Is PagerDuty (PD) Stock Undervalued Right Now?

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One stock to keep an eye on is PagerDuty (PD). PD is currently sporting a Zacks Rank #2 (Buy) and an A for Value. The stock holds a P/E ratio of 15.36, while its industry has an average P/E of 26.44. Over the past 52 weeks, PD's Forward P/E has been as high as 28.68 and as low as 13.23, with a median of 20.09.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. PD has a P/S ratio of 1.61. This compares to its industry's average P/S of 3.28.

These figures are just a handful of the metrics value investors tend to look at, but they help show that PagerDuty is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, PD feels like a great value stock at the moment.

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

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