PagerDuty PD shares are down 15.7% year-to-date, versus the Zacks Internet – Software industry’s gain of 38.3% and the broader Zacks Computer & Technology sector’s return of 35.5%.
PD has underperformed its peers, such as Atlassian TEAM, which offers similar digital operations management solutions. TEAM shares rose 13.5% over the same period.
The underperformance can be attributed to continued weakness in the SMB segment and a challenging macroeconomic environment impacting the Enterprise segment, leading to longer sales cycles.
Despite these challenges, PD is benefiting from a growing customer base and greater adoption of its Operations Cloud, including AIOps and automation capabilities.
PagerDuty price consensus chart | PagerDuty quote
PD has seen an increase in the number of high value customers, with this number spending over $100,000 in annual recurring revenue (ARR) and increasing to 825 in Q3 2024, a 6% increase over the past year . This highlights the growing adoption and expansion of PagerDuty’s solutions among large-scale customers.
Growing demand for automation and generative AI has been a key growth driver for Pager Duty.
In response to this demand, in Q3 2024, PD introduced AI-driven solutions such as PagerDuty Advance, which integrates generative AI to improve incident management and shorten response times. This innovation has attracted more customers looking to automate and optimize IT operations.
The increased demand for automated and intelligent incident management solutions is remarkable. In October, PagerDuty announced innovations for its Operations Cloud that enhance AI-driven automation and machine learning to help organizations improve operational resilience, reduce downtime and mitigate the risk of outages.
The company’s AIOps and automation capabilities have been a key contributor, accounting for more than 40% of net new ARR in Q3 2024, driving increasing demand for these advanced IT operations and incident management tools demonstrates.
PagerDuty’s growing portfolio has helped the company expand its customer base, supported by partnerships with key industry players including Amazon AMZN and Snowflake SNOW.
PagerDuty recently announced new generative AI and automation features for PagerDuty Advance, integrated with Amazon’s cloud computing platform Amazon Web Service (AWS) tools such as Amazon Bedrock, Bedrock Guardrails and Amazon Q Business, to improve incident management and operational efficiency.
PagerDuty has integrated its Operations Cloud with Snowflake Trail to help joint customers proactively manage incidents, improve operational efficiency and reduce downtime using observability and incident management capabilities.
