Shares of PagerDuty Inc. (NYSE:PD) have dropped to a fresh 52-week low, hitting $14.27, as investor concerns about the broader tech environment and the company’s growth outlook weigh heavily on the stock. Despite strong gross margins of 83% and a market cap of $1.38 billion, the cloud operations platform is facing investor skepticism amid economic uncertainty and sector-wide headwinds.
Over the past 12 months, PagerDuty’s stock has fallen by more than 21%, reflecting broader anxieties in the cloud and software industries. While the company has managed to maintain a steady revenue growth rate of 8.55%, the stock’s recent decline points to growing unease around future performance. Analyst price targets currently range from $16 to $25, suggesting some still see upside potential. According to several market watchers, current share levels could present a value opportunity, particularly given PagerDuty’s operational efficiency and improving profitability metrics.
The drop comes despite a better-than-expected Q1 2025 earnings report. PagerDuty posted earnings per share (EPS) of $0.24, beating consensus estimates of $0.19. Revenue for the quarter came in at $119.8 million, slightly exceeding expectations of $119.27 million. However, the stock still declined in aftermarket trading, highlighting investor caution even in the face of solid financial performance.
Looking ahead, the company guided full-year revenue between $493 million and $499 million, implying growth of 5% to 7%. Analysts appear divided on what’s next for the company. Goldman Sachs kept a Neutral rating, noting PagerDuty’s steady path toward profitability but cautioning that near-term revenue growth could be muted. Meanwhile, JPMorgan lowered its price target from $21 to $18 and reiterated an Underweight rating, citing weaknesses in sales execution.
To address these issues, PagerDuty is recalibrating its go-to-market approach, focusing more heavily on the enterprise segment. The company expects performance to improve as its salesforce gains experience and matures in targeting larger customers. Despite recent setbacks, PagerDuty continues to land new clients and expand its presence in the enterprise space, signaling long-term confidence in its growth strategy.
The stock’s 52-week low serves as a wake-up call for the company to execute on strategic shifts and rebuild investor trust in a challenging market environment.