Pagerduty Inc Dossier
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SectorInformation Technology IndustryApplication Software Beta (adjusted)0.96 Intrinsic Value $26.69median of 5 methods · middle span $22-$34based on filings through 31 Jul 2026 Market Price $15.58Price as of 1 Oct 2026 Significantly undervaluedIntrinsic value is 71% above the market price −50% · IV below pricenear fair value ±15%IV above price · +50% marker beyond scale (+71%) Data confidence Sign in to view data confidence Market Cap $1.2B Enterprise Value $1.4B Shares Outstanding 78.4M diluted Moat Rating None Next Earnings Date24 Nov 2026 All prices and values are periodic snapshots, not live quotes. Source dates are shown for reference. ThesisStreet consensus, scenarios, merits, risks, and invalidation triggers Thesis Summary PagerDuty is undergoing a critical business model transformation, transitioning from a traditional seat-based subscription model to an integrated, usage-based Operations Cloud platform. While the company has demonstrated impressive operational discipline—expanding its non-GAAP operating margin to 25% and maintaining GAAP profitability—its top-line growth has stalled, with Q1 FY2027 revenue growing only 1% year-over-year and ARR remaining flat at $496 million. The transition to usage-based pricing and generative AI offerings (such as PagerDuty Advance) represents a viable long-term growth driver, but these initiatives are in their early stages. Furthermore, near-term headwinds persist as dollar-based net retention (DBNR) has stepped down to 97% due to seat-count optimization and macroeconomic pressures on midsize SaaS customers. Consequently, the stock is valued at a depressed multiple, reflecting a balanced risk-reward profile until top-line acceleration materializes. This section is the 12-month view: analyst targets and the probability-weighted scenarios built from them. The intrinsic value at the top of this page answers a different question: what the business is worth today. Street view · analyst 12-month targets Low · most bearish analyst$8.00 Mean target$9.43 High · most bullish analyst$11.00 Street targets sit below today's price; our intrinsic value sits above it. Different horizons, different questions. Our research · scenarios, merits, risks, and invalidation triggersResearch as of 19 Jun 2026 Scenarios · 12-month scenario targets Bear CaseDownside scenario $7.0020% The bear case materializes if the transition to usage-based pricing fails to gain traction, leading to prolonged revenue contraction as seat-count downgrades outpace consumption-based expansion. Competitive pressures intensify from large consolidated platforms (e.g., ServiceNow, Datadog) bundling incident response tools, causing further erosion in DBNR below 95%. Macroeconomic headwinds continue to pressure the core midsize SaaS and SMB customer segments, leading to elevated churn and forcing PagerDuty to compromise on pricing, which compresses operating margins back toward 20%. Base CaseCentral scenario $9.4355% Matches the consensus meanIn the base case, PagerDuty operates as a slow-growth, highly profitable cash generator. Revenue growth remains flat to low-single digits (1% to 3%) for FY2027, in line with management's guidance of $488.5 million to $496.5 million. The transition to usage-based pricing stabilizes DBNR around 97% to 100%, offsetting seat-count optimization. Non-GAAP operating margins remain healthy at 24% to 25%, supported by disciplined cost controls and operational AI leverage. The company continues to generate robust free cash flow (30%+ margin) and utilizes its balance sheet to buy back shares, providing a strong valuation floor. Bull CaseUpside scenario $12.5025% The bull case is driven by a successful transition to usage-based pricing, which unlocks significant expansion revenue as customers scale their digital operations and deploy automated AI workflows. Additionally, PagerDuty capitalizes on Atlassian's forced shutdown of Opsgenie in 2027, capturing a substantial share of migrating enterprise customers. Generative AI adoption (PagerDuty Advance and SRE Agents) drives higher average contract values, accelerating revenue growth back to double digits while operating margins expand toward the 30% long-term target. Mechanical EPS accretion is further amplified by aggressive share repurchases under the newly authorized $100 million program. Scenarios are anchored to street consensus at the research date, with our probabilities and rationale. Key Investment Merits
Key Investment Risks
Thesis Invalidation Triggers
All scenarios are estimates and subject to change. Past performance is not indicative of future results. Quality Pillars MembersThis section is available to registered members. Create a free account or sign in to unlock the full breakdown. Explore this dossierValuationIntrinsic value, the six-method breakdown, peer medians, and your assumptions sandbox.Financial SnapshotRevenue, profitability, returns, balance sheet, dividends, and the filing-level detail.Qualitative AnalysisBusiness overview, strategic initiatives, and mergers, acquisitions & partnerships.Outlook & Key DatesForward estimates, reporting calendar, and the monitoring framework. |