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Bear of the Day: PagerDuty (PD)

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PagerDuty PD is a $3.6 billion provider of digital operations management solutions that address enterprise applications and systems performance.

The company offers a SaaS platform which helps developers, IT operations, and other cross-functional enterprise teams prevent and resolve business impacting incidents.

Here's how they describe their origins...

PagerDuty was founded by three innovative software developers who knew what it was like to carry the pager for "always on" cloud services. They made a bet that the early practice and culture of DevOps which encourages collaboration between development and operations would become strategic for every company.

What started as automating on-call rotations has evolved into a platform that helps companies of all sizes proactively manage their digital operations so their teams can spend less time reacting to incidents and more time building for the future.

In a sense, you could call PD a "first responder for DevOps."

PagerDuty customers include Priceline.com, IBM Cloud, Allstate, Twilio TWLO, Paylocity, Zoom ZM, Dropbox, Cloudflare, Shopify SHOP.

After you read my Bull of the Day on Fastly FSLY, you might wonder if they are a customer now after that company's big outage "incident" in June.

Why PD is a Zacks #5 Rank?

While PD has been a serial upside earnings surpriser -- averaging +22% the last four quarters -- the earnings outlook took a decidedly different trajectory early this year.

To highlight the disappointment for some investors, FY22 (ends in January) is expected to record a loss 38-cents, representing an annual decline of 58% vs last year's -$0.24.

And insult to injury, while FY23 was projected to creep into profitability, the consensus now is for a loss of about 20 cents.

The good news is that revenues are still growing solidly in the 25-30% zone and the stock only trades at 11 times next year's consensus of $345 million. That makes it a bargain in cloud territory.

Bottom line on PD: A unique business model in an exploding industry with an impressive list of customers means I'm looking to buy PD on the dips once the growth outlook turns around. The Zacks Rank will let us know.

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PagerDuty (PD) : Free Stock Analysis Report
Shopify Inc. (SHOP) : Free Stock Analysis Report
Twilio Inc. (TWLO) : Free Stock Analysis Report
Zoom Video Communications, Inc. (ZM) : Free Stock Analysis Report
Fastly, Inc. (FSLY) : Free Stock Analysis Report
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