PagerDuty (PD) AI Stock Analysis

• Market Cap: $589.76M
• Dividend Yield: N/A
• Average Volume (3M): 4.05M
• Price to Earnings (P/E): 5.6
• Beta (1Y): 1.23
• Revenue Growth: 7.01%
• EPS Growth: N/A
• Country: US
• Employees: 1,242
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 0.29
• Shares Outstanding: 84,979,485
• 10 Day Avg. Volume: 3,613,886
• 30 Day Avg. Volume: 4,054,224
• PEG Ratio: -0.01
• Price to Book (P/B): 3.81
• Price to Sales (P/S): 1.96
• P/FCF Ratio: 8.64
• Enterprise Value/Market Cap: 1.37
• Enterprise Value/Revenue: 1.64
• Enterprise Value/Gross Profit: 1.93
• Enterprise Value/Ebitda: 42.67
• 1Y Price Target: $7.84
• Price Target Upside: 12.97% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 9
• EPS Forecast (FY): 1.19
• Revenue Forecast (FY): $509.33M

• Rating: 64 Neutral
• Price Target: $8.00 ▲(15.27% Upside)
• Action: Reiterated Date: 03/13/26
• Date: Action: Reiterated 03/13/26

The score is anchored by improving financial fundamentals (profitability inflection, strong gross margins, and solid free cash flow) and a low P/E valuation, but is held back by clear technical weakness and earnings-call headwinds (seat compression, softer retention/ARR, and reduced near-term revenue guidance). Leverage remains an added financial risk to monitor.

Positive Factors

High gross margins & revenue scale

Consistently high gross margins and meaningful revenue scale provide durable operating leverage: large fixed-cost absorption potential supports long-term profitability as the business grows, enabling reinvestment in product and sales while protecting unit economics versus lower-margin peers.

Strong free cash flow generation

Robust free cash flow and high conversion versus net income strengthen financial sustainability: steady FCF supports debt reduction, R&D and go-to-market investments, and reduces dependence on external financing, improving strategic optionality over the medium term.

Expanding AI integration ecosystem

Broadening AI agent integrations is a structural product advantage: deeper partner connectivity and agentic workflows increase platform stickiness, drive consumption-based use cases, and position the company as a control plane for AI operations—supporting durable demand and differentiation.

Negative Factors

Elevated leverage

Material leverage for a SaaS company raises structural financial risk: higher interest and principal obligations limit flexibility for pricing, R&D or M&A, and increase vulnerability to slower revenue growth, making execution and cash conversion crucial to sustain the business plan.

Seat-license compression & weaker retention

Ongoing seat-based compression and flat DBNR indicate structural pressure on expansion economics: reduced seat counts and smaller expansion deals limit ARR growth and make revenue per customer less predictable, increasing execution risk during a transition to usage or value pricing.

Thin operating profitability / earnings quality

Despite GAAP profit in the latest year, core operating margins are still slim and earnings may be influenced by non-operating items; this weak structural operating margin base reduces resilience to demand shocks and makes sustainable margin expansion a key execution risk.

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 primarily makes money through recurring subscription revenue from its cloud-delivered platform. Customers typically pay for access to PagerDuty’s offerings under term-based contracts (often annual or multi-year), with pricing generally tied to the number of users/licenses and/or the specific product tiers and modules a customer adopts. Key revenue streams include: (1) Subscription revenue: fees for core incident response/on-call and incident management capabilities, plus add-on products and higher-tier plans that provide expanded functionality (e.g., broader automation, analytics, and advanced operational features). Revenue growth is driven by new customer acquisition and expansion within existing customers through seat growth, upgrades to higher tiers, and adoption of additional modules. (2) Professional services and other revenue (non-core): fees for services such as implementation assistance, training, and advisory/consulting work, which are typically smaller than subscription revenue. Significant factors contributing to earnings include the company’s ability to retain and expand accounts over time (net retention/expansion dynamics), and its extensive integrations and partner ecosystem (e.g., with monitoring/observability, cloud, and collaboration tools), which can increase product stickiness and drive adoption—however, specific partner revenue-sharing terms or material partnership economics are null.

