PagerDuty (PD) Q3 Earnings Report Preview: What To Look For

Petr Huřťák /
2022/11/30 4:12 am EST

IT incident response platform PagerDuty (NYSE:PD) will be announcing earnings results tomorrow after the bell. Here's what to look for.

Last quarter PagerDuty reported revenues of $90.2 million, up 33.6% year on year, beating analyst revenue expectations by 2.3%. It was a mixed quarter for the company, with strong top line growth but a decline in gross margin. The company added 134 customers to a total of 15,174.

Is PagerDuty buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting PagerDuty's revenue to grow 29.3% year on year to $92.8 million, slowing down from the 33.4% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted loss is expected to come in at -$0.04 per share.

PagerDuty Total Revenue

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company has a history of exceeding Wall St's expectations, beating revenue estimates every single time over the past two years on average by 2.72%.

Looking at PagerDuty's peers in the cloud monitoring segment, some of them have already reported Q3 earnings results, giving us a hint of what we can expect. Dynatrace delivered top-line growth of 23.4% year on year, beating analyst estimates by 2.22% and Datadog reported revenues up 61.3% year on year, exceeding estimates by 5.37%. Dynatrace traded up 1.93% on the results, Datadog was up 4.87%. Read our full analysis of Dynatrace's results here and Datadog's results here.

Tech stocks have had a rocky start in 2022 and while some of the software stocks have fared somewhat better, they have not been spared, with share price declining 7.98% over the last month. PagerDuty is down 2.28% during the same time, and is heading into the earnings with analyst price target of $32.50, compared to share price of $20.81.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

The author has no position in any of the stocks mentioned.