PagerDuty (PD) has been upgraded to a Zacks Rank #2 (Buy), reflecting growing optimism about the company's earnings prospects. This might drive the stock higher in the near term.
PD's second-quarter fiscal 2025 results benefit from an expanding customer base. However, weak top-line guidance negatively impacts share price.
Two cloud-related stocks are putting pressure on the sector today.
U.S. stock futures were lower this morning, with the Nasdaq futures dipping over 100 points on Wednesday.
PagerDuty's Q2 FY25 earnings report shows stabilization in customer metrics and revenue, leading to an upgrade from Sell to Hold. The company reported a 7.8% y/y revenue increase to $116 million, with ARR growing 10% y/y, indicating potential growth in H2 FY25. Management's cost control measures improved operating margins by 400 basis points, with adjusted operating margins reaching 17.3% in Q2.
PagerDuty, Inc. (NYSE:PD ) Q2 2025 Earnings Conference Call September 3, 2024 5:00 PM ET Company Participants Tony Righetti - VP, IR Jennifer Tejada - CEO Howard Wilson - CFO Conference Call Participants Sanjit Singh - Morgan Stanley Koji Ikeda - Bank of America Securities Jacob Roberge - William Blair Andrew Sherman - TD Cowen Jeff Van Rhee - Craig Hallum Kingsley Crane - Canaccord Genuity John Gomez - Scotiabank Operator Good afternoon, folks. Sorry for the delay.
PagerDuty (PD) came out with quarterly earnings of $0.21 per share, beating the Zacks Consensus Estimate of $0.16 per share. This compares to earnings of $0.19 per share a year ago.
The CFO says deals could take longer to close and smaller businesses are still “a headwind to growth.”
PagerDuty has significantly underperformed the market, with shares down over 42% in the past five years. Recent quarters have shown slowing revenue growth rates, with pressure on management to deliver an acceleration in coming periods. Ark Invest's significant ownership in PagerDuty could put additional pressure on shares if Cathie Wood decides to start selling.
Roku continues to gain more users in the crowded streaming market. Roblox is still dominating its growing niche of the gaming market.
Positive on PagerDuty with growth potential once the macro environment improves. PD offers a strong value proposition to organizations with regard to IT incident management. PD addresses a huge TAM and with its new products, I see potential for growth acceleration in the future.
Wood bought shares of PagerDuty for her Ark Invest funds every trading day last month. Growth has slowed at PagerDuty over the past two years, but it's expected to return to accelerating revenue gains later this year.