PagerDuty (NYSE:PD) versus Alight (NYSE:ALIT) Critical Comparison

PagerDuty (NYSE:PD) and Alight (NYSE:ALIT) are both small-cap computer and technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their dividends, earnings, profitability, institutional ownership, analyst recommendations, valuation and risk.

Insider and Institutional Ownership

97.3% of PagerDuty shares are held by institutional investors. Comparatively, 96.7% of Alight shares are held by institutional investors. 6.0% of PagerDuty shares are held by company insiders. Comparatively, 2.1% of Alight shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current recommendations and price targets for PagerDuty and Alight, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PagerDuty	2	6	3	0	2.09
Alight	2	3	3	0	2.13

PagerDuty presently has a consensus target price of $11.25, indicating a potential upside of 32.04%. Alight has a consensus target price of $3.13, indicating a potential upside of 495.01%. Given Alight’s stronger consensus rating and higher possible upside, analysts clearly believe Alight is more favorable than PagerDuty.

Volatility & Risk

PagerDuty has a beta of 0.94, indicating that its stock price is 6% less volatile than the S&P 500. Comparatively, Alight has a beta of 1.6, indicating that its stock price is 60% more volatile than the S&P 500.

Profitability

This table compares PagerDuty and Alight’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
PagerDuty	38.60%	18.20%	4.60%
Alight	-137.50%	13.04%	4.42%

Earnings and Valuation

This table compares PagerDuty and Alight”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
PagerDuty	$493.71 million	1.33	$173.85 million	$2.04	4.18
Alight	$2.26 billion	0.12	-$3.10 billion	($5.87)	-0.09

PagerDuty has higher earnings, but lower revenue than Alight. Alight is trading at a lower price-to-earnings ratio than PagerDuty, indicating that it is currently the more affordable of the two stocks.

Summary

PagerDuty beats Alight on 9 of the 13 factors compared between the two stocks.

About PagerDuty

PagerDuty, Inc. engages in the operation of a digital operations management platform in the United States and internationally. The company’s digital operations management platform collects data and digital signals from virtually any software-enabled system or device and leverage machine learning to correlate, process, and predict opportunities and issues. Its platform includes PagerDuty Incident Management that provides a real-time view across the status of a digital service while incorporating noise reduction to remove false positives; AIOps that applies machine learning to correlate and automate the identification of incidents from billions of events; Process Automation offers centralized design time and run time environment for orchestrating automated workflows that span across departments, technologies, and networks; Customer Service Operations, which is offered to orchestrate, automate, and scale responses to customer impacting issues. It serves various industries, including software and technology, telecommunications, retail, travel and hospitality, media and entertainment, and financial services. PagerDuty, Inc. was founded in 2009 and is headquartered in San Francisco, California.

About Alight

Alight, Inc. provides cloud-based integrated digital human capital and business solutions worldwide. The company operates through two segments, Employer Solutions and Professional Services. The Employer Solutions segment offers employee wellbeing, integrated benefits administration, healthcare navigation, financial wellbeing, leave of absence management, retiree healthcare and payroll; and operates AI-led capabilities software. The Professional Services segment offers consulting offerings, such as cloud advisory, deployment, and optimization services for cloud platforms. The company provides Alight Worklife, an intuitive, cloud-based employee engagement platform. Its solutions enable employees to enrich their health, wealth, and wellbeing that helps organizations achieve a high-performance culture. Alight, Inc. was founded in 2020 and is based in Lincolnshire, Illinois.