Monness analyst Brian White has maintained their neutral stance on PD stock, giving a Hold rating today.
Geoff Meacham has given his Hold rating due to a combination of factors that pertain to PagerDuty’s recent performance and future expectations. Despite observing a significant year-over-year improvement in operating margin in the third quarter of fiscal year 2024, there is a sense of caution due to the anticipated economic challenges ahead which could impact PagerDuty’s growth trajectory. Moreover, while PagerDuty is well-positioned to capitalize on the increasing demand for real-time digital operations and the broader digital transformation wave, there are uncertainties that warrant a more conservative stance on the stock at this time.
Furthermore, PagerDuty’s growth has slowed down to 15%, and several key performance indicators have shown a weakening trend in the last quarter. For instance, deferred revenue and calculated billings fell short of expectations, and there was a slight reduction in paid customers. The dollar-based net retention rate also dipped, indicating potential issues with customer expansion and retention. While PagerDuty has executed well on margins and has recently completed an acquisition aimed at enriching its incident management capabilities, the mixed financial metrics and cautious outlook for the coming fiscal year have led to fine-tuning of revenue and EPS estimates, reinforcing the decision to maintain a Hold rating.
In another report released today, TD Cowen also downgraded the stock to a Hold with a $23.00 price target.
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PagerDuty (PD) Company Description:
PagerDuty, Inc. operates a digital operations management platform. It provides incident management solution that integrates with information technology Ops and DevOps monitoring stacks to improve operational reliability and agility. The company was founded by Andrew Miklas, Baskar Puvanathasan, and Dan Alexandru Solomon in 2009 and is headquartered in San Francisco, CA.
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