PagerDuty (PD) shares edged up around 2% today, catching some attention among software investors. While there was no major news announcement, the stock’s modest bump stands out, especially given its recent underperformance this year.
See our latest analysis for PagerDuty.
PagerDuty’s 2% share price lift today brings a small but welcome uptick, considering its 2024 performance has been disappointing, with a year-to-date share price decline of nearly 14% and a 12-month total shareholder return loss of over 22%. While that hints at momentum still struggling to recover, the latest move may reflect shifting sentiment or a growing sense that the risk/reward balance is starting to look more attractive in light of recent results and sector dynamics.
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But with shares trading at a notable discount to analyst targets and recent earnings growth outpacing revenue, is PagerDuty now undervalued or is the market already factoring in any turnaround? Could this be an overlooked buying opportunity?
The most popular narrative sees PagerDuty’s fair value at just above $19, compared to a last close of $15.49. This suggests the consensus believes the market is still missing some upside. With the current price notably below projected value, investors are left to weigh whether improving earnings prospects will be realized.
The rapid growth in usage and complexity of digital infrastructure, especially within AI-native and large enterprise customers, along with record platform utilization (over 25% year-over-year growth), points to rising demand for PagerDuty’s core incident management and automation offerings. These trends can drive strong future recurring revenue as digital transformation accelerates globally.
Read the complete narrative.
Want to see why analysts are backing this higher valuation? The secret is a bold earnings turnaround, surging adoption, and a powerful margin shift that underpin the entire narrative. What are the underlying assumptions shaping this outlook? Dig into the details to uncover the full story driving this ambitious price target.
Result: Fair Value of $19.14 (UNDERVALUED)
Have a read of the narrative in full and understand what’s behind the forecasts.
However, unexpected customer downgrades or rising competition could quickly weaken the case for a sustained rebound in PagerDuty’s share price.
Find out about the key risks to this PagerDuty narrative.