In the dynamic world of software applications, Pegasystems Inc. and Perfect Corp. stand out by targeting distinct yet overlapping markets with innovative solutions. Pegasystems focuses on enterprise software for customer engagement and automation, while Perfect Corp. leads in AI-driven beauty and fashion tech. This comparison explores their strategies, growth potential, and market positioning to help you decide which company deserves a place in your investment portfolio.
Table of contents
Companies Overview
I will begin the comparison between Pegasystems Inc. and Perfect Corp. by providing an overview of these two companies and their main differences.
Pegasystems Inc. Overview
Pegasystems Inc. develops and markets enterprise software applications globally, focusing on customer engagement and digital process automation. Its flagship offerings include the Pega Platform and Pega Infinity, supporting industries such as financial services, healthcare, and government. Founded in 1983 and headquartered in Massachusetts, Pegasystems employs over 5,400 people and operates primarily through direct sales and technology partnerships.
Perfect Corp. Overview
Perfect Corp. specializes in SaaS artificial intelligence and augmented reality solutions for beauty and fashion technology. The company offers a wide range of virtual try-on and AI-powered analysis tools, catering to consumer-facing applications like makeup and hairstyle simulations. Established in 2015 and based in Taiwan, Perfect Corp. has around 340 employees and is listed on the NYSE since 2022.
Key similarities and differences
Both companies operate in the software application industry within the technology sector but focus on distinct markets and solutions. Pegasystems targets enterprise clients with process automation and customer engagement software, whereas Perfect Corp. serves consumer markets with AI and AR beauty tech products. Pegasystems has a significantly larger market capitalization and workforce, reflecting its broader global enterprise reach compared to Perfect Corp.’s niche consumer technology focus.
Income Statement Comparison
This table presents a side-by-side comparison of key income statement metrics for Pegasystems Inc. and Perfect Corp. based on their most recent fiscal year results.
| Metric | Pegasystems Inc. (PEGA) | Perfect Corp. (PERF) |
|---|---|---|
| Market Cap | 8.9B | 179M |
| Revenue | 1.50B | 60.2M |
| EBITDA | 185M | -2.0M |
| EBIT | 149M | -2.8M |
| Net Income | 99.2M | 5.0M |
| EPS | 0.58 | 0.05 |
| Fiscal Year | 2024 | 2024 |
Income Statement Interpretations
Pegasystems Inc.
Pegasystems Inc. has shown steady revenue growth with a 47.14% increase over five years, reaching $1.5B in 2024. Net income rose significantly, recovering from losses in earlier years to $99M in 2024, reflecting a 261.62% growth overall. Margins improved, with a favorable gross margin near 74% and a net margin of 6.63% in 2024. The latest year saw moderate revenue growth of 4.51% alongside a sharp 46.09% increase in EBIT and nearly 40% rise in net margin, indicating improving profitability.
Perfect Corp.
Perfect Corp. doubled its revenue over the 2020-2024 period, hitting $60M in 2024 with a 12.52% one-year growth. Net income also grew robustly, reaching $5M in 2024, representing overall growth of 189.77%. Gross margin is strong at almost 78%, but EBIT margin remains negative at -4.72%, reflecting ongoing operating losses. While revenue and net income growth are favorable, EBIT declined sharply by 151.28% in the latest year, signaling challenges in operating profitability despite positive EPS growth.
Which one has the stronger fundamentals?
Both companies exhibit favorable income statement trends, with Pegasystems showing sustained improvement in profitability and stable margins, while Perfect Corp. delivers faster revenue growth but struggles with negative EBIT margins. Pegasystems displays more consistent margin expansion and net income growth, suggesting stronger profitability fundamentals. Perfect Corp.’s higher revenue growth contrasts with its ongoing operating losses, indicating a riskier earnings profile despite positive net margin and EPS trends.
