In an era where seamless digital experiences are paramount, PagerDuty, Inc. is revolutionizing operational efficiency across industries. By harnessing advanced machine learning techniques, this innovative software company transforms data signals into actionable insights, ensuring businesses can preemptively address issues before they escalate. With a strong reputation for quality and a robust platform serving diverse sectors from technology to telecommunications, PagerDuty’s potential for growth raises an essential question: do its fundamentals still justify its current market valuation?
Table of contents
Company Description
PagerDuty, Inc. is a prominent player in the software application industry, founded in 2009 and headquartered in San Francisco, California. The company offers a comprehensive digital operations management platform that integrates data signals from various software systems, utilizing advanced machine learning to identify opportunities and address issues proactively. PagerDuty operates primarily in the United States and Japan, serving diverse sectors including technology, telecommunications, retail, and financial services. With a market capitalization of approximately $1.13B, the company has established itself as a leader in operational efficiency and incident response solutions, positioning itself strategically as a vital component in the evolving landscape of digital operations management and enterprise resilience.
Fundamental Analysis
In this section, I will analyze PagerDuty, Inc.’s income statement, financial ratios, and dividend payout policy to assess its financial health and investment potential.
Income Statement
Below is the income statement for PagerDuty, Inc. (PD), detailing the company’s financial performance over the last few fiscal years.
| Item | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | 214M | 281M | 371M | 431M | 467M |
| Cost of Revenue | 31M | 48M | 70M | 78M | 80M |
| Operating Expenses | 249M | 335M | 430M | 449M | 448M |
| Gross Profit | 183M | 233M | 300M | 353M | 388M |
| EBITDA | -58M | -93M | -107M | -53M | -12M |
| EBIT | -64M | -103M | -126M | -73M | -32M |
| Interest Expense | 10M | 5M | 5M | 6M | 9M |
| Net Income | -69M | -107M | -129M | -82M | -43M |
| EPS | -0.87 | -1.27 | -1.46 | -0.89 | -0.59 |
| Filing Date | 2021-03-19 | 2022-03-17 | 2023-03-16 | 2024-03-18 | 2025-03-17 |
Interpretation of Income Statement
Over the past four years, PagerDuty has shown a consistent upward trend in revenue, increasing from 214M in 2021 to 467M in 2025. However, the net income remains negative, albeit improving from -69M in 2021 to -43M in 2025, indicating a reduction in losses. The gross profit margin has shown stability, but EBITDA remains in the negative, suggesting ongoing operational challenges. In the most recent fiscal year, while revenue growth appears robust, the company is still grappling with high operating expenses, which have slightly decreased, hinting at potential efficiency improvements.
Financial Ratios
The table below summarizes the financial ratios for PagerDuty, Inc. (Ticker: PD) across the last available years.
| Metrics | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Net Margin | -32.26% | -38.19% | -34.85% | -18.98% | -9.14% |
| ROE | -18.79% | -40.25% | -53.63% | -47.64% | -32.92% |
| ROIC | -9.91% | -17.30% | -23.26% | -14.81% | -10.07% |
| P/E | -58.49 | -25.97 | -20.45 | -26.75 | -39.87 |
| P/B | 10.99 | 10.45 | 10.97 | 12.74 | 13.12 |
| Current Ratio | 3.70 | 2.84 | 2.21 | 2.50 | 1.87 |
| Quick Ratio | 3.70 | 2.84 | 2.21 | 2.50 | 1.87 |
| D/E | 0.68 | 1.15 | 1.25 | 2.69 | 3.57 |
| Debt-to-Assets | 31.35% | 38.15% | 36.87% | 49.82% | 50.00% |
| Interest Coverage | -6.65 | -18.84 | -23.81 | -14.81 | -6.46 |
| Asset Turnover | 0.27 | 0.35 | 0.45 | 0.47 | 0.50 |
| Fixed Asset Turnover | 5.72 | 7.32 | 11.45 | 20.11 | 16.61 |
| Dividend Yield | 0% | 0% | 0% | 0% | 0% |
Interpretation of Financial Ratios
Analyzing PagerDuty, Inc.’s financial ratios for FY 2025 reveals several concerning aspects of its financial health. The liquidity ratios indicate a current ratio of 1.87, which suggests adequate short-term liquidity, yet the quick ratio matches this, indicating reliance on inventory that is nonexistent. Solvency is troubling with a solvency ratio of -0.028 and a debt-to-equity ratio of 3.57, highlighting significant leverage risk. Profitability remains weak, with a net profit margin of -9.14% and an operating profit margin of -12.79%. The efficiency ratios also show mixed results, with a receivables turnover of 4.35 but an inventory turnover of 0. Overall, while liquidity appears acceptable, concerns about solvency and profitability present significant risks.
