Shares of digital operations management solutions provider PagerDuty (NYSE:PD) are trending lower today after the company announced plans to offer convertible senior notes with a principal amount of $350 million in a private placement.
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Furthermore, the initial purchasers will have an option to acquire up to an additional $52.5 million principal amount of the notes, which will be due in 2028.
The company plans to use the net proceeds from the move to repurchase some of its notes due in 2025, for working capital, for capped call transactions as well as for other general corporate purposes. Additionally, the company plans to use up to $50 million of the net proceeds to repurchase its common shares.
Today’s 6% price drop comes on top of a nearly 32.5% value erosion in PagerDuty shares over the past six months. While revenues have been steadily ticking higher over the past five years, a positive annual bottom line still remains elusive for PagerDuty.
Is PD a Good Stock to Buy?
Overall, the Street has a consensus price target of $27.80 on PagerDuty, alongside a Moderate Buy consensus rating. This implies a 27.3% potential upside in the stock.
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