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Dynatrace
(NYSE:DT)
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Rating:78Outperform
Price Target:
$50.00
▲(40.45% Upside)
Action:Reiterated
Date:07/02/26
DT scores well primarily on financial strength (low leverage, strong cash generation, and high gross margins) and a constructive technical setup (price above key moving averages with positive momentum). The main constraint on the score is valuation (very high P/E with no dividend support), while guidance is broadly positive but includes near-term margin and timing risks (cloud hosting cost headwind and DPS renewal variability).
Positive Factors
Recurring subscription model
A primarily subscription-based revenue model creates durable, predictable cash flows and high customer lifetime value. With broad platform adoption and expansion potential inside large accounts, recurring revenue supports reinvestment, margin stability, and multiyear visibility into ARR growth and retention dynamics.
Negative Factors
Decelerating revenue growth
Slowing top-line growth after rapid scale signals a tougher go-to-market or market saturation dynamic versus prior years. Even with large ARR, deceleration complicates margin expansion and raises execution demands to sustain the multi-year growth profile expected by enterprise customers and investors.
Read all positive and negative factors
Positive Factors
Negative Factors
Recurring subscription model
A primarily subscription-based revenue model creates durable, predictable cash flows and high customer lifetime value. With broad platform adoption and expansion potential inside large accounts, recurring revenue supports reinvestment, margin stability, and multiyear visibility into ARR growth and retention dynamics.
Read all positive factors
Dynatrace Key Performance Indicators (KPIs)
Any
Revenue by Segment
Shows how revenue is distributed across different business units, highlighting which areas are driving growth and which may need strategic adjustments.
Shows how revenue is distributed across different business units, highlighting which areas are driving growth and which may need strategic adjustments.
Data provided by:
The Fly
The FlyDynatrace (DT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$12.73B
Dividend YieldN/A
Average Volume (3M)5.51M
Price to Earnings (P/E)81.1
Beta (1Y)0.95
Revenue Growth18.82%
EPS Growth-66.60%
CountryUS
Employees5,600
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)0.54
Shares Outstanding291,475,740
10 Day Avg. Volume4,756,284
30 Day Avg. Volume5,513,035
Financial Highlights & Ratios
PEG Ratio-1.03
Price to Book (P/B)4.21
Price to Sales (P/S)5.45
P/FCF Ratio20.87
Enterprise Value/Market Cap0.87
Enterprise Value/Revenue5.49
Enterprise Value/Gross Profit6.74
Enterprise Value/Ebitda34.25
Forecast
1Y Price Target
$46.92Price Target Upside31.79% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering27
EPS Forecast (FY)1.95
Revenue Forecast (FY)$2.33B
Dynatrace Business Overview & Revenue Model
Company Description
Dynatrace, Inc. specializes in providing a sophisticated software intelligence platform tailored for complex, evolving multi-cloud setups. The Dynatrace platform, central to their offerings, delivers a wide array of functionalities including monit...
How the Company Makes Money
Dynatrace primarily makes money by selling subscriptions to its Dynatrace software platform, typically under recurring-term contracts with enterprise customers. Revenue is largely recurring and is recognized over the subscription term as customers...
Dynatrace Earnings Call Summary
Earnings Call Date:May 13, 2026
(Q4-2026)
| % Change Since: |
Next Earnings Date:Aug 05, 2026
Earnings Call Sentiment Positive
The call emphasized substantial progress: surpassing $2.0B ARR, consistent 16% ARR growth, high-growth consumption (logs >$100M and >100% YoY growth), strong revenue growth (+16-17%), healthy margins (non-GAAP operating margin ~29%), strong free cash flow and aggressive buybacks, and clear product and AI/agent-driven go-to-market momentum. Key near-term headwinds include a $28M GAAP restructuring charge, anticipated ~100 bps gross margin pressure from cloud hosting costs due to rising consumption, and timing/renewal variability related to a large DPS cohort that could affect the realization of FY27 net new ARR. Overall, positive execution and credible guidance for ARR acceleration were presented, with manageable operational and timing risks called out.Positive Updates
Surpassed $2 Billion ARR & Consistent ARR Growth
ARR ended fiscal 2026 at $2.05 billion, marking the company surpassing the $2B ARR milestone. Dynatrace delivered its fourth consecutive quarter of 16% year-over-year ARR growth and stabilized ARR growth at 16% for the year.
Negative Updates
Q4 GAAP Restructuring & Impairment Charges
Q4 GAAP operating income included $28 million of restructuring and impairment charges related to workforce reductions and office footprint rationalization, which reduced GAAP profitability for the quarter.
