PagerDuty (PD) Stock Forecast & Price Target

PagerDuty Inc. has demonstrated a solid performance with a notable increase in paid customers, totaling 15,247, which reflects a positive trend in customer growth. The company has achieved strong profitability, evidenced by operating margins expanding by 650 basis points year-over-year, alongside substantial quarterly outperformance in cash flow from operations. Furthermore, there is an optimistic outlook for PagerDuty’s growth trajectory supported by anticipated increases in technology spending and higher rates of customer renewals and expansions, which could lead to a favorable valuation multiple.

PagerDuty's outlook appears negative due to anticipated revenue growth that is projected to be 250 basis points lower than the base case estimates for calendar year 2025-2026, primarily attributed to expected declines in tech spending and challenges in acquiring new customers. The firm is also facing potential lower renewal and expansion rates, which could negatively impact its growth and margin profile, suggesting a reduced valuation multiple for its stock. Additionally, financial metrics reveal that recent billings of $113.4 million demonstrated only a 6.2% increase, falling short of the consensus estimate of $119.1 million and reflecting a broader concern about the company's ability to meet market expectations.