The shares of PagerDuty, Inc. (NYSE:) rose more than 4% on Wednesday thanks to a rating upgrade from analysts at Craig-Hallum.
The investment firm upgraded PD to Buy from Hold and raised its price target to $30 from $21 per share, believing there is “substantial room for reacceleration as the clouds clear.”
“PagerDuty has made material improvements that should pay off in the future,” the analysts noted. “On the SMB front, layoffs in the technology sector have declined in recent quarters, and accordingly headwinds have eased significantly, which should improve revenue, customer count, churn and other affected metrics.”
Additionally, they believe the company has made meaningful progress on the business side by “shifting aggressively and very effectively as purchasing power shifted from developers to CFO/procurement.”
As a result, the company sees PagerDuty experience higher customer engagement and therefore sign longer and more multi-product deals.
“We believe that the current discount for peers is not appropriate and see that gap being closed,” the company concluded.
