Cautious Outlook for PagerDuty Amid Execution Risks and Revenue Challenges

Bank of America Securities analyst Koji Ikeda reiterated a Sell rating on PagerDuty (PD – Research Report) today and set a price target of $15.00.

Koji Ikeda’s rating is based on several factors impacting PagerDuty’s financial outlook. The company reported mixed results for the first quarter of fiscal year 2026, with revenue falling short of the high-end guidance and a reduction in the full-year revenue forecast. This was primarily due to higher-than-expected downgrades in the enterprise segment and increased churn in the commercial segment. These challenges indicate execution risks that could hinder PagerDuty’s performance compared to its small-cap software peers.
Additionally, while PagerDuty is making organizational changes in anticipation of hiring a new Chief Revenue Officer, there are still execution risks associated with these transitions. The company’s key metrics, such as annual recurring revenue and net retention rate, have shown negative trends, further contributing to the cautious outlook. The price objective has been lowered to $15, reflecting these execution risks and the slower revenue growth profile compared to its infrastructure software peers.