PagerDuty adds 15% on takeover rumors; RBC says M&A interest could come from large tech players

investing.com:

PagerDuty (NYSE:PD) shares rose more than 15% following a report from Bloomberg News that the software company is actively exploring options in response to takeover interest from private equity firms.

The increased share value suggests positive investor sentiment in response to the news, reflecting anticipation and potential opportunities associated with a takeover or other strategic actions.

RBC analysts reiterated an Outperform rating and a $31 per share price target on PD stock.

“While we have no knowledge of a pending transaction, we've long thought PagerDuty could be an interesting M&A candidate, and wrote about it earlier this week as part of our 2024 software outlook.

“We think overall software M&A could accelerate this year after what was a rather slow 2023 for software M&A transactions.”

Analysts also argue that a strategic buyer could get involved, which would make sense.

“We believe M&A interest could be from several large tech players that could look to add a high-quality SaaS asset that increasingly feels well positioned to help customers with automation, workflow and AI.”