In a report released yesterday, Andrew Sherman from TD Cowen maintained a Buy rating on Dynatrace, with a price target of $65.00.
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Andrew Sherman has given his Buy rating due to a combination of factors that suggest Dynatrace is positioned for growth. The company is expected to report its second fiscal quarter results with a potential beat and slight raise in annual recurring revenue, driven by solid partner checks and the benefits of a shift to semi-annual quotas. Despite mixed sentiment and low expectations, the stock’s valuation appears attractive, trading at a multiple of future free cash flow.
Furthermore, Dynatrace’s recent performance and strategic initiatives bolster confidence in its future prospects. The company has shown strong annual recurring revenue growth, and management’s optimism about its strategic pipeline and large deal opportunities is encouraging. Additionally, the introduction of a renewals team to focus on converting a broader range of customers to its platform could serve as an incremental growth driver. These factors collectively underpin Sherman’s positive outlook on Dynatrace’s stock.