compares the strategic positioning of Pegasystems Inc. and monday.com Ltd., including their market position, key segments, and exposure to technological disruption:
Pegasystems Inc.
- Established player with $8.9B market cap, moderate beta, facing competitive software industry pressure.
- Focuses on enterprise software with diversified products: cloud platform, customer engagement, automation, consulting, and maintenance services.
- Exposure through cloud platforms and automation software, adapting to digital process automation trends.
monday.com Ltd.
- Smaller $6.5B market cap, higher beta, competing in cloud-based work management software market.
- Offers cloud-based Work OS with modular building blocks for work management and various business solutions.
- Dependent on cloud-based solutions, potentially sensitive to rapid innovation in visual work operating systems.
Pegasystems Inc. vs monday.com Ltd. Positioning
Pegasystems shows a diversified approach with broad enterprise software offerings across industries, while monday.com concentrates on cloud-based work management tools. Pegasystems benefits from multiple revenue streams; monday.com’s focus offers specialization but with narrower scope.
Which has the best competitive advantage?
Both companies exhibit slightly unfavorable MOAT evaluations, shedding value but with improving profitability. Pegasystems’ larger scale and diversified business may offer more stable capital efficiency compared to monday.com’s higher value destruction despite growth.
Stock Comparison
The stock price chart highlights significant divergence in performance between Pegasystems Inc. and monday.com Ltd. over the past year, with Pegasystems showing robust gains and monday.com facing notable declines amid shifting trading dynamics.
Trend Analysis
Pegasystems Inc. (PEGA) experienced a strong bullish trend over the past 12 months with a 63.18% price increase, although the momentum has decelerated recently. The stock reached a high of 66.27 and a low of 28.73, with moderate volatility (std deviation 10.77).
monday.com Ltd. (MNDY) displayed a bearish trend over the same period, declining by 39.06% with decelerating downward momentum. The stock showed high volatility (std deviation 47.32), peaking at 324.31 and bottoming at 126.7.
Comparatively, Pegasystems delivered the highest market performance with a substantial positive return, while monday.com faced significant losses and greater volatility throughout the year.
Target Prices
The current analyst consensus indicates promising upside potential for both Pegasystems Inc. and monday.com Ltd.
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| Pegasystems Inc. | 80 | 67 | 74 |
| monday.com Ltd. | 330 | 194 | 264.42 |
Analysts expect Pegasystems’ stock to rise from its current $51.99 toward a consensus target of $74, signaling a strong potential gain. monday.com’s consensus target of $264.42 is substantially above its current price of $126.70, reflecting high growth expectations.
Analyst Opinions Comparison
This section compares analysts’ ratings and financial scores for Pegasystems Inc. and monday.com Ltd.:
Rating Comparison
PEGA Rating
- Rating: B+, classified as Very Favorable by analysts.
- Discounted Cash Flow Score: Moderate at 3.
- ROE Score: Very Favorable with a top score of 5.
- ROA Score: Very Favorable with a maximum score of 5.
- Debt To Equity Score: Moderate at 3, indicating balanced risk.
- Overall Score: Moderate at 3.
MNDY Rating
- Rating: B-, also classified as Very Favorable overall.
- Discounted Cash Flow Score: Favorable at 4.
- ROE Score: Moderate at 3.
- ROA Score: Moderate at 3.
- Debt To Equity Score: Moderate at 3, similar risk profile.
- Overall Score: Moderate at 3.
Which one is the best rated?
Based strictly on the available data, Pegasystems Inc. holds a higher rating (B+) with very favorable ROE and ROA scores, while monday.com Ltd. has a lower rating (B-) but a better discounted cash flow score. Overall, Pegasystems appears better rated in profitability metrics.
Scores Comparison
Here is a comparison of Pegasystems Inc. and monday.com Ltd. scores based on Altman Z-Score and Piotroski Score:
PEGA Scores
- Altman Z-Score: 10.31, indicating a safe zone with low bankruptcy risk.
- Piotroski Score: 8, classified as very strong financial health.
MNDY Scores
- Altman Z-Score: 6.33, also in safe zone, low bankruptcy risk.
- Piotroski Score: 5, indicating average financial strength.
Which company has the best scores?
Pegasystems Inc. outperforms monday.com Ltd. with a higher Altman Z-Score and a notably stronger Piotroski Score, indicating better overall financial stability and strength based on the provided data.
Grades Comparison
The following presents a comparison of the recent grades assigned to Pegasystems Inc. and monday.com Ltd.:
Pegasystems Inc. Grades
This table summarizes the latest grades given by recognized financial institutions for Pegasystems Inc.
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| JP Morgan | maintain | Overweight | 2025-12-05 |
| Wedbush | maintain | Outperform | 2025-10-23 |
| RBC Capital | maintain | Outperform | 2025-10-23 |
| Barclays | maintain | Equal Weight | 2025-10-23 |
| Rosenblatt | maintain | Buy | 2025-10-23 |
| DA Davidson | upgrade | Buy | 2025-10-22 |
| Rosenblatt | maintain | Buy | 2025-10-15 |
| Rosenblatt | maintain | Buy | 2025-07-24 |
| DA Davidson | maintain | Neutral | 2025-07-24 |
| Wedbush | maintain | Outperform | 2025-07-24 |
Overall, Pegasystems Inc. has predominantly maintained positive ratings, with multiple buy and outperform grades and one equal weight rating.
monday.com Ltd. Grades
This table summarizes the latest grades given by recognized financial institutions for monday.com Ltd.
