2022 is not off to the best start for investors, particularly those who invest in growth stocks. Like most things, we have inflation to thank for that. Even the SPDR S&P 500 and ARK Innovation’s ETF are down 10 and 20%, respectively.
It’s during these downturns, however when smart investors who take a step back, a deep breath, and evaluate the moment, end up profiting in the long run. In this post, we’ll cover one red hot under-the-radar stock to buy now.
PagerDuty: A SaaS Incident Response Platform for IT
As businesses become more reliant on digital tools to run their operations, they’re also running into more technical issues than ever before.
What happens when you’re working remotely or on the weekend or over a holiday, and you have to wait until the next business day before someone with your IT department can help you?
Your business loses money. A ton of money.
The downtime can also upset customers and eventually investors and shareholders, resulting in a sloppy, yet avoidable mess.
PagerDuty helps businesses to avoid these issues with its platform that automatically assigns incident responses through real-time tracking. As a result, businesses that use PagerDuty continue running smoothly. The platform also offers digital solutions that are preventative and predictive to fight downtime and pave the way for faster troubleshooting.
PD Earnings Highlights
Some key findings from the company’s Q3 report include:
- $71.8 million revenue (33.5% increase YOY).
- Operating cash flow was $2.7 million.
- Free cash flow worth $1.8 million.
- As of the Q3 earnings call in October 2021, cash, cash equivalents, and current investments were $545.3 million.
PagerDuty Boost ROI For Customers
PagerDuty prides itself on converging Incident Response, AIOps, Automation, and now Customer Service Operations to deliver rapid ROI and customer trust.
DraftKings is one of PagerDuty’s clients. PagerDuty takes care of the following duties for the popular sports betting platform:
- Notifies the correct teams when incidents arise
- Provides visibility and communication to handle incidents, including outages with the website or app.
Before DraftKings started working with PagerDuty, it had a team that worked around the clock to continually and manually monitor the system for outages and other issues, especially on big game days. These employees had to carry laptops with them wherever they went in order to react at the drop of a hat.
Eventually, they started feeling burned out from their constant “pager duty.” The founders set out to fix that problem with PagerDuty, which:
- Automates the process to instantly notify the appropriate staff member
- Enables data-driven decision-making
- Solves problems on a dime before customers notice
Some of PagerDuty’s other customers include:
14,500 Customers & 543 Paying $100k+
Software developers on a mission to change the way incident responses are handled founded PagerDuty in 2009. In 2010, the founders raised a seed funding round of $1.9 million. In 2013, its Series A round raised $10.7 million. By 2018, it had raised more than $170 million in venture funding.
PagerDuty launched Event Intelligence in 2018, which is a product company engineers designed to analyze incoming digital signals and human responses to communicate incident response suggestions to operators as new incidents pop up. They also launched PagerDuty Visibility and PagerDuty Analytics that same year.
In 2019, the company went public on the New York Stock Exchange. One year after, PagerDuty acquired Rundeck, a leading provider of DevOps automation for enterprise.
For the third quarter of 2021, PagerDuty reported nearly 14,500 paid customers, 543 of which provided revenues of more than $100K per year, an increase of 35% from the year before. Not all of PagerDuty’s customers are paying, which presents the company with a lot of room to grow. It’s forecasted $279 million in sales for the fiscal year 2022.
“Q3 was an outstanding quarter for PagerDuty as we delivered record revenue of $72 million and grew 33% year over year,” said Jennifer Tejada, Chairperson, and CEO at PagerDuty.
PagerDuty: A Blazing Buy?
Like many stocks in 2022, PD is currently experiencing a downward trajectory, but the company should reward its investors handsomely in the long run as it continues to increase its customer base and expand its service offerings. Companies like DraftKings rely on PagerDuty in order to make their businesses run seamlessly, which makes the product very sticky.
It appears as if PagerDuty is just getting started “building on a strong foundation of digital infrastructure to become the Operations Cloud for the modern enterprise.” With a per share price just north of $30 and a growing and impressive client roster, now might well be the ideal time to buy this red hot under the radar stock.
The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.