PD Stock Sank To An All-Time Low Today – What’s Driving The Slump?

• PagerDuty lowered its FY2026 revenue forecast to $490 million to $492 million, below its prior outlook between $493 million and $497 million.
• Third-quarter revenue came in at $124.5 million, up 4.7% from a year earlier but marginally below Street estimates of $124.8 million, according to fiscal.ai.
• Morgan Stanley and RBC Capital lowered their price targets on the stock.

Shares of PagerDuty Inc. (PD) sank nearly 24% to a record low on Wednesday, after brokerages slashed their target price on the stock after the company trimmed its FY2026 topline outlook.

PagerDuty lowered its FY2026 revenue forecast to $490 million to $492 million, below its prior outlook between $493 million and $497 million. For the fourth quarter, the company expects revenue of $122 million to $124 million, representing a flat to 2% year-over-year increase.

Its third-quarter (Q3) revenue came in at $124.5 million, up 4.7% year over year but marginally below Street estimates of $124.8 million, according to fiscal.ai. The company reported operating income of $8.1 million, with a 6.5% margin, while non-GAAP operating income was $35.5 million. Its non-GAAP earnings per share came in at $0.33, above the consensus of $0.24.

Brokerage Action

Morgan Stanley lowered its price target on PD shares to $16 from $17, while maintaining an ‘Equal Weight’ rating. The firm highlighted that Q3 annual recurring revenue (ARR) slowed to 3% year over year and Q4 guidance points to just 1% revenue growth with flat billings, making a meaningful growth acceleration in FY27 look difficult.

RBC Capital cut its price target on the stock to $17 from $18 but maintained an ‘Outperform’ rating, noting that the company delivered a mixed quarter as seat-based optimizations picked up. The firm added that PagerDuty is pushing multi-year deals and earlier renewals to offset seat-related pressures. While it remains cautious about near-term growth, it is encouraged by the company’s stronger-than-expected profitability.

How Did Stocktwits Users React?

Despite the steep intraday losses, retail sentiment on Stocktwits turned ‘extremely bullish’ from ‘bullish’ a day earlier, accompanied by ‘extremely high’ message volumes.

A few users believe that the stock is oversold.

The stock has been under some selling pressure this year, declining more than 37%.

For updates and corrections, email newsroom[at]stocktwits[dot]com.

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