Financial Analysis: Progress Software (NASDAQ:PRGS) versus PowerFleet (NASDAQ:AIOT)

PowerFleet (NASDAQ:AIOT) and Progress Software (NASDAQ:PRGS) are both small-cap technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their dividends, risk, earnings, institutional ownership, profitability, valuation and analyst recommendations.

Earnings and Valuation

This table compares PowerFleet and Progress Software”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
PowerFleet	$443.78 million	0.78	-$20.55 million	($0.16)	-15.97
Progress Software	$999.93 million	1.79	$73.13 million	$2.17	20.15

Progress Software has higher revenue and earnings than PowerFleet. PowerFleet is trading at a lower price-to-earnings ratio than Progress Software, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent ratings and recommmendations for PowerFleet and Progress Software, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PowerFleet	1	2	2	0	2.20
Progress Software	0	2	6	1	2.89

PowerFleet currently has a consensus price target of $7.40, indicating a potential upside of 189.63%. Progress Software has a consensus price target of $51.57, indicating a potential upside of 17.94%. Given PowerFleet’s higher probable upside, research analysts clearly believe PowerFleet is more favorable than Progress Software.

Volatility & Risk

PowerFleet has a beta of 1.42, meaning that its share price is 42% more volatile than the S&P 500. Comparatively, Progress Software has a beta of 0.87, meaning that its share price is 13% less volatile than the S&P 500.

Profitability

This table compares PowerFleet and Progress Software’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
PowerFleet	-4.69%	2.36%	1.18%
Progress Software	9.24%	42.91%	9.09%

Institutional & Insider Ownership

73.4% of PowerFleet shares are owned by institutional investors. 5.9% of PowerFleet shares are owned by insiders. Comparatively, 4.1% of Progress Software shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Progress Software beats PowerFleet on 11 of the 15 factors compared between the two stocks.

About PowerFleet

PowerFleet, Inc. provides software-as-a-service and Internet of Things solutions that help businesses monitor and manage vehicles, equipment, cargo and other mobile assets. Its platforms use connected devices and data analytics to provide visibility into asset location, utilization, condition and performance. Its offerings include fleet management and vehicle telematics, asset tracking, driver and safety tools, and solutions for managing equipment in warehouses and other industrial settings. These services are designed to help customers improve operational efficiency, safety and asset control.

About Progress Software

Progress Software Corporation develops software used by organizations to build, deploy, manage and secure business applications and IT environments. Founded in 1981 and headquartered in Burlington, Massachusetts, the company serves customers around the world. Its products include OpenEdge, an application development and database platform; Sitefinity, a digital experience platform; and tools for data connectivity, application performance monitoring, network management and managed file transfer. Progress also offers Chef for infrastructure automation and Kemp LoadMaster for application delivery and load balancing.