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PagerDuty Inc (PD)
NYSE:PD
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PagerDuty
(NYSE:PD)
72Outperform
Positive Factors
Operational Performance
Non-GAAP operating margin of 21.0% was well above the implied guidance of ~13%.
Product Innovation
Newer products contributed 40% to net new annual recurring revenue, indicating strong product innovation and adoption.
Negative Factors
Competition
PagerDuty faces increasing competition, particularly from Datadog's new competing product, which could attract lower-tier SMB customers.
PagerDuty (PD) vs. S&P 500 (SPY)
Market Cap
$1.52B
Dividend YieldN/A
Average Volume (3M)984.32K
Price to Earnings (P/E)―
Beta (1Y)1.75
Revenue Growth8.71%
EPS Growth2.42%
CountryUS
Employees1,182
SectorTechnology
Sector Strength45
IndustrySoftware
Share Statistics
EPS (TTM)-0.81
Shares Outstanding90,155,075
10 Day Avg. Volume1,145,628
30 Day Avg. Volume984,319
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)3.33
Price to Cash Flow (P/CF)17.30
P/FCF Ratio19.60
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$18.50Price Target Upside12.39% Upside
Rating ConsensusModerate Sell
Number of Analyst Covering3
PagerDuty Business Overview & Revenue Model
Company DescriptionPagerDuty, Inc. operates a digital operations management platform. It provides incident management solution that integrates with information technology Ops and DevOps monitoring stacks to improve operational reliability and agility. The company was founded by Andrew Miklas, Baskar Puvanathasan, and Dan Alexandru Solomon in 2009 and is headquartered in San Francisco, CA.
How the Company Makes MoneyPagerDuty makes money primarily through a subscription-based revenue model. The company offers various service plans that cater to different levels of organizational needs, ranging from small teams to large enterprises. Customers pay recurring fees based on the number of users, the specific features they require, and the level of customization and support needed. Additionally, PagerDuty generates revenue from professional services, which include training, implementation, and consulting services to help organizations optimize the use of its platform. Significant partnerships with cloud providers and integration with various IT service management tools enhance its offerings, potentially contributing to its revenue growth.
PagerDuty Financial Statement Overview
Summary
PagerDuty exhibits robust revenue growth and strong cash flow management, essential for a company in the growth-focused software industry. The high leverage and ongoing net losses pose risks, but the company's strategic focus on expanding its asset base and maintaining cash flow strength positions it well for future profitability improvements.Income Statement
PagerDuty has demonstrated solid revenue growth, with TTM revenue increasing significantly compared to the previous year. Gross profit margin remains strong, indicating effective cost management, despite negative EBIT and net income margins reflecting ongoing operating losses. The company's focus on growth is evident, but profitability challenges persist.75
Positive
Balance Sheet
PagerDuty's balance sheet shows a high debt-to-equity ratio, indicative of significant leverage. However, the company's equity ratio is relatively low, suggesting a greater reliance on debt financing. Return on equity remains negative due to net losses, but the company's asset base is expanding, which may support future growth.68
Positive
Cash Flow
The company has shown positive operating cash flow and strong free cash flow growth, highlighting effective cash management and operational efficiency improvements. Although free cash flow to net income ratio is favorable, indicating cash flow strength, the net income remains negative, highlighting a need for profitability improvements.80
Positive
| Breakdown | |||||
| TTM | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 | Mar 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 457.17M | 430.70M | 370.79M | 281.40M | 213.56M | 166.35M | Gross Profit |
| 371.84M | 352.87M | 300.36M | 233.03M | 182.87M | 141.77M | EBIT |
| -73.28M | -96.25M | -129.38M | -101.71M | -66.28M | -55.56M | EBITDA |
| -28.15M | -52.80M | -107.20M | -93.36M | -57.57M | -47.46M | Net Income Common Stockholders |
| -73.85M | -81.76M | -129.22M | -107.45M | -68.90M | -50.34M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 542.16M | 571.19M | 476.97M | 543.36M | 560.28M | 351.40M | Total Assets |
| 866.75M | 925.31M | 817.87M | 806.45M | 795.44M | 435.40M | Total Debt |
| 459.70M | 461.02M | 301.52M | 307.62M | 249.33M | 0.00 | Net Debt |
| 133.26M | 98.01M | 27.50M | -42.17M | -89.83M | -124.02M | Total Liabilities |
| 738.66M | 746.41M | 575.79M | 539.47M | 428.72M | 127.46M | Stockholders Equity |
| 111.60M | 171.60M | 240.98M | 266.98M | 366.73M | 307.94M |
| Cash Flow | Free Cash Flow | ||||
| 101.51M | 64.43M | 8.51M | -12.83M | 5.25M | -5.35M | Operating Cash Flow |
| 108.64M | 71.97M | 16.98M | -6.02M | 10.10M | -173.00K | Investing Cash Flow |
| -47.12M | -30.52M | -86.17M | 17.38M | -49.32M | -232.07M | Financing Cash Flow |
| -115.38M | 51.60M | -6.41M | -736.00K | 254.37M | 225.94M |
PagerDuty Technical Analysis
Negative
16.46
Price Trends
18.30
Negative
18.90
Negative
19.26
Negative
Market Momentum
-0.48
Positive
29.30
Positive
16.85
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 16.46 is below the 20-day moving average (MA) of 18.03, below the 50-day MA of 18.30, and below the 200-day MA of 19.26, indicating a bearish trend. The MACD of -0.48 indicates Positive momentum. The RSI at 29.30 is Positive, neither overbought nor oversold. The STOCH value of 16.85 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PD.
