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Cloud Monitoring Stocks Q3 Teardown: PagerDuty (NYSE:PD) Vs The Rest


Jabin Bastian /
2022/01/20 6:05 am EST
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Quarterly earnings results are a good time to check in on a company’s progress, especially compared to other peers in the same sector. Today we are looking at PagerDuty (NYSE:PD), and the best and worst performers in the cloud monitoring software group.

Software is eating the world, increasing organizations’ reliance on digital-only solutions. As more workloads and applications move to the cloud, the reliability of the underlying cloud infrastructure becomes ever more critical, and ever more complex. To solve the challenge, companies and their engineering teams have turned to a range of cloud monitoring tools that provide them with visibility to troubleshoot the issues in real time.

The 5 cloud monitoring stocks we track reported a strong Q3; on average, revenues beat analyst consensus estimates by 4.66%, while on average next quarter revenue guidance was 4.68% above consensus. The technology sell-off has been putting pressure on stocks since November and while some of the cloud monitoring stocks have fared somewhat better, they have not been spared, with share price declining 14% since earnings, on average.

PagerDuty (NYSE:PD)

Started by three former Amazon engineers, PagerDuty (NYSE:PD) is a software as a service platform that helps companies respond to IT incidents fast and make sure that any downtime is minimized.

PagerDuty reported revenues of $71.7 million, up 33.4% year on year, beating analyst expectations by 2.29%. It was a very strong quarter for the company, with accelerating customer growth and a very optimistic guidance for the next quarter.

"Q3 was an outstanding quarter for PagerDuty as we delivered record revenue of $72 million and grew 33% year over year. Our product innovation continues to accelerate across use cases and departments as we empower enterprises to mature their digital operations and deliver superior customer experiences," said Jennifer Tejada, Chairperson and CEO at PagerDuty.

PagerDuty Total Revenue

The stock is down 12% since the results and currently trades at $29.51.

Is now the time to buy PagerDuty? Access our full analysis of the earnings results here, it's free.

Best Q3: Datadog (NASDAQ:DDOG)

Named after a database the founders had to painstakingly look after at their previous company, Datadog (NASDAQ:DDOG) is a software as a service platform that makes it easier to monitor cloud infrastructure and applications.

Datadog reported revenues of $270.4 million, up 74.8% year on year, beating analyst expectations by 9.14%. It was an impressive quarter for the company, with a very optimistic guidance for the next quarter and an exceptional revenue growth.

Datadog Total Revenue

Datadog achieved the strongest analyst estimates beat and fastest revenue growth among its peers. The company added 190 enterprise customers paying more than $100,000 annually to a total of 1,800. The stock is down 21.7% since the results and currently trades at $130.60.

Is now the time to buy Datadog? Access our full analysis of the earnings results here, it's free.

Slowest Q3: Sumo Logic (NASDAQ:SUMO)

Founded in 2010 by Christian Beegden who went from driving a cab in Germany to landing an internship at Amazon, Sumo Logic (NASDAQ:SUMO) is software as a service data analytics platform that helps companies get insight into what is happening in their servers and applications.

Sumo Logic reported revenues of $62 million, up 19.5% year on year, beating analyst expectations by 1.9%. It was an OK quarter for the company, with a decent beat of analyst estimates.

Sumo Logic had the weakest performance against analyst estimates in the group. The stock is down 17.3% since the results and currently trades at $11.26.

Read our full analysis of Sumo Logic's results here.

Dynatrace (NYSE:DT)

Founded in Austria in 2005, Dynatrace (NYSE:DT) provides companies with software that allows them to monitor the performance of their full technology stack, from software applications to the infrastructure they run on.

Dynatrace reported revenues of $226.3 million, up 34.2% year on year, beating analyst expectations by 2.58%. It was a decent quarter for the company, with a strong top line growth.

Dynatrace had the weakest full year guidance update among the peers. The stock is down 34.9% since the results and currently trades at $50.55.

Read our full, actionable report on Dynatrace here, it's free.

New Relic (NYSE:NEWR)

With the name being an anagram of its founder, Lew Cirne, New Relic (NYSE:NEWR) makes a monitoring software that collects, scores, and analyses performance data about a client's IT stack.

New Relic reported revenues of $195.6 million, up 17.8% year on year, beating analyst expectations by 7.4%. It was a strong quarter for the company, with accelerating growth in large customers.

New Relic achieved the highest full year guidance raise but had the slowest revenue growth among the peers. The company added 47 enterprise customers paying more than $100,000 annually to a total of 1,011. The stock is up 16% since the results and currently trades at $105.59.

Read our full, actionable report on New Relic here, it's free.

The author has no position in any of the stocks mentioned