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PagerDuty Inc (PD)
NYSE:PD
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PagerDuty
(NYSE:PD)
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Rating:64Neutral
Price Target:
$18.00
▲(8.96% Upside)
PagerDuty's overall stock score is driven by strong financial performance in terms of revenue growth and gross margins, as well as positive technical indicators. However, the negative P/E ratio and challenges in profitability weigh down the score. The earnings call provided a positive outlook with GAAP profitability and strategic growth initiatives, but highlighted some operational challenges.
Positive Factors
GAAP Profitability
Achieving GAAP profitability marks a significant milestone, indicating improved financial health and operational efficiency, which can enhance investor confidence and support future growth initiatives.
International Revenue Growth
Strong international revenue growth demonstrates successful global expansion and demand, which diversifies revenue streams and reduces reliance on domestic markets, enhancing long-term stability.
AI Ecosystem Integration
Integration into the AI ecosystem positions PagerDuty as a key player in a rapidly growing sector, potentially driving future revenue through innovative AI solutions and partnerships.
Negative Factors
Elevated Churn
Elevated churn and reduced net retention indicate challenges in customer retention, which can impact long-term revenue stability and necessitate increased customer acquisition efforts.
Inconsistent North America Sales
Inconsistent sales performance in North America suggests potential issues in market strategy or execution, which could hinder growth in a key market if not addressed effectively.
High Leverage
High leverage can pose financial risks, limiting flexibility and increasing vulnerability to economic downturns, which may impact long-term financial stability and growth potential.
PagerDuty (PD) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.55B
Dividend YieldN/A
Average Volume (3M)2.39M
Price to Earnings (P/E)―
Beta (1Y)1.54
Revenue Growth8.20%
EPS Growth82.75%
CountryUS
Employees1,242
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)0.30
Shares Outstanding93,246,410
10 Day Avg. Volume1,714,442
30 Day Avg. Volume2,386,758
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap0.89
Enterprise Value/Revenue2.85
Enterprise Value/Gross Profit3.40
Enterprise Value/Ebitda110.80
Forecast
1Y Price Target
$18.38Price Target Upside11.26% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering10
PagerDuty Business Overview & Revenue Model
Company DescriptionPagerDuty, Inc. operates a digital operations management platform in the United States, Japan, and internationally. Its digital operations management platform collects data digital signals from virtually any software-enabled system or device, and leverage powerful machine learning to correlate, process, and predict opportunities and 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.
How the Company Makes MoneyPagerDuty generates revenue primarily through a subscription-based model, offering various pricing tiers for its platform based on features and usage levels. Key revenue streams include monthly and annual subscriptions from enterprise customers, who pay for access to the incident response and operational management capabilities. Additionally, PagerDuty has partnerships with major technology providers, such as AWS, Google Cloud, and Microsoft Azure, which help to enhance its service offerings and extend its market reach. The company also benefits from upselling and cross-selling opportunities as clients expand their usage of the platform across different teams and departments.
PagerDuty Earnings Call Summary
Earnings Call Date:Sep 03, 2025
(Q2-2026)
| % Change Since: |
Next Earnings Date:Dec 03, 2025
Earnings Call Sentiment Neutral
PagerDuty, Inc.'s earnings call highlighted significant achievements including achieving GAAP profitability, strong international growth, and substantial traction in the AI-native segment. These positive developments were tempered by challenges such as elevated churn, downgrades, and inconsistent sales performance in North America. Overall, the company shows promising growth potential with ongoing strategic initiatives, but faces hurdles in customer retention and sales execution.Q2-2026 Updates
Positive Updates
GAAP Profitability Achieved
PagerDuty, Inc. achieved GAAP profitability for the first time in the company's history in Q2 FY2026, with a non-GAAP operating margin reaching 25%, exceeding guidance and showing an 800-point year-over-year expansion.
Strong International Performance
International revenue increased 12% annually, contributing 29% of total revenue, and surpassed targets, indicating strong global demand and improved sales execution.
Growth in High-Value Customer Base
The number of customers spending over $100,000 annually increased to 868, rising by 20 customers sequentially and 48 year over year, reflecting successful expansion in the high-value customer segment.
AI-Native Ecosystem Traction
Native AI leaders now contribute 2% of total ARR and are growing rapidly, with over half of the Fortune 50 AI companies using PagerDuty, Inc.'s platform, validating the company's role in the AI ecosystem.
Innovation and Strategic Partnerships
PagerDuty, Inc. launched four new AI agents and announced a strategic partnership with Amazon Q, enhancing its ecosystem and integrating with major platforms to provide comprehensive incident management solutions.
Negative Updates
Elevated Churn and Downgrades
Dollar-based net retention dropped to 102% from 104% in Q1, impacted by elevated churn and downgrades, primarily due to customer seat optimization and cost containment initiatives.
Inconsistent North America Sales Performance
The performance of the North America sales team was inconsistent, leading to the appointment of a new leader and organizational changes to improve agility and customer responsiveness.
Decline in Gross Retention
Gross retention was lower, contributing to the decline in dollar-based net retention, indicating challenges in maintaining existing customer contracts.