Financial Ratios Comparison
The table below presents a side-by-side comparison of key financial ratios for Pegasystems Inc. and Perfect Corp. based on their latest fiscal year data for 2024.
| Ratios | Pegasystems Inc. (PEGA) | Perfect Corp. (PERF) |
|---|---|---|
| ROE | 16.9% | 3.4% |
| ROIC | 7.4% | -2.1% |
| P/E | 80.1 | 56.6 |
| P/B | 13.6 | 1.93 |
| Current Ratio | 1.23 | 5.52 |
| Quick Ratio | 1.23 | 5.52 |
| D/E | 0.94 | 0.0035 |
| Debt-to-Assets | 31.1% | 0.28% |
| Interest Coverage | 18.1 | -449 |
| Asset Turnover | 0.85 | 0.33 |
| Fixed Asset Turnover | 14.4 | 57.9 |
| Payout ratio | 10.3% | 0% |
| Dividend yield | 0.13% | 0% |
Interpretation of the Ratios
Pegasystems Inc.
Pegasystems shows a mix of neutral and favorable ratios, with a strong return on equity (16.94%) and interest coverage (21.87), indicating solid profitability and debt service capacity. However, its high price-to-earnings (80.12) and price-to-book (13.57) ratios are unfavorable, suggesting valuation concerns. The company pays a small dividend with a low yield (0.13%), reflecting limited shareholder returns.
Perfect Corp.
Perfect Corp. has several unfavorable ratios, including return on equity (3.42%) and return on invested capital (-2.1%), pointing to weak profitability and capital efficiency. Its current ratio (5.52) is unusually high, which is marked unfavorable, possibly indicating inefficient asset use. The company does not pay dividends, likely prioritizing reinvestment and growth over distributions.
Which one has the best ratios?
Pegasystems presents a slightly favorable overall ratio profile with stronger profitability and coverage metrics despite valuation concerns. Perfect Corp. has more unfavorable ratios, especially on profitability and interest coverage, resulting in a slightly unfavorable overall rating. Pegasystems appears to have a more balanced and robust financial standing based on these ratio evaluations.
Strategic Positioning
This section compares the strategic positioning of Pegasystems Inc. and Perfect Corp., including market position, key segments, and exposure to technological disruption:
Pegasystems Inc.
- Large market cap of 8.9B, competes in enterprise software with global reach.
- Key segments include cloud platform, subscription licenses, and consulting.
- Faces disruption from evolving digital automation and cloud software trends.
Perfect Corp.
- Small market cap of 178M, focused on AI and AR solutions in beauty and fashion tech niche.
- Key driver is SaaS AI and AR virtual try-on applications and beauty tech apps.
- Exposure to fast-changing AR and AI technologies in consumer-focused beauty and fashion sectors.
Pegasystems Inc. vs Perfect Corp. Positioning
Pegasystems shows a diversified enterprise software approach with significant cloud and consulting revenues, offering broad industry coverage. Perfect Corp. is more concentrated on AI and AR beauty tech, emphasizing niche innovation but with smaller scale and scope.
Which has the best competitive advantage?
Both companies have a slightly unfavorable MOAT status with growing ROIC but currently shed value relative to WACC. Pegasystems has a smaller negative gap (-1.18) versus Perfect Corp. (-8.06), indicating a relatively stronger competitive advantage despite value destruction.
Stock Comparison
The past year has seen Pegasystems Inc. (PEGA) demonstrate a strong bullish trend with a 63.18% price increase, despite recent deceleration, while Perfect Corp. (PERF) experienced a bearish trend marked by a 28.98% decline, both showing seller dominance in recent trading.
Trend Analysis
Pegasystems Inc. (PEGA) posted a 63.18% price rise over the past 12 months, reflecting a bullish trend with decelerating momentum. The stock reached a high of 66.27 and a low of 28.73, with a volatility of 10.77.
Perfect Corp. (PERF) recorded a 28.98% price drop over the same period, indicating a bearish trend with deceleration. Its price ranged between 1.61 and 2.7, showing very low volatility at 0.27.
