In the fast-evolving software application sector, Shopify Inc. and PagerDuty, Inc. stand out as innovators shaping distinct yet overlapping markets. Shopify powers global commerce with an all-in-one platform for merchants, while PagerDuty specializes in digital operations management using advanced machine learning. Comparing these technology leaders reveals contrasting growth paths and innovation strategies. Join me as we explore which company presents the most compelling investment opportunity in 2026.
Table of contents
Companies Overview
I will begin the comparison between Shopify and PagerDuty by providing an overview of these two companies and their main differences.
Shopify Overview
Shopify Inc. is a Canadian commerce company providing a comprehensive commerce platform and services globally, including Canada, the US, Europe, and Asia Pacific. Its platform supports merchants in managing products, sales channels, payments, fulfillment, and customer relationships. Shopify also offers custom themes, apps, and merchant solutions like working capital access. Founded in 2004 and headquartered in Ottawa, it is a key player in the software application industry with a market cap of 205B USD.
PagerDuty Overview
PagerDuty, Inc., headquartered in San Francisco and founded in 2009, operates a digital operations management platform. This platform collects data from software-enabled systems and applies machine learning to predict issues and opportunities. Serving multiple industries worldwide, including technology, telecom, and financial services, PagerDuty is positioned in the software application sector with a market cap of approximately 1.05B USD. It focuses on real-time operational intelligence and incident response.
Key similarities and differences
Both Shopify and PagerDuty operate in the software application industry and provide platforms that enhance business operations globally. Shopify focuses on commerce solutions, enabling merchants to sell and manage products across various channels, while PagerDuty specializes in digital operations management through data analytics and machine learning. Their business models differ in target markets and service scopes: Shopify targets e-commerce merchants, whereas PagerDuty serves a broader range of industries with incident response and operational insights.
Income Statement Comparison
The table below presents the most recent fiscal year income statement data for Shopify Inc. and PagerDuty, Inc., allowing a straightforward side-by-side financial comparison.
| Metric | Shopify Inc. (SHOP) | PagerDuty, Inc. (PD) |
|---|---|---|
| Market Cap | 205.2B | 1.05B |
| Revenue | 8.88B | 467.5M |
| EBITDA | 1.34B | -11.9M |
| EBIT | 1.30B | -32.5M |
| Net Income | 2.02B | -42.7M |
| EPS | 1.56 | -0.59 |
| Fiscal Year | 2024 | 2025 |
Income Statement Interpretations
Shopify Inc.
Shopify showed strong revenue growth from 2020 to 2024, with revenue rising from $2.9B to $8.9B and net income improving substantially from $320M to $2.0B. Margins remained favorable, with a gross margin over 50% and net margin at 22.7% in 2024. The latest year exhibited accelerated growth, especially in EBIT and net income margins, signaling robust profitability gains.
PagerDuty, Inc.
PagerDuty’s revenue increased steadily from $214M in 2021 to $467M in 2025, with net losses narrowing from -$69M to -$43M. Despite high gross margins near 83%, EBIT and net margins stayed negative, though improving in 2025. The company showed positive trends in revenue and margin growth, but profitability remains a challenge with continued net losses.
Which one has the stronger fundamentals?
Shopify presents stronger fundamentals, with consistently favorable margins and significant profitability improvements, including positive net and EBIT margins. PagerDuty maintains high gross margins and improving revenue but still reports losses and negative profitability margins. Shopify’s income statement reflects a more established and financially solid position relative to PagerDuty.
Financial Ratios Comparison
The table below presents a side-by-side comparison of key financial ratios for Shopify Inc. (SHOP) and PagerDuty, Inc. (PD) based on their most recent fiscal year data available.
| Ratios | Shopify Inc. (2024) | PagerDuty, Inc. (2025) |
|---|---|---|
| ROE | 17.5% | -32.9% |
| ROIC | 7.5% | -9.7% |
| P/E | 68.2 | -39.9 |
| P/B | 11.9 | 13.1 |
| Current Ratio | 3.71 | 1.87 |
| Quick Ratio | 3.70 | 1.87 |
| D/E | 0.10 | 3.57 |
| Debt-to-Assets | 8.1% | 50.0% |
| Interest Coverage | 0 | -6.46 |
| Asset Turnover | 0.64 | 0.50 |
| Fixed Asset Turnover | 63.4 | 16.6 |
| Payout Ratio | 0 | 0 |
| Dividend Yield | 0 | 0 |
Interpretation of the Ratios
Shopify Inc.
Shopify shows a balanced mix of strong and weak ratios, with a 22.74% net margin and 17.47% return on equity, both favorable. However, its high price-to-earnings of 68.18 and price-to-book of 11.91 are less attractive. The current ratio at 3.71 is considered unfavorable despite a favorable quick ratio of 3.7. Shopify does not pay dividends, reflecting a reinvestment strategy focused on growth and innovation.
PagerDuty, Inc.