Read all updates
Q4-2026 Updates
Positive
Negative
Surpassed $2 Billion ARR & Consistent ARR Growth
ARR ended fiscal 2026 at $2.05 billion, marking the company surpassing the $2B ARR milestone. Dynatrace delivered its fourth consecutive quarter of 16% year-over-year ARR growth and stabilized ARR growth at 16% for the year.
Read all positive updates
Company Guidance
The company guided fiscal 2027 ARR to $2.38–$2.40 billion (15.5%–16.5% growth), implying full‑year net new ARR of $320–$340 million (up ~16%–23%) with net new modestly weighted to the first half; total revenue of $2.32–$2.34 billion and subscription revenue of $2.22–$2.24 billion (both +14%–15%); non‑GAAP operating margin of ~29.5% (including ~150 bps of OpEx leverage offset by a ~100 bp gross‑margin headwind from higher cloud hosting costs); non‑GAAP net income $584–$594 million and EPS $1.93–$1.95 on ~302–304 million shares; an effective cash tax rate of 18.5%; free cash flow margin of 26.5% and pretax free cash flow margin of 32%; SBC expected just under 14% of revenue (down ~100 bps); and Q1 revenue guidance of ~$540–$551 million with subscription revenue $523–$527 million, Q1 non‑GAAP operating margin 27.5%–28% and EPS $0.44–$0.45 (shares ~298–299M).Dynatrace Financial Statement Overview
Summary
Income Statement
76
Positive
Balance Sheet
90
Very Positive
Cash Flow
88
Very Positive
| Breakdown | Mar 2026 | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 2.02B | 1.70B | 1.43B | 1.16B | 929.45M |
| Gross Profit | 1.65B | 1.38B | 1.16B | 935.64M | 756.57M |
| EBITDA | 323.82M | 271.53M | 209.85M | 147.99M | 138.73M |
| Net Income | 162.67M | 483.68M | 154.63M | 107.96M | 52.45M |
Balance Sheet | |||||
| Total Assets | 4.42B | 4.14B | 3.41B | 2.77B | 2.54B |
| Cash, Cash Equivalents and Short-Term Investments | 1.17B | 1.11B | 836.87M | 555.35M | 462.97M |
| Total Debt | 164.32M | 75.36M | 69.53M | 75.17M | 338.76M |
| Total Liabilities | 1.80B | 1.52B | 1.39B | 1.16B | 1.24B |
| Stockholders Equity | 2.61B | 2.62B | 2.02B | 1.60B | 1.30B |
Cash Flow | |||||
| Free Cash Flow | 527.24M | 433.31M | 351.65M | 333.35M | 233.22M |
| Operating Cash Flow | 559.42M | 459.42M | 378.11M | 354.88M | 250.92M |
| Investing Cash Flow | -15.69M | -69.31M | -193.05M | -21.54M | -30.89M |
| Financing Cash Flow | -471.66M | -151.63M | 50.66M | -232.34M | -80.66M |
Dynatrace Technical Analysis
Positive
35.60
Price Trends
41.08
Positive
38.84
Positive
41.67
Positive
Market Momentum
1.11
Negative
54.25
Neutral
56.35
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DT, the sentiment is Positive. The current price of 35.6 is below the 20-day moving average (MA) of 42.66, below the 50-day MA of 41.08, and below the 200-day MA of 41.67, indicating a bullish trend. The MACD of 1.11 indicates Negative momentum. The RSI at 54.25 is Neutral, neither overbought nor oversold. The STOCH value of 56.35 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DT.
Dynatrace Risk Analysis
Dynatrace disclosed 50 risk factors in its most recent earnings report. Dynatrace reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Dynatrace Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $12.73B | 81.11 | 6.00% | ― | 18.82% | -66.60% | |
75 Outperform | $6.26B | 17.00 | 37.43% | ― | 17.26% | ― | |
68 Neutral | $5.48B | -214.84 | -2.66% | ― | 24.90% | -233.01% | |
67 Neutral | $11.33B | 72.03 | 10.99% | ― | 24.92% | 356.37% | |
64 Neutral | $13.48B | -19.68 | -21.33% | ― | 7.55% | -39.50% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
DT
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-8.82
-16.80%
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Dynatrace Corporate Events
Business Operations and StrategyExecutive/Board ChangesStock Buyback
Dynatrace Adds Veteran Directors, Emphasizes Shareholder Value Strategy
Positive
Jul 1, 2026
On July 1, 2026, Dynatrace appointed technology veterans George Riedel and Dan Streetman to its board of directors, following a period of constructive engagement with activist investor Starboard Value LP. The additions bring deep experience in ent...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.