PagerDuty Inc. shares finished higher Monday as analysts started coverage of the DevOps company’s stock less than a month after it started trading, with the split among buys and holds appearing to be an opinion of how much growth the stock’s doubling in a month is already priced in.
PagerDuty PD, +5.69% shares closed up 5.7% at $49.04, compared with 0.5% declines for both the S&P 500 index SPX, -0.45% and the tech-heavy Nasdaq Composite Index COMP, -0.50% .
In mid-April, PagerDuty shares surged nearly 60% on their first day of trading, and are 104% above their initial public offering price of $24. By comparison, the S&P 500 is up 1.5% and the Nasdaq is up 2.2% since PagerDuty’s IPO.
By Monday, seven analysts were covering PagerDuty, three with buy ratings and four with hold ratings, and an average price target of $48.45, according to FactSet data.
PagerDuty offers a subscription service that allows businesses to improve the constant interplay between software developers and operators — so-called DevOps — within their organization and lets them use real-time data to address incidents that occur. Competitors include Atlassian Corp.’s TEAM, +0.14% OpsGenie and Splunk Inc.’s SPLK, -0.09% VictorOps products.
BTIG analyst Joel Fishbein, who has a neutral rating on the stock, said he expects north of 30% growth at PagerDuty “for many years,” but said he is “watching closely for a pullback as an entry point” given the stock’s impressive run in less than a month.
Morgan Stanley analyst Sanjit Singh, who has an equal-weight rating and a $47 price target, also said PagerDuty growth opportunity “looks priced in.”
“We believe valuation levels currently assume significant outperformance relative to our estimates resulting in a more balanced risk/reward,” Singh said