In the competitive landscape of the technology sector, EPAM Systems, Inc. and PagerDuty, Inc. stand out for their innovative approaches and distinct market offerings. Both companies operate in overlapping industries—information technology services and application software—yet they tackle different challenges within this space. EPAM focuses on digital platform engineering, while PagerDuty excels in digital operations management. This analysis aims to help you determine which of these companies presents the more compelling investment opportunity.
Table of contents
Company Overview
EPAM Overview
EPAM Systems, Inc. is a leading global provider of digital platform engineering and software development services, headquartered in Newtown, Pennsylvania. Founded in 1993, the company has established a strong position in the Information Technology Services sector. EPAM offers a comprehensive suite of services, including engineering, infrastructure management, and digital consulting, serving a diverse range of industries from financial services to healthcare. With a market capitalization of $10.33B and over 61,200 employees, EPAM focuses on leveraging innovative technologies such as artificial intelligence and robotics to enhance operational efficiency for its clients.
PagerDuty Overview
PagerDuty, Inc. operates a cutting-edge digital operations management platform that streamlines incident response and operational workflows for organizations globally. Founded in 2009 and based in San Francisco, California, PagerDuty caters to industries including telecommunications, retail, and financial services. The company, with a market cap of $1.1B, utilizes machine learning to analyze digital signals from various software systems, enabling businesses to proactively address issues before they escalate. With a workforce of approximately 1,242 employees, PagerDuty emphasizes enhancing digital operations through its robust platform.
Key similarities and differences
Both EPAM and PagerDuty operate within the technology sector, focusing on enhancing digital capabilities for businesses. However, their business models differ significantly; EPAM emphasizes comprehensive software development and consulting services, while PagerDuty centers on a specialized digital operations management platform designed for real-time incident response and workflow optimization.
Income Statement Comparison
Below is a comparative income statement for EPAM Systems, Inc. and PagerDuty, Inc. for their most recent fiscal years, highlighting key financial metrics.
| Metric | EPAM Systems, Inc. | PagerDuty, Inc. |
|---|---|---|
| Market Cap | 10.33B | 1.10B |
| Revenue | 4.73B | 467.50M |
| EBITDA | 671.69M | -11.89M |
| EBIT | 544.58M | -32.50M |
| Net Income | 454.53M | -42.74M |
| EPS | 7.93 | -0.59 |
| Fiscal Year | 2024 | 2025 |
Interpretation of Income Statement
In the most recent fiscal year, EPAM Systems demonstrated stable revenue growth, increasing from 4.69B in 2023 to 4.73B in 2024. This growth was accompanied by improved margins, resulting in a net income of 454.53M, showcasing effective cost management. Conversely, PagerDuty’s revenue rose to 467.50M but reported a net loss of 42.74M, indicating challenges in maintaining profitability despite growth. The negative EBITDA and EBIT suggest ongoing operational inefficiencies, requiring careful assessment from investors focused on risk management and potential recovery strategies.
Financial Ratios Comparison
The following table compares the most recent financial ratios of EPAM Systems, Inc. (EPAM) and PagerDuty, Inc. (PD), helping investors evaluate their financial health and investment potential.
| Metric | EPAM | PD |
|---|---|---|
| ROE | 12.52% | -32.92% |
| ROIC | 10.67% | -10.07% |
| P/E | 29.47 | -39.87 |
| P/B | 3.69 | 13.12 |
| Current Ratio | 2.96 | 1.87 |
| Quick Ratio | 2.96 | 1.87 |
| D/E | 0.045 | 3.57 |
| Debt-to-Assets | 3.44% | 50.00% |
| Interest Coverage | 0 | -6.46 |
| Asset Turnover | 0.99 | 0.50 |
| Fixed Asset Turnover | 14.07 | 16.61 |
| Payout Ratio | 0% | 0% |
| Dividend Yield | 0% | 0% |
Interpretation of Financial Ratios
EPAM demonstrates robust financial metrics, highlighted by a strong ROE and manageable debt levels, indicating efficient capital utilization. Conversely, PD presents concerning ratios, notably negative ROE, high debt-to-equity, and low interest coverage, reflecting financial distress. Investors should approach PD with caution, while EPAM appears to be a more stable investment.