Evolution of Financial Ratios
Over the past five years, PagerDuty’s financial ratios have shown a decline in profitability, with net profit margins consistently negative and a deteriorating solvency ratio. Liquidity ratios have fluctuated, but the current ratio has generally remained above 1, which is a positive sign amidst the ongoing challenges.
Distribution Policy
PagerDuty, Inc. does not pay dividends, reflecting its focus on reinvestment for growth and innovation during a high-growth phase. The absence of dividend payouts aligns with a strategy aimed at maximizing long-term shareholder value through investments in R&D and potential acquisitions. Additionally, the company engages in share buybacks, which can enhance shareholder value by reducing the number of outstanding shares. Overall, this distribution approach appears to support sustainable long-term value creation for shareholders.
Sector Analysis
PagerDuty, Inc. operates within the Software – Application industry, providing a robust digital operations management platform that leverages machine learning to optimize operational efficiency across various sectors.
Strategic Positioning
PagerDuty, Inc. holds a significant position in the digital operations management market, with a market cap of approximately $1.13B. The company has carved out a solid market share with its advanced platform that leverages machine learning to optimize operational efficiencies. However, competitive pressure from emerging software applications and established players in the sector raises the stakes. Additionally, the rapid pace of technological disruption necessitates continuous innovation to maintain relevance and leadership. As of now, PagerDuty’s beta of 0.687 indicates a relatively stable stock performance compared to the market, reflecting cautious investor sentiment amid these challenges.
Key Products
Below is a table highlighting the key products offered by PagerDuty, Inc., which play a crucial role in their digital operations management platform.
| Product | Description |
|---|---|
| Incident Response | A tool that allows teams to manage and respond to incidents in real-time, ensuring minimal downtime and enhanced operational efficiency. |
| Event Intelligence | This feature aggregates data from various sources, utilizing machine learning to identify patterns and predict potential issues before they escalate. |
| Automation | Automates repetitive tasks and workflows, helping teams to focus on higher-impact activities and reducing manual errors in incident management. |
| On-Call Management | A scheduling tool that helps organizations manage on-call rotations effectively, ensuring that the right team members are always available for incident resolution. |
| Analytics and Reporting | Provides insights and metrics on incident management performance, helping organizations to refine processes and improve service reliability over time. |
These products collectively enhance PagerDuty’s ability to deliver a comprehensive digital operations management solution, addressing the needs of various industries effectively.
Main Competitors
The competitive landscape for PagerDuty, Inc. includes several notable companies in the software application sector. Below is a table of the main competitors, including PagerDuty, sorted by descending market cap:
| Company | Market Cap |
|---|---|
| Jamf Holding Corp. | 1.73B |
| Lightspeed Commerce Inc. | 1.58B |
| Amplitude, Inc. | 1.49B |
| MeridianLink, Inc. | 1.48B |
| Karooooo Ltd. | 1.46B |
| PAR Technology Corporation | 1.39B |
| Adeia Inc. | 1.37B |
| PagerDuty, Inc. | 1.13B |
| Kodiak AI, Inc. Common Stock | 1.09B |
| Alight, Inc. | 1.08B |
| Porch Group, Inc. | 986M |
The main competitors of PagerDuty, Inc. highlight a robust market environment primarily in the United States, with companies engaged in various sectors of software applications. Each competitor brings unique offerings that may appeal to different customer segments within this growing industry.
Competitive Advantages
PagerDuty, Inc. boasts a robust competitive edge through its advanced digital operations management platform, which utilizes machine learning to analyze data from various software systems. This capability allows businesses to predict and resolve operational issues efficiently, appealing to a diverse range of industries. Looking ahead, PagerDuty is well-positioned for growth with plans to expand into new markets and enhance its product offerings. The ongoing trend towards digital transformation presents significant opportunities for the company to capture additional market share and solidify its leadership in the software application sector.
