PagerDuty (PD) AI Stock Analysis

• Market Cap: $637.85M
• Dividend Yield: N/A
• Average Volume (3M): 3.04M
• Price to Earnings (P/E): 4.2
• Beta (1Y): 1.31
• Revenue Growth: 7.01%
• EPS Growth: N/A
• Country: US
• Employees: 1,242
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 0.33
• Shares Outstanding: 91,776,800
• 10 Day Avg. Volume: 3,819,011
• 30 Day Avg. Volume: 3,040,349
• PEG Ratio: 1.18
• Price to Book (P/B): 13.12
• Price to Sales (P/S): 3.64
• P/FCF Ratio: 15.72
• Enterprise Value/Market Cap: 1.08
• Enterprise Value/Revenue: 1.40
• Enterprise Value/Gross Profit: 1.67
• Enterprise Value/Ebitda: 22.79
• 1Y Price Target: $14.57
• Price Target Upside: 121.77% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 9
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 62 Neutral
• Price Target: $7.50 ▲(14.16% Upside)

The score is held back most by very weak technical conditions (sharp downtrend and depressed momentum indicators). Fundamentals are mixed: strong gross margins and improving cash generation are offset by leverage and still-challenged operating profitability. Valuation is supportive due to a low P/E, while the latest earnings call was balanced—margin execution was strong, but ARR/retention pressure and lowered near-term revenue guidance add risk.

Positive Factors

High Gross Margin

An 84.36% gross margin reflects durable SaaS economics and strong unit economics for a subscription platform. High gross margins provide long-term capacity to invest in product, go-to-market, and margin expansion even if operating costs rise, supporting sustainable profitability.

Improving Cash Generation

Very strong free cash flow growth (381% TTM) and a strong free-cash-flow-to-net-income ratio indicate improved cash conversion and operational discipline. Durable FCF growth enhances financial flexibility to fund product development, multi-year deals, or reduce leverage over time.

Product Leadership & Enterprise Traction

Continued product innovation, AI operations focus, strong net new customer adds (284 YTD) and multiyear agreements show deepening enterprise adoption. Multiyear deals and larger customers ($100k+ buyers rising) increase revenue visibility and durable competitive positioning.

Negative Factors

Elevated Leverage

A debt-to-equity ratio of 1.27 and negative ROE indicate meaningful leverage and constrained equity returns. Elevated leverage reduces flexibility for strategic investment, heightens refinancing risk, and limits the firm's ability to absorb slower ARR or prolonged macro weakness.

Weaker Dollar-Based Net Retention

Dollar-based net retention at ~100% signals expansion no longer reliably offsets churn and contraction. Lower gross retention and customer downgrades erode recurring revenue durability, making future growth more dependent on continual new customer acquisition.

Seat Compression and ARR Pressure

ARR growth of only 3% and explicit seat-license compression in large accounts indicate structural pressure on expansion revenue. Persistent seat downsizing and smaller deal sizes reduce long-term ARR scalability and require sustained product-led or usage-based adoption to restore growth.

PagerDuty Business Overview & Revenue Model

Company Description

PagerDuty, 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 Money

PagerDuty generates revenue through a subscription-based model, offering various tiers of service plans tailored to different organizational needs. The key revenue streams include monthly or annual subscription fees for access to its platform, which provides features like incident response, on-call scheduling, and analytics. Additionally, PagerDuty monetizes through upselling premium features and integrations with third-party tools. Significant partnerships with major cloud service providers and technology platforms also enhance its market reach and contribute to its earnings by providing bundled services that attract new customers.

PagerDuty Financial Statement Overview

Summary

Income statement strength (75) is supported by solid TTM revenue growth (15.8%) and very high gross margin (84.36%), but operating profitability remains weak (negative EBIT margin) and reported net margin benefits from non-operational factors. Balance sheet is the main drag (60) due to elevated leverage (debt-to-equity 1.27) and negative ROE. Cash flow (70) is improving meaningfully with strong free cash flow growth, though cash flow alignment to net income is only moderate (operating cash flow to net income 0.43).

Income Statement

PagerDuty has shown strong revenue growth with a TTM growth rate of 15.8%, indicating robust demand for its services. The gross profit margin is high at 84.36%, reflecting efficient cost management. However, the company has struggled with profitability, as evidenced by a negative EBIT margin, though the net profit margin has turned positive at 31.12% due to non-operational factors. Overall, the income statement reflects strong revenue growth and gross profitability, but operational profitability remains a challenge.

Balance Sheet

The balance sheet shows a high debt-to-equity ratio of 1.27 in the TTM period, indicating significant leverage, which poses financial risk. The return on equity is negative, suggesting that the company is not generating sufficient returns on shareholders' investments. However, the equity ratio is reasonable, indicating a balanced asset structure. The balance sheet reflects a need for improved financial stability and profitability.

Cash Flow

PagerDuty's cash flow statement shows positive trends, with a free cash flow growth rate of 381.3% in the TTM period, indicating improved cash generation capabilities. The operating cash flow to net income ratio is 0.43, suggesting that cash flows are not fully aligned with reported earnings. The free cash flow to net income ratio is strong at 0.95, highlighting efficient cash conversion. Overall, the cash flow statement indicates improving cash generation, though alignment with earnings could be enhanced.