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| BTIG | maintain | Buy | 2026-01-15 |
| Barclays | maintain | Overweight | 2026-01-12 |
| Jefferies | maintain | Buy | 2026-01-05 |
| Citigroup | maintain | Buy | 2025-12-23 |
| Tigress Financial | maintain | Buy | 2025-12-11 |
| Baird | maintain | Outperform | 2025-11-11 |
| Wells Fargo | maintain | Overweight | 2025-11-11 |
| DA Davidson | maintain | Buy | 2025-11-11 |
| Morgan Stanley | maintain | Overweight | 2025-11-11 |
| Piper Sandler | maintain | Overweight | 2025-11-11 |
monday.com Ltd. shows a strong consensus with mostly buy and overweight ratings, supported by multiple well-known financial institutions maintaining their positive outlook.
Which company has the best grades?
Both Pegasystems Inc. and monday.com Ltd. have received predominantly positive grades, with strong buy and buy recommendations. However, monday.com Ltd. has a higher number of buy and overweight ratings, indicating slightly stronger analyst confidence. This difference may influence investor sentiment regarding growth prospects and risk management considerations.
Strengths and Weaknesses
Below is a comparative table highlighting the strengths and weaknesses of Pegasystems Inc. (PEGA) and monday.com Ltd. (MNDY) based on recent financial and operational data:
| Criterion | Pegasystems Inc. (PEGA) | monday.com Ltd. (MNDY) |
|---|---|---|
| Diversification | Strong revenue mix with Pega Cloud (1.13B) leading, plus consulting and maintenance segments | Limited product diversification, focused on work OS platform only |
| Profitability | Moderate net margin (6.63%), favorable ROE (16.94%), neutral ROIC (7.4%) | Low net margin (3.33%), low ROE (3.14%), negative ROIC (-1.73%) |
| Innovation | Growing ROIC trend indicates improving profitability; significant cloud subscription growth | Also shows growing ROIC trend but still shedding value; heavy investments impacting profitability |
| Global presence | Well-established with global client base and diverse service offerings | Strong cloud-based platform but primarily focused on SaaS market with less legacy business |
| Market Share | Solid market position in BPM and CRM segments with expanding cloud services | Growing market share in collaboration tools but faces intense competition |
Key takeaways: Pegasystems benefits from diversified revenue streams and improving profitability despite current slight value destruction. monday.com shows strong growth potential with cloud innovation but struggles with profitability and value creation. Both require cautious evaluation, balancing growth and financial health.
Risk Analysis
Below is a summary table of key risks for Pegasystems Inc. (PEGA) and monday.com Ltd. (MNDY) based on the most recent 2024 data:
| Metric | Pegasystems Inc. (PEGA) | monday.com Ltd. (MNDY) |
|---|---|---|
| Market Risk | Moderate beta 1.08, stable demand in enterprise software | Higher beta 1.26, more volatile price range and market sentiment |
| Debt Level | Moderate debt-to-assets 31%, DE ratio 0.94 (neutral) | Low debt-to-assets 6.3%, DE ratio 0.10 (favorable, low leverage) |
| Regulatory Risk | US-based with global operations, moderate compliance complexity | Israel-based with international presence, moderate regulatory exposure |
| Operational Risk | Larger workforce (5.4K), potential integration risks with cloud offerings | Smaller workforce (2.5K), scaling risks in international markets |
| Environmental Risk | Moderate, typical of software sector with focus on cloud infrastructure | Moderate, similar sector risks, potential for increased scrutiny in EU markets |
| Geopolitical Risk | US headquarters, some exposure to global market instability | Based in Israel, some geopolitical uncertainty in the region |
Synthesis: The most impactful risk is market volatility for monday.com due to its higher beta and wider stock price fluctuations, while Pegasystems faces moderate leverage and operational risks. Both companies operate globally with typical regulatory and geopolitical challenges, but Pegasystems’ stronger financial health and higher Piotroski score reduce bankruptcy risk significantly compared to monday.com.
Which Stock to Choose?
Pegasystems Inc. (PEGA) has shown steady income growth with a 47% rise in revenue and a strong 262% increase in net income over 2020–2024. Its profitability is solid, with a favorable 16.94% ROE and a slightly favorable overall ratio profile, despite some high valuation multiples. Debt levels are moderate, and the company holds a very favorable B+ rating, supported by a safe-zone Altman Z-Score and a very strong Piotroski Score.
monday.com Ltd. (MNDY) experienced robust revenue growth of 503% over the same period but with more modest net income gains of 121%. Profitability metrics are weaker, with low ROE and ROIC, and a neutral ratio profile reflecting higher valuation multiples and some financial risks. The firm carries low debt and holds a very favorable B- rating, with a safe-zone Altman Z-Score but an average Piotroski Score.
For investors prioritizing growth potential and improving profitability, PEGA’s favorable rating and income stability might appear more attractive. Conversely, those favoring rapid top-line expansion with lower leverage could interpret MNDY’s profile as fitting. Both companies show signs of value destruction per MOAT analysis but with improving profitability trends, suggesting nuanced risk considerations based on investor tolerance and strategy.
Disclaimer: Investment carries a risk of loss of initial capital. The past performance is not a reliable indicator of future results. Be sure to understand risks before making an investment decision.
Go Further
I encourage you to read the complete analyses of Pegasystems Inc. and monday.com Ltd. to enhance your investment decisions:
