Core Viewpoint - PagerDuty (PD) has underperformed in the market, with a 15.7% decline year-to-date, contrasting with the Zacks Internet - Software industry's increase of 38.3% and the broader Zacks Computer & Technology sector's return of 35.5% [1] Group 1: Performance and Market Position - The underperformance is linked to ongoing weakness in the Small and Medium-sized Business segment and a challenging macroeconomic environment affecting the Enterprise segment, resulting in longer sales cycles [2] - PD's customer base is expanding, with a notable increase in high-value customers, specifically those spending over 100,000inAnnualRecurringRevenue(ARR),whichroseto825inQ32024,markinga6118.5 million and 120.5million,withnon−GAAPearningsexpectedintherangeof15−16centspershare,reflectingayear−over−yearrevenueincreaseof7.5464.5 million and $466.5 million, representing an 8% year-over-year growth, with non-GAAP earnings projected at 78-79 cents per share [11] Group 5: Valuation and Investment Potential - PagerDuty's stock is currently viewed as having a stretched valuation, with a Price/Book ratio of 15.83X compared to the industry average of 3.78X, indicating it is not cheap [14] - Despite the valuation concerns, the robust AI portfolio and expanding partner base present attractive investment opportunities, supported by a Zacks Rank 2 (Buy) and a Growth Score of A [15]
PagerDuty(PD) ZACKS·2024-12-18 16:31