PagerDuty (PD) Stock Forecast & Price Target

PagerDuty Inc. demonstrates a positive outlook due to its robust customer acquisition growth, evidenced by an increase in the number of paid customers to 15,247, and a significant rise in profitability, highlighted by a 650 basis point year-over-year improvement in operating margins. The company's successful integration of artificial intelligence into its platform and its geographic revenue diversification position it well for expanded growth, especially as tech spending rises and renewal rates improve. Furthermore, the upward revisions to EBITDA estimates for 2025, 2026, and 2027 suggest a strong financial trajectory and potential for multiple expansions amid improving balance sheet health.

PagerDuty Inc. is experiencing revenue growth challenges, with international revenue increasing only 7% year-over-year and accounting for 29% of total revenue, indicating a deceleration in growth. The company faces potential downside scenarios projecting a significant reduction in revenue growth, attributed to factors such as a decline in tech spending, difficulties in acquiring new customers, and lower renewal and expansion rates. Furthermore, the company’s trailing twelve months (TTM) billings growth of only 4% year-over-year fell short of expectations, suggesting a less favorable outlook for both revenue and margins, which may lead to a lower valuation multiple.