PagerDuty (PD) Stock Forecast & Price Target

PagerDuty Inc demonstrates a strong financial outlook, evidenced by an increase in gross margin expectations for 2026 by 3% to $330 million despite operational challenges indicated by a 1% year-over-year decline. The company has shown resilience in customer acquisition, with 15,247 paid customers and increased operational metrics, as well as an improvement in operating margins by 650 basis points year-over-year, suggesting a robust profitability trajectory. Furthermore, as tech spending is expected to rise and platform usage continues to expand, PagerDuty's diversified international revenue stream positions it well for future growth, potentially leading to multiple expansion in its stock valuation.

PagerDuty Inc. has experienced a decline in key financial metrics, specifically noting that total revenue growth has slowed, with international revenue showing only a 7% year-over-year increase and accounting for 29% of total revenue, indicating a deceleration quarter-over-quarter. The company's downside scenarios suggest a potential fall in revenue growth by 250 basis points from estimates for CY 2025-2026, which could stem from reduced technology spending, challenges in acquiring new customers, and lower renewal and expansion rates. Furthermore, PagerDuty's trailing twelve-month (TTM) billings increased by only 4% year-over-year, falling short of company expectations and contributing to a less favorable growth and margin outlook, potentially leading to a lower valuation multiple.