PagerDuty Aims For Growth Despite Uncertainty, Analysts Say After Q4 Report

PagerDuty Inc PD reported fourth-quarter results Wednesday that were broadly in-line with expectations. The company posted 37% year-on-year revenue growth in the quarter and guided to 28% revenue growth in fiscal 2021.

The PagerDuty Analysts

Baird’s Robert Oliver maintained an Outperform rating on PagerDuty and reduced the price target from $23 to $18.

Morgan Stanley’s Sanjit Singh reiterated an Equal-Weight rating and lowered the price target from $22 to $18.

The PagerDuty Takeaways 

PagerDuty’s fourth-quarter print reflected continued traction at larger enterprises and the initial guidance for fiscal 2021 is solid, despite conservatism related to the uncertain near-term environment, Oliver said in a Wednesday note. 

The company did not indicate any meaningful change in pricing and competitive environment, the analyst said.

Most of PagerDuty’s deals were from e-commerce or self-service models, which means coronavirus-related travel restrictions will have less of an impact, he said. 

PagerDuty's order flow could increase due to unprecedented work-from-home scenarios, according to Baird. 

Morgan Stanley’s Singh said in a Thursday note that, while PagerDuty had “lingering sales issues” in the fourth quarter, its high retention rates, self-service sales engine and limited exposure to verticals that are the most impacted by the pandemic should help the company “weather the coming storm.”

Although the company has not felt any meaningful COVID-19 impact so far, there is a lack of visibility and it remains to be seen “how well positioned PagerDuty is to withstand what is likely to be a weaker IT spending environment,” the analyst said. 

PagerDuty Price Action

The stock was up 20.71% at $18.01 at the time of publication Thursday. 

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Earnings Scheduled For March 18, 2020