PagerDuty

Software - Application · Technology

Winston Score

Winston is curious

A decent business — some strong pillars, some weaker.

Data as of Aug 23, 2026 · filings through Apr 30, 2026

How the score breaks down

Quality

Good

Growth

Good

Cash Flow

Strong

Stability

Good

Valuation

Good

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Winston Score History

The full picture

PagerDuty makes software that alerts the right people when something goes wrong with a company's technology systems. If a website crashes or an app stops working at 2 a.m., PagerDuty figures out who needs to know and wakes them up fast. Its customers are mostly IT and engineering teams at mid-size and large companies across industries like finance, retail, and healthcare.

The company earns money through subscriptions, where businesses pay a recurring fee based on how many users they have. PagerDuty operates mainly in North America but also serves customers in Europe and Asia, and it generates around $470 million in annual revenue. Its moat comes from being deeply embedded in how engineering teams respond to outages, making it sticky and hard to rip out once installed. The main risk is competition from larger software platforms like ServiceNow and Microsoft, which are building similar alerting features directly into tools companies already use.

Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+2.7% YoY

YoY Growth Rate

Slow revenue growth

EPS Growth

+208.3% YoY

YoY Growth Rate

Strong earnings growth

Insider Activity

14.5%ownership

→ Flat

Insider ownership roughly steady over the past year

Cash Position

Cash flow positive

$471M cash & investments

Quarterly Free Cash Flow

↑ Burn rate improving

Company generates more cash than it spends — no dilution risk from fundraising

Growth context

PagerDuty is growing revenue at 3% year-over-year. The Winston Score measures business quality today — these growth metrics show what could matter tomorrow.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

Every number that matters to educated investors.

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Quality

Profit per sale

Gross Margin

84.3%

Premium pricing power — 84.3% gross margin

Profit after running costs

Operating Margin

7.6%

Modest — 7.6% operating margin

Return on the money invested

ROCE

4.1%

Weak — 4.1% return on capital

ROIC between 0% and 5%. They earn a few cents back per dollar invested in the business.

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Growth

Sales growth

Sales YoY

+3.7%

Slow sales growth (+3.7% YoY)

Profit growth

EPS YoY

N/A

—

Data not available

How steady the profit is

EPS Consistency

8/8 quarters

Every recent quarter grew earnings vs last year

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Cash Flow

Profit that turns into cash

Cash Conversion

69%

Modest — 69% of profit becomes cash

Spare cash per sale

FCF Margin

25.3%

Converts sales into free cash efficiently (25.3%)

Free cash flow margin above 20%. Out of every $100 in sales, more than $20 is real cash they keep.

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Stability

What it owes vs what it owns

Debt / Equity

1.83

Elevated debt (1.83)

Covers its interest

Interest Cover

4.11x

Adequate interest coverage (4.1x)

Interest coverage between 3 and 8. Profits cover interest several times over.

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Valuation

Price vs profit

P/E Ratio (TTM)

5.9x

no trend

Attractive valuation — P/E 5.9

P/E under 10. The price tag is small relative to last year's profit.

Cheaper or dearer next year

P/E vs Forward

-2.2

SLOWING

Earnings expected to fall — forward P/E higher than today

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Dividends

Not applicable for this business.

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