PagerDuty exhibits mostly unfavorable ratios, including a negative net margin of -9.14% and return on equity of -32.92%. Its debt levels are high with a debt-to-equity ratio of 3.57 and debt-to-assets at 50%, both unfavorable. The current and quick ratios near 1.87 are favorable, but no dividends are paid, likely due to ongoing losses and a focus on R&D and business development.
Which one has the best ratios?
Comparing both, Shopify presents a more favorable overall ratio profile with half its ratios positive, including strong profitability metrics, despite some valuation concerns. PagerDuty’s ratios are predominantly unfavorable, marked by losses and high leverage. Therefore, Shopify holds the advantage in financial ratio strength based on the data provided.
Strategic Positioning
This section compares the strategic positioning of Shopify Inc. and PagerDuty, Inc., including market position, key segments, and exposure to technological disruption:
Shopify Inc.
- Leading global commerce platform with high market cap and strong competitive pressure.
- Focus on commerce platform services: merchant solutions and subscription services driving growth.
- Moderate exposure to technological disruption through continuous platform innovation.
PagerDuty, Inc.
- Smaller market cap with competitive pressure in digital operations management.
- Concentrated on digital operations management across diverse industries.
- Exposure to disruption via machine learning in digital operations management.
Shopify Inc. vs PagerDuty, Inc. Positioning
Shopify adopts a diversified strategy with multiple revenue streams in commerce platforms, while PagerDuty focuses on a concentrated niche in digital operations management. Shopify benefits from scale; PagerDuty from specialized technology application.
Which has the best competitive advantage?
Both companies are currently shedding value with ROIC below WACC but show growing profitability trends. Neither displays a strong economic moat; both have slightly unfavorable competitive advantages based on recent MOAT evaluations.
Stock Comparison
The stock prices of Shopify Inc. and PagerDuty, Inc. over the past 12 months reveal contrasting trajectories, with Shopify showing a strong overall rise despite recent declines, while PagerDuty exhibits a pronounced downward trend and seller dominance.
Trend Analysis
Shopify Inc.’s stock recorded a bullish trend over the past year with a 106.83% increase, though momentum has decelerated. The price ranged from a low of 54.43 to a high of 173.86, with volatility measured by a 33.71 standard deviation.
PagerDuty, Inc. experienced a bearish trend with a 50.58% decrease over the last 12 months and decelerating losses. The stock fluctuated between 11.49 and 24.66, showing low volatility at a 2.91 standard deviation.
Comparing the two, Shopify delivered the highest market performance with significant gains, while PagerDuty faced substantial declines, reflecting diverging investor sentiment and price momentum.
Target Prices
The current analyst consensus provides a positive outlook for both Shopify Inc. and PagerDuty, Inc.
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| Shopify Inc. | 200 | 140 | 186.24 |
| PagerDuty, Inc. | 19 | 15 | 16.2 |
Analysts expect Shopify’s stock to appreciate from its current price of $157.66 toward a consensus target of $186.24, indicating upside potential. PagerDuty’s consensus target of $16.2 also suggests modest gains from its current $11.49 price.
Analyst Opinions Comparison
This section compares analysts’ ratings and grades for Shopify Inc. and PagerDuty, Inc.:
Rating Comparison
Shopify Inc. Rating
- Rating: B, assessed as Very Favorable by analysts.
- Discounted Cash Flow Score: 3, indicating moderate valuation based on future cash flows.
- ROE Score: 4, showing favorable efficiency in generating profits from equity.
- ROA Score: 5, very favorable use of assets to generate earnings.
- Debt To Equity Score: 3, suggesting moderate financial risk from debt levels.
- Overall Score: 3, a moderate overall financial standing.
PagerDuty, Inc. Rating
- Rating: A-, also Very Favorable in evaluation.
- Discounted Cash Flow Score: 5, reflecting very favorable future cash flow projections.
- ROE Score: 5, indicating very favorable profit generation efficiency.
- ROA Score: 5, also very favorable asset utilization.
- Debt To Equity Score: 1, indicating very unfavorable financial risk due to higher debt reliance.
- Overall Score: 4, favorable overall financial standing.
Which one is the best rated?
PagerDuty holds a higher overall rating (A-) and superior scores in discounted cash flow, ROE, ROA, and overall metrics compared to Shopify. However, Shopify shows a more moderate debt-to-equity risk profile than PagerDuty.
Scores Comparison
Here is a comparison of the Altman Z-Score and Piotroski Score for both companies:
SHOP Scores
- Altman Z-Score: 50.42, indicating a safe zone status.
- Piotroski Score: 6, categorized as average financial health.
PD Scores
- Altman Z-Score: 1.26, indicating a distress zone.
- Piotroski Score: 7, categorized as strong financial health.
Which company has the best scores?
SHOP has a significantly higher Altman Z-Score, placing it in the safe zone, while PD’s score is in the distress zone. PD scores better on Piotroski, with strong financial health versus SHOP’s average.
