Pegasystems Inc. and PagerDuty, Inc. are both influential players in the software application sector, specializing in enterprise solutions that enhance operational efficiency and customer engagement. While Pegasystems focuses on comprehensive digital process automation and customer experience platforms, PagerDuty excels in real-time digital operations management with machine learning capabilities. This comparison aims to highlight which company offers a more compelling investment opportunity in today’s tech-driven market. Let’s explore which stands out for your portfolio.
Table of contents
Companies Overview
I will begin the comparison between Pegasystems Inc. and PagerDuty, Inc. 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 products include Pega Platform and Pega Infinity, which serve diverse sectors such as financial services, healthcare, and manufacturing. Headquartered in Massachusetts, Pegasystems leverages direct sales and partnerships to maintain a strong market position with a workforce of 5,443 employees.
PagerDuty, Inc. Overview
PagerDuty, Inc. operates a digital operations management platform that uses machine learning to analyze data from software-enabled systems, enhancing operational efficiency. Founded in 2009 and based in San Francisco, PagerDuty serves various industries like technology, telecommunications, and retail. The company employs 1,242 people and focuses on real-time digital operations across the US, Japan, and other international markets.
Key similarities and differences
Both companies operate in the software application industry, emphasizing technology-driven solutions to improve business processes. Pegasystems offers a broader suite of enterprise software with a focus on customer engagement and automation, while PagerDuty specializes in digital operations management using machine learning. Pegasystems has a larger employee base and market cap, reflecting its longer establishment and diversified product range compared to PagerDuty’s more niche platform.
Income Statement Comparison
This table compares the most recent fiscal year income statement metrics for Pegasystems Inc. and PagerDuty, Inc., illustrating their financial performance in 2024 and 2025 respectively.
| Metric | Pegasystems Inc. (PEGA) | PagerDuty, Inc. (PD) |
|---|---|---|
| Market Cap | 8.9B | 1.0B |
| Revenue | 1.50B (2024) | 467M (2025) |
| EBITDA | 185M (2024) | -12M (2025) |
| EBIT | 149M (2024) | -32M (2025) |
| Net Income | 99M (2024) | -54M (2025) |
| EPS | 0.58 (2024) | -0.59 (2025) |
| Fiscal Year | 2024 | 2025 |
Income Statement Interpretations
Pegasystems Inc.
Pegasystems Inc. demonstrated steady revenue growth from 2020 to 2024, increasing from $1.02B to $1.50B, with net income recovering strongly from losses in earlier years to $99M in 2024. Margins improved notably, with a gross margin of 73.91% and a net margin of 6.63%. The latest year saw favorable EBIT growth of 46%, reflecting operational efficiency gains.
PagerDuty, Inc.
PagerDuty, Inc. experienced robust revenue expansion, nearly doubling from $214M in 2021 to $467M in 2025, with net losses narrowing to $43M in 2025. Despite a high gross margin of 82.96%, the company maintained negative EBIT and net margins, though both improved significantly in the last year. Revenue and EPS growth rates remain favorable, indicating progress toward profitability.
Which one has the stronger fundamentals?
Pegasystems shows stronger profitability fundamentals with positive net income and improving margins, benefiting from stable operating leverage. PagerDuty posts higher revenue growth but remains unprofitable, though it is reducing losses and improving margins. Pegasystems’ consistent earnings and margin expansion contrast with PagerDuty’s ongoing challenges in achieving profitability.
Financial Ratios Comparison
The following table presents a side-by-side comparison of key financial ratios for Pegasystems Inc. (PEGA) and PagerDuty, Inc. (PD) based on their most recent fiscal year data.
| Ratios | Pegasystems Inc. (2024) | PagerDuty, Inc. (2025) |
|---|---|---|
| ROE | 16.94% | -32.92% |
| ROIC | 7.40% | -9.66% |
| P/E | 80.12 | -39.87 |
| P/B | 13.57 | 13.12 |
| Current Ratio | 1.23 | 1.87 |
| Quick Ratio | 1.23 | 1.87 |
| D/E (Debt to Equity) | 0.94 | 3.57 |
| Debt-to-Assets | 31.09% | 50.00% |
| Interest Coverage | 18.12 | -6.46 |
| Asset Turnover | 0.85 | 0.50 |
| Fixed Asset Turnover | 14.36 | 16.61 |
| Payout ratio | 10.28% | 0% |
| Dividend yield | 0.13% | 0% |
Interpretation of the Ratios
Pegasystems Inc.
Pegasystems shows a mix of ratio strengths and weaknesses, with a favorable return on equity (16.94%) and interest coverage (21.87), but unfavorable valuation multiples like a high P/E ratio (80.12) and price-to-book (13.57). Liquidity ratios are neutral to favorable. The company pays a dividend with a low yield of 0.13%, indicating modest shareholder returns and possible risks from the payout’s sustainability.
PagerDuty, Inc.
PagerDuty’s ratios mostly indicate weakness, with unfavorable net margin (-9.14%), ROE (-32.92%), and interest coverage (-3.51). Although liquidity ratios are strong, leverage ratios like debt-to-equity (3.57) and debt-to-assets (50%) are concerning. PagerDuty does not pay dividends, reflecting its negative profitability and focus on reinvestment and growth, without share buybacks reported.
