Shares of PagerDuty (NYSE: PD) were up in morning trading on Friday after the cloud computing company got an upgrade from Morgan Stanley analyst Sanjit Singh. The analyst upgraded the stock to a Buy from Hold and raised the price target to $36 from $32.
Analyst Singh’s price target is currently the highest price target on the Street and implies an upside potential of 29.5% at current levels.
The analyst stated in a research note to clients that PD had registered a compounded annual growth rate of 32% over the past two years while its net dollar retention rates have surpassed 120% for the past eight straight quarters.
Singh noted, “The stability in revenue stemming from a subscription model has provided the breathing room for management to execute on initiatives to improve the cost structure which has thus far translated to 800 bps of operating margin improvement in [estimated fiscal 2023].”
Besides Singh, other analysts are also bullish on PD stock with a Strong Buy consensus rating based on six Buys and two Holds.
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