Telos (NASDAQ:TLS – Get Free Report) and PagerDuty (NYSE:PD – Get Free Report) are both small-cap technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, risk, institutional ownership, dividends, profitability, analyst recommendations and earnings.
Risk and Volatility
Telos has a beta of 0.98, meaning that its share price is 2% less volatile than the S&P 500. Comparatively, PagerDuty has a beta of 0.96, meaning that its share price is 4% less volatile than the S&P 500.
Institutional and Insider Ownership
62.1% of Telos shares are held by institutional investors. Comparatively, 97.3% of PagerDuty shares are held by institutional investors. 14.9% of Telos shares are held by insiders. Comparatively, 6.0% of PagerDuty shares are held 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.
Analyst Recommendations
This is a summary of current recommendations and price targets for Telos and PagerDuty, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Telos | 1 | 3 | 3 | 1 | 2.50 |
| PagerDuty | 2 | 5 | 3 | 0 | 2.10 |
Telos currently has a consensus price target of $7.58, suggesting a potential downside of 1.13%. PagerDuty has a consensus price target of $12.81, suggesting a potential downside of 17.68%. Given Telos’ stronger consensus rating and higher probable upside, research analysts clearly believe Telos is more favorable than PagerDuty.
Profitability
This table compares Telos and PagerDuty’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Telos | -8.13% | -2.60% | -1.80% |
| PagerDuty | 37.50% | 18.52% | 4.84% |
Valuation & Earnings
This table compares Telos and PagerDuty”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Telos | $164.80 million | 3.48 | -$36.55 million | ($0.21) | -36.52 |
| PagerDuty | $492.55 million | 2.49 | $173.85 million | $2.00 | 7.78 |
PagerDuty has higher revenue and earnings than Telos. Telos 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 Telos on 8 of the 14 factors compared between the two stocks.
About Telos
Telos Corporation (NASDAQ: TLS) is a cybersecurity and information technology company that provides secure technology solutions to government and commercial organizations. The company focuses on helping customers protect critical systems, data and digital identities while supporting secure operations in complex and highly regulated environments. Its offerings include cybersecurity consulting, cloud security, secure networking, identity and access management, risk management and governance solutions.
About PagerDuty
PagerDuty, Inc. provides cloud-based software for managing digital operations. Its PagerDuty Operations Cloud platform helps organizations detect and respond to technology incidents, coordinate response teams, automate operational workflows and reduce disruptions to digital services. The company’s products support incident management, AIOps, automation and customer service operations. They are used by IT, engineering, security and support teams to monitor systems, prioritize alerts and coordinate work across people and technology.
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