PD · PagerDuty
Conviction · Low · more likely to lag the S&P 500 over the next three months
Wrong if: a daily close above $18.66
Note written ·
Price against the kill line
14.5% clear of its kill line on the 13 November 2026 close.
How to read this
This note expects the shares to lag the market, so its kill line sits above the price: a close above the red mark would prove the view wrong. Prices run from low on the left to high on the right. The dot is where the stock closed on 13 November 2026, left of the mark while it is below the line; a dot right of the mark has closed through it.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close above $18.66, on record since 11 November 2026. The shares are up 36.3% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close above $18.66, over the 52-week intraday high of $18.06 set on 28 October 2026, would show the shares leading the S&P 500. Fiscal third-quarter revenue above $125 million together with a raised fiscal 2027 revenue outlook would also prove the call wrong.
Research onlyNot in the portfolio.
Key figures from the filings · Technology
Quarter to 31 July 2026, filed 27 August 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 124
- Revenue, change on a year (%)
- +0.8
- Gross margin (%)
- 83.9
- Operating margin (%)
- 8.2
- Free cash flow, four quarters ($M)
- 127
- Net cash, cash less debt ($M)
- 73.1
- Price to earnings (×)
- 6.8
- Enterprise value to sales (×)
- 2.4
All filed numbers
What PagerDuty reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Gross margin (%) | Operating margin (%) |
|---|---|---|---|---|
| first filed | 124 | +0.8 | 83.9 | 8.2 |
| first filed | 121 | +1.0 | 84.3 | 7.6 |
| first filed | 125 | +2.7 | 85.9 | 3.6 |
| first filed | 125 | +4.7 | 85.3 | 6.5 |
| first filed | 123 | +6.4 | 84.6 | 2.9 |
| first filed | 120 | +7.8 | 84.0 | −8.6 |
| Pre-tax income ($M) | 12.1 |
| Net income ($M) four quarters: 184 | 7.8 |
| Diluted shares, change on a year (%) against the quarter to 31 July 2025 | −16.0 |
| Operating cash flow ($M) | 131 |
| Capital spending ($M) | 4.8 |
| Free cash flow ($M) | 127 |
| Cash and short-term investments ($M) | 470 |
| Debt ($M) convertible debt | 397 |
| Net cash, cash less debt ($M) | 73.1 |
| Deferred revenue ($M) +2.6% on a year | 236 |
| Backlog, orders not yet delivered ($M) +0.2% on a year | 426 |
| Receivables ($M) | 71.7 |
| Inventory ($M) | Not reported |
| Shareholders' equity ($M) | 232 |
| Market value ($M) | 1,255 |
| Enterprise value, market value plus net debt ($M) | 1,181 |
| Enterprise value to sales (×) | 2.4 |
| Enterprise value to operating income (×) | 36.9 |
| Price to earnings (×) | 6.8 |
| Price to book value (×) | 5.4 |
| Free-cash-flow yield (%) | 10.1 |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 9.7% of shares outstanding sold short, 4.7 days of average trading to cover, −0.9% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $2.8M |
| 12 monthsfrom | $0 | $13.9M |
The thesis
PagerDuty's shares are more likely to lag the S&P 500 over the next three months. Revenue is growing at 0.8% from a year earlier, yet the shares rose 32.1% over three months to close at $15.72 on 12 November 2026, above most published analyst targets. The fiscal third-quarter 2027 report, expected around 24 November 2026 but not yet confirmed by the company, shows whether revenue and net retention can support that price.
The latest reported business numbers date from 27 August 2026. For the quarter ended 31 July 2026, PagerDuty reported revenue of $124.436 million, annual recurring revenue of $501 million and dollar-based net retention of 98%. It raised fiscal 2027 revenue guidance to $491.5–496.5 million and guided the third quarter to $123.0–125.0 million. No results, guidance change or deal news has followed.
At $15.72 the price reflects a recovery that has not yet shown up in revenue: the close sits above RBC Capital's $14 target (9 November 2026) and Bank of America's $11 target (23 October 2026). The rating is Low because the cost cut and the open sale question are already widely known. Meanwhile the executive chair sold shares on the way up to the October high, and neither the 3 November 2026 product launch nor RBC's higher target lifted the shares.
Bullish and bearish views on PagerDuty, Inc.
The bull case on PagerDuty, Inc. (PD), in brief: guidance rose alongside a cost cut. The bear case: growth is close to flat.
Bull case
- Guidance rose alongside a cost cut. On 27 August 2026 PagerDuty raised its fiscal 2027 non-GAAP operating margin outlook to 25%–26% and its adjusted earnings per share outlook to $1.33–1.37. It also announced a workforce reduction of about 15%, with $5.5–7.5 million of charges expected mostly in the quarter that ended 31 October 2026.
- Cash funds buybacks. Free cash flow was $32.8 million in the quarter ended 31 July 2026. The 10-Q for that quarter shows 799,112 shares repurchased at an average of $9.51, with $92.4 million left on a $100 million authorization approved in May 2026.
- A new AI product line shipped. On 3 November 2026 PagerDuty launched Paige, an autonomous site reliability engineering (SRE) agent. It also renamed its Operations Cloud the PD Reliability Platform and opened an experimental PD Labs program, per DevOps.com and the PagerDuty blog.
