Shares of PagerDuty, Inc. (NYSE:PD) are up more than 4% Wednesday on the back of a rating upgrade from analysts at Craig-Hallum.
The investment firm lifted PD to Buy from Hold, increasing the price target to $30 from $21 per share, believing there is "substantial room for reacceleration when the clouds clear."
"PagerDuty has made material improvements that should bear fruit going forward," note the analysts. "On the SMB front, tech layoffs have lessened over the past few quarters, and accordingly, headwinds have materially lessened, which should improve top line, customer count, churn, and other metrics that had been affected."
In addition, they feel that on the enterprise side, the company has made meaningful progress in the business by "aggressively and very effectively pivoting when purchasing power moved from developers to CFO/procurement."
As a result, the firm says PagerDuty is experiencing higher-level engagement with customers and is accordingly signing longer and more multi-product deals.
"We believe the current discount to peers is not appropriate and see that gap closing," concluded the firm.