Which one has the best ratios?
Pegasystems delivers a slightly favorable overall ratio profile, supported by strong profitability and coverage ratios despite some valuation concerns. PagerDuty exhibits predominantly unfavorable financial ratios, burdened by losses and high leverage, with only liquidity and a few efficiency metrics favorable. Based on ratio evaluations, Pegasystems appears to have the more balanced financial position.
Strategic Positioning
This section compares the strategic positioning of Pegasystems Inc. and PagerDuty, Inc., focusing on Market position, Key segments, and Exposure to technological disruption:
Pegasystems Inc.
- Established market presence with 8.9B market cap; faces moderate competitive pressure in enterprise software.
- Diversified revenue streams: cloud, subscription, consulting, and maintenance across multiple industries globally.
- Moderate exposure through cloud-based platforms and AI-driven customer engagement and automation software.
PagerDuty, Inc.
- Smaller market cap of 1B; operates in digital operations with competitive pressures in tech platforms.
- Focused on digital operations management platform serving various industries including tech and telecom.
- Relies on machine learning for incident prediction; exposure to disruption in software-enabled operations.
Pegasystems Inc. vs PagerDuty, Inc. Positioning
Pegasystems presents a diversified business model with multiple revenue streams and broad industry reach. PagerDuty concentrates on digital operations management with a narrower product focus but applies advanced machine learning technologies. Both face competitive pressure but differ in scale and segment breadth.
Which has the best competitive advantage?
Both companies show a slightly unfavorable MOAT evaluation, indicating value destruction despite growing profitability. Pegasystems has a smaller negative ROIC-to-WACC gap and a stronger ROIC growth trend, suggesting a relatively better competitive advantage.
Stock Comparison
The stock price movements of Pegasystems Inc. and PagerDuty, Inc. over the past year exhibit contrasting trading dynamics, with Pegasystems showing a strong overall gain despite recent declines, and PagerDuty experiencing a sustained downward trajectory.
Trend Analysis
Pegasystems Inc. (PEGA) recorded a bullish trend over the past 12 months with a 63.18% price increase, although the trend shows deceleration and a recent short-term decline of 18.32%. Volatility remains elevated with a standard deviation of 10.77.
PagerDuty, Inc. (PD) showed a bearish trend over the last year, with a 51.76% price drop and decelerating losses. Recent performance worsened, declining 30.14% with lower volatility at 2.92 standard deviation.
Comparing both stocks, Pegasystems delivered the highest market performance with a substantial overall gain, while PagerDuty experienced significant value erosion during the same period.
Target Prices
The current analyst consensus presents a cautiously optimistic outlook for Pegasystems Inc. and PagerDuty, Inc.
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| Pegasystems Inc. | 80 | 67 | 74 |
| PagerDuty, Inc. | 19 | 15 | 16.2 |
Analysts expect Pegasystems’ stock to appreciate significantly from its current price of $51.99, reflecting strong confidence. PagerDuty’s consensus target of $16.2 also suggests upside potential compared to its $11.22 market price.
Analyst Opinions Comparison
This section compares the analysts’ ratings and financial scores for Pegasystems Inc. and PagerDuty, Inc.:
Rating Comparison
Pegasystems Inc. Rating
- Rating: B+, evaluated as Very Favorable
- Discounted Cash Flow Score: 3, Moderate valuation
- ROE Score: 5, very favorable efficiency
- ROA Score: 5, very favorable asset use
- Debt To Equity Score: 3, moderate financial risk
- Overall Score: 3, moderate overall assessment
PagerDuty, Inc. Rating
- Rating: A-, evaluated as Very Favorable
- Discounted Cash Flow Score: 5, very favorable valuation
- ROE Score: 5, very favorable efficiency
- ROA Score: 5, very favorable asset use
- Debt To Equity Score: 1, very unfavorable financial risk
- Overall Score: 4, favorable overall assessment
Which one is the best rated?
PagerDuty, Inc. holds a higher overall rating (A-) and overall score (4) compared to Pegasystems Inc.’s B+ and score of 3. PagerDuty also scores better on discounted cash flow but shows a weaker debt-to-equity profile.
Scores Comparison
Here is a comparison of the Altman Z-Score and Piotroski Score for Pegasystems Inc. and PagerDuty, Inc.:
Pegasystems Inc. Scores
- Altman Z-Score: 10.31, indicating a safe zone with very low bankruptcy risk.
- Piotroski Score: 8, classified as very strong financial health.
PagerDuty, Inc. Scores
- Altman Z-Score: 1.26, indicating distress zone with high bankruptcy risk.
- Piotroski Score: 7, classified as strong financial health.
Which company has the best scores?
Based strictly on the provided data, Pegasystems Inc. has the best scores with a much higher Altman Z-Score in the safe zone and a very strong Piotroski Score compared to PagerDuty, which falls in the distress zone and has a slightly lower Piotroski Score.
