PagerDuty Under Investigation as Stock Drops Due to Customer Churn
Written by Emily J. Thompson, Senior Investment Analyst
Source: Globenewswire
Updated: 1 hour ago0mins
- Customer Churn Trend: PagerDuty's November 25, 2025 earnings report revealed that while the number of customers churning and downgrading is decreasing, the dollar value of contraction due to seat-based reductions and cautious customer budgets has exceeded forecasts, negatively impacting financial performance.
- Guidance Revision: The company revised its full fiscal year guidance for 2026 in the same report, reflecting uncertainty about future revenues, which could lead to decreased investor confidence and increased stock volatility.
- Stock Price Reaction: Following this news, PagerDuty's stock price dropped, indicating market concerns regarding the company's future profitability, which may affect its financing capabilities and competitive position.
- Legal Investigation Initiated: Holzer & Holzer LLC is investigating whether PagerDuty complied with federal securities laws, and if violations are found, the company may face legal liabilities and further financial losses.
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Analyst Views on PD
Wall Street analysts forecast PD stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for PD is 17.25 USD with a low forecast of 15.00 USD and a high forecast of 20.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
11 Analyst Rating
6 Buy
5 Hold
0 Sell
Moderate Buy
Current: 13.140
Low
15.00
Averages
17.25
High
20.00
Current: 13.140
Low
15.00
Averages
17.25
High
20.00
BofA
No Rating -> Underperform
downgrade
$12
2025-12-02
Reason
BofA
Price Target
$12
2025-12-02
downgrade
No Rating -> Underperform
Reason
BofA is moving to Underperform PagerDuty from No Rating with a $12 price target. With PagerDuty seen facing demand headwinds, a pricing model change and an upcoming CFO transition, the firm thinks its could take multiple quarters to see stabilization in growth metrics, the analyst tells investors.
Craig-Hallum
Buy
to
Hold
downgrade
$20 -> $15
2025-11-26
Reason
Craig-Hallum
Price Target
$20 -> $15
2025-11-26
downgrade
Buy
to
Hold
Reason
Craig-Hallum downgraded PagerDuty to Hold from Buy with a price target of $15, down from $20.
Morgan Stanley
Equal Weight
downgrade
$17 -> $16
2025-11-26
Reason
Morgan Stanley
Price Target
$17 -> $16
2025-11-26
downgrade
Equal Weight
Reason
Morgan Stanley lowered the firm's price target on PagerDuty to $16 from $17 and keeps an Equal Weight rating on the shares. With Q3 ARR decelerating to 3% year-over-year and Q4 guidance calling for 1% year-over-year revenue growth and flat trailing twelve month billings, the prospect of re-accelerating growth in FY27 "appears challenging," the analyst tells investors.
Craig-Hallum
Craig-Hallum
Buy
to
Hold
downgrade
$20 -> $15
2025-11-26
Reason
Craig-Hallum
Craig-Hallum
Price Target
$20 -> $15
2025-11-26
downgrade
Buy
to
Hold
Reason
As previously reported, Craig-Hallum downgraded PagerDuty to Hold from Buy with a price target of $15, down from $20. The firm notes the company was in line on revenue and again well ahead on EPS, with forward revenue pulled in, but EPS raised. Further, Craig-Hallum says great cost controls should not be overlooked and have bought the company much greater patience than it otherwise would have exhibited in the wait for improved sales execution, customer retention, and overall revenue growth/acceleration. While shares are seemingly inexpensive, the firm believes growth expectations continue to deflate and the top line is now down to 1% year-over-year in Q4, threatening to go negative. While difficult to put a precise finger on it, there clearly appears to be a fundamental change in end markets in ways detrimental to the standing of PagerDuty, Craig-Hallum adds.
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About PD
PagerDuty, Inc. is engaged in digital operations management platform that manages urgent and mission-critical work for digital business. The Company collects data and digital signals from virtually any software-enabled system or device and leverages enables machine learning to correlate, process, and predict opportunities and issues. It uses incident response, event management, and automation, the Company brings together the right people with the right information so they can resolve issues and act on opportunities in minutes or seconds from wherever they are. The PagerDuty Operations Cloud consists of PagerDuty Incident Management, AIOps, Process Automation, and Customer Service Operations. PagerDuty Incident Management provides a real-time view across the status of a digital service while incorporating intelligent noise reduction to remove false positives. PagerDuty Process Automation provides a centralized design time and run time environment for orchestrating automated workflows.
About the author
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Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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