PagerDuty (NYSE:PD) Shares Gap Up Following Better-Than-Expected Earnings

PagerDuty (NYSE:PD) shares gapped up prior to trading on Friday after the company announced better than expected quarterly earnings. The stock had previously closed at $12.63, but opened at $13.09. PagerDuty shares last traded at $13.59, with a volume of 362,996 shares.

The company reported $0.32 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.31 by $0.01. The company had revenue of $124.44 million during the quarter, compared to analysts’ expectations of $123.27 million. PagerDuty had a return on equity of 18.20% and a net margin of 38.60%.The company’s revenue for the quarter was up .8% compared to the same quarter last year. During the same quarter in the prior year, the business posted $0.30 earnings per share. PagerDuty has set its FY 2027 guidance at 1.330-1.370 EPS and its Q3 2027 guidance at 0.340-0.360 EPS.

PagerDuty announced that its board has authorized a stock repurchase program on Thursday, May 28th that authorizes the company to repurchase $100.00 million in shares. This repurchase authorization authorizes the company to reacquire up to 16.4% of its shares through open market purchases. Shares repurchase programs are usually a sign that the company’s leadership believes its stock is undervalued.

Key Stories Impacting PagerDuty

Here are the key news stories impacting PagerDuty this week:

• Positive Sentiment: Quarterly results topped estimates. PagerDuty reported fiscal Q2 2027 adjusted earnings of $0.32 per share, versus the $0.31 consensus, while revenue of $124.44 million exceeded expectations of $123.27 million. Revenue rose 0.8% year over year. PagerDuty Announces Second Quarter Fiscal 2027 Financial Results
• Positive Sentiment: Recurring revenue and cash flow showed progress. Management said annual recurring revenue surpassed $500 million and free cash flow reached $33 million, suggesting improving monetization and financial discipline. PagerDuty Q2 2027 Earnings Call Transcript
• Positive Sentiment: Profit guidance was raised relative to consensus. Fiscal 2027 EPS guidance of $1.33–$1.37 is well above the $1.17 analyst estimate. Third-quarter EPS guidance of $0.34–$0.36 also exceeds the $0.31 consensus, supporting the case for stronger margins and earnings leverage. PagerDuty forecasts Q3 FY2027 operating margin
• Neutral Sentiment: Revenue expectations remain conservative. Fiscal 2027 revenue guidance of $491.5–$496.5 million is broadly in line with the $493.2 million consensus, while Q3 guidance of $123–$125 million is close to estimates. This indicates that the main upside case is profitability rather than accelerating sales growth.
• Negative Sentiment: PagerDuty plans to cut approximately 15% of its workforce. The restructuring may improve operating margins, with Q3 margin guidance of 26.5%–27.5%, but it also signals cost pressure and could raise concerns about execution, employee disruption, and future growth capacity. PagerDuty to cut about 15 percent of workforce

Wall Street Analyst Weigh In

Several research firms have commented on PD. Morgan Stanley raised their target price on shares of PagerDuty from $9.00 to $10.00 and gave the company an “underweight” rating in a research note on Friday. Canaccord Genuity Group upped their price target on shares of PagerDuty from $10.00 to $15.00 and gave the stock a “buy” rating in a research note on Friday. Weiss Ratings upgraded shares of PagerDuty from a “sell (d+)” rating to a “hold (c-)” rating in a report on Friday, August 21st. Royal Bank Of Canada raised their price objective on shares of PagerDuty from $9.00 to $12.00 and gave the company a “sector perform” rating in a research note on Friday, August 14th. Finally, Truist Financial boosted their target price on PagerDuty from $11.00 to $13.00 and gave the stock a “buy” rating in a report on Thursday, August 20th. Three research analysts have rated the stock with a Buy rating, six have given a Hold rating and two have assigned a Sell rating to the stock. According to MarketBeat.com, the company has a consensus rating of “Hold” and an average price target of $12.94.

Hedge Funds Weigh In On PagerDuty

Several large investors have recently made changes to their positions in PD. Corient Private Wealth LP acquired a new position in shares of PagerDuty in the 2nd quarter worth approximately $140,000. Amundi raised its holdings in shares of PagerDuty by 15.9% in the 2nd quarter. Amundi now owns 55,346 shares of the company’s stock worth $534,000 after purchasing an additional 7,596 shares in the last quarter. California State Teachers Retirement System lifted its stake in PagerDuty by 930.3% during the second quarter. California State Teachers Retirement System now owns 835,034 shares of the company’s stock valued at $86,532,000 after purchasing an additional 753,989 shares during the last quarter. Proficio Capital Partners LLC acquired a new stake in PagerDuty during the second quarter valued at approximately $129,000. Finally, Hennessy Advisors Inc. acquired a new stake in PagerDuty during the second quarter valued at approximately $176,000. Institutional investors own 97.26% of the company’s stock.

PagerDuty Stock Up 9.2%

The stock has a market capitalization of $1.06 billion, a P/E ratio of 6.76, a PEG ratio of 3.13 and a beta of 0.93. The company has a debt-to-equity ratio of 1.83, a current ratio of 1.95 and a quick ratio of 1.95. The stock’s fifty day moving average is $10.57 and its two-hundred day moving average is $8.40.

About PagerDuty

PagerDuty, Inc engages in the operation of a digital operations management platform in the United States and internationally. The company’s digital operations management platform collects data and digital signals from virtually any software-enabled system or device and leverage machine learning to correlate, process, and predict opportunities and issues. Its platform includes PagerDuty Incident Management that provides a real-time view across the status of a digital service while incorporating noise reduction to remove false positives; AIOps that applies machine learning to correlate and automate the identification of incidents from billions of events; Process Automation offers centralized design time and run time environment for orchestrating automated workflows that span across departments, technologies, and networks; Customer Service Operations, which is offered to orchestrate, automate, and scale responses to customer impacting issues.