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PagerDuty Inc (PD)
NYSE:PD

PagerDuty (PD) AI Stock Analysis

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PD

PagerDuty

(NYSE:PD)

Rating:72Outperform
Price Target:
$18.00
▲(10.16%Upside)
PagerDuty's stock score of 71.9 reflects strong growth potential driven by impressive revenue and cash flow performance. The strategic focus on AI and automation, alongside recent board enhancements, highlights efforts to achieve future profitability. However, ongoing net losses, reliance on debt, and macroeconomic uncertainties pose challenges that need addressing to fully capitalize on growth opportunities.
Positive Factors
Customer Growth
The company managed to add 133 customers, resulting in one of the best quarters in nearly 3 years for customer growth.
Profit Performance
Improving profit performance is seen as an enduring positive aspect, with the potential to reach 25% operating margins annually within the next three years.
Negative Factors
Customer Retention
Net Revenue Retention slipped 2 points lower to 104%, which is below prior expectations for the full year, signaling potential challenges in customer retention.
Execution Challenges
PagerDuty is challenged by go-to-market execution issues and organizational transitions, affecting its top-line trends.
Revenue Guidance
Revenue growth guidance for the full year was cut by nearly 2 percentage points, indicating a cautious outlook for future revenue.

PagerDuty (PD) vs. SPDR S&P 500 ETF (SPY)

PagerDuty Business Overview & Revenue Model

Company DescriptionPagerDuty, Inc. is a leading digital operations management platform that empowers organizations to manage and respond to critical disruptions in real-time. Operating primarily within the information technology and services sector, PagerDuty provides solutions that enable efficient incident response, on-call management, and operational reliability. Its core products and services include incident management, event intelligence, and automation tools designed to enhance the digital resilience of businesses across various industries.
How the Company Makes MoneyPagerDuty generates revenue primarily through a subscription-based model, offering its software-as-a-service (SaaS) platform to businesses of all sizes. The company charges customers based on the number of users and the specific features utilized within its platform, with different pricing tiers available to accommodate varying needs. Key revenue streams include subscription fees from its incident management and automation solutions. Additionally, PagerDuty may derive income from professional services, which assist clients in implementing and optimizing their use of the platform. Strategic partnerships and integrations with other technology providers also enhance its offerings, potentially contributing to customer acquisition and retention.

PagerDuty Earnings Call Summary

Earnings Call Date:May 29, 2025
(Q1-2026)
|
% Change Since: 1.49%|
Next Earnings Date:Aug 28, 2025
Earnings Call Sentiment Neutral
The earnings call reflected a mix of positive achievements in revenue growth, strategic partnerships, and AI innovation, but also highlighted challenges in enterprise segment execution and macroeconomic uncertainties affecting customer behavior.
Q1-2026 Updates
Positive Updates
Revenue Growth and Strong Margins
PagerDuty delivered revenue of $120 million, representing 8% growth at the top of guidance range. Non-GAAP operating margin reached 20%, exceeding the target by 500 basis points.
Strategic Partnerships and Expansions
Strengthened strategic partnership with AWS and significant expansion in the public sector, achieving FedRAMP low and pursuing FedRAMP moderate authorization.
Improved Customer Acquisition
Achieved significant improvement in net new paid customers with the largest increase in eight quarters, driven by a new commercial digital acquisition strategy.
AI and Innovation Initiatives
Expansion of AI capabilities including AI Scribe agent leveraging transcripts from Zoom and Microsoft Teams, with plans to launch three additional AI agents this quarter.
International Revenue Growth
International revenue increased 11% annually, contributing 28% of total revenue.
Negative Updates
Enterprise Segment Challenges
Higher than expected customer downgrades and elevated churn in the commercial business negatively impacted dollar-based net retention.
Revenue Growth Guidance
Guidance for full fiscal year 2026 revenue was adjusted to a growth rate of 5% to 7%, down from the previously provided range of $500 million to $507 million.
Macroeconomic Uncertainty Impact
Continued macroeconomic uncertainty affecting some enterprise customers, leading to cautious spending and downgrades.
Company Guidance
During the call, PagerDuty provided guidance for fiscal year 2026, projecting a revenue range of $493 million to $499 million, reflecting a growth rate of 5% to 7%. The company emphasized its focus on achieving GAAP profitability, with anticipated net income per diluted share between $0.95 and $1, implying an operating margin of 20% to 21%. The guidance for the second quarter of fiscal 2026 expects revenue between $122.5 million and $124.5 million, with net income per diluted share between $0.19 and $0.20, translating to an operating margin of 17%. PagerDuty also highlighted its strategic focus on leveraging AI and automation to improve operational efficiency and enhance its enterprise engagement model, while maintaining a strong balance sheet with nearly $600 million in cash and investments. The company continues to execute a $150 million share repurchase program, reflecting its commitment to shareholder value.

