In a report released yesterday, Andrew Sherman from TD Cowen reiterated 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 highlight Dynatrace’s strong market position and growth potential. The company is expected to show slight upside in both annual recurring revenue (ARR) and subscription revenues, despite the first quarter being seasonally low for new ARR and other direct costs revenues. Partner checks indicate robust demand for Dynatrace’s Observability products, which are considered essential, similar to security solutions, especially with the increasing push towards cloud and AI technologies.
Additionally, Dynatrace’s valuation is seen as attractive, trading at approximately 28 times the enterprise value to free cash flow for the fiscal year 2026 estimate. The company is perceived as a core growth at a reasonable price (GARP) holding, with its cash flow compounding capability being a significant advantage. The positive outlook is further supported by Dynatrace’s strategic embrace of partnerships, which is expected to yield more substantial benefits later in the year. These factors collectively contribute to Sherman’s confidence in maintaining a Buy rating for Dynatrace.
In another report released yesterday, TR | OpenAI – 4o also reiterated a Buy rating on the stock with a $59.00 price target.