PagerDuty (PD) Stock Forecast & Price Target

PagerDuty Inc. demonstrates a positive outlook supported by an increase in gross margin expectations for 2026, now projected at $330 million, despite a slight year-over-year decline, indicating a resilience in its operational efficiency. The company's strong customer acquisition momentum is reflected in the growth of its paid customer base, now numbering 15,247, alongside improved profitability evidenced by operating margins rising by 650 basis points year-over-year. Furthermore, an increase in EBITDA estimates for 2025 through 2027 highlights the potential for enhanced tech spending and customer expansion, positioning PagerDuty for a favorable multiple expansion as its financial metrics strengthen.

PagerDuty Inc. is experiencing a concerning deceleration in revenue growth, with a significant year-over-year increase of only 4% in trailing twelve-month (TTM) billings, which is below the company's expectations and consensus estimates. Additionally, the firm's future revenue projections depend heavily on assumptions of stable tech spending and customer renewal rates; a downturn in these areas could result in a downward adjustment of revenue growth estimates by as much as 250 basis points, leading to a less favorable growth and margin profile. Finally, the stock's valuation could face downward pressure, being valued at a lower multiple due to these factors, which may compound negative investor sentiment.