PagerDuty Risk Analysis
PagerDuty disclosed 69 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 (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $30.59B | ― | -1.21% | ― | 27.77% | 89.39% | |
72 Outperform | $1.52B | ― | -53.07% | ― | 8.71% | 2.42% | |
72 Outperform | $166.53B | 118.18 | 16.53% | ― | 22.44% | -18.31% | |
69 Neutral | $18.58B | 1,825.94 | 0.46% | ― | 15.33% | ― | |
66 Neutral | $34.95B | 198.56 | 7.75% | ― | 26.12% | 274.50% | |
58 Neutral | $21.35B | 10.05 | -19.26% | 2.35% | 5.02% | -22.63% | |
57 Neutral | $56.56B | ― | -32.59% | ― | 23.19% | 11.01% |
* Technology Sector Average
Performance Comparison
PD
PagerDuty
16.46
-6.93
-29.63%
NOW
ServiceNow
808.40
31.52
4.06%
TEAM
Atlassian
224.10
16.37
7.88%
OKTA
Okta
107.00
-2.66
-2.43%
ZS
Zscaler
199.36
-2.07
-1.03%
DDOG
Datadog
101.96
-21.63
-17.50%
PagerDuty Earnings Call Summary
Earnings Call Date: Dec 26, 2024 | % Change Since: -10.15% | Next Earnings Date: Mar 13, 2025
Earnings Call Sentiment Positive
The earnings call conveyed a generally positive outlook with strong revenue and ARR growth, high net retention rates, and successful adoption of new products. However, challenges in converting large deals and slightly lower than expected billings growth tempered the overall sentiment.Highlights
Revenue and Operating Income Surpass Expectations
PagerDuty delivered a solid quarter with revenue growth of 9% and non-GAAP operating margin expanded to 21%, both well above guidance ranges.
Strong Annual Recurring Revenue (ARR) Growth
Net new ARR was $9 million, a 21% increase over Q3 of last year, and total ARR increased to $483 million, growing 10% year-over-year.
High Dollar-Based Net Retention Rate
The dollar-based net retention rate stood at 107%, indicating strong customer retention and expansion.
Successful New Product Adoption
AIOps, Automation, and Customer Service Ops contributed more than 40% to incremental ARR. Enterprises adopting multiple products saw a 253% ROI over 3 years.
Improved Gross Margin and Cash Flow
Gross margin was 86%. Cash from operations was $22 million, 19% of revenue, and free cash flow was $19 million, 16% of revenue.
Recognition and Industry Leadership
PagerDuty was recognized by Forrester and GigaOm for its leadership in AIOps, and Fortune recognized it as a top company for women.
Lowlights
Large Deal Conversion Challenges
An unusual number of large Q3 opportunities were deferred, delaying ARR acceleration to FY '26.
Slight Decline in Commercial Segment
The number of Commercial accounts declined slightly, impacting overall customer numbers.
Lower Than Expected Billings Growth
Trailing 12 months' billings were $478 million, a 9% increase compared to a year ago, slightly below the 10% target.
Revenue Growth Outlook Slightly Reduced
Revenue growth for Q4 is projected at 7% to 8%, slightly below the 11% rate previously tracked toward.
Company Guidance
During the Q3 2025 earnings call, PagerDuty provided a positive outlook despite some deferred large deals. The company reported a 9% revenue growth and a 21% non-GAAP operating margin. Net new ARR increased by $9 million, marking a 21% rise compared to the previous year, and total annual recurring revenue reached $483 million, up 10% year-over-year. Dollar-based net retention stood at 107%, while customers with ARR greater than $500,000 saw a 20% increase. The Operations Cloud's adoption led to an average return on investment of 250% over three years, with a payback period of less than a year. For Q4, PagerDuty anticipates revenue between $118.5 million and $120.5 million, with a projected operating margin of 13%, and for the full fiscal year, the revenue guidance was adjusted slightly upward to a range of $464.5 million to $466.5 million, with an expected operating margin of 16%.PagerDuty Corporate Events
Executive/Board Changes
PagerDuty Announces Leadership Changes in Legal Department
Neutral
Feb 3, 2025
On January 31, 2025, Shelley Webb, Chief Legal & People Officer of PagerDuty, Inc., announced her resignation effective February 3, 2025. In response, Kathy Chi, Vice President and Deputy General Counsel, will assume the role of interim General Counsel. Webb will receive her annual bonus under the company’s Short-Term Incentive Program, contingent on the achievement of performance goals.
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.