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

Key Points

• PagerDuty beat quarterly expectations: Fiscal Q2 2027 adjusted EPS came in at $0.32 versus the $0.31 consensus, while revenue reached $124.44 million, up 0.8% year over year and above estimates.
• Profitability outlook and shareholder returns improved: Fiscal 2027 EPS guidance of $1.33–$1.37 exceeds analyst expectations, and the board approved a $100 million share-repurchase program covering up to 16.4% of shares.
• Cost reductions remain a concern: PagerDuty plans to cut roughly 15% of its workforce, potentially supporting margins but raising questions about execution and future growth; analysts collectively maintain a “Hold” rating with an average $12.94 price target.

Shares of PagerDuty (NYSE:PD - Get Free Report) gapped up prior to trading on Friday following a stronger than expected earnings report. The stock had previously closed at $12.63, but opened at $13.09. PagerDuty shares last traded at $13.59, with a volume of 362,996 shares trading hands.

The company reported $0.32 earnings per share for the quarter, beating the consensus estimate of $0.31 by $0.01. The firm had revenue of $124.44 million during the quarter, compared to analyst estimates of $123.27 million. PagerDuty had a net margin of 38.60% and a return on equity of 18.20%. The firm's revenue for the quarter was up .8% compared to the same quarter last year. During the same quarter in the previous year, the firm earned $0.30 earnings per share. PagerDuty has set its FY 2027 guidance at 1.330-1.370 EPS and its Q3 2027 guidance at 0.340-0.360 EPS.

PagerDuty declared that its board has approved a stock buyback plan on Thursday, May 28th that allows the company to repurchase $100.00 million in shares. This repurchase authorization allows the company to repurchase up to 16.4% of its shares through open market purchases. Shares repurchase plans are generally a sign that the company's board believes its stock is undervalued.

Key Headlines Impacting PagerDuty

Here are the key news stories impacting PagerDuty this week:

• Positive Sentiment: Quarterly results topped estimates. PagerDuty reported fiscal Q2 2027 adjusted earnings of $0.32 per share, versus the $0.31 consensus, while revenue of $124.44 million exceeded expectations of $123.27 million. Revenue rose 0.8% year over year. PagerDuty Announces Second Quarter Fiscal 2027 Financial Results
• Positive Sentiment: Recurring revenue and cash flow showed progress. Management said annual recurring revenue surpassed $500 million and free cash flow reached $33 million, suggesting improving monetization and financial discipline. PagerDuty Q2 2027 Earnings Call Transcript
• Positive Sentiment: Profit guidance was raised relative to consensus. Fiscal 2027 EPS guidance of $1.33–$1.37 is well above the $1.17 analyst estimate. Third-quarter EPS guidance of $0.34–$0.36 also exceeds the $0.31 consensus, supporting the case for stronger margins and earnings leverage. PagerDuty forecasts Q3 FY2027 operating margin
• Neutral Sentiment: Revenue expectations remain conservative. Fiscal 2027 revenue guidance of $491.5–$496.5 million is broadly in line with the $493.2 million consensus, while Q3 guidance of $123–$125 million is close to estimates. This indicates that the main upside case is profitability rather than accelerating sales growth.
• Negative Sentiment: PagerDuty plans to cut approximately 15% of its workforce. The restructuring may improve operating margins, with Q3 margin guidance of 26.5%–27.5%, but it also signals cost pressure and could raise concerns about execution, employee disruption, and future growth capacity. PagerDuty to cut about 15 percent of workforce

Wall Street Analyst Weigh In

Several equities research analysts recently weighed in on the stock. Weiss Ratings upgraded shares of PagerDuty from a "sell (d+)" rating to a "hold (c-)" rating in a research note on Friday, August 21st. UBS Group set a $13.50 target price on PagerDuty in a research note on Wednesday. Truist Financial upped their target price on PagerDuty from $11.00 to $13.00 and gave the company a "buy" rating in a report on Thursday, August 20th. TD Cowen reiterated a "buy" rating on shares of PagerDuty in a research report on Wednesday. Finally, Morgan Stanley raised their price target on PagerDuty from $9.00 to $10.00 and gave the stock an "underweight" rating in a report on Friday. Three investment analysts have rated the stock with a Buy rating, six have given a Hold rating and two have given a Sell rating to the company. According to data from MarketBeat.com, the company presently has an average rating of "Hold" and an average price target of $12.94.

Institutional Inflows and Outflows

Hedge funds and other institutional investors have recently bought and sold shares of the company. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. increased its stake in shares of PagerDuty by 1.3% in the first quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 51,601 shares of the company's stock valued at $943,000 after purchasing an additional 671 shares during the period. California State Teachers Retirement System boosted its position in shares of PagerDuty by 1.4% during the second quarter. California State Teachers Retirement System now owns 81,474 shares of the company's stock worth $1,245,000 after buying an additional 1,129 shares during the period. ProShare Advisors LLC boosted its position in shares of PagerDuty by 11.8% during the fourth quarter. ProShare Advisors LLC now owns 16,324 shares of the company's stock worth $214,000 after buying an additional 1,720 shares during the period. Loomis Sayles & Co. L P grew its holdings 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 worth $14,329,000 after buying an additional 3,276 shares in the last quarter. Finally, Alliancebernstein L.P. grew its holdings in PagerDuty by 4.1% in the 3rd quarter. Alliancebernstein L.P. now owns 95,302 shares of the company's stock worth $1,574,000 after buying an additional 3,784 shares in the last quarter. 97.26% of the stock is owned by institutional investors and hedge funds.

PagerDuty Price Performance

The company has a debt-to-equity ratio of 1.83, a quick ratio of 1.95 and a current ratio of 1.95. The firm has a market capitalization of $1.06 billion, a P/E ratio of 6.76, a price-to-earnings-growth ratio of 3.13 and a beta of 0.93. The business has a fifty day moving average of $10.57 and a 200-day moving average of $8.40.

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.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.

Continue following MarketBeat

Add MarketBeat as your preferred source on Google to see our latest stories in your feed.

Add As Preferred Source