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Dynatrace
(NYSE:DT)
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Rating:77Outperform
Price Target:
$52.00
▲(24.94% Upside)
Action:Reiterated
Date:08/05/26
DT scores well on financial quality (strong margins, free cash flow generation, and a conservative balance sheet) and is further supported by a constructive earnings update with raised revenue/margin/EPS guidance and solid ARR momentum. The score is tempered by expensive valuation (high P/E with no dividend support) and only moderately positive technicals that are somewhat extended.
Positive Factors
Cash generation & margins
Sustained high free cash flow and near‑one-to-one cash conversion indicate durable earnings quality. This generates internal funding for R&D, inorganic options, and sustained capital returns while reducing reliance on external financing through product cycles.
Negative Factors
Top-line deceleration
Material slowdown in reported revenue growth reduces operating leverage potential and raises pressure on sustaining investment-driven expansion. Persistent deceleration forces greater reliance on upsells, consumption monetization and margin improvements to meet longer-term targets.
Read all positive and negative factors
Positive Factors
Negative Factors
Cash generation & margins
Sustained high free cash flow and near‑one-to-one cash conversion indicate durable earnings quality. This generates internal funding for R&D, inorganic options, and sustained capital returns while reducing reliance on external financing through product cycles.
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
$12.86B
Dividend YieldN/A
Average Volume (3M)4.99M
Price to Earnings (P/E)82.3
Beta (1Y)0.97
Revenue Growth18.82%
EPS Growth-66.60%
CountryUS
Employees5,600
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)0.54
Shares Outstanding290,228,880
10 Day Avg. Volume3,795,858
30 Day Avg. Volume4,993,576
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 Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$51.00Price Target Upside22.54% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering28
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:Aug 05, 2026
(Q1-2027)
| Next Earnings Date:Oct 29, 2026
Earnings Call Sentiment Positive
The call presented a strong, broad-based quarter with multiple operational and financial beats: accelerating net new ARR, robust logs and consumption growth, record new-logo performance, solid free cash flow and increased shareholder returns. Management reiterated ARR acceleration goals and raised certain revenue and margin posture while remaining conservative on full-year ARR guidance. Key near-term risks include FX headwinds, renewal seasonality concentrated in the back half of the year, reliance on large deals causing timing volatility, and an upcoming CFO transition. Overall the positive momentum and clear AI/agent monetization pathways outweigh the timing and macro/operational risks.Positive Updates
Strong ARR Growth
Total ARR reached $2.14B, up 17% year-over-year. Q1 net new ARR was $85M (66% growth YoY; 41% organic growth excluding $13M from Bindplane). Trailing 12-month organic net new ARR growth accelerated to 17% (from 12% in Q4).
Negative Updates
Foreign Exchange Headwind
Approximately 40% of revenue is FX-exposed; company now expects a USD strength headwind of $14M to ARR and $4M to revenue (noted as an incremental headwind of $23M to ARR and $19M to revenue in commentary).
Read all updates
Q1-2027 Updates
Positive
Negative
Strong ARR Growth
Total ARR reached $2.14B, up 17% year-over-year. Q1 net new ARR was $85M (66% growth YoY; 41% organic growth excluding $13M from Bindplane). Trailing 12-month organic net new ARR growth accelerated to 17% (from 12% in Q4).
Read all positive updates
Company Guidance
Guidance summary: For FY‑27 Dynatrace maintained constant‑currency ARR growth guidance of 15.5%–16.5% and raised constant‑currency total and subscription revenue growth to 14.5%–15.0% (up 25 bps at the midpoint); it increased the high end of full‑year non‑GAAP operating margin guidance to 29.75% (up 25 bps) and raised non‑GAAP EPS to $1.97–$1.99 (up $0.04 at the midpoint) assuming 295–297M diluted shares and an 18.5% effective cash tax rate, while keeping adjusted free cash flow margin guidance at 26.5% (reflecting a revised adjusted FCF definition). Management expects an FX headwind of $14M to ARR and $4M to revenue (an incremental headwind of $23M to ARR and $19M to revenue), will revisit ARR at the fiscal midpoint, and modeled Q2 at revenue growth of 15%–16%, non‑GAAP operating margin of 29.5%–30% and non‑GAAP EPS of $0.48–$0.49. Q1 results that underpinned the update included ARR of $2.14B (+17% YoY), net new ARR of $85M (66% YoY, 41% organic excl. $13M from Bindplane), total revenue $555M and subscription revenue $530M (+15%, ~100 bps above the high end of guidance), non‑GAAP operating margin 29%, non‑GAAP net income $140M ($0.48/sh), adjusted FCF of $309M (T‑12M adjusted FCF $579M, 28% of revenue).Dynatrace Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
90
Very Positive
Cash Flow
84
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
41.62
Price Trends
42.88
Positive
40.05
Positive
41.27
Positive
Market Momentum
0.47
Negative
61.27
Neutral
87.96
Negative
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 41.62 is below the 20-day moving average (MA) of 43.91, below the 50-day MA of 42.88, and above the 200-day MA of 41.27, indicating a bullish trend. The MACD of 0.47 indicates Negative momentum. The RSI at 61.27 is Neutral, neither overbought nor oversold. The STOCH value of 87.96 is Negative, 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 |
|---|---|---|---|---|---|---|---|
77 Outperform | $12.86B | 82.30 | 6.00% | ― | 18.82% | -66.60% | |
77 Outperform | $6.84B | 18.56 | 37.43% | ― | 17.26% | ― | |
68 Neutral | $12.65B | 80.39 | 10.99% | ― | 24.92% | 356.37% | |
68 Neutral | $5.83B | -228.69 | -2.66% | ― | 24.90% | -233.01% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
61 Neutral | $13.84B | -20.20 | -21.33% | ― | 7.55% | -39.50% |
* Technology Sector Average
DT
Dynatrace
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-9.54%
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Dynatrace Corporate Events
Business Operations and StrategyExecutive/Board ChangesStock BuybackFinancial Disclosures
Dynatrace Posts Strong Q1 2027 Earnings Momentum
Positive
Aug 5, 2026
Dynatrace reported strong results for the first quarter of fiscal 2027 ended June 30, 2026, with annual recurring revenue rising 17% to $2.14 billion and total revenue up 16% to $555 million, surpassing guidance and boosting free cash flow. The co...
Business Operations and StrategyExecutive/Board Changes
Dynatrace Adds AI and Cloud Veteran to Board
Positive
Jul 29, 2026
On July 29, 2026, Dynatrace announced that it had appointed Chandu Thota to its board of directors, effective July 27, 2026, adding a seasoned AI and cloud technology leader to its governance team. Thota brings more than two decades of experience ...
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.