Andrew Sherman, an analyst from TD Cowen, reiterated the Hold rating on PagerDuty (PD – Research Report). The associated price target remains the same with $19.00.
Andrew Sherman has given his Hold rating due to a combination of factors that reflect both positive developments and ongoing challenges for PagerDuty. On the positive side, the company has shown strong enterprise traction, with a notable increase in annual recurring revenue (ARR) from large customers and a promising contribution from newer products. The management’s confidence is further signaled by a new $150 million buyback and an improved operating margin guide.
However, Sherman also highlights some concerns that justify the Hold rating. The company’s revenue growth guidance for the fiscal year 2026 is below market expectations, and there is a need for patience as ARR growth is anticipated to reaccelerate in the latter half of the year. Additionally, the recent change in the Chief Revenue Officer introduces some uncertainty, and the company has faced challenges with billings consistency. Despite the low valuation, these mixed factors suggest that growth needs to pick up meaningfully before a more positive rating can be considered.