SWOT Analysis
The purpose of this analysis is to evaluate the key internal and external factors that could impact PagerDuty, Inc.’s strategic position.
Strengths
- strong market presence
- advanced machine learning capabilities
- diverse industry applications
Weaknesses
- no dividend payouts
- reliance on software industry
- high competition
Opportunities
- expansion into new markets
- increasing demand for digital operations management
- potential partnerships with major tech firms
Threats
- economic downturns
- cybersecurity threats
- rapid technological changes
Overall, PagerDuty, Inc. possesses significant strengths and opportunities that can be leveraged for growth. However, the company must remain vigilant of its weaknesses and external threats to maintain a competitive edge in the rapidly evolving technology landscape.
Stock Analysis
Over the past year, PagerDuty, Inc. (ticker: PD) has experienced significant price fluctuations, characterized by a pronounced bearish trend, particularly evident in its recent trading dynamics.
Trend Analysis
Analyzing the stock over the past 12 months, PagerDuty’s price has decreased by approximately -53.18%. This sharp decline indicates a clear bearish trend, with the stock’s movement exhibiting deceleration in its downward trajectory. Notably, the highest price recorded was 26.23, while the lowest was 12.0. The standard deviation of 3.02 reflects a moderate level of volatility in the stock’s price movements.
Volume Analysis
In the last three months, the total trading volume for PagerDuty has reached 833.91M shares, with seller-driven activity dominating at 466.84M shares compared to buyer volume of 361.90M shares, translating to a buyer percentage of 43.4%. It’s important to note that the volume trend is increasing, which suggests heightened market participation. However, the recent period shows a buyer dominance of only 29.1%, indicating a seller-dominant environment and reflecting cautious investor sentiment.
Analyst Opinions
Recent analyst recommendations for PagerDuty, Inc. (PD) indicate a consensus to buy. Analysts have highlighted the company’s strong financial metrics, particularly noting its impressive return on equity and return on assets, both scoring 5. With an overall score of 4 and a discounted cash flow score also rated at 5, the outlook appears favorable. Notably, the A- rating reflects confidence in PagerDuty’s growth potential and sound management of debt, which scored a 1. As an investor, I remain cautiously optimistic about this stock for the current year.
Stock Grades
PagerDuty, Inc. (ticker: PD) has garnered attention from several reputable grading companies, providing insights into its current market position.
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| RBC Capital | Maintain | Outperform | 2025-11-26 |
| Craig-Hallum | Downgrade | Hold | 2025-11-26 |
| Morgan Stanley | Maintain | Equal Weight | 2025-11-26 |
| TD Cowen | Maintain | Buy | 2025-11-26 |
| Truist Securities | Maintain | Buy | 2025-11-19 |
| Baird | Maintain | Neutral | 2025-09-04 |
| Canaccord Genuity | Maintain | Buy | 2025-09-04 |
| RBC Capital | Maintain | Outperform | 2025-09-04 |
| Canaccord Genuity | Maintain | Buy | 2025-06-02 |
| Truist Securities | Maintain | Buy | 2025-05-30 |
Overall, the trend in grades for PagerDuty indicates a mix of stability and caution. While several firms maintain their positive outlook with ratings like “Outperform” and “Buy,” the downgrade from Craig-Hallum to “Hold” suggests a need for investors to monitor the stock closely.
Target Prices
According to the latest consensus from analysts, PagerDuty, Inc. has established target prices reflecting a range of expectations.
| Target High | Target Low | Consensus |
|---|---|---|
| 19 | 15 | 16.75 |
Overall, analysts anticipate that PagerDuty’s stock will hover around a consensus target of 16.75, indicating a moderate growth outlook.
Consumer Opinions
Consumer sentiment around PagerDuty, Inc. (PD) reflects a mix of satisfaction and concerns, showcasing both their strengths and areas for improvement.
| Positive Reviews | Negative Reviews |
|---|---|
| “Excellent customer support, always available!” | “The pricing model can be confusing.” |
| “User-friendly interface makes incident management easy.” | “Occasional bugs disrupt service continuity.” |
| “Great integration with other tools, very efficient!” | “Limited customization options for reports.” |
Overall, consumer feedback indicates that while PagerDuty excels in customer support and usability, users frequently express frustration with pricing clarity and occasional technical issues.