Dividend and Shareholder Returns
Neither EPAM Systems nor PagerDuty pays dividends, which aligns with their strategies of reinvesting earnings for growth and innovation. EPAM’s focus on expanding its service offerings is evident, while PagerDuty is likely prioritizing product development despite losses. Both companies engage in share buybacks, which can provide shareholder value. However, the lack of dividends may present risks if their growth strategies do not translate into sustainable profitability. Thus, the absence of dividends, coupled with share repurchase activities, reflects a commitment to long-term value creation, albeit with inherent risks.
Strategic Positioning
EPAM Systems, Inc. commands a significant market share in the digital platform engineering sector, leveraging its extensive service offerings across diverse industries. With a market cap of 10.33B, it faces moderate competitive pressure from agile players like PagerDuty, Inc., which, despite its smaller market cap of 1.10B, excels in digital operations management. Both companies are navigating technological disruptions, emphasizing the need for continuous innovation to maintain their competitive edge.
Stock Comparison
Over the past year, the stock prices of EPAM Systems, Inc. (EPAM) and PagerDuty, Inc. (PD) have exhibited significant volatility and distinct trading dynamics, prompting an analysis of their performance trajectories and investor sentiment.
Trend Analysis
Analyzing the stock trends over the past year, we find that:
- EPAM Systems, Inc. (EPAM) has experienced a price change of -35.26%, indicating a bearish trend. The stock has seen notable highs at 311.98 and lows at 142.38, with an acceleration in its downward movement. The standard deviation of 45.99 suggests considerable volatility in its price movements.
- In more recent trends, EPAM has shown a recovery with a price change of +19.8% from September 14, 2025, to November 30, 2025, indicating a bullish trend during this period, despite the overall bearish outlook. The recent trend slope of 3.28 reflects a positive short-term momentum.
- PagerDuty, Inc. (PD) has recorded a price change of -43.71%, also reflecting a bearish trend. The stock’s highest price reached 26.23, while the lowest was recorded at 12.0, indicating a significant decline. The acceleration status is marked as deceleration, with a standard deviation of 2.97, which points to less volatility compared to EPAM.
- Recently, PD has shown a price change of -27.01% from September 14, 2025, to November 30, 2025, confirming the bearish trend with a slight negative slope of -0.24, indicating a continued downward trajectory.
In summary, while both stocks face bearish trends in the long term, EPAM shows signs of recovery in the short term, whereas PD continues to struggle with a negative performance outlook. Investors should remain cautious and consider the volatility and overall market conditions when making investment decisions.
Analyst Opinions
Recent analyst recommendations for EPAM Systems, Inc. (EPAM) show a rating of B+, indicating a cautious stance with a consensus to hold. Analysts highlight a solid discounted cash flow score but point to concerns regarding the price-to-earnings ratio. In contrast, PagerDuty, Inc. (PD) holds an A- rating, with a consensus to buy. Analysts praise its strong return on equity and assets, suggesting robust growth potential. Overall, the consensus for EPAM is to hold, while PD is recommended as a buy.
Stock Grades
In the current market, reliable stock grades provide valuable insights into the performance outlook for companies. Here’s a closer look at the recent ratings for EPAM Systems, Inc. and PagerDuty, Inc.
