PagerDuty downgraded amid valuation challenges in AI market
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 23 2024
0mins
Should l Buy PD?
Source: Benzinga
PagerDuty Inc's stock fell by 13.97% as it crossed below its 5-day SMA, reflecting investor concerns amid a broader market decline with the Nasdaq-100 down 1.72% and the S&P 500 down 1.07%.
The core catalyst for this decline is the downgrade from RBC Capital, which lowered PagerDuty's rating from Outperform to Sector Perform and cut its price target from $17 to $15. Additionally, Truist reduced its price target from $20 to $16 while maintaining a Buy rating, highlighting the valuation challenges faced by PagerDuty in the competitive AI market. Analysts also foresee increased consolidation in the incident management sector, which could further threaten PagerDuty's market position and profitability.
These developments suggest that PagerDuty is under significant pressure from both market dynamics and internal business model limitations, prompting investors to reassess their positions in light of the potential risks and rewards.
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Analyst Views on PD
Wall Street analysts forecast PD stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for PD is 16.14 USD with a low forecast of 12.00 USD and a high forecast of 20.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
9 Analyst Rating
4 Buy
4 Hold
1 Sell
Moderate Buy
Current: 7.900
Low
12.00
Averages
16.14
High
20.00
Current: 7.900
Low
12.00
Averages
16.14
High
20.00
About PD
PagerDuty, Inc. is engaged in digital operations management platform that manages urgent and mission-critical work for digital business. The Company collects data and digital signals from virtually any software-enabled system or device and leverages enables machine learning to correlate, process, and predict opportunities and issues. It uses incident response, event management, and automation, the Company brings together the right people with the right information so they can resolve issues and act on opportunities in minutes or seconds from wherever they are. The PagerDuty Operations Cloud consists of PagerDuty Incident Management, AIOps, Process Automation, and Customer Service Operations. PagerDuty Incident Management provides a real-time view across the status of a digital service while incorporating intelligent noise reduction to remove false positives. PagerDuty Process Automation provides a centralized design time and run time environment for orchestrating automated workflows.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
PagerDuty Faces Valuation Gap Amid AI Market Divide
- Rating Downgrade Impact: RBC Capital downgraded PagerDuty from Outperform to Sector Perform and reduced its price target from $17 to $15, reflecting ongoing pressure from its seat-based business model and limited potential for margin expansion in the short term.
- Market Divide Phenomenon: Truist lowered PagerDuty's price target from $20 to $16 while maintaining a Buy rating, highlighting a sharp divide between AI market winners and losers, indicating potential valuation challenges for the company in the coming years.
- Industry Consolidation Expectations: Analysts anticipate further consolidation in the incident management market, posing a threat to PagerDuty's market position, especially as competition intensifies, which could impact its market share and profitability.
- Investment Potential Assessment: While PagerDuty is viewed as an investment opportunity among small-cap tech stocks, analysts suggest that certain AI stocks offer greater upside potential and lower downside risk, urging investors to carefully evaluate risks and rewards in their portfolios.
See More
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- Potential Buyout Candidates: A number of technology companies are being considered for potential buyout offers.
- Investor Opportunities: Investors may benefit financially when these buyout deals are officially announced.
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PagerDuty Director Plans to Sell $6.37 Million in Common Stock via Form 144
Stock Sale Announcement: Dan Alexander Rusolomon plans to sell 533,333 shares of PagerDuty common stock on January 15, with an estimated market value of approximately $6.37 million.
Reduction in Shareholding: Rusolomon has reduced his shareholding in PagerDuty by 266,667 shares since December 30, 2025, with a total value of around $3.56 million.
See More
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- Earnings Release Schedule: Precision Drilling plans to release its Q4 and year-end 2025 results after market close on February 11, 2026, which is expected to provide investors with critical financial data and operational performance insights.
- Conference Call Timing: The company has scheduled a conference call for February 12, 2026, at 11:00 a.m. MT (1:00 p.m. ET), allowing investors to register for a dial-in number and unique PIN to participate in Q&A.
- Webcast Availability: The conference call will be webcast, accessible via the company’s website, with a replay available until the next quarterly call is posted, ensuring transparency and accessibility of information for stakeholders.
- Company Background Information: Precision is a leading provider of energy industry services, featuring advanced digital technology Alpha™ and environmental solutions EverGreen™, committed to delivering efficient and predictable drilling services, thereby enhancing its competitive position in the industry.
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PagerDuty (PD) Earnings Estimates Revised Upward, Stock Price Expected to Continue Rising
- Earnings Outlook Improvement: PagerDuty is expected to report earnings of $0.24 per share for the current quarter, reflecting a 9.1% increase from the previous year, indicating sustained profitability that could drive stock price appreciation.
- Analyst Optimism: Over the past 30 days, earnings estimates for PagerDuty have surged by 225%, showcasing strong analyst confidence in the company's future performance, which is likely to positively influence investor sentiment.
- Strong Rating: PagerDuty has achieved a Zacks Rank #1 (Strong Buy), and historical data shows that stocks with this rating have averaged a 25% annual return since 2008, providing a compelling investment opportunity for shareholders.
- Positive Market Performance: The stock has gained 12% over the past four weeks, reflecting market optimism regarding its earnings growth prospects, prompting investors to consider adding it to their portfolios for potential gains.
