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    PagerDuty (PD) valuation update after earnings beat, raised guidance, and new AWS resilience competency win

    Simply Wall St·12/07/2025 17:17:46
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    PagerDuty (PD) just put together a stronger earnings story, lifting its full year profit and margin outlook while also securing a new AWS resilience competency that reinforces its role in mission critical cloud operations.

    See our latest analysis for PagerDuty.

    Even with the earnings beat and AWS resilience win, sentiment is still catching up. The 90 day share price return of minus 28.48 percent and 1 year total shareholder return of minus 42.27 percent show momentum has been weak despite improving fundamentals.

    If PagerDuty’s story has you rethinking where durable growth might come from next, it could be worth scanning high growth tech and AI stocks for other software and infrastructure names reshaping digital operations.

    With shares down sharply over the past year, yet trading at a steep intrinsic discount and below analyst targets, are investors overlooking PagerDuty’s improving cash generation, or is the market already pricing in limited future growth?

    Most Popular Narrative: 26.7% Undervalued

    PagerDuty's most followed narrative sees fair value at $16.75, well above the recent $12.28 close, framing a sizeable potential upside.

    The transition from seat-based to usage-based pricing models, validated by rapid growth in usage-based product lines (60%+ year-over-year) and strong initial customer feedback, aligns future topline growth more closely with actual customer value realization. This is expected to set the stage to reaccelerate ARR growth and improve net retention as automation reduces per-seat dependency.

    Read the complete narrative.

    Want to see the math behind that upside call? This narrative leans on a striking blend of modest revenue growth, shifting margins, and a bold future earnings multiple. Curious which assumptions really move the fair value dial here and how they compare with today’s weak share price performance? Dig into the full story to uncover the projections behind that premium target.

    Result: Fair Value of $16.75 (UNDERVALUED)

    Have a read of the narrative in full and understand what's behind the forecasts.

    However, this upside hinges on a smooth pricing transition and resilient demand, with competitive pressure and revenue volatility both capable of quickly undermining the bullish case.

    Find out about the key risks to this PagerDuty narrative.

    Build Your Own PagerDuty Narrative

    If you see the story differently or want to dig into the numbers yourself, you can build a custom view of PagerDuty in just a few minutes: Do it your way.

    A great starting point for your PagerDuty research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

    Looking for more investment ideas?

    Do not stop with a single stock story; use the Simply Wall Street Screener to uncover fresh, data driven opportunities aligned with the way you like to invest.

    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.