PagerDuty (PD) Stock Forecast & Price Target

PagerDuty Inc shows a positive outlook driven by strong customer acquisition momentum, with a notable increase to 15,247 paid customers and operational metrics indicating growth across various dimensions. The company's projected EBITDA shows a steady increase over the next three years, with 2025, 2026, and 2027 estimates rising to $493 million, $496 million, and $496 million respectively, surpassing street consensus estimates. Furthermore, the expectation of improved operating margins and an expanding balance sheet, coupled with a geographically diversified business model, supports the potential for multiple expansion and enhanced profitability in the long term.

PagerDuty Inc. has recently experienced a slowdown in revenue growth, with a year-over-year increase of only 4% in total billings, falling short of company expectations and indicating potential challenges in market demand and client retention. The need for a significant reduction in growth projections, alongside anticipated declines in tech spending and customer expansion and renewal rates, suggest that the company may face further financial pressures in the near future. Consequently, a less favorable growth and margin profile could lead to a decrease in stock multiple, amplifying the negative outlook for PagerDuty’s financial performance going forward.