Reviewing Scientific Learning (OTCMKTS:SCIL) & Pegasystems (NASDAQ:PEGA)

Scientific Learning (OTCMKTS:SCIL) and Pegasystems (NASDAQ:PEGA) are both computer and technology companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, institutional ownership, profitability, valuation, analyst recommendations, risk and dividends.

Profitability

This table compares Scientific Learning and Pegasystems’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Scientific Learning	N/A	N/A	N/A
Pegasystems	16.05%	43.49%	18.42%

Insider and Institutional Ownership

46.9% of Pegasystems shares are held by institutional investors. 16.1% of Scientific Learning shares are held by company insiders. Comparatively, 50.1% of Pegasystems shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings for Scientific Learning and Pegasystems, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Scientific Learning	0	0	0	0	0.00
Pegasystems	0	2	9	0	2.82

Pegasystems has a consensus target price of $70.05, suggesting a potential upside of 19.32%. Given Pegasystems’ stronger consensus rating and higher probable upside, analysts clearly believe Pegasystems is more favorable than Scientific Learning.

Valuation & Earnings

This table compares Scientific Learning and Pegasystems”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Scientific Learning	N/A	N/A	N/A	N/A	N/A
Pegasystems	$1.50 billion	6.66	$99.19 million	$1.49	39.40

Pegasystems has higher revenue and earnings than Scientific Learning.

Summary

Pegasystems beats Scientific Learning on 9 of the 9 factors compared between the two stocks.

About Scientific Learning

Scientific Learning Corporation, an education company, develops, distributes, and licenses technology that accelerates learning by enhancing the processing efficiency of the brain. Its flagship Fast ForWord, a Web-based product, comprises Fast ForWord Language for elementary learners and Fast ForWord Literacy for adolescent learners that build foundational reading and language skills to help districts move below grade level learners to learn in the general classroom, and Fast ForWord Reading, which builds learning capacity through developing cognitive skills using exercises focusing on phonemic awareness, phonics and decoding, spelling, vocabulary, fluency, and comprehension. The company also provides Reading Assistant that offers a one-on-one reading tutor for learners; ResultsNow!, an online hosting and support solution for its Fast ForWord and Reading Assistant products; and BrainPro services targeted at learners who are below grade level. In addition, it offers on-site product training, technical installation, implementation management, consulting, and Web-based synchronous and asynchronous professional development services; and software technical update releases, as well as extensive telephone, email, and chat support services. The company offers learning solutions primarily to educational institutions, speech and language clinics, learning centers, and parents. Scientific Learning Corporation was founded in 1995 and is headquartered in Oakland, California.

About Pegasystems

Pegasystems Inc. develops, markets, licenses, hosts, and supports enterprise software in the United States, rest of the Americas, the United Kingdom, rest of Europe, the Middle East, Africa, and the Asia-Pacific. The company provides Pega Infinity, a software portfolio comprising of Pega Customer Decision Hub, a real-time AI-powered decision engine to enhance customer acquisition and experiences across inbound, outbound, and paid media channels; Pega Customer Service to anticipate customer needs, connect customers to people and systems, and automate customer interactions to evolve the customer service experience, as well as to allow enterprises to deliver interactions across channels and enhance employee productivity; and Pega Platform, an intelligent automation software for increasing efficiency of clients’ processes and workflows. It also offers Situational Layer Cake that organizes logic into layers that map to the unique dimensions of a client’s business, such as customer types, lines of business, geographies, etc.; Pega Express Methodology and low code that connects enterprise data and systems to customer experience channels; Pega Cloud that allows clients to develop, test, and deploy applications; Pega Catalyst, which helps clients to transform and prototype their customer journeys; Pega Academy, which offers instructor-led and online training to its employees, clients, and partners; and global service assurance and client support services. It primarily markets its software and services to financial services, healthcare, communications and media, government, insurance, manufacturing and high tech, and consumer services markets through a direct sales force, as well as partnerships with technology providers and application developers. Pegasystems Inc. was incorporated in 1983 and is headquartered in Cambridge, Massachusetts.