Comparing both, PEGA outperformed PERF significantly, delivering the highest market performance in the last year. PEGA’s bullish trend contrasts with PERF’s sustained bearish pattern.
Target Prices
The current analyst consensus shows promising upside potential for Pegasystems Inc. and a stable outlook for Perfect Corp.
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| Pegasystems Inc. | 80 | 67 | 74 |
| Perfect Corp. | 7 | 7 | 7 |
For Pegasystems Inc., the consensus target price of 74 is significantly above its current price of 51.99, indicating optimistic analyst expectations. Perfect Corp.’s consensus target is 7, well above its current 1.74, suggesting potential for substantial growth as perceived by analysts.
Analyst Opinions Comparison
This section compares analysts’ ratings and grades for Pegasystems Inc. (PEGA) and Perfect Corp. (PERF):
Rating Comparison
PEGA Rating
- Rating: B+, assessed as very favorable overall.
- Discounted Cash Flow Score: Moderate at 3.
- ROE Score: Very favorable at 5, indicating strong profit generation from equity.
- ROA Score: Very favorable at 5, showing effective asset utilization.
- Debt To Equity Score: Moderate at 3, indicating moderate financial risk.
- Overall Score: Moderate at 3.
PERF Rating
- Rating: A-, assessed as very favorable overall.
- Discounted Cash Flow Score: Very favorable at 5.
- ROE Score: Moderate at 2, indicating less efficiency in equity profit generation.
- ROA Score: Moderate at 3, showing average asset utilization.
- Debt To Equity Score: Favorable at 4, indicating lower financial risk.
- Overall Score: Favorable at 4.
Which one is the best rated?
Based strictly on the provided data, PERF holds a higher overall rating and better scores in discounted cash flow and debt-to-equity, while PEGA excels in return on equity and assets. PERF is slightly better rated overall.
Scores Comparison
The comparison of the Altman Z-Score and Piotroski Score for Pegasystems and Perfect Corp. is as follows:
PEGA Scores
- Altman Z-Score: 10.31, indicating a safe zone status.
- Piotroski Score: 8, classified as very strong financial health.
PERF Scores
- Altman Z-Score: 1.31, indicating distress zone status.
- Piotroski Score: 6, classified as average financial health.
Which company has the best scores?
Pegasystems has a higher Altman Z-Score in the safe zone and a very strong Piotroski Score, while Perfect Corp. is in the distress zone with an average Piotroski Score. Pegasystems shows stronger financial stability based on these metrics.
Grades Comparison
Here is the comparison of the latest reliable grades for Pegasystems Inc. and Perfect Corp.:
Pegasystems Inc. Grades
The following table summarizes recent grades from well-known 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, the grades for Pegasystems show a strong buy and outperform trend with multiple upgrades and maintained positive ratings from major firms.
Perfect Corp. Grades
The following table summarizes recent grades from recognized financial institutions for Perfect Corp.:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Piper Sandler | Maintain | Neutral | 2024-02-29 |
| Goldman Sachs | Maintain | Neutral | 2023-10-26 |
| Piper Sandler | Maintain | Neutral | 2023-10-25 |
| Piper Sandler | Maintain | Neutral | 2023-07-26 |
| Piper Sandler | Maintain | Neutral | 2023-07-25 |
| Piper Sandler | Maintain | Neutral | 2023-04-27 |
| Oppenheimer | Downgrade | Perform | 2023-04-20 |
| Oppenheimer | Downgrade | Perform | 2023-04-19 |
| Oppenheimer | Downgrade | Perform | 2023-04-18 |
| Piper Sandler | Maintain | Neutral | 2023-03-08 |
The grades for Perfect Corp. mainly hold steady at neutral, with some downgrades from outperform to perform, indicating a more cautious stance.
Which company has the best grades?
