Shares of PagerDuty (NYSE:PD) closed nearly 17% higher on January 10 on speculation of a potential sale. Bloomberg reported that the company is exploring alternatives amid takeover interest by private equity firms. PagerDuty is a cloud-based company offering an incident response platform.
Notably, PagerDuty stock has delivered a return of approximately 1% over the past year, significantly underperforming the S&P 500’s (SPX) gain of about 20%. Macro headwinds impacting its customers’ spending and concerns about billings and churn rates restricted the upside in PD stock.
In Q3, PagerDuty’s quarterly calculated billings were $109 million, up 4% year-over-year. However, the growth was below the management’s guidance of an 8% to 10% increase. Further, its customers are reducing their spending because of the macro environment, adversely impacting its financial performance. Against this background, let’s look at what the Street suggests for PagerDuty stock.
What is the Price Forecast for PD Stock?
Analysts’ stock forecast suggests limited upside potential in PD stock. Further, analysts are cautiously optimistic about its prospects. TD Cowen analyst Derrick Wood downgraded PagerDuty stock to Hold and lowered the price target to $23 from $29 on December 1. The analysts cited weak billings in Q3 and a higher churn rate for the downgrade.
Overall, PagerDuty stock has five Buys and five Hold recommendations for a Moderate Buy consensus rating. Analysts’ average price target of $27.38 implies 3.32% upside potential from levels.