PagerDuty Financial Statement Overview

Summary

Strong revenue scaling and excellent gross margins, with a sharp swing to profitability in 2026 and solid free cash flow generation. The main constraints are meaningful leverage on the balance sheet and still-thin core operating profitability (near breakeven at EBIT and low EBITDA margin), which increases execution risk if growth stays pressured.

Income Statement

Revenue has scaled steadily from $214M (2021) to $493M (2026 annual), with particularly strong growth in the latest year (+68% vs. +9% in 2025). Gross margins are consistently excellent (~81–86%), supporting strong operating leverage potential. Profitability has also inflected sharply: net margin moved from sizable losses (2021–2025) to a strong profit in 2026 (net margin ~35%). The main weakness is that operating profitability is still thin on an ongoing basis (EBITDA margin ~1.2% in 2026 and near breakeven at the EBIT line), suggesting earnings quality may be influenced by non-operating items and that the core cost structure still needs tightening.

Balance Sheet

Leverage is the key constraint: debt remains high at ~$413M (2026) and debt-to-equity is elevated at ~1.63x, though improved meaningfully from ~3.57x in 2025 as equity rebuilt. Total assets are stable around ~$0.9–1.0B, and the 2026 return on equity is very strong, reflecting the swing to profitability. Offsetting these positives, the company is still more leveraged than is ideal for a software model, and the balance sheet profile is less conservative than earlier years (e.g., 2021 debt-to-equity was ~0.68x).

Cash Flow

Cash generation is a clear positive: operating cash flow is solid and consistent (roughly $72M–$118M from 2024–2026), and free cash flow is strong ($112M in 2026). Free cash flow conversion relative to net income is also high (~97% in 2026), which supports earnings credibility. The key weakness is volatility in the growth rate of free cash flow (down in 2026 after a rise in 2025 and a large jump in 2024), indicating some lumpiness and less predictable cash flow momentum year to year.

Breakdown	Jan 2026	Jan 2025	Jan 2024	Jan 2023	Jan 2022
Income Statement
Total Revenue	492.55M	467.50M	430.70M	370.79M	281.40M
Gross Profit	418.40M	387.83M	352.87M	300.36M	233.03M
EBITDA	18.96M	-11.89M	-52.80M	-107.20M	-93.36M
Net Income	173.85M	-42.73M	-81.76M	-129.22M	-107.45M
Balance Sheet
Total Assets	990.51M	927.27M	925.31M	817.87M	806.45M
Cash, Cash Equivalents and Short-Term Investments	469.84M	570.83M	571.19M	476.97M	543.36M
Total Debt	413.33M	463.65M	461.02M	301.52M	307.62M
Total Liabilities	719.85M	779.22M	746.41M	575.79M	539.47M
Stockholders Equity	253.59M	129.83M	171.60M	240.98M	266.98M
Cash Flow
Free Cash Flow	111.92M	108.41M	64.43M	8.51M	-12.83M
Operating Cash Flow	114.86M	117.89M	71.97M	16.98M	-6.02M
Investing Cash Flow	-18.28M	-19.97M	-30.52M	-86.17M	17.38M
Financing Cash Flow	-206.42M	-116.14M	51.60M	-6.41M	-736.00K

PagerDuty Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 6.94
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 6.94 is below the 20-day moving average (MA) of 7.13, below the 50-day MA of 9.10, and below the 200-day MA of 13.67, indicating a bearish trend. The MACD of -0.43 indicates Negative momentum. The RSI at 34.56 is Neutral, neither overbought nor oversold. The STOCH value of 40.40 is Neutral, 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	$1.01B	7.22	19.47%	―	5.80%	12.20%
KARO	79 Outperform	$1.48B	22.71	31.88%	2.66%	18.30%	22.19%
SEMR	67 Neutral	$1.80B	―	-6.73%	―	19.87%	-136.93%
PD	64 Neutral	$589.76M	5.56	77.23%	―	7.01%	―
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
SPT	59 Neutral	$340.55M	-15.25	-22.88%	―	13.09%	32.34%
BMBL	57 Neutral	$436.30M	-0.53	-106.91%	―	-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.