PagerDuty Financial Statement Overview

Summary
PagerDuty is on a positive growth trajectory with impressive revenue and cash flow growth, signifying potential for future profitability. While the gross profit margins are robust, persistent net losses and reliance on debt highlight areas needing improvement. The balance sheet reflects moderate leverage, typical of growth-focused tech companies, but underscores the need for strategic initiatives to enhance profitability and equity financing. The strong cash flow position provides a buffer, facilitating continued investment and potential debt reduction.
Income Statement
75
Positive
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.
Balance Sheet
68
Positive
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.
Cash Flow
82
Very Positive
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.
Breakdown
TTMMar 2025Mar 2024Mar 2023Mar 2022Mar 2021
Income StatementTotal Revenue
476.13M467.50M430.70M370.79M281.40M213.56M
Gross Profit
396.63M387.83M352.87M300.36M233.03M182.87M
EBIT
-48.37M-59.77M-96.25M-129.38M-101.71M-66.28M
EBITDA
-14.53M-14.52M-52.80M-107.20M-93.36M-57.57M
Net Income Common Stockholders
-33.94M-42.73M-81.76M-129.22M-107.45M-68.90M
Balance SheetCash, Cash Equivalents and Short-Term Investments
459.44M570.83M571.19M476.97M543.36M560.28M
Total Assets
784.01M927.27M925.31M817.87M806.45M795.44M
Total Debt
303.04M463.65M461.02M301.52M307.62M249.33M
Net Debt
40.70M117.19M98.01M27.50M-42.17M-89.83M
Total Liabilities
542.11M779.22M746.41M575.79M539.47M428.72M
Stockholders Equity
240.35M129.83M171.60M240.98M266.98M366.73M
Cash FlowFree Cash Flow
110.30M108.41M64.43M8.51M-12.83M5.25M
Operating Cash Flow
119.91M117.89M71.97M16.98M-6.02M10.10M
Investing Cash Flow
-18.83M-19.97M-30.52M-86.17M17.38M-49.32M
Financing Cash Flow
-113.83M-116.14M51.60M-6.41M-736.00K254.37M

PagerDuty Technical Analysis

Technical Analysis Sentiment
Positive
Last Price16.34
Price Trends
50DMA
15.94
Positive
100DMA
17.17
Negative
200DMA
18.02
Negative
Market Momentum
MACD
-0.18
Positive
RSI
55.39
Neutral
STOCH
70.44
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 16.34 is above the 20-day moving average (MA) of 15.94, above the 50-day MA of 15.94, and below the 200-day MA of 18.02, indicating a neutral trend. The MACD of -0.18 indicates Positive momentum. The RSI at 55.39 is Neutral, neither overbought nor oversold. The STOCH value of 70.44 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 66 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

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
CXCXM
80
Outperform
$2.27B21.2017.50%6.75%97.06%
76
Outperform
$1.66B22.9416.09%1.98%3.84%10.25%
PDPD
72
Outperform
$1.51B-23.09%8.55%60.23%
SPSPT
66
Neutral
$1.26B-36.95%17.79%16.49%
65
Neutral
$1.41B-6.48%10.75%56.37%
63
Neutral
$1.32B-6.49%5.15%28.27%
62
Neutral
$11.81B10.34-7.44%2.91%7.41%-7.93%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
PD
PagerDuty
16.07
-4.00
-19.93%
SPNS
Sapiens
30.03
-2.10
-6.54%
SPT
Sprout Social
21.72
-12.49
-36.51%
JAMF
Jamf Holding
10.67
-4.56
-29.94%
CXM
Sprinklr
8.70
-0.26
-2.90%
MLNK
MeridianLink
17.14
-2.86
-14.30%

PagerDuty Corporate Events

Executive/Board ChangesBusiness Operations and Strategy
PagerDuty Announces Board Appointment with Scalar Gauge
Positive
Apr 28, 2025

On April 28, 2025, PagerDuty announced a cooperation agreement with Scalar Gauge Fund, resulting in the appointment of Donald J. Carty to its Board of Directors as a Class I director. This strategic move is part of PagerDuty’s efforts to enhance its board with experienced leaders, aiming to drive growth and profitability through a focus on enterprise customers and evolving market strategies. The agreement includes customary standstill provisions and voting commitments from Scalar Gauge, reflecting a collaborative approach to enhancing shareholder value.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.