Reviewing Q2 (NYSE:QTWO) and PagerDuty (NYSE:PD)

PagerDuty (NYSE:PD) and Q2 (NYSE:QTWO) are both technology companies, but which is the better stock? We will compare the two companies based on the strength of their risk, dividends, institutional ownership, earnings, analyst recommendations, profitability and valuation.

Risk and Volatility

PagerDuty has a beta of 0.97, meaning that its stock price is 3% less volatile than the S&P 500. Comparatively, Q2 has a beta of 1.34, meaning that its stock price is 34% more volatile than the S&P 500.

Institutional & Insider Ownership

97.3% of PagerDuty shares are owned by institutional investors. 6.0% of PagerDuty shares are owned by insiders. Comparatively, 0.9% of Q2 shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Earnings & Valuation

This table compares PagerDuty and Q2″s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
PagerDuty	$492.55 million	2.79	$173.85 million	$2.00	8.74
Q2	$846.20 million	5.10	$52.01 million	$1.40	49.47

PagerDuty has higher earnings, but lower revenue than Q2. PagerDuty is trading at a lower price-to-earnings ratio than Q2, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current ratings for PagerDuty and Q2, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PagerDuty	2	5	3	0	2.10
Q2	0	4	9	1	2.79

PagerDuty currently has a consensus price target of $12.56, indicating a potential downside of 28.15%. Q2 has a consensus price target of $74.83, indicating a potential upside of 8.05%. Given Q2’s stronger consensus rating and higher probable upside, analysts plainly believe Q2 is more favorable than PagerDuty.

Profitability

This table compares PagerDuty and Q2’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
PagerDuty	37.50%	18.52%	4.84%
Q2	10.87%	17.04%	8.80%

Summary

Q2 beats PagerDuty on 9 of the 15 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 Q2

Q2 Holdings, Inc. provides cloud-based digital solutions to regional and community financial institutions in the United States. The company offers Digital Banking Platform, an end-to-end digital banking platform supports its financial institution customers in their delivery of unified digital banking services across digital channels. Its digital banking platform solutions, comprising Q2 Consumer Banking, Q2 Small Business and Commercial, Q2mobile Remote Deposit Capture, Q2 Sentinel, Q2 Patrol, Q2 SMART, Q2 Contextual Personal Financial Management, Q2 Goals, Q2 CardSwap, Q2 Gro, Q2 Innovation Studio, Q2 Biller Direct, ClickSWITCH, Sensibill, Centrix Dispute Tracking System, Centrix Payments I.Q. System, and Centrix Exact/Transaction Management System. The company also provides lending solutions, which consists precisionlender solutions, a cloud-based platform, data-driven sales enablement, relationship pricing, and portfolio management solution includes precisionlender platform, premium treasury pricing, data studio, and Andi; and Q2 Cloud Lending solutions, a cloud-based digital lending platform and end-to-end lending solution that allows financial institutions, FinTechs, and Alt-FIs to automate and digitize their lending activities, supporting digital lending applications, scoring, underwriting, servicing, and collections for multiple assets classes comprising Q2 CL portal, originate, loan, marketplace, and collections. In addition, it offers Q2 Innovation Studio, an application program interface, or API, based and software development kit, or SDK, based open technology platform; and Helix, a cloud-native, real-time core processing platform. The company was formerly known as CBG Holdings, Inc. and changed its name to Q2 Holdings, Inc. in March 2013. Q2 Holdings, Inc. was founded in 2004 and is headquartered in Austin, Texas.