PagerDuty slips as Monness, Crespi, Hardt downgrades after 'strong rebound' from May lows
Michael Vi

PagerDuty (NYSE:PD) shares fell on Friday even as investment firm Monness, Crespi, Hardt downgraded the cloud computing software company, citing the "strong rebound" in the stock from the lows seen in May.
Analyst Brian White lowered his rating on PagerDuty (PD) to neutral, noting that while the last several months have been "especially painful" for next-generation software companies, PagerDuty (PD) has seen strength, but there is concern that this will "fizzle out in due time."
PagerDuty (PD) is scheduled to report second-quarter results on September 1 and Monness, Crespi, Hardt believes the company will generate 32% growth for $88.1M in revenues and lose an adjusted 8 cents per share.
However, there is concern that billings growth could slow, with PagerDuty (PD) expecting growth between 25% and 30%.
 White noted that while PagerDuty (PD) has "executed well" in recent quarters, "smoke has begun to appear," with companies starting to see softer results, including Datadog (DDOG).
"We view Datadog as the highest-quality, most consistent, next-gen software vendor in our coverage; however, the company was still unable to escape this economic blaze and issued an uncharacteristically guarded outlook last week," White wrote in a note to clients. 
"Moreover, other observability players recently called out reduced usage patterns, deal slippage, elongated sales cycles, and greater spending scrutiny."
Analysts are mostly wary on PagerDuty (PD). It had an average rating of HOLD from Seeking Alpha authors, while Wall Street analysts rate it a BUY. Conversely, Seeking Alpha's quant system, which consistently beats the market, rates PD a HOLD.