How PagerDuty’s (PD) Return to Profitability and New CRO Could Reshape Its Growth Trajectory

• PagerDuty, Inc. announced the appointment of Todd McNabb as Chief Revenue Officer and reported its second quarter earnings, showing positive net income and increased revenue, along with updated guidance for the rest of fiscal 2026.
• An important detail is that the company achieved profitability in the quarter and hired an executive with extensive experience in driving revenue growth across enterprise organizations.
• We'll explore how PagerDuty's recent return to profitability and leadership change could influence its longer-term growth outlook and investment narrative.

Find companies with promising cash flow potential yet trading below their fair value.

PagerDuty Investment Narrative Recap

To own PagerDuty shares, you need conviction that recurring demand for cloud incident management and automation will ultimately outpace mounting competitive and pricing pressures. The recent return to profitability and the hire of an experienced CRO could help strengthen execution and reduce risk around the company’s shift to usage-based pricing, which remains the biggest short-term catalyst and risk; so far, this news is positive but not material enough to offset these challenges.

Among recent announcements, PagerDuty’s earnings update is most relevant here, reporting its first profitable quarter and continuing revenue growth. This progress offers execution momentum as the company navigates pricing model changes and customer seat optimization, both of which are closely tied to its investment story.

Yet, on the other hand, investors should be keenly aware of ongoing risk as automation adoption may structurally reduce the need for core incident management platforms like...

Read the full narrative on PagerDuty (it's free!)

PagerDuty's narrative projects $572.1 million in revenue and $74.9 million in earnings by 2028. This requires 6.3% yearly revenue growth and a $111.8 million increase in earnings from a current level of -$36.9 million.

Uncover how PagerDuty's forecasts yield a $19.14 fair value, a 16% upside to its current price.

Exploring Other Perspectives

Three fair value estimates from the Simply Wall St Community range from US$19.14 to US$26.88 per share. While community expectations differ, the move to usage-based pricing could introduce revenue volatility and weigh on near-term performance, inviting you to consider multiple viewpoints.

Explore 3 other fair value estimates on PagerDuty - why the stock might be worth as much as 63% more than the current price!

Build Your Own PagerDuty Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your PagerDuty research is our analysis highlighting 4 key rewards that could impact your investment decision.
• Our free PagerDuty research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate PagerDuty's overall financial health at a glance.

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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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