- Analyst targets are still rising. RBC Capital raised its target to $14 from $12 on 9 November 2026 and kept a Sector Perform rating. Bank of America raised its target to $11 from $9.50 on 23 October 2026 and kept an Underperform rating.
- The sale question is still open. Reuters reported on 25 July 2025 that PagerDuty was exploring a sale with Qatalyst Partners. No statement ending that process has been made.
Bear case
- Growth is close to flat. Revenue rose 0.8% from a year earlier in the quarter ended 31 July 2026. Net retention of 98% means existing customers spent slightly less than a year earlier.
- Most analyst targets sit below the price. The $15.72 close on 12 November 2026 is above RBC Capital's $14, Bank of America's $11, Morgan Stanley's $10 (28 August 2026) and Canaccord Genuity's $15 Buy target (28 August 2026). MarketBeat's consensus target of $16.64 (2 October 2026) sits just above the close.
- The executive chair sold into the rally. SEC Form 4 filings show Executive Chair Jennifer Tejada sold 107,000 shares at $15.11 on 30 September 2026, 57,500 at $17.16 on 15 October 2026 and 5,945 at $18.00 on 28 October 2026. All three sales ran under a Rule 10b5-1 plan, a trading schedule set in advance.
- The restructuring is an execution test. About 15% of staff are leaving, and management expects the action to be substantially complete by the end of the fiscal fourth quarter (earnings call, 27 August 2026). A cut to the $491.5 million revenue floor would show the reset reaching customers.
- No sale has materialised. A prior sale attempt in late 2023 drew no acceptable offer. The 2025 exploration has produced no announced transaction in more than 15 months.
Price setup
The shares closed at $15.72 on 12 November 2026. The 50-day moving average is $15.65 and the 200-day moving average is $10.36, both as of that close. The 52-week intraday high is $18.06 from 28 October 2026, and the last close is 13.0% below it. The 52-week closing low is $5.73 from 10 April 2026.
The three-month gain is 32.1%, measured from the $11.90 close on 14 August 2026. The shares fell from $16.23 on 5 November 2026 to $15.68 on 6 November 2026. They have closed between $15.57 and $15.72 in every session since. They now sit on the 50-day average, so the report decides whether they reclaim the October high or return toward the $14 RBC target.
Catalysts ahead
- ~24 November 2026 (est.): Fiscal third-quarter 2027 results. Tests the $123.0–125.0 million revenue outlook, the $491.5 million fiscal 2027 revenue floor and whether net retention moves up from 98%. It is the first quarter to carry most of the restructuring charge. The company has not confirmed the date; MarketBeat estimates 24 November 2026 from last year's schedule.
What would change the view
A daily close above $18.66, over the 52-week intraday high of $18.06 set on 28 October 2026, would show the shares leading the S&P 500. Fiscal third-quarter revenue above $125 million together with a raised fiscal 2027 revenue outlook would also prove the call wrong.
What it trades with
PagerDuty's 2026 moves have followed company events: the sale exploration, the CEO and CFO change on 22 June 2026 and the guidance raise on 27 August 2026. Its operating peers are IT operations and observability software vendors. The Paige launch ties its product to enterprise AI software, but no AI revenue figure has been reported. The ticker PD also belongs to Precision Drilling on the Toronto Stock Exchange. That company's late-October 2026 results and rating changes appear in PD news feeds and do not concern PagerDuty.
The evidence, claim by claim (8)
- Fiscal second-quarter 2027 revenue was $124.436 million, up 0.8% from a year earlier; annual recurring revenue was $501 million and dollar-based net retention was 98%. PagerDuty fiscal second-quarter 2027 results release · as of
- PagerDuty raised fiscal 2027 revenue guidance to $491.5–496.5 million and guided the fiscal third quarter to $123.0–125.0 million of revenue and $0.34–0.36 of adjusted earnings per share. PagerDuty fiscal second-quarter 2027 results release and earnings call · as of
- PagerDuty announced a workforce reduction of about 15%, with $5.5–7.5 million of charges expected mostly in the fiscal third quarter. PagerDuty 8-K and 27 August 2026 earnings call · as of
- PagerDuty repurchased 799,112 shares at an average price of $9.51 in the quarter ended 31 July 2026 under a $100 million authorization approved in May 2026. PagerDuty Form 10-Q for the quarter ended 31 July 2026 · as of
- PagerDuty launched Paige, an autonomous site reliability engineering agent, renamed its Operations Cloud the PD Reliability Platform and opened PD Labs. DevOps.com; PagerDuty blog · as of
- RBC Capital raised its PagerDuty price target to $14 from $12 and kept a Sector Perform rating. Benzinga report of RBC Capital note · as of
- Bank of America raised its PagerDuty price target to $11 from $9.50 and kept an Underperform rating. fiscal.ai report of Bank of America note · as of
- Executive Chair Jennifer Tejada sold 107,000 shares at $15.11 on 30 September 2026, 57,500 at $17.16 on 15 October 2026 and 5,945 at $18.00 on 28 October 2026, all under a Rule 10b5-1 plan. SEC Form 4 filings dated 2 October 2026, 19 October 2026 and 30 October 2026 · as of
Sources
- PagerDuty
- SEC EDGAR
- PagerDuty (NYSE: PD) stays profitable while cutting 15% of jobs · stocktitan.net
- DevOps.com
- PagerDuty
- PagerDuty (PD) Earnings Date and Reports 2026 · marketbeat.com
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