Breakdown	TTM	Jan 2025	Jan 2024	Jan 2023	Jan 2022	Jan 2021
Income Statement
Total Revenue	489.21M	467.50M	430.70M	370.79M	281.40M	213.56M
Gross Profit	412.69M	387.83M	352.87M	300.36M	233.03M	182.87M
EBITDA	30.16M	-11.89M	-52.80M	-107.20M	-93.36M	-57.57M
Net Income	152.23M	-42.73M	-81.76M	-129.22M	-107.45M	-68.90M
Balance Sheet
Total Assets	1.03B	927.27M	925.31M	817.87M	806.45M	795.44M
Cash, Cash Equivalents and Short-Term Investments	547.78M	570.83M	571.19M	476.97M	543.36M	560.28M
Total Debt	408.53M	463.65M	461.02M	301.52M	307.62M	249.33M
Total Liabilities	688.45M	779.22M	746.41M	575.79M	539.47M	428.72M
Stockholders Equity	320.50M	129.83M	171.60M	240.98M	266.98M	366.73M
Cash Flow
Free Cash Flow	114.74M	108.41M	64.43M	8.51M	-12.83M	5.25M
Operating Cash Flow	120.85M	117.89M	71.97M	16.98M	-6.02M	10.10M
Investing Cash Flow	-17.29M	-19.97M	-30.52M	-86.17M	17.38M	-49.32M
Financing Cash Flow	-108.20M	-116.14M	51.60M	-6.41M	-736.00K	254.37M

PagerDuty Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 6.57
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PD, the sentiment is Negative. The current price of 6.57 is below the 20-day moving average (MA) of 8.64, below the 50-day MA of 10.96, and below the 200-day MA of 14.39, indicating a bearish trend. The MACD of -1.35 indicates Positive momentum. The RSI at 16.63 is Positive, neither overbought nor oversold. The STOCH value of 5.62 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PD.

PagerDuty Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
YALA	81 Outperform	$1.13B	8.85	20.19%	―	5.80%	12.20%
KARO	79 Outperform	$1.44B	25.35	32.71%	2.66%	18.30%	22.19%
SEMR	69 Neutral	$1.79B	―	-1.68%	―	19.87%	-136.93%
PD	62 Neutral	$637.85M	4.18	70.46%	―	7.01%	―
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
SPT	61 Neutral	$428.68M	-8.99	-26.69%	―	13.09%	32.34%
BMBL	51 Neutral	$304.40M	-1.51	-25.34%	―	-7.43%	61.36%

PagerDuty Corporate Events

PagerDuty CFO Transition Agreement and Leadership Continuity Plan

On February 1, 2026, PagerDuty, Inc. entered into a Transition Agreement with its Chief Financial Officer and principal financial officer, Owen Howard Wilson, formalizing the terms of his previously announced retirement. Under the agreement, Wilson is expected to remain in the CFO role until a new finance chief is appointed, and then continue as a full‑time, non‑officer strategic advisor until no later than February 28, 2027, with an anticipated annual salary of $475,000 in that advisory role. His existing equity awards will stay outstanding and continue to vest under their current terms, and his employment will remain at‑will, allowing either party to terminate the relationship at any time, providing leadership continuity in the finance function while the company transitions to a new CFO.

The most recent analyst rating on (PD) stock is a Buy with a $13.00 price target. To see the full list of analyst forecasts on PagerDuty stock, see the PD Stock Forecast page.

PagerDuty appoints Scott Aronson to board of directors

On January 15, 2026, PagerDuty’s board appointed enterprise technology veteran Scott Aronson as a Class II director, effective February 9, 2026, and expanded the board from nine to ten members while also naming him to its audit committee. Aronson, a former Cloudera COO and VMware go-to-market leader who now advises enterprise-focused SaaS and AI start-ups as an operating partner at Stripes, is expected to bolster PagerDuty’s operational and go-to-market expertise as the company scales its AI-driven Operations Cloud and deepens its push into large enterprise accounts, reinforcing its position as a core digital operations platform for global organizations.

The most recent analyst rating on (PD) stock is a Hold with a $12.00 price target. To see the full list of analyst forecasts on PagerDuty stock, see the PD Stock Forecast page.

PagerDuty director retires; board plans new appointment

On December 30, 2025, PagerDuty, Inc. announced that Alex Solomon retired effective immediately from its Board of Directors as a Class II director for personal reasons, with the company clarifying that his departure did not stem from any disagreement over its operations, policies, or practices. Following his retirement, the board was reduced to nine members, with two remaining Class II directors, and PagerDuty signaled its intent to strengthen governance by appointing a new independent director in the near future.

The most recent analyst rating on (PD) stock is a Hold with a $13.50 price target. To see the full list of analyst forecasts on PagerDuty stock, see the PD Stock Forecast page.

PagerDuty CFO Owen Howard Wilson Announces Retirement

On November 22, 2025, PagerDuty announced the upcoming retirement of its Chief Financial Officer, Owen Howard Wilson, pending the appointment of a successor. The company also reported its third-quarter fiscal 2026 financial results, highlighting a 5% year-over-year revenue increase to $125 million and a 3% growth in Annual Recurring Revenue to $497 million. PagerDuty achieved its second consecutive quarter of GAAP profitability, showcasing strong operational performance and strategic advancements in AI and incident management solutions. The company anticipates continued growth and market expansion, supported by a robust balance sheet and free cash flow.

The most recent analyst rating on (PD) stock is a Buy with a $20.00 price target. To see the full list of analyst forecasts on PagerDuty stock, see the PD Stock Forecast page.