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

Key Points

• PagerDuty shares gapped up after the company reported stronger-than-expected quarterly results, opening at $9.33 versus the prior close of $7.44.
• The company posted adjusted EPS of $0.32, topping the $0.24 consensus, while revenue came in at $120.97 million, slightly above estimates. PagerDuty also said its Q2 guidance for EPS and revenue was above expectations.
• PagerDuty’s board authorized a $100 million share repurchase program, covering up to 16.4% of outstanding shares, a move that signals management believes the stock may be undervalued.

PagerDuty (NYSE:PD - Get Free Report)'s share price gapped up prior to trading 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 trading hands.

The company reported $0.32 earnings per share for the quarter, beating the consensus estimate of $0.24 by $0.08. PagerDuty had a net margin of 35.30% and a return on equity of 16.29%. The business had revenue of $120.97 million for the quarter, compared to analyst estimates of $119.52 million. During the same period in the prior year, the business posted $0.24 earnings per share. PagerDuty's revenue was up 1.0% compared to the same quarter last year. 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 authorizes the company to repurchase $100.00 million in outstanding shares. This repurchase authorization authorizes the company to buy up to 16.4% of its shares through open market purchases. Shares repurchase plans are usually a sign that the company's management believes its stock is undervalued.

More PagerDuty News

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

Wall Street Analysts Forecast Growth

Several research firms recently weighed in on PD. Weiss Ratings reissued a "sell (d)" rating on shares of PagerDuty in a research note on Friday, May 22nd. Morgan Stanley set a $9.00 price objective on shares of PagerDuty in a research report on Thursday, February 19th. William Blair reiterated a "market perform" rating on shares of PagerDuty in a report on Friday, March 13th. Royal Bank Of Canada reiterated a "sector perform" rating and issued a $9.00 price target on shares of PagerDuty in a report on Friday. Finally, Wall Street Zen lowered shares of PagerDuty from a "buy" rating to a "hold" rating in a report on Monday. Three analysts have rated the stock with a Buy rating, six have issued a Hold rating and three have issued a Sell rating to the company's stock. According to data from MarketBeat, the company has an average rating of "Hold" and an average price target of $11.89.

Institutional Investors Weigh In On PagerDuty

Hedge funds and other institutional investors have recently made changes to their positions in the stock. EverSource Wealth Advisors LLC increased its position in shares of PagerDuty by 252.0% during the 3rd quarter. EverSource Wealth Advisors LLC now owns 1,605 shares of the company's stock worth $27,000 after purchasing an additional 1,149 shares during the last quarter. Aster Capital Management DIFC Ltd acquired a new position in PagerDuty in the third quarter valued at about $59,000. WealthCollab LLC purchased a new position in PagerDuty during the first quarter worth about $25,000. KBC Group NV boosted its stake in PagerDuty by 89.5% during the fourth quarter. KBC Group NV now owns 4,402 shares of the company's stock worth $58,000 after buying an additional 2,079 shares during the period. Finally, PNC Financial Services Group Inc. lifted its holdings in shares of PagerDuty by 1,219.9% in the 1st quarter. PNC Financial Services Group Inc. now owns 4,976 shares of the company's stock worth $31,000 after acquiring an additional 4,599 shares during the last quarter. Institutional investors and hedge funds own 97.26% of the company's stock.

PagerDuty Stock Performance

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 stock has a market capitalization of $771.37 million, a price-to-earnings ratio of 4.93, a price-to-earnings-growth ratio of 3.19 and a beta of 0.78. The firm's fifty day moving average price is $6.66 and its 200 day moving average price is $9.43.

About PagerDuty

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.

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