Grades Comparison
Here is a comparison of recent grades assigned to Shopify Inc. and PagerDuty, Inc. by recognized grading companies:
Shopify Inc. Grades
The following table summarizes recent grade updates from reliable financial institutions for Shopify Inc.:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Scotiabank | Upgrade | Sector Outperform | 2026-01-08 |
| Wolfe Research | Downgrade | Peer Perform | 2026-01-06 |
| Wells Fargo | Maintain | Overweight | 2025-12-17 |
| Truist Securities | Maintain | Hold | 2025-11-05 |
| CIBC | Maintain | Outperform | 2025-11-05 |
| Cantor Fitzgerald | Maintain | Neutral | 2025-11-05 |
| DA Davidson | Maintain | Buy | 2025-11-05 |
| Scotiabank | Maintain | Sector Perform | 2025-11-05 |
| Needham | Maintain | Buy | 2025-11-05 |
| JP Morgan | Maintain | Overweight | 2025-11-05 |
Shopify’s grades mostly range from Hold to Outperform, with recent upgrades and some downgrades reflecting mixed but generally positive sentiment.
PagerDuty, Inc. Grades
The following table details recent grade changes from established grading firms for PagerDuty, Inc.:
| 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’s grades show a mix of Buy, Hold, and Outperform ratings, with some recent downgrades indicating a cautious stance among analysts.
Which company has the best grades?
Shopify Inc. has received a stronger consensus with a majority of Buy and Outperform ratings, while PagerDuty, Inc.’s grades are more mixed and lean toward Hold. This difference may influence investors’ perception of relative growth potential and risk.
Strengths and Weaknesses
Below is a comparison table highlighting key strengths and weaknesses of Shopify Inc. (SHOP) and PagerDuty, Inc. (PD) based on the most recent financial and operational data.
| Criterion | Shopify Inc. (SHOP) | PagerDuty, Inc. (PD) |
|---|---|---|
| Diversification | Strong revenue diversification with significant Merchant Solutions and Subscription segments (6.53B and 2.35B in 2024) | Limited diversification, focused primarily on IT incident management services |
| Profitability | Positive net margin (22.74%) and ROE (17.47%), but ROIC below WACC, indicating value destruction | Negative net margin (-9.14%), ROE (-32.92%), and ROIC, shedding value |
| Innovation | Demonstrates growing ROIC trend, signaling improving profitability | Also shows growing ROIC trend but remains unprofitable overall |
| Global presence | Large global e-commerce platform presence with high asset turnover (0.64) | Smaller global footprint with moderate asset turnover (0.5) |
| Market Share | Leading e-commerce platform with expanding service offerings | Niche player in IT operations with moderate market share |
Key takeaways: Shopify excels in revenue diversification and profitability metrics despite value destruction concerns, showing improving profitability trends. PagerDuty struggles with profitability and leverage but is gradually improving its returns. Caution is advised for both, with Shopify offering a slightly more favorable risk profile.
Risk Analysis
The table below summarizes key risk factors for Shopify Inc. (SHOP) and PagerDuty, Inc. (PD) based on the most recent data from 2025-2026.
| Metric | Shopify Inc. (SHOP) | PagerDuty, Inc. (PD) |
|---|---|---|
| Market Risk | High volatility (beta 2.84) | Moderate volatility (beta 0.63) |
| Debt level | Low debt-to-equity (0.1) | High debt-to-equity (3.57) |
| Regulatory Risk | Moderate (global operations) | Moderate (US and international) |
| Operational Risk | Platform dependency, scaling | Reliance on digital ops platform |
| Environmental Risk | Moderate, technology sector | Moderate, technology sector |
| Geopolitical Risk | Exposure to multiple regions | Primarily US, some international |
Shopify faces significant market risk due to high beta and valuation concerns, but its low debt level and strong liquidity mitigate financial risk. PagerDuty’s most impactful risks are its high leverage and weak profitability, placing it in financial distress despite strong operational scores. Caution is advised, especially for PagerDuty due to its Altman Z-Score in the distress zone.
Which Stock to Choose?
Shopify Inc. (SHOP) has shown strong income growth with a 25.78% revenue increase in 2024 and consistently favorable profitability, including a 22.74% net margin and a 17.47% ROE. Its debt levels are low, and the rating is very favorable (B), though some valuation ratios remain high.
PagerDuty, Inc. (PD) displays moderate revenue growth of 8.54% in 2025 but struggles with negative net and EBIT margins. Debt levels are higher, reflected in an unfavorable debt-to-equity ratio, despite an overall very favorable rating (A-). Profitability ratios remain unfavorable.
Investors seeking growth and profitability might find Shopify’s improving income and solid financial ratios more appealing, while those with a tolerance for risk and interest in a company with a strong rating but operational challenges could consider PagerDuty. The choice could depend on the investor’s preference for stability versus potential turnaround.
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 Shopify Inc. and PagerDuty, Inc. to enhance your investment decisions:
