Core Insights - PagerDuty's market cap has fallen to approximately $1 billion, reflecting a valuation of about 2x its annual recurring revenue (ARR) of $500 million, indicating a significant decline in growth expectations despite achieving profitability [3][4][8] Financial Performance - PagerDuty reported an ARR of $497 million, representing a modest year-over-year growth of just 3% [4] - The company's net revenue retention (NRR) has dropped to 100%, indicating no expansion among existing customers [4][14] - The customer count has remained flat at around 15,400 for three years, suggesting challenges in acquiring new customers [4][16] Growth Challenges - The growth rate has slowed to approximately 4-5%, a stark contrast to previous rates of over 30% [4][15] - The decline in NRR from 139% at IPO to 100% today highlights a significant deterioration in customer expansion [11][14] - The competitive landscape has shifted, with larger platforms like Datadog and ServiceNow bundling incident management solutions, posing a threat to PagerDuty's market position [28][29] Market Valuation - Companies with higher growth rates (30%+) are trading at multiples of 10-15x ARR, while PagerDuty's low growth has resulted in a valuation of only 2-3x ARR [9][20] - The market is currently valuing PagerDuty at a level that reflects its slow growth, positioning it as a value stock rather than a growth stock [21][40] Strategic Considerations - PagerDuty is exploring a potential sale, indicating a shift in strategy as the board seeks to enhance shareholder value amid declining growth prospects [25] - The company has attempted to expand its total addressable market (TAM) through acquisitions and new product offerings, but these efforts have not yet translated into significant growth [48][49] Competitive Landscape - The emergence of new startups focused on incident management, which are more affordable and user-friendly, is intensifying competition for PagerDuty [30][32] - The overall market for incident management has matured, leading to challenges in sustaining growth for established players like PagerDuty [36][37]

Company Overview - PagerDuty, Inc. has been identified as one of the biggest losers in the market this week, indicating a significant decline in its stock performance [1]. Market Performance - The digital operations management platform has been described as one of the more disappointing stocks in the market so far, suggesting ongoing challenges in its market position [1].

Core Viewpoint - PagerDuty, Inc. has been identified as one of the biggest losers in the market this week, indicating significant disappointment in its stock performance [1]. Company Summary - PagerDuty is a digital operations management platform that has underperformed in the market, reflecting broader challenges within its sector [1]. Market Context - The article highlights the current market sentiment towards PagerDuty, suggesting that it is facing difficulties compared to its peers [1].

Core Insights - The company reported a successful financial year '24-'25 with a 4.3% like-for-like sales growth and a 5.8% operating profit growth despite facing unexpected costs related to National Insurance [1][2] - The company achieved the lowest team turnover and highest team engagement percentage, along with record guest review scores and a strong safety record, indicating a well-prepared business for future challenges [1] - The company acknowledges upcoming challenges due to high red meat costs but is actively working on mitigating these through its Ignite and capital programs, suggesting a temporary impact on growth [2] Financial Performance - The company delivered a 4.3% increase in like-for-like sales and a 5.8% increase in operating profit [1] - An unexpected GBP 11 million impact from National Insurance costs was noted in the second half of the year [1] - The company anticipates a reduction in debt service costs by GBP 130 million per annum as it approaches the years 2030 and 2031, positioning itself well for future opportunities [2] Operational Highlights - The company recorded the lowest team turnover and the highest team engagement percentage in its history [1] - Guest review scores reached an all-time high, reflecting improved customer satisfaction [1] - The remodel program yielded the highest return on investment ever, indicating effective capital allocation [1]

Core Insights - PagerDuty, Inc. shares dropped over 24% following the release of Q3 fiscal 2026 results, which exceeded earnings forecasts but fell short of revenue expectations, alongside a reduction in full-year sales outlook [1] Financial Performance - The company reported quarterly revenue of $124.5 million, representing a 4.7% year-over-year increase but below the consensus estimate of $125.41 million [2] - Adjusted EPS was $0.33, surpassing the expected $0.25, and the company achieved GAAP profitability for the second consecutive quarter with an operating income of $8.1 million [2] Guidance and Outlook - Full-year revenue guidance was revised down to $490 million to $492 million from a previous range of $493 million to $497 million, which is also below the consensus of $498 million [3] - The adjusted EPS forecast was raised to $1.11 to $1.12, exceeding expectations of $1.02 [3] - For Q4, PagerDuty anticipates revenue between $122 million and $124 million and adjusted EPS of $0.24 to $0.25 [4] Key Metrics - Annual Recurring Revenue (ARR) increased by 3% to $497 million [3] - The number of customers with over $100,000 in ARR grew by 5% to 867 [3] - Dollar-based net retention rate decreased to 100% from 107% a year prior [3]

Core Viewpoint - PagerDuty's stock experienced a significant decline of 25.7% following the release of its mixed Q3 earnings report, despite exceeding earnings expectations [1][2]. Financial Performance - PagerDuty reported an adjusted earnings per share of $0.33, surpassing analysts' expectations of $0.24, while sales were slightly below expectations at $124.5 million compared to the anticipated $124.9 million [2][3]. - Year-over-year sales growth was recorded at 5%, and the company achieved its second consecutive quarter of GAAP profitability, with an operating profit margin of 6.5% and GAAP earnings of $1.69 per share [3]. - The actual free cash flow for the quarter was $20.9 million, significantly lower than the reported net income of $161.6 million [4]. Market Metrics - PagerDuty's current market capitalization stands at approximately $1 billion, with a price-to-free cash flow ratio of 8.8x based on a free cash flow of $117.6 million for the year [6]. - The stock is currently trading within a 52-week range of $11.13 to $21.98, with a current price of $11.47 after a decline of $3.71 [5][6]. Investment Outlook - Despite the recent sell-off, the stock is viewed as a potential small-cap buy, especially considering a modest projected growth rate of 9% [7].

Core Insights - PagerDuty reported mixed third-quarter financial results, with earnings per share (EPS) of 33 cents beating the analyst consensus estimate of 25 cents, but quarterly sales of $124.545 million missing the estimate of $125.034 million [1] - The company issued fourth-quarter guidance for adjusted EPS of 24 to 25 cents, aligning with market estimates, but projected sales of $122 million to $124 million, below the estimate of $127.295 million [2] - PagerDuty's CEO highlighted the company's strong position with product leadership, a solid balance sheet, and robust free cash flow, despite a 25.5% drop in share price to $11.31 following the earnings announcement [3] Financial Performance - Quarterly earnings were reported at 33 cents per share, exceeding the consensus estimate of 25 cents [1] - Quarterly sales reached $124.545 million, falling short of the analyst consensus estimate of $125.034 million [1] - Fourth-quarter adjusted EPS guidance is set at 24 to 25 cents, with sales projections between $122 million and $124 million, both below market expectations [2] Analyst Ratings and Price Targets - RBC Capital maintained an Outperform rating but lowered the price target from $18 to $17 [6] - Morgan Stanley kept an Equal-Weight rating while reducing the price target from $17 to $16 [6] - TD Cowen maintained a Buy rating but slashed the price target from $22 to $20 [6]

Upgrades - Argus upgraded Herbalife (HLF) to Buy from Hold, citing a Q3 earnings beat and raising FY25 EPS view by $0.03 to $2.15 and FY26 view by $0.04 to $2.64 [2] - JPMorgan upgraded Atmus Filtration (ATMU) to Overweight from Neutral with a price target increase to $60 from $53, following the proposed acquisition of Koch Filter [2] - Morgan Stanley upgraded Amentum (AMTM) to Equal Weight from Underweight, raising the price target to $35 from $20, indicating a more balanced risk/reward at current share levels [3] - Northland upgraded NetApp (NTAP) to Outperform from Market Perform, increasing the price target to $137 from $120, after reporting revenue growth of 4% year-over-year in fiscal Q2 and guidance for 5% growth in the second half of FY26 [3] - Deutsche Bank upgraded Autodesk (ADSK) to Buy from Hold, raising the price target to $375 from $345, following "very healthy" Q3 results described as one of the "cleanest" quarterly prints in recent years [4] Downgrades - Macquarie downgraded Nio (NIO) to Neutral from Outperform, lowering the price target to $5.30 from $6.70, after issuing "weak" Q4 volume guidance of 122,500 units at the midpoint [5] - Craig-Hallum downgraded PagerDuty (PD) to Hold from Buy, reducing the price target to $15 from $20, noting a fundamental change in end markets negatively affecting PagerDuty [5] - UBS downgraded Biohaven (BHVN) to Neutral from Buy, with a price target decrease to $11 from $26, citing multiple R&D and regulatory setbacks impacting confidence in its pipeline [5] - Bernstein downgraded Ambev (ABEV) to Market Perform from Outperform, setting a price target of $2.88, attributing the downgrade to valuation concerns as shares rose 16% year-to-date [5] - RBC Capital downgraded Morgan Stanley Direct Lending (MSDL) to Sector Perform from Outperform, lowering the price target to $18 from $19, suggesting lower net interest income return on equity expectations for 2026 [5]

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Core Insights - PagerDuty reported quarterly earnings of $0.33 per share, exceeding the Zacks Consensus Estimate of $0.24 per share, and showing an increase from $0.25 per share a year ago, resulting in an earnings surprise of +37.50% [1] - The company posted revenues of $124.55 million for the quarter ended October 2025, slightly missing the Zacks Consensus Estimate by 0.32%, but up from $118.95 million year-over-year [2] - PagerDuty has surpassed consensus EPS estimates in all four of the last quarters, while it has topped consensus revenue estimates twice during the same period [2] Future Outlook - The immediate price movement of PagerDuty's stock will largely depend on management's commentary during the earnings call and the company's earnings outlook [3][4] - The current consensus EPS estimate for the upcoming quarter is $0.23 on revenues of $127.23 million, and for the current fiscal year, it is $1.02 on revenues of $495.59 million [7] - The Zacks Rank for PagerDuty is currently 3 (Hold), indicating that the shares are expected to perform in line with the market in the near future [6] Industry Context - The Internet - Software industry, to which PagerDuty belongs, is currently ranked in the top 31% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]