Risk Analysis
In assessing PagerDuty, Inc. (PD), it’s crucial to understand the various risks that could impact its performance. Below is a table summarizing key risks to consider.
| Category | Description | Probability | Impact |
|---|---|---|---|
| Market Volatility | Fluctuations in market conditions affecting share price. | High | High |
| Competition | Increasing competition from new and established players in the IT service management sector. | Medium | High |
| Regulatory Changes | Potential changes in regulations that could affect operational costs and compliance. | Medium | Medium |
| Technology Risk | Risks associated with software outages or cyber threats impacting service reliability. | High | High |
| Economic Downturn | A recession could reduce customer spending on IT services. | Medium | High |
In summary, the most significant risks for PagerDuty involve market volatility and technology risks, which can substantially affect both its stock performance and operational integrity.
Should You Buy PagerDuty, Inc.?
PagerDuty, Inc. exhibits significant challenges in profitability, with a reported net income of -43.54M in FY 2025, indicating ongoing financial struggles. The company’s return on invested capital (ROIC) of -10.07% is notably below the weighted average cost of capital (WACC) of 6.02%, suggesting value destruction and a lack of effective capital utilization. Furthermore, PagerDuty maintains a considerable debt load, with a total debt of 463.65M, resulting in a debt-to-equity ratio of 4.10, which may imply elevated financial risk. The overall rating is A-, which could be interpreted as a mixed signal regarding its investment potential.
Favorable signals
I have identified several favorable elements in the data for PagerDuty, Inc. The revenue growth stands at 8.54%, indicating a positive trend in sales. Additionally, the gross margin is high at 82.96%, which suggests strong profitability on sales. The company has also shown an impressive gross profit growth of 9.91% and a significant EBIT growth of 55.46%. Furthermore, the interest expense as a percentage of revenue is favorable at 1.98%, and the recent EPS growth is notable at 33.71%. Lastly, the current ratio and quick ratio are both favorable at 1.87, suggesting good short-term liquidity.
Unfavorable signals
Despite the favorable elements, there are significant unfavorable signals present. The net margin is negative at -9.14%, indicating that the company is not currently profitable after accounting for all expenses. Additionally, the EBIT margin is unfavorable at -6.95%. The return on equity (ROE) is also negative at -32.92%, and the return on invested capital (ROIC) is unfavorable at -10.07%, indicating value destruction. The company has a debt-to-equity ratio of 3.57 and a debt-to-assets ratio of 50%, which are both concerning. The price-to-book ratio stands at 13.12, and the interest coverage ratio is unfavorable at -3.51, further illustrating the company’s financial challenges.
Conclusion
Considering the overall favorable opinion from the income statement but the unfavorable evaluation of the ratios, it appears that the company may face challenges ahead. Additionally, the long-term trend is bearish, and recent seller volume exceeds buyer volume, suggesting that it might be prudent to wait for buyers to return before making any investment decisions.
Disclaimer: This article is not financial advice. Each investor is responsible for their own investment decisions.
Additional Resources
- PagerDuty’s (NYSE:PD) Earnings Are Weaker Than They Seem – Yahoo Finance (Dec 03, 2025)
- Securities Fraud Investigation Into PagerDuty, Inc. (PD) Announced – Shareholders Who Lost Money Urged To Contact Glancy Prongay & Murray LLP, a Leading Securities Fraud Law Firm – Business Wire (Dec 04, 2025)
- PD ALERT: Levi & Korsinsky Investigates PagerDuty, Inc. for Possible Securities Fraud Violations – ACCESS Newswire (Dec 05, 2025)
- Securities Fraud Investigation Into PagerDuty, Inc. (PD) Announced – Shareholders Who Lost Money Urged to Contact The Law Offices of Frank R. Cruz – The AI Journal (Dec 04, 2025)
- PagerDuty, Inc. (NYSE:PD) Not Doing Enough For Some Investors As Its Shares Slump 25% – Sahm (Nov 30, 2025)
For more information about PagerDuty, Inc., please visit the official website: pagerduty.com
