Digital operations management platform Pager Duty, Inc. (NYSE:PD) The stock has outperformed the tech bear market, down just -18% this year. The Digital Ecosystem Management Platform enables companies to manage and analyze digital applications in real-time using artificial intelligence (AI) and automation to predict future problems before they occur. The digital transformation trend is a strong growth driver as more and more companies migrate to the cloud, strengthen their resilient data flows and prioritize cybersecurity. The company increased its total number of paying customers to 15,040 from 13,918 in the same period last year. Dollar-based net retention rates ranged from 121% to 126%. Customers with annual sales over $100,000 rose to 655 from 458 a year ago. Some notable gains and service additions during the quarter were Cisco Systems (NASDAQ:CSCO), DocuSign (NASDAQ:DOCU), Mattel (NYSE:MAT), Shopify (NASDAQ:SHOP) and World Market. PagerDuty is the provider of long-term tailwinds including digital acceleration, cloud adoption, workflow automation and DevOps transformation. Prudent investors looking for exposure to managing digital ecosystems may see opportunistic downsides in PagerDuty stock.
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Results publication Q1 financial year 2023
On June 2, 2022, PagerDuty reported its fiscal first quarter 2023 results for the quarter ended April 2022. The company reported earnings per share (EPS) of (-$0.04) excluding one-time items compared to analyst consensus estimates. (-$0.08) loss, $0.04 loss. Revenue rose 34.3% year over year (YoY) to $85.37 million, beating analyst estimates of $82.67 million. Jennifer Tejada, CEO of PagerDuty, commented, “PagerDuty’s revenue accelerated in the first quarter, growing 34% year over year in an environment of sustained demand, even as we continue to improve our operational leverage. Our operational response to cloud incidents combines AIOPS and automation to orchestrate and resolve mission-critical, time-sensitive disruption tasks, serving a large digital operational TAM as organizations strive for efficiency and productivity. Empowering Customer Success Our teams’ commitment to continued customer retention and expansion, while our innovation drives enterprise and mid-market strength. We are committed to profitability in Q4 FY23 and for the full FY2424. We look forward to execution. We are confident in our abilities and are raising our high and low guidance for the full year.”
PagerDuty issued a revenue guidance of $87-$88 million for the second quarter of fiscal 2023 ($0.09 vs ($0.08) vs ($0.08) analyst consensus estimates). Company expects full year 2023 EPS of (-$0.21) to (-$0.17) versus (-$0.21) analyst consensus estimates of $364-$369 million in revenue for the full year.
Conference call takeaways
CEO Tejada noted that the 600 basis point year-over-year improvement helps PagerDuty meet its target of profitability for fiscal 2024 for the full year, bottom line guidance for the year. Growth will be driven by mid-market and enterprise segments, as $100,000 annual maturity customers (ARR) have grown 43% annually. Pager Duty is an integral part of its customers’ digital infrastructure as they require a platform that automates and streamlines their digital operations. Digital transformation and cloud initiatives are multi-year projects as digital infrastructure increases in complexity and interdependence. They called PagerDuty the most flexible and reliable digital operations platform with around 670 integrations. It’s an AI-powered workflow that robustly displays time-sensitive events to unlock insight automation capabilities and increase efficiency. Customers typically sign up for Site Reliability Engineering and upgrade to its Digital Operations products, resulting in a gross customer retention rate of over 95% over the past five years.
PD Opportunistic pullback levels
Using Rifle charts on weekly and daily timeframes provides an accurate reading of price action in the PD. Weekly Rifle Chart Breakdown of the Rifle Chart hit its low at $21.67 Fibonacci (Fib) levels, 5-period weekly moving average (MA) falls back to $25.85 and 15-period MA to $28.80 to halt the downtrend. The weekly stochastic bounces off the 20-band. The 50-period weekly MA is near the $34.72 Fibonacci level. weekly Market Structure Less (MSL) The buying started with a breakout above $26.96. The weekly lower Bollinger Band (BB) is at $19.59 and the upper BB is at $39.06. The daily rifle chart is attempting a breakout as the 5-period MA at $25.91 crossed the 15-period MA at $25.45. The upper UBB daily price is $30.09 as the stochastic surges through the 50 band. Prudent investors can look to opportunistic pullback levels at $25.88 Fib, $24.21 Fib, $22.86 Fib, $21.67 Fib, $20.60, $19.67 Fib, $18.27 Fib and 16, $87 fib eighth. There is an uptrend from the $34.72 Fib level to the $28.52 Fib level.