Pager Duty Inc [NYSE: PD]: Its IPO season, and some highly publicized ones haven’t lived up to the hype. One IPO that has performed extremely well is PagerDuty Inc. Since it went public on the 11th of April, the company has been on a positive trajectory, pushing from $38.35 to its Friday’s close of $51.82. That’s a 35% increase from its IPO price.
PagerDuty Inc. is backed by legendary tech startup founder Peter Thiel, and focuses on making secretive surveillance technologies. So good is the company at deep data mining that its technologies could have had a hand in the capture of Osama Bin Laden. However, the company’s clientele is not just made up of governments, the company also uses data mining to give commercial organizations valuable information, such as predicting consumer behavior. PagerDuty data analysis technologies can recognize consumer behaviors that most data analysis technologies would find hard to capture.
Given that big data is a high growth market, PagerDuty could experience significant growth going into the future. Big data is expected to hit $156 billion by the year 2026, which translates to a compound annual growth rate of 19.3%. As such, a company like PagerDuty that is operating from a position of technical strength stands to make it big in this market. PD also takes its clients very seriously. According to CEO, Jennifer Tejada, the company has never had downtime in its year history. It takes its clients seriously that it never lets maintenance issues affect the quality of service it offers to clients. This is an intrinsic strength that could support the value of PD going forward.
Looking at the numbers, the company made a loss of $40.7 million for the year ending 31st January 2019. This follows a loss of $38.1 million a year earlier. However, revenues grew in this period from $79.6 million to $117.8 million in the same period. On top of that, the company’s client list has grown. In the past one year, the number of customers paying over $100k has increased from 144 to 228. That’s 58% increase in the number of high paying customers. It signals to a growing uptake of the company’s products. It’s a good indicator that going forward, the company will turn a profit and enter into a profit growth path going forward.
Another factor that supports its growth is its strong debt management. The company has a levered free cash flow of $13.52 million, and a current ratio of 1.95. This gives the company the leeway to keep investing in its core product offering. The company’s growing revenues further support it’s potential to keep growing its cash position going forward, and even strengthen its market position going into the future. The company’s quarterly revenues grew by 46% year-on-year. It’s one IPO that has started from a position of strength, backed by strong fundamentals.