EPAM Systems, Inc. Grades
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Mizuho | maintain | Outperform | 2025-11-11 |
| JP Morgan | maintain | Overweight | 2025-11-07 |
| Morgan Stanley | maintain | Equal Weight | 2025-09-09 |
| JP Morgan | maintain | Overweight | 2025-08-20 |
| Barclays | maintain | Overweight | 2025-05-12 |
| Needham | maintain | Buy | 2025-05-09 |
| Guggenheim | maintain | Buy | 2025-05-09 |
| Piper Sandler | maintain | Neutral | 2025-05-09 |
| Morgan Stanley | maintain | Equal Weight | 2025-05-09 |
| Stifel | maintain | Buy | 2025-05-02 |
PagerDuty, Inc. Grades
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| TD Cowen | maintain | Buy | 2025-11-26 |
| RBC Capital | maintain | Outperform | 2025-11-26 |
| Craig-Hallum | downgrade | Hold | 2025-11-26 |
| Morgan Stanley | maintain | Equal Weight | 2025-11-26 |
| Truist Securities | maintain | Buy | 2025-11-19 |
| Baird | maintain | Neutral | 2025-09-04 |
| RBC Capital | maintain | Outperform | 2025-09-04 |
| Canaccord Genuity | maintain | Buy | 2025-09-04 |
| Canaccord Genuity | maintain | Buy | 2025-06-02 |
| JP Morgan | maintain | Underweight | 2025-05-30 |
Overall, both companies maintain a stable outlook with numerous “Buy” and “Outperform” ratings from various reputable analysts. However, the recent downgrade for PagerDuty by Craig-Hallum suggests a need for cautious observation in the coming months.
Target Prices
I have gathered target price data from reliable sources for two companies. Here are the consensus expectations from analysts:
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| EPAM Systems, Inc. | 185 | 175 | 180 |
| PagerDuty, Inc. | 19 | 15 | 16.75 |
For EPAM Systems, analysts expect a consensus target price of 180, which is slightly below the current market price of 187, indicating a potential for limited upside. PagerDuty’s consensus target price of 16.75 is significantly higher than its current price of 12, suggesting a more favorable outlook for growth.
Strengths and Weaknesses
The table below outlines the strengths and weaknesses of EPAM Systems, Inc. and PagerDuty, Inc., based on the most recent data available.
| Criterion | EPAM Systems, Inc. | PagerDuty, Inc. |
|---|---|---|
| Diversification | High | Moderate |
| Profitability | Strong | Weak |
| Innovation | High | Moderate |
| Global presence | Strong | Moderate |
| Market Share | Significant | Limited |
| Debt level | Low | High |
Key takeaways indicate that while EPAM Systems exhibits strong profitability, innovation, and a global presence, PagerDuty struggles with profitability and holds a high debt level. Investors may consider these factors when evaluating their investment choices.
Risk Analysis
The following table outlines the key risks associated with EPAM Systems, Inc. and PagerDuty, Inc. for the most recent fiscal year.
| Metric | EPAM Systems, Inc. | PagerDuty, Inc. |
|---|---|---|
| Market Risk | Moderate | High |
| Regulatory Risk | Low | Moderate |
| Operational Risk | Moderate | High |
| Environmental Risk | Low | Low |
| Geopolitical Risk | High | Moderate |
In summary, EPAM faces significant market and geopolitical risks, while PagerDuty struggles with operational challenges and high market risk. Both companies operate in volatile sectors, which increases their exposure to these risks.
Which one to choose?
When comparing EPAM Systems, Inc. (EPAM) and PagerDuty, Inc. (PD), EPAM shows stronger fundamentals overall. EPAM has a market cap of 13.4B with a net profit margin of 9.6%, while PD, with a market cap of 1.7B, reports a negative net profit margin of -9.1%. EPAM’s B+ rating contrasts with PD’s A- rating, indicating that while PD has better growth potential, EPAM demonstrates better profitability and stability.
Investors focused on growth may prefer PD due to its higher return on equity and discounted cash flow score, despite the risks associated with its current financial performance. Conversely, those prioritizing stability and consistent returns may favor EPAM, especially given its better profit margins and robust balance sheet.
Disclaimer: This article is not financial advice. Each investor is responsible for their own investment decisions.
Go further
I encourage you to read the complete analyses of EPAM Systems, Inc. and PagerDuty, Inc. to enhance your investment decisions:
