PagerDuty (NYSE:PD) Shares Gap Down – Here’s Why

Shares of PagerDuty (NYSE:PD) gapped down before the market opened on Wednesday . The stock had previously closed at $12.25, but opened at $11.75. PagerDuty shares last traded at $12.1480, with a volume of 82,531 shares trading hands.

Trending Headlines about PagerDuty

Here are the key news stories impacting PagerDuty this week:

• Positive Sentiment: Q2 results exceeded expectations: PagerDuty reported adjusted earnings of $0.32 per share, above consensus estimates of $0.30–$0.31 and matching the prior-year result. Revenue reached $124.44 million, ahead of the roughly $123.27 million consensus estimate. PagerDuty Announces Second Quarter Fiscal 2027 Financial Results
• Positive Sentiment: Profit guidance was raised above analyst expectations: Third-quarter fiscal 2027 EPS guidance of $0.34–$0.36 is above the $0.31 consensus estimate. Full-year EPS guidance of $1.33–$1.37 also exceeds the $1.17 consensus, signaling improved margin and cost discipline. PagerDuty Surpasses Q2 Earnings and Revenue Estimates
• Positive Sentiment: Cash generation and recurring revenue reached notable milestones: Management said annual recurring revenue surpassed $500 million and free cash flow totaled $33 million, supporting the company’s focus on sustainable, profitable growth. PagerDuty Announces Second Quarter Fiscal 2027 Financial Results
• Positive Sentiment: Analyst sentiment improved: TD Cowen maintained a Buy rating and raised its price target to $13.50 from $10, citing progress with PagerDuty’s usage-based model and an attractive valuation. PagerDuty Analyst Reaffirms Buy Rating and Raises Price Target
• Neutral Sentiment: Revenue expectations remain restrained: Third-quarter revenue guidance of $123 million–$125 million is broadly in line with the $124.2 million consensus, while full-year guidance of $491.5 million–$496.5 million is only modestly above the $493.2 million consensus midpoint.
• Negative Sentiment: Restructuring introduces execution risk: PagerDuty announced a restructuring while emphasizing profitable growth. Although the actions may improve efficiency, restructuring costs and potential disruption could weigh on near-term operations. PagerDuty Announces Restructuring Amid Focus on Profitable Growth

Analyst Ratings Changes

A number of research firms recently weighed in on PD. Royal Bank Of Canada lifted their price objective on shares of PagerDuty from $9.00 to $12.00 and gave the company a “sector perform” rating in a research note on Friday, August 14th. Weiss Ratings raised PagerDuty from a “sell (d+)” rating to a “hold (c-)” rating in a report on Friday, August 21st. Morgan Stanley cut PagerDuty from an “equal weight” rating to an “underweight” rating and reduced their price target for the company from $10.00 to $9.00 in a research report on Tuesday, July 21st. Wall Street Zen lowered PagerDuty from a “buy” rating to a “hold” rating in a research note on Saturday, July 25th. Finally, TD Cowen reissued a “buy” rating on shares of PagerDuty in a report on Wednesday. Three equities research analysts have rated the stock with a Buy rating, six have issued a Hold rating and two have given a Sell rating to the stock. Based on data from MarketBeat, the company presently has a consensus rating of “Hold” and a consensus price target of $12.28.

PagerDuty Trading Up 3.8%

The firm’s 50 day moving average is $10.57 and its 200 day moving average is $8.40. The company has a debt-to-equity ratio of 1.83, a current ratio of 1.95 and a quick ratio of 1.95. The company has a market cap of $976.26 million, a PE ratio of 6.21, a PEG ratio of 3.13 and a beta of 0.93.

PagerDuty (NYSE:PD) last posted its earnings results on Thursday, August 27th. The company reported $0.32 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.31 by $0.01. PagerDuty had a net margin of 38.60% and a return on equity of 18.20%. The business had revenue of $124.44 million for the quarter, compared to analysts’ expectations of $123.27 million. During the same period in the prior year, the company posted $0.30 EPS. The business’s revenue for the quarter was up .8% compared to the same quarter last year. PagerDuty has set its FY 2027 guidance at 1.330-1.370 EPS and its Q3 2027 guidance at 0.340-0.360 EPS. On average, equities analysts anticipate that PagerDuty will post 0.58 earnings per share for the current year.

PagerDuty announced that its Board of Directors has initiated a share buyback program on Thursday, May 28th that allows the company to repurchase $100.00 million in outstanding shares. This repurchase authorization allows the company to buy up to 16.4% of its stock through open market purchases. Stock repurchase programs are typically a sign that the company’s board believes its stock is undervalued.

Hedge Funds Weigh In On PagerDuty

Several hedge funds and other institutional investors have recently added to or reduced their stakes in the business. Corient Private Wealth LP bought a new position in PagerDuty in the 2nd quarter worth about $140,000. Amundi boosted its position in shares of PagerDuty by 15.9% during the 2nd quarter. Amundi now owns 55,346 shares of the company’s stock valued at $534,000 after acquiring an additional 7,596 shares during the last quarter. California State Teachers Retirement System grew its holdings in shares of PagerDuty by 930.3% during the second quarter. California State Teachers Retirement System now owns 835,034 shares of the company’s stock worth $86,532,000 after purchasing an additional 753,989 shares in the last quarter. Proficio Capital Partners LLC purchased a new position in shares of PagerDuty during the second quarter worth about $129,000. Finally, Hennessy Advisors Inc. purchased a new position in shares of PagerDuty during the second quarter worth about $176,000. 97.26% of the stock is currently owned by hedge funds and other institutional investors.

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.