Update shared on 04 Dec 2025
Fair value Decreased 9.46%Analysts reduced their price target on PagerDuty from approximately $18.50 to $16.75, reflecting more conservative assumptions around revenue growth, profit margins, and a higher future price-to-earnings multiple.
What's in the News
- PagerDuty achieved the Amazon Web Services Resilience Services Competency in the software category, becoming one of the first AWS Software Partners to earn this designation and validating its ability to support mission-critical, always-on workloads (Key Developments).
- The company launched what it calls the industry's first end to end AI agent suite, reporting up to 50% faster incident resolution, reduced on call fatigue, and more than 150 platform enhancements across its Fall 2025 release (Key Developments).
- New AI driven capabilities, including Scribe, Shift and Insights agents, along with deeper integrations with Slack, Microsoft Teams and Spotify Backstage, aim to embed automation and resilience directly into developer workflows (Key Developments).
- For the fourth quarter of fiscal 2026, PagerDuty guided to revenue of $122 million to $124 million, implying 0% to 2% growth, and net income per diluted share of $0.24 to $0.25 (Key Developments).
- PagerDuty raised its full year fiscal 2026 earnings outlook, now expecting revenue of $490 million to $492 million, about 5% growth, and net income per diluted share of $1.11 to $1.12, implying a 24% operating margin (Key Developments).
Valuation Changes
- Fair Value Estimate: reduced from $18.50 to $16.75, falling moderately to reflect more conservative assumptions.
- Discount Rate: increased slightly from 9.23% to about 9.52%, implying a marginally higher required return.
- Revenue Growth: lowered significantly from roughly 5.96% to about 3.89%, indicating a more muted growth outlook.
- Net Profit Margin: cut sharply from about 9.93% to roughly 3.65%, reflecting a more cautious view on long term profitability.
- Future P/E: raised substantially from about 43.4x to roughly 104.5x, signaling a higher assumed valuation multiple despite weaker fundamentals.
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