PagerDuty (PD) Moves 6.9% Higher: Will This Strength Last?

PagerDuty PD shares ended the last trading session 6.9% higher at $15.72. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 1.3% loss over the past four weeks.

PagerDuty is benefiting from strong demand for its AI-enhanced incident management, AIOps, automation solutions, and expanding use cases in managing AI infrastructure and operations.

This software developer is expected to post quarterly earnings of $0.22 per share in its upcoming report, which represents a year-over-year change of +4.8%. Revenues are expected to be $123.59 million, up 6.6% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For PagerDuty, the consensus EPS estimate for the quarter has been revised 33.3% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on PD going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

PagerDuty is a member of the Zacks Internet - Software industry. One other stock in the same industry, Phunware PHUN, finished the last trading session 1.2% lower at $3.21. PHUN has returned 6.9% over the past month.

Phunware's consensus EPS estimate for the upcoming report has remained unchanged over the past month at -$0.15. Compared to the company's year-ago EPS, this represents a change of +53.1%. Phunware currently boasts a Zacks Rank of #3 (Hold).

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This article originally published on Zacks Investment Research (zacks.com).

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