PagerDuty (PD) Valuation Check After Securities Law Probe and Guidance Cut Spurs Investor Reassessment
PagerDuty (PD) is back in the spotlight after law firm Levi & Korsinsky launched an investigation into potential securities law violations, following the company’s disclosure of weaker customer retention and trimmed full year revenue guidance.
See our latest analysis for PagerDuty.
The share price has slid to about $13.04 after a 23.7% drop on November 26. That weak reaction lines up with a 1 year total shareholder return of roughly minus 29%, suggesting momentum is clearly fading as investors reassess growth and risk.
If this kind of reset has you rethinking your exposure to SaaS names, it could be worth scanning high growth tech and AI stocks for other growth plays where sentiment and execution are still better aligned.
With the stock now trading at a steep discount to both its history and analyst targets, investors have to ask whether pessimism has overshot fundamentals or whether the current price already reflects muted growth from here.
Most Popular Narrative: 22.1% Undervalued
Against a last close of $13.04, the most popular narrative pegs PagerDuty’s fair value at $16.75, framing today’s sell off as a potential mispricing.
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 sets the stage to reaccelerate ARR growth and improve net retention as automation reduces per seat dependency.
Curious how modest revenue growth, shifting margins, and a richer future earnings multiple can still justify upside from here? The full narrative unpacks the math behind that conviction.
Result: Fair Value of $16.75 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, persistent seat optimization, customer downgrades, and monetization risk from the shift to usage based pricing could easily derail that upside 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 stress test the assumptions with your own inputs, you can build a custom view in 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.
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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.
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