Company Guidance
During PagerDuty, Inc.'s second quarter fiscal year 2026 call, several key metrics and guidance were provided. The company reported revenue of $123 million, marking a 6% year-over-year growth and achieved GAAP profitability for the first time. The non-GAAP operating margin reached 25%, an 800-point year-over-year expansion. Annual recurring revenue (ARR) increased to $499 million, with a 5% year-over-year growth and a dollar-based net retention rate of 102%. New and expansion bookings rose by over 15% sequentially, with net new customer additions totaling 208, nearly tripling those of the previous fiscal year. PagerDuty's high-value customer base, spending over $100,000, expanded to 868 customers. The company anticipates revenue for the third quarter to range between $124 million and $126 million, with a full fiscal year 2026 revenue expectation of between $493 million and $497 million, representing a growth rate of 5% to 6%. The net income per diluted share for the full fiscal year is projected to be between $1.00 and $1.04, with an operating margin of 21% to 22%. The company aims to achieve GAAP profitability for the full year in fiscal year 2027, with continued focus on accelerating ARR growth and expanding margins.PagerDuty Financial Statement Overview
Summary
PagerDuty shows strong revenue and cash flow growth, with a high gross profit margin of 83.30%. However, the company faces challenges with a negative net profit margin of -7.13% and moderate leverage, indicating areas for improvement in profitability and equity financing.Income Statement
PagerDuty has demonstrated strong revenue growth with a 10.54% increase from the previous year, indicative of a robust growth trajectory. The company's gross profit margin is high at 83.30% TTM, showcasing its efficient cost management in generating revenue. However, the net profit margin remains negative at -7.13% TTM, reflecting ongoing operational challenges and losses, although improving from previous periods. The EBIT margin of -10.15% and EBITDA margin of -3.05% TTM suggest that operational efficiencies need enhancement to achieve profitability.65
Positive
Balance Sheet
The balance sheet reflects a moderate level of financial stability. PagerDuty's debt-to-equity ratio stands at 3.18, indicating reliance on debt but showing a manageable level of leverage typical for growth-oriented tech firms. The return on equity is negative at -23.30% TTM, due to the negative net income, highlighting profitability challenges. The equity ratio of 15.71% TTM suggests a lower proportion of equity financing, posing potential risks if revenue growth does not translate into profitability.55
Neutral
Cash Flow
PagerDuty displays strong cash flow performance with a free cash flow growth rate of 71.19% from the previous year, indicating effective cash generation. The operating cash flow to net income ratio is 3.53 TTM, highlighting substantial cash flow relative to net income and reflecting efficient operations. The free cash flow to net income ratio of 3.25 TTM further supports the company's ability to generate cash despite net losses, providing a cushion for future investments and debt obligations.70
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 483.61M | 467.50M | 430.70M | 370.79M | 281.40M | 213.56M |
| Gross Profit | 405.18M | 387.83M | 352.87M | 300.36M | 233.03M | 182.87M |
| EBITDA | 12.42M | -11.89M | -52.80M | -107.20M | -93.36M | -57.57M |
| Net Income | -13.25M | -42.73M | -81.76M | -129.22M | -107.45M | -68.90M |
Balance Sheet | ||||||
| Total Assets | 891.53M | 927.27M | 925.31M | 817.87M | 806.45M | 795.44M |
| Cash, Cash Equivalents and Short-Term Investments | 567.85M | 570.83M | 571.19M | 476.97M | 543.36M | 560.28M |
| Total Debt | 408.37M | 463.65M | 461.02M | 301.52M | 307.62M | 249.33M |
| Total Liabilities | 693.85M | 779.22M | 746.41M | 575.79M | 539.47M | 428.72M |
| Stockholders Equity | 180.71M | 129.83M | 171.60M | 240.98M | 266.98M | 366.73M |
Cash Flow | ||||||
| Free Cash Flow | 110.52M | 108.41M | 64.43M | 8.51M | -12.83M | 5.25M |
| Operating Cash Flow | 118.52M | 117.89M | 71.97M | 16.98M | -6.02M | 10.10M |
| Investing Cash Flow | -22.21M | -19.97M | -30.52M | -86.17M | 17.38M | -49.32M |
| Financing Cash Flow | -144.38M | -116.14M | 51.60M | -6.41M | -736.00K | 254.37M |
PagerDuty Technical Analysis
Positive
16.52
Price Trends
16.07
Positive
15.74
Positive
16.74
Negative
Market Momentum
0.07
Negative
53.77
Neutral
65.43
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PD, the sentiment is Positive. The current price of 16.52 is above the 20-day moving average (MA) of 16.30, above the 50-day MA of 16.07, and below the 200-day MA of 16.74, indicating a neutral trend. The MACD of 0.07 indicates Negative momentum. The RSI at 53.77 is Neutral, neither overbought nor oversold. The STOCH value of 65.43 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PD.
PagerDuty Risk Analysis
PagerDuty disclosed 67 risk factors in its most recent earnings report. PagerDuty reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
PagerDuty Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $1.87B | 35.27 | 28.76% | 2.19% | 14.21% | 23.74% | |
77 Outperform | $1.19B | 9.43 | 19.26% | ― | 6.79% | 12.97% | |
64 Neutral | $1.55B | ― | -8.04% | ― | 8.20% | 82.75% | |
62 Neutral | $812.79M | -13.62 | -37.20% | ― | 14.79% | 27.52% | |
60 Neutral | $1.08B | -786.67 | -0.46% | ― | 22.16% | -107.92% | |
49 Neutral | $655.27M | -0.83 | -147.04% | ― | -5.06% | -2318.18% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
PD
PagerDuty
16.52
-1.11
-6.30%
SPT
Sprout Social
12.92
-15.41
-54.39%
YALA
Yalla Group
7.51
2.62
53.58%
BMBL
Bumble
6.09
-0.46
-7.02%
SEMR
SEMrush Holdings
7.08
-7.12
-50.14%
KARO
Karooooo
57.12
19.60
52.24%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.