Grades Comparison
Here is the comparison of the latest available grades from recognized grading companies for Pegasystems Inc. and PagerDuty, Inc.:
Pegasystems Inc. Grades
The following table summarizes the recent grades assigned to Pegasystems Inc. by established financial firms:
| 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 |
Pegasystems Inc. maintains predominantly positive grades, with multiple Buy and Outperform ratings and a recent upgrade observed.
PagerDuty, Inc. Grades
The following table summarizes the recent grades assigned to PagerDuty, Inc. by established financial firms:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Truist Securities | Maintain | Buy | 2026-01-07 |
| RBC Capital | Downgrade | Sector Perform | 2026-01-05 |
| TD Cowen | Maintain | Buy | 2025-11-26 |
| Craig-Hallum | Downgrade | Hold | 2025-11-26 |
| Morgan Stanley | Maintain | Equal Weight | 2025-11-26 |
| RBC Capital | Maintain | Outperform | 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 |
PagerDuty, Inc. exhibits a mixed grade profile with several Buy ratings but also downgrades to Hold and Sector Perform, indicating some uncertainty.
Which company has the best grades?
Pegasystems Inc. has generally received stronger and more consistent Buy and Outperform grades compared to PagerDuty, Inc., which shows a more mixed rating trend. This difference may affect investor sentiment and perceived risk profiles.
Strengths and Weaknesses
The table below summarizes key strengths and weaknesses of Pegasystems Inc. (PEGA) and PagerDuty, Inc. (PD) based on their recent financial metrics, market positions, and operational characteristics.
| Criterion | Pegasystems Inc. (PEGA) | PagerDuty, Inc. (PD) |
|---|---|---|
| Diversification | Moderate: Revenue spread across consulting, maintenance, cloud, and subscription licenses, with cloud services growing strongly | Limited: Focused mainly on incident response and IT operations management software |
| Profitability | Moderate profitability: ROIC at 7.4% (slightly below WACC), net margin 6.63%, positive ROE 16.94% | Unprofitable: Negative ROIC (-9.66%), net margin (-9.14%), and ROE (-32.92%) |
| Innovation | Solid innovation focus with increasing cloud revenue, reflecting growing product adoption | Innovation-driven growth, but high expenses weigh on profitability |
| Global presence | Established global presence with diverse client base and consistent cloud revenue growth | Growing presence but relatively smaller scale and higher financial risk |
| Market Share | Stable market share in enterprise software and BPM sectors | Niche market player with growing but still limited share in IT incident management |
In summary, Pegasystems shows a balanced profile with improving profitability and diversified revenue streams, though value creation remains a challenge. PagerDuty is in a growth phase with innovation momentum but faces significant profitability and leverage risks. Investors should weigh growth potential against financial stability.
Risk Analysis
Below is a comparative risk overview for Pegasystems Inc. (PEGA) and PagerDuty, Inc. (PD) based on the most recent data available in 2026:
| Metric | Pegasystems Inc. (PEGA) | PagerDuty, Inc. (PD) |
|---|---|---|
| Market Risk | Moderate (Beta 1.08) | Lower (Beta 0.63) |
| Debt level | Moderate (D/E 0.94) | High (D/E 3.57) |
| Regulatory Risk | Moderate | Moderate |
| Operational Risk | Moderate | Moderate |
| Environmental Risk | Low | Low |
| Geopolitical Risk | Moderate (Global presence) | Moderate (Global presence) |
Pegasystems shows moderate market and debt risks with a strong Altman Z-Score indicating financial stability. PagerDuty faces higher financial risk due to elevated debt levels and a distress-zone Altman Z-Score, making it more vulnerable to financial distress despite strong operational scores. Investors should weigh PagerDuty’s growth potential against its financial fragility.
Which Stock to Choose?
Pegasystems Inc. (PEGA) shows a favorable income statement with stable revenue growth of 4.51% in 2024 and a strong net margin of 6.63%. Its financial ratios are slightly favorable overall, with a solid ROE of 16.94% and manageable debt levels. The company’s rating is very favorable (B+), supported by a safe-zone Altman Z-Score of 10.31 and a very strong Piotroski Score of 8. Although the MOAT evaluation indicates value destruction, it also signals improving profitability.
PagerDuty, Inc. (PD) presents a mixed financial picture with favorable revenue growth of 8.54% in 2025 but negative net margin at -9.14%. Its financial ratios are mostly unfavorable, notably due to high debt and negative interest coverage, despite a favorable WACC and some strong turnover ratios. The company holds a very favorable rating (A-), but its Altman Z-Score is in the distress zone at 1.26, with a strong Piotroski Score of 7. The MOAT assessment also points to value destruction but with some profitability improvement.
Investors focused on financial stability and profitability might find Pegasystems’ stronger income metrics and safer financial scores more appealing. Conversely, those with a higher risk tolerance or seeking growth potential could interpret PagerDuty’s improving revenue and favorable rating as opportunities, despite its financial challenges. The choice could depend on the investor’s risk profile and preference for stability versus growth.
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 PagerDuty, Inc. to enhance your investment decisions:
