Shares of IT incident response platform PagerDuty (PD, Financial) fell 1.15% in the afternoon session following the company's release of its second-quarter earnings results.
PagerDuty (PD, Financial) lowered its full-year revenue guidance, which contributed to the decline in stock price. Additionally, the company's revenue for the quarter missed expectations by a narrow margin, indicating potential pressure on sales.
The current price of PagerDuty stocks stands at $18.08, reflecting a decrease from previous levels. The company's market capitalization is approximately $1.73 billion, and it recorded a price-to-book (P/B) ratio of 9.93. The GF Value of PagerDuty indicates a possible value trap, suggesting investors should think twice before making decisions. For more details, see the GF Value page.
The data also shows that PagerDuty has a total revenue of $446.94 million with a significant asset growth rate of 42.8% annually over the past five years, which has outpaced its revenue growth rate of 22.4%. Despite the growth in revenue, the company's gross margin has been in a long-term decline at an average rate of -1.1% per year. This could indicate potential efficiency issues within the company's operations.
PagerDuty’s financial health remains a concern as its Altman Z-Score places it in the distress zone, indicating a possibility of bankruptcy within the next two years. The company's debt-to-equity ratio is relatively high at 2.64, which coupled with the declining gross margins may raise red flags for investors.
On the positive side, the company boasts an expanding operating margin, indicating a potentially improving efficiency in its core operations. The firm's Beneish M-Score of -3.17 suggests that PagerDuty is unlikely to be manipulating its financial statements, which can be a comforting factor for investors.
Another point to note is that PagerDuty's stock price is close to its 3-year low, and its price-to-sales (P/S) ratio is also near a 10-year low of 4.18. This might make the stock attractive to value investors looking for opportunities in the software sector.
However, with a predictability factor of zero and numerous warning signs, including insider selling activity and slowing revenue growth, investors should exercise caution. The stock is categorized under speculative growth with a Style Box rating of "Small Growth." Despite having a satisfactory growth grade of 'B', its financial health and profitability grades are 'C' and 'F', respectively.
Given the volatile nature of PagerDuty's financial metrics and market performance, potential investors should carefully evaluate these factors before making an investment decision. For deeper insights, visit the GF Value assessment of PagerDuty (PD, Financial).