Pegasystems Inc. has received consistently stronger grades, including multiple buys and outperforms, compared to Perfect Corp.’s neutral and downgraded ratings. This suggests Pegasystems may be perceived as having better growth or value potential, which could influence investor preference for higher confidence in returns.
Strengths and Weaknesses
Below is a comparative overview of key strengths and weaknesses of Pegasystems Inc. (PEGA) and Perfect Corp. (PERF) based on their recent financial and operational data.
| Criterion | Pegasystems Inc. (PEGA) | Perfect Corp. (PERF) |
|---|---|---|
| Diversification | Strong with multiple revenue streams: Pega Cloud (1.13B), Subscription License (398M), Maintenance (341M), Consulting (213M) | Limited product segmentation data available, indicating potential concentration risk |
| Profitability | Moderate net margin (6.63%), ROE favorable (16.94%), ROIC neutral (7.4%) | Net margin neutral (8.34%), but ROE (3.42%) and ROIC (-2.1%) unfavorable |
| Innovation | High fixed asset turnover (14.36) and growing ROIC trend (+224%) suggest efficient use of innovation investments | Very high fixed asset turnover (57.94) but negative ROIC and interest coverage indicate risks in translating innovation into profits |
| Global presence | Established global footprint with strong consulting and cloud services | Data insufficient to assess global presence accurately |
| Market Share | Well-positioned in cloud and subscription markets with growing revenues over recent years | Market share unclear; financial indicators suggest challenges in market competitiveness |
Key takeaways: Pegasystems demonstrates strong diversification and improving profitability trends, despite currently shedding some value. Perfect Corp. shows innovative asset use but struggles with profitability and financial stability, indicating higher investment risk.
Risk Analysis
Below is a risk comparison table for Pegasystems Inc. (PEGA) and Perfect Corp. (PERF) based on the most recent data from 2024.
| Metric | Pegasystems Inc. (PEGA) | Perfect Corp. (PERF) |
|---|---|---|
| Market Risk | Moderate beta (1.08) indicating average volatility | Low beta (0.45) indicating lower volatility |
| Debt level | Moderate debt-to-equity (0.94), neutral risk | No debt (0.0), low financial risk |
| Regulatory Risk | Moderate, US-based software firm with standard compliance | Moderate, Taiwan-based with tech regulations |
| Operational Risk | Medium, large scale with 5.4K employees | Higher, smaller scale with 342 employees |
| Environmental Risk | Low, software sector with minimal direct impact | Low, tech/software with minimal direct impact |
| Geopolitical Risk | US-based, exposure mainly domestic and global markets | Higher, based in Taiwan with regional geopolitical tensions |
The most impactful risks are Pegasystems’ market volatility and moderate debt, which are manageable given its strong financial health and profitability. Perfect Corp. faces higher geopolitical risk due to its Taiwan base and shows financial distress signs with a low Altman Z-Score, despite having no debt. Caution is advised with Perfect Corp. given its weaker profitability and operational scale.
Which Stock to Choose?
Pegasystems Inc. (PEGA) shows a favorable income statement with strong revenue and net income growth over 2020-2024. Financial ratios are slightly favorable, with good profitability and moderate debt levels. The company has a very favorable B+ rating but a slightly unfavorable economic moat due to ROIC below WACC despite improving profitability.
Perfect Corp. (PERF) presents a favorable income statement overall, with solid revenue growth but mixed profitability metrics, including a negative EBIT margin. Its financial ratios are slightly unfavorable, reflecting some weaknesses in asset turnover and interest coverage, yet the company benefits from a very favorable A- rating. PERF’s economic moat is also slightly unfavorable, with ROIC under WACC but improving.
Investors focused on consistent profitability and a stronger rating might find Pegasystems more aligned with quality investing, while those prioritizing growth potential amid some operational challenges could see Perfect Corp. as fitting a growth-oriented profile. The choice could depend on tolerance for financial stability versus growth variability.
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 Perfect Corp. to enhance your investment decisions:
