Shares of PagerDuty (NYSE: PD) have jumped today, up by 4% as of 1:10 p.m. EDT, after getting a bullish initiation from Wall Street. Monness Crespi Hardt analyst Brian White kicked off coverage of PagerDuty with a buy rating and $35 price target.
PagerDuty is positioned to capitalize as more companies accelerate digital transformations due to the COVID-19 pandemic, according to White. The company is comparable to other enterprise software providers while offering more reasonable valuations. Shares currently trade at around 11 times sales, which is cheaper than peers.
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White considers PagerDuty to be a "young, high-quality, promising company in a nascent software category with big potential."
The initiation comes shortly after PagerDuty told Barron's last week how the broad shift to remote work has increased demand for the company's offerings.
"In many ways, the distribution of workers as a result of people working from home has been a huge tailwind for PagerDuty because we were designed for developers who, historically, are distributed by definition," CEO Jennifer Tejada told the outlet. PagerDuty's platform was created to be used by remote teams in different geographical areas and time zones.
The tech company's guidance for this fiscal year calls for revenue of $204 million to $213 million, which represents growth of 23% to 28%. That should result in an adjusted net loss per share of $0.25 to $0.30 in fiscal 2021. On the last earnings call, Tejada added, "While we never could have imagined the post-COVID world, it has accelerated opportunities for us to expand our platform beyond DevOps and IT team."
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