Dynatrace: DevCycle Acquisition Poised to Reaccelerate Growth and Unlock Valuation Upside

In a report released yesterday, Koji Ikeda from Bank of America Securities maintained a Buy rating on Dynatrace, with a price target of $64.00.

Koji Ikeda has given his Buy rating due to a combination of factors tied to Dynatrace’s growth prospects and valuation. He sees the acquisition of DevCycle as a strategic move that deepens Dynatrace’s integration into developer workflows, particularly in fast-growing AI and startup environments where software is being built and iterated rapidly. By adding feature management capabilities like controlled rollouts, experimentation, and personalization, Dynatrace is better positioned to capture more AI-related workloads and expand its usage within existing and new customers. Ikeda believes this should support a reacceleration in Annual Recurring Revenue and subscription revenue, which in turn could act as a meaningful catalyst for the stock.

Furthermore, Ikeda highlights that Dynatrace currently trades at a notable discount to its infrastructure software peers on an EV/FCF basis, leaving room for multiple expansion if the growth reacceleration materializes. The DevCycle deal is a tuck-in acquisition funded with cash and is not expected to be materially dilutive to near-term financials, which reduces execution risk. He expects more clarity on the integration strategy and growth roadmap at Dynatrace’s upcoming Perform Conference and the next earnings call, but the current risk/reward profile already supports a positive stance. Taken together, these elements underpin his Buy rating and confidence in upside potential toward the stated price objective.

In another report released on January 12, KeyBanc also maintained a Buy rating on the stock with a $60.00 price target.