Stock of the Day

November 4, 2019

PagerDuty (PD)

$17.27
+$0.63 (+3.8%)
Market Cap: $1.31B

About PagerDuty

PagerDuty, Inc. engages in the operation of a digital operations management platform in the United States and internationally. The company's digital operations management platform collects data and digital signals from virtually any software-enabled system or device and leverage machine learning to correlate, process, and predict opportunities and issues. Its platform includes PagerDuty Incident Management that provides a real-time view across the status of a digital service while incorporating noise reduction to remove false positives; AIOps that applies machine learning to correlate and automate the identification of incidents from billions of events; Process Automation offers centralized design time and run time environment for orchestrating automated workflows that span across departments, technologies, and networks; Customer Service Operations, which is offered to orchestrate, automate, and scale responses to customer impacting 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.

Today's Trend

PagerDuty, Inc. (NYSE: PD) shares have increased as investors respond to better-than-expected fiscal second-quarter results, stronger earnings guidance and a restructuring plan aimed at improving profitability. The rally follows a quarter with modest revenue growth but meaningful cost discipline and cash generation.

  • Q2 results exceeded expectations. PagerDuty reported adjusted earnings of $0.32 per share versus the $0.31 consensus estimate and revenue of $124.44 million, ahead of expectations for $123.27 million. Revenue increased 0.8% year over year. PagerDuty Q2 Earnings Results
  • Management raised its earnings outlook. Fiscal 2027 EPS guidance of $1.33 to $1.37 is well above the $1.17 analyst consensus, while third-quarter EPS guidance of $0.34 to $0.36 also exceeds expectations. Full-year revenue guidance of $491.5 million to $496.5 million is broadly in line with estimates. PagerDuty Guidance Update
  • Cost reductions are supporting margins. PagerDuty plans to cut approximately 15% of its workforce and forecast third-quarter operating margins of 26.5% to 27.5%. Investors appear to be viewing the restructuring as a way to accelerate profitable growth. The company also highlighted more than $500 million in annual recurring revenue and $33 million in quarterly free cash flow. PagerDuty Margin Forecast and Restructuring
  • Canaccord Genuity upgraded its valuation view. The firm raised its price target from $10 to $15 and maintained a Buy rating, providing additional support for the stock’s advance. Canaccord Raises PagerDuty Price Target
  • Analyst opinion remains mixed. Monness analyst Brian White reiterated a Hold rating, citing sluggish demand and mixed fundamentals. This suggests investors may question whether the improved profitability can be sustained if growth remains limited. PagerDuty Hold Rating
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