See More
PagerDuty Under Investigation as Stock Drops Due to Customer Churn
- Customer Churn Trend: PagerDuty's November 25, 2025 earnings report revealed that while the number of customers churning and downgrading is decreasing, the dollar value of contraction due to seat-based reductions and cautious customer budgets has exceeded forecasts, negatively impacting financial performance.
- Guidance Revision: The company revised its full fiscal year guidance for 2026 in the same report, reflecting uncertainty about future revenues, which could lead to decreased investor confidence and increased stock volatility.
- Stock Price Reaction: Following this news, PagerDuty's stock price dropped, indicating market concerns regarding the company's future profitability, which may affect its financing capabilities and competitive position.
- Legal Investigation Initiated: Holzer & Holzer LLC is investigating whether PagerDuty complied with federal securities laws, and if violations are found, the company may face legal liabilities and further financial losses.
See More
PagerDuty Faces Valuation Gap Amid AI Market Divide
- Rating Downgrade Impact: RBC Capital downgraded PagerDuty from Outperform to Sector Perform and reduced its price target from $17 to $15, reflecting ongoing pressure from its seat-based business model and limited potential for margin expansion in the short term.
- Market Divide Phenomenon: Truist lowered PagerDuty's price target from $20 to $16 while maintaining a Buy rating, highlighting a sharp divide between AI market winners and losers, indicating potential valuation challenges for the company in the coming years.
- Industry Consolidation Expectations: Analysts anticipate further consolidation in the incident management market, posing a threat to PagerDuty's market position, especially as competition intensifies, which could impact its market share and profitability.
- Investment Potential Assessment: While PagerDuty is viewed as an investment opportunity among small-cap tech stocks, analysts suggest that certain AI stocks offer greater upside potential and lower downside risk, urging investors to carefully evaluate risks and rewards in their portfolios.
See More
Upcoming Tech Acquisitions: 6 Stocks Poised to Gain.
- Potential Buyout Candidates: A number of technology companies are being considered for potential buyout offers.
- Investor Opportunities: Investors may benefit financially when these buyout deals are officially announced.
See More
PagerDuty Director Plans to Sell $6.37 Million in Common Stock via Form 144
Stock Sale Announcement: Dan Alexander Rusolomon plans to sell 533,333 shares of PagerDuty common stock on January 15, with an estimated market value of approximately $6.37 million.
Reduction in Shareholding: Rusolomon has reduced his shareholding in PagerDuty by 266,667 shares since December 30, 2025, with a total value of around $3.56 million.
See More
Precision Drilling Schedules Q4 2025 Earnings Release and Conference Call
- Earnings Release Schedule: Precision Drilling plans to release its Q4 and year-end 2025 results after market close on February 11, 2026, which is expected to provide investors with critical financial data and operational performance insights.
- Conference Call Timing: The company has scheduled a conference call for February 12, 2026, at 11:00 a.m. MT (1:00 p.m. ET), allowing investors to register for a dial-in number and unique PIN to participate in Q&A.
- Webcast Availability: The conference call will be webcast, accessible via the company’s website, with a replay available until the next quarterly call is posted, ensuring transparency and accessibility of information for stakeholders.
- Company Background Information: Precision is a leading provider of energy industry services, featuring advanced digital technology Alpha™ and environmental solutions EverGreen™, committed to delivering efficient and predictable drilling services, thereby enhancing its competitive position in the industry.
See More
PagerDuty (PD) Earnings Estimates Revised Upward, Stock Price Expected to Continue Rising
- Earnings Outlook Improvement: PagerDuty is expected to report earnings of $0.24 per share for the current quarter, reflecting a 9.1% increase from the previous year, indicating sustained profitability that could drive stock price appreciation.
- Analyst Optimism: Over the past 30 days, earnings estimates for PagerDuty have surged by 225%, showcasing strong analyst confidence in the company's future performance, which is likely to positively influence investor sentiment.
- Strong Rating: PagerDuty has achieved a Zacks Rank #1 (Strong Buy), and historical data shows that stocks with this rating have averaged a 25% annual return since 2008, providing a compelling investment opportunity for shareholders.
- Positive Market Performance: The stock has gained 12% over the past four weeks, reflecting market optimism regarding its earnings growth prospects, prompting investors to consider adding it to their portfolios for potential gains.
See More
PagerDuty Under Investigation as Stock Drops Due to Customer Churn
- Customer Churn Trend: PagerDuty's November 25, 2025 earnings report revealed that while the number of customers churning and downgrading is decreasing, the dollar value of contraction due to seat-based reductions and cautious customer budgets has exceeded forecasts, negatively impacting financial performance.
- Guidance Revision: The company revised its full fiscal year guidance for 2026 in the same report, reflecting uncertainty about future revenues, which could lead to decreased investor confidence and increased stock volatility.
- Stock Price Reaction: Following this news, PagerDuty's stock price dropped, indicating market concerns regarding the company's future profitability, which may affect its financing capabilities and competitive position.
- Legal Investigation Initiated: Holzer & Holzer LLC is investigating whether PagerDuty complied with federal securities laws, and if violations are found, the company may face legal liabilities and further financial losses.
See More
