PagerDuty (PD): Examining Valuation as Shares Close Up 3% After Prolonged Decline

PagerDuty (PD) shares edged higher, closing at $12 after a 3% daily gain. Investors are watching the company’s valuation closely as the stock continues to trade at a significant discount based on recent performance trends.

See our latest analysis for PagerDuty.

PagerDuty’s share price has struggled to find positive momentum, posting a steep year-to-date decline along with a 1-year total shareholder return of -43.5%. While the latest pop hints at renewed interest, performance over the past year reflects persistent challenges and shifting risk perceptions.

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With shares trading far below analyst targets and the company reporting only modest revenue growth, the key question becomes whether PagerDuty is genuinely undervalued right now, or if the market is already reflecting muted growth expectations.

Most Popular Narrative: 35.1% Undervalued

The most widely followed narrative values PagerDuty at a fair value well above its recent close price. This suggests that the company’s operational transformation may not yet be fully recognized by the market. According to this perspective, the next catalyst could shift sentiment rapidly.

The rapid growth in usage and complexity of digital infrastructure, especially within AI-native and large enterprise customers, alongside record platform utilization (over 25% year-over-year growth) points to rising demand for PagerDuty's core incident management and automation offerings. This can contribute to future recurring revenue as digital transformation accelerates globally.

Read the complete narrative.

Why is the current narrative so bullish? There is a combination of growth expectations, automation trends, and new pricing structures at play. Curious about the bold assumptions fueling this eye-catching valuation? Dive in to see how far analysts believe PagerDuty can go.

Result: Fair Value of $18.50 (UNDERVALUED)

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

However, ongoing seat optimization and the shift to usage-based pricing could limit growth and introduce new risks to PagerDuty’s bullish narrative.

Find out about the key risks to this PagerDuty narrative.

Build Your Own PagerDuty Narrative

If you see things differently or want to dig into the numbers yourself, it only takes a few minutes to craft your own view. Do it your way

A great starting point for your PagerDuty research is our analysis highlighting 4 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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