PagerDuty, Inc. (PD) DCF Valuation & Fundamental Primer
PagerDuty, Inc. (PD) currently trades at $323.64 with an enterprise value of $3.19B. Our proprietary institutional model rates PagerDuty, Inc. at 54/100 (Grade: B · Mixed Fundamental Profile). The current market price prices in an implied 5-year revenue CAGR of 106.0% vs. historical growth of 21.6% (Aggressive Growth Expectations Priced In).
Institutional fundamental teardown of PagerDuty, Inc. (PD) covering SEC 10-K/10-Q cash flow conversion, SBC dilution friction, and Reverse-DCF valuation hurdles.
PagerDuty, Inc. (PD) 3-Scenario DCF Valuation Range
Institutional Software Quality Scorecard (54/100 · Grade B)
Viable recurring software business but carries notable dilution, lower margins, or higher leverage.
Positive FCF but lower conversion efficiency due to capex or timing
Severe dilution; heavy SBC shields GAAP losses while diluting common equity
Elite Tier-1 SaaS compounder with high gross margin and superior Rule of 40
Moderate leverage or cash burn; monitor liquidity runway
Core Investment Strengths & Moats
- Top-quartile software unit economics: 83.0% gross margin and 44.8% Rule of 40 score
Key Operational & Dilution Risks
- Excessive shareholder dilution: SBC represents 27.0% of revenue and 107% of operating cash flow
Reverse-DCF Solver: What Growth is Priced Into PD?
The current share price demands 106.0% 5-year CAGR—a +84.4% acceleration over historical run-rate (21.6%). Any growth slowdown risks valuation multiple contraction.
PagerDuty, Inc. (PD) 5-Year Fundamental Forecast
| Statement Line Item | TTM Audited Base | TTM | Y1 | Y2 | Y3 | Y4 | Y5 |
|---|---|---|---|---|---|---|---|
| Revenue | $467.5M | $467.5M | $568.7M | $691.7M | $841.4M | $1.02B | $1.24B |
| Gross Profit | $387.8M | $387.8M | $471.8M | $573.9M | $698.0M | $849.1M | $1.03B |
| Operating Income (EBIT) | $-59.8M | $-59.8M | $-72.7M | $-88.5M | $-107.6M | $-130.9M | $-159.2M |
| Stock-Based Compensation (SBC) | $126.2M | $126.2M | $153.5M | $186.8M | $227.2M | $276.3M | $336.1M |
| Unlevered Free Cash Flow (FCF) | $108.4M | $108.4M | $131.9M | $160.4M | $195.1M | $237.3M | $288.7M |
| SBC-Adjusted True Cash Flow | $-17.8M | $-17.8M | $-21.7M | $-26.4M | $-32.1M | $-39.0M | $-47.4M |
Marketing Automation, CX & Messaging Peer Comparables Matrix
| Company | Ticker | Market Cap | TTM Revenue | Gross Margin | FCF Margin | Rule of 40 | SBC % Rev | EV / Rev |
|---|---|---|---|---|---|---|---|---|
| PagerDuty, Inc. | PD | $39.16B | $467.5M | 83.0% | 23.2% | 44.8% | 27.0% | 84.0× |
| Salesforce, Inc. | CRM | $307.82B | $37.90B | 76.8% | 32.4% | 43.4% | 8.4% | 8.0× |
| Twilio Inc. | TWLO | $38.62B | $2.83B | 80.7% | 27.3% | 51.3% | 17.8% | 12.9× |
| DocuSign, Inc. | DOCU | $29.38B | $3.57B | 75.7% | 21.7% | 45.5% | 17.2% | 7.7× |
| Zoom Video Communications | ZM | $17.84B | $1.58B | 72.8% | 20.8% | 43.2% | 12.5% | 11.0× |
| RAMP | RAMP | $17.48B | $1.43B | 72.6% | 25.3% | 42.9% | 19.7% | 12.1× |
| SEMR | SEMR | $57.62B | $4.34B | 82.8% | 33.8% | 57.0% | 15.2% | 12.8× |
| Peer Cohort Median Benchmark (N=6) | 76.3% | 26.3% | 44.5% | 16.2% | 11.6× | |||
EV / Revenue Multiple Compression Stress Test
| Multiple Scenario | EV / Revenue | Implied Enterprise Value | Implied Equity Value | Implied Share Price | Delta vs Current |
|---|---|---|---|---|---|
| Current Multiple | 84.0× | $39.28B | $39.16B | $323.64 | 0.0% |
| -20% Multiple Compression | 67.2× | $31.42B | $31.30B | $258.72 | -20.0% |
| -35% Multiple Compression | 54.6× | $25.53B | $25.41B | $210.03 | -35.0% |
| Software Baseline Floor (5.0× EV/Rev) | 5.0× | $2.34B | $2.22B | $18.35 | -94.0% |
Frequently Asked Questions: PagerDuty, Inc. (PD) Valuation
What is PagerDuty, Inc. (PD)'s intrinsic DCF valuation and implied share price?
Based on audited SEC 10-K/10-Q filings and a 5-year 3-statement discounted cash flow (DCF) model, PagerDuty, Inc. (PD) has a Base Case implied value of $25.40 per share (with a Bear Case of $10.09 and a Bull Case of $47.08), compared to its current price of $323.64. The model discounts projected free cash flows at a 10.0% WACC and a 2.5% terminal growth rate.
What is PagerDuty, Inc. (PD)'s Rule of 40 score and Free Cash Flow margin?
PagerDuty, Inc. achieves a Rule of 40 score of 44.8%, combining a 21.6% revenue growth run-rate with a 23.2% TTM free cash flow margin on $467.5M in trailing twelve-month revenue. In the Marketing Automation, CX & Messaging peer cohort, the median Rule of 40 benchmark is 44.5%.
What revenue growth rate is priced into PD stock according to Reverse-DCF analysis?
At $323.64 per share (Enterprise Value of $39.28B), our Reverse-DCF solver indicates the market is pricing in a 5-year implied revenue CAGR of 106.0%, compared to PagerDuty, Inc.'s historical CAGR of 21.6%. Overall market expectations are rated as "Aggressive Growth Expectations Priced In".
How does PagerDuty, Inc. compare to Marketing Automation, CX & Messaging software peers?
PagerDuty, Inc. (PD) earns an institutional Software Quality Score of 54/100 (Grade B — Mixed Fundamental Profile). Across its Marketing Automation, CX & Messaging peer group (CRM, TWLO, DOCU, ZM, RAMP), the cohort trades at a median EV/TTM Revenue multiple of 11.6× and a median gross margin of 76.3%.
How does Stock-Based Compensation (SBC) impact PagerDuty, Inc. (PD)'s valuation?
PagerDuty, Inc. recorded $126.2M in TTM stock-based compensation (27.0% of revenue). When treating SBC as a cash-equivalent compensation expense, PagerDuty, Inc.'s SBC-adjusted free cash flow yield is -0.1%, scoring 4/25 on our Shareholder Dilution Friction pillar.