JPMorgan downgraded PagerDuty (PD) to Underweight from Neutral with an unchanged price target of $21. The firm sees “several crosscurrents at play, which makes it difficult to underwrite the long-term success of the company’s multi-product platform play at this point.” JPMorgan sees a commoditization of PagerDuty’s core product driven by a rapidly evolving competitive landscape, in addition to a lot of large established vendors upstream, such as observability players. This could introduce unfavorable contract negotiations, especially around expansion of large deals for PagerDuty, and could likely pressure new customer additions, contends the firm.
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