What is the outlook for the upcoming quarter and FY2026, especially regarding subscription growth?

Outlook for Q2 FY‑2026 and FY‑2026 (Subscription Growth)

PagerDuty is entering a pivotal reporting window. The market is already pricing a modest “buy‑the‑rumor” premium (Sentiment = 5) on the upcoming Q2 FY‑2026 release, reflecting confidence that subscription revenue—its core growth engine—will keep expanding at a mid‑single‑digit to low‑double‑digit pace year‑over‑year. Management has repeatedly highlighted three tailwinds that should sustain this trajectory: (1) the continued migration of enterprises to cloud‑native, event‑driven architectures; (2) expanding land‑and‑expand opportunities within existing accounts via premium incident‑response and observability add‑ons; and (3) a low‑churn rate that has hovered around 2‑3 % in recent quarters. Assuming the company meets its internal guidance of roughly 12‑14 % YoY subscription revenue growth for FY‑2026, the top line should comfortably beat consensus, reinforcing the bullish bias on the stock.

Trading Implications & Technical Take‑aways

Technically, PagerDuty has been trading in a tight range just above its 50‑day moving average (≈ $57) with the 200‑day MA (≈ $53) acting as a strong support level. A clean beat on subscription growth and forward‑looking FY‑2026 guidance would likely trigger a breakout above the recent high of $62, attracting momentum buyers and lifting the short‑term RSI from its current neutral 48‑52 zone. Conversely, any miss on the subscription pace—or an ominous churn increase—could see the price retest the $55‑$57 support band and provide a short‑term entry point for contrarians. Actionable signal: consider a small‑to‑moderate long position at current levels with a stop just below $55; add to the position on a confirmed beat and an upward price move past $62, while being prepared to trim if Q2 guidance signals slower subscription acceleration or if the stock falls back through the 50‑day MA on volume‑driven weakness.