Before we can figure out what robotic process automation stock is the best, we need to put together a list of all RPA stocks around the globe. In order to make life easier, we only want to include the leaders.
Of the four names in Gartner’s leadership quadrant, UiPath, WorkFusion, and Automation Anywhere are privately held. Blue Prism is the only publicly traded stock in the leaders list. Since we’re looking for a pure-play leader in RPA, Blue Prism fits the bill.
Blue Prism isn’t the only publicly traded RPA vendor. Another name on Gartner’s quadrant, Pega (PEGA), is a publicly traded pure play RPA stock listed under “visionaries.” (According to Gartner’s quadrant, a visionary is less able of executing than a leader – just like in real life.) Let’s look at how these two publicly traded RPA stocks compare when it comes to revenue growth.
Putting Gartner’s ranking aside for a second, here’s a a look at the revenue growth for Blue Prism and Pega side-by-side.
Blue Prism shows strong revenue growth alongside growing losses. Pega shows revenues that appear to have flat-lined along with profitability except for 2019.
When we invest in disruptive technology companies, we expect them to be growing revenues at a rate that reflects the growth of the technology. If RPA is the fastest growing enterprise software segment today, we want to invest in companies that are capturing that growth. Based on the above charts, that appears to be Blue Prism.
That long trend of revenue growth appears to have stalled for Pega. In 2018, revenues only grew 0.35% and in 2019, only 2.22%. With growth having stalled for two years straight, we’re avoiding the company until revenue growth returns.
Let’s summarize the thesis here. We’re bullish on RPA because it’s saving corporations billions of dollars, something that will be in even more demand during times of economic strife. We want to invest in a pure-play RPA stock which experts consider a leader in its space.