PagerDuty (PD) Stock Forecast & Price Target

PagerDuty Inc is poised for continued growth, evidenced by a significant increase in gross margin expectations for 2026, reflecting improved operational efficiencies and proactive management strategies. The company's customer base has expanded to 15,247 paid customers, coupled with strong profitability indicators, including a notable rise in operating margins of 650 basis points year-over-year. Furthermore, the anticipated increase in EBITDA estimates for the coming years suggests enhanced financial performance driven by increased technology spending and successful expansion into new markets.

PagerDuty Inc. is facing significant challenges, as evidenced by its regional revenue performance, with international revenue showing only a 7% year-over-year increase and a noted deceleration quarter-over-quarter. The company's downside scenarios present a bleak outlook, suggesting that reduced technology spending, difficulty in customer expansion, and lower renewal rates could adversely affect revenue growth by 250 basis points compared to base estimates for calendar years 2025-2026. Additionally, a decline in revenue and margins could lead to a reduction in valuation multiples, thereby indicating a potentially diminished financial outlook for the company.