How does PagerDuty's valuation metrics (e.g., P/E, EV/Revenue) compare to its main competitors in the digital operations management space?

Fundamentals vs. peers

PagerDuty (PD) still posts a loss at the operating‑margin level, so a forward‑looking P/E is essentially “‑” (i.e., not meaningful) and is far higher than the modestly positive P/E ratios of its more mature rivals such as ServiceNow (≈ 30×) and Atlassian (≈ 45×). Consequently, the EV/Revenue multiple is the primary valuation yardstick for PD. Based on the most recent guidance (FY 2026 revenue ≈ $1.1 bn, market‑cap ≈ $5.5 bn, net cash ≈ $0.5 bn), PD’s EV/Rev sits in the 14‑16× range. By contrast, ServiceNow— the dominant ITSM player—trades at roughly 12× EV/Rev, while Atlassian’s Opsgenie business (now part of Atlassian) is priced near 13× EV/Rev. Dynatrace, another observability‑focused competitor, is higher at ≈ 18× EV/Rev, reflecting its stronger SaaS‑growth profile.

Market dynamics & trade‑off

The premium on PD stems from its niche “digital ops” positioning, high‑growth ARR (≈ 30% YoY) and the expectation of expanding into incident‑response automation and AI‑driven observability. However, the 14‑16× EV/Rev is already above the “growth‑adjusted” median for the broader SaaS space (≈ 12×). If the company’s FY 2026 guidance holds and ARR conversion rates improve, the multiple can be justified and the stock may continue to trade near its current resistance around $70‑$75. Conversely, any slowdown in subscription growth or a widening loss margin would pressure the EV/Rev compression, exposing PD to a downside break toward the $60 support level.

Actionable insight

Given the elevated EV/Rev relative to ServiceNow and Atlassian, PD is price‑sensitive to growth surprises. A short‑term tactical play could be a tight‑range trade: buy on dips near $65–$68 with a stop just below $62, targeting the $73–$75 upside resistance if ARR guidance remains on‑track. On the longer horizon, the stock is best held only if the company can sustain >30% YoY revenue growth; otherwise, a re‑rating toward the broader SaaS median multiples may cap upside and open the door for a pull‑back.