PagerDuty (NYSE:PD) Shares Gap Up Following Strong Earnings

PagerDuty (NYSE:PD)’s stock price gapped up before the market opened on Friday after the company announced better than expected quarterly earnings. The stock had previously closed at $7.44, but opened at $9.33. PagerDuty shares last traded at $9.1390, with a volume of 1,269,018 shares traded.

The company reported $0.32 EPS for the quarter, topping the consensus estimate of $0.24 by $0.08. PagerDuty had a return on equity of 16.29% and a net margin of 35.30%.The business had revenue of $120.97 million during the quarter, compared to analyst estimates of $119.52 million. During the same period last year, the business posted $0.24 earnings per share. The company’s quarterly revenue was up 1.0% on a year-over-year basis. PagerDuty has set its Q2 2027 guidance at 0.290-0.310 EPS.

PagerDuty declared that its board has authorized a stock repurchase plan on Thursday, May 28th that permits the company to repurchase $100.00 million in shares. This repurchase authorization permits the company to repurchase up to 16.4% of its shares through open market purchases. Shares repurchase plans are generally an indication that the company’s board of directors believes its stock is undervalued.

Key Stories Impacting PagerDuty

Here are the key news stories impacting PagerDuty this week:

• Positive Sentiment: PagerDuty beat Q1 estimates, reporting adjusted EPS of $0.32 versus the $0.24 consensus and revenue of $120.97 million, slightly above forecasts. The company also said its Q2 EPS and revenue guidance topped expectations, which helped support the stock. PagerDuty Announces First Quarter Fiscal 2027 Financial Results
• Positive Sentiment: The board authorized a new $100 million buyback program, a signal management believes the shares are undervalued and a factor that could reduce the share count. RTT News stock buyback report
• Neutral Sentiment: PagerDuty’s new CEO announcement and commentary around AI-first operations management add a longer-term strategic angle, but they are not the main driver of today’s trading. TipRanks company announcement
• Negative Sentiment: The earnings quality and growth trend remain weak: revenue rose less than 1% year over year, ARR was flat, large-customer counts declined, and DBNRR slipped below 100%, suggesting churn is outweighing expansion. Seeking Alpha analysis

Analyst Ratings Changes

A number of analysts have issued reports on the stock. William Blair reiterated a “market perform” rating on shares of PagerDuty in a research note on Friday, March 13th. Weiss Ratings reaffirmed a “sell (d)” rating on shares of PagerDuty in a research note on Friday, May 22nd. Royal Bank Of Canada reiterated a “sector perform” rating and set a $9.00 target price on shares of PagerDuty in a report on Friday. Canaccord Genuity Group decreased their price target on shares of PagerDuty from $19.00 to $9.00 and set a “buy” rating for the company in a research report on Friday, March 13th. Finally, Morgan Stanley set a $9.00 price objective on PagerDuty in a research note on Thursday, February 19th. Three equities research analysts have rated the stock with a Buy rating, six have assigned a Hold rating and three have issued a Sell rating to the company’s stock. According to data from MarketBeat, the company presently has a consensus rating of “Hold” and a consensus target price of $11.89.

Institutional Investors Weigh In On PagerDuty

A number of institutional investors and hedge funds have recently made changes to their positions in PD. Vanguard Group Inc. grew its holdings in shares of PagerDuty by 3.8% during the fourth quarter. Vanguard Group Inc. now owns 13,066,929 shares of the company’s stock worth $171,307,000 after buying an additional 472,975 shares during the last quarter. ARK Investment Management LLC increased its holdings in shares of PagerDuty by 2.6% in the third quarter. ARK Investment Management LLC now owns 8,827,404 shares of the company’s stock valued at $145,829,000 after purchasing an additional 224,769 shares during the period. Geode Capital Management LLC raised its stake in shares of PagerDuty by 2.9% during the fourth quarter. Geode Capital Management LLC now owns 2,113,117 shares of the company’s stock worth $27,708,000 after purchasing an additional 58,881 shares during the last quarter. Ameriprise Financial Inc. lifted its holdings in shares of PagerDuty by 333.2% during the third quarter. Ameriprise Financial Inc. now owns 1,450,429 shares of the company’s stock worth $23,961,000 after purchasing an additional 1,115,577 shares during the period. Finally, Loomis Sayles & Co. L P grew its position in PagerDuty by 0.3% in the 4th quarter. Loomis Sayles & Co. L P now owns 1,092,963 shares of the company’s stock valued at $14,329,000 after buying an additional 3,276 shares during the last quarter. 97.26% of the stock is owned by hedge funds and other institutional investors.

PagerDuty Stock Up 22.0%

The company has a market capitalization of $771.37 million, a price-to-earnings ratio of 4.93, a PEG ratio of 3.19 and a beta of 0.78. The company has a current ratio of 2.01, a quick ratio of 2.01 and a debt-to-equity ratio of 1.56. The firm’s 50 day simple moving average is $6.66 and its 200-day simple moving average is $9.43.

PagerDuty Company Profile

PagerDuty, Inc engages in the operation of a digital operations management platform in the United States and internationally. The company’s digital operations management platform collects data and digital signals from virtually any software-enabled system or device and leverage machine learning to correlate, process, and predict opportunities and issues. Its platform includes PagerDuty Incident Management that provides a real-time view across the status of a digital service while incorporating noise reduction to remove false positives; AIOps that applies machine learning to correlate and automate the identification of incidents from billions of events; Process Automation offers centralized design time and run time environment for orchestrating automated workflows that span across departments, technologies, and networks; Customer Service Operations, which is offered to orchestrate, automate, and scale responses to customer impacting issues.