Dynatrace (DT) AI Stock Analysis

• Market Cap: $12.05B
• Dividend Yield: N/A
• Average Volume (3M): 2.91M
• Price to Earnings (P/E): 24.0
• Beta (1Y): 1.09
• Revenue Growth: 18.50%
• EPS Growth: 207.45%
• Country: US
• Employees: 4,700
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 0.44
• Shares Outstanding: 301,488,280
• 10 Day Avg. Volume: 2,955,930
• 30 Day Avg. Volume: 2,908,965
• PEG Ratio: 0.14
• Price to Book (P/B): 5.37
• Price to Sales (P/S): 8.28
• P/FCF Ratio: 32.47
• Enterprise Value/Market Cap: 1.12
• Enterprise Value/Revenue: 7.27
• Enterprise Value/Gross Profit: 8.92
• Enterprise Value/Ebitda: 49.51
• 1Y Price Target: $59.42
• Price Target Upside: 43.60% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 21
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 77 Outperform
• Price Target: $45.00 ▲(8.75% Upside)

Dynatrace's strong financial performance and positive earnings call results are the primary drivers of its overall score. The company's robust revenue growth, strategic partnerships, and increased platform adoption are significant strengths. However, the bearish technical indicators and moderate valuation slightly temper the overall score.

Positive Factors

Recurring revenue and ARR growth

Dynatrace's subscription-based SaaS model and 16% ARR / 17% subscription revenue growth provide durable, predictable revenue streams. Strong recurring revenue supports long-term investment in R&D and sales while smoothing cash flow over multiple quarters.

Strong cash generation and conservative balance sheet

Consistent free cash flow growth and a low debt-to-equity profile give Dynatrace financial flexibility to fund growth initiatives, weather downturns, and invest in platform expansion without over-reliance on external financing, supporting durable capital allocation.

Platform adoption, product momentum and partnerships

Rapid DPS adoption (50% customers, 70% ARR), plus >100% YoY growth in log management and strategic integrations, indicates deeper customer embedding and rising consumption. This broadens revenue streams and raises switching costs, strengthening long-term competitive position.

Negative Factors

Stagnant net retention rate

A modest, non-improving NRR of ~111% suggests limited incremental revenue extraction from the installed base despite strong consumption in some areas. Over the medium term this constrains organic revenue growth and increases dependence on new customer acquisition.

Macro and geopolitical exposure in EMEA

Ongoing macro and geopolitical uncertainty in EMEA can prolong elongated sales cycles, pressure enterprise IT budgets, and raise churn/renewal risks. These regional headwinds are structural over months and can materially affect enterprise SaaS adoption and deal timing.

Intensifying competition after rival acquisitions

Consolidation by large incumbents (e.g., Palo Alto acquiring a rival) raises competitive intensity from well-funded vendors bundling observability with security/cloud stacks. This can pressure pricing, slow share gains, and raise go-to-market hurdles over the medium term.

Dynatrace Business Overview & Revenue Model

Company Description

Dynatrace, Inc. provides a software intelligence platform for dynamic multi-cloud environments. It operates Dynatrace, a software intelligence platform, which provides application and microservices monitoring, runtime application security, infrastructure monitoring, digital experience monitoring, business analytics, and cloud automation. Its platform allows its customers to modernize and automate IT operations, develop and release software, and enhance user experiences. The company also offers implementation, consulting, and training services. Dynatrace, Inc. markets its products through a combination of direct sales team and a network of partners, including resellers, system integrators, and managed service providers. It serves customers in various industries comprising banking, insurance, retail, manufacturing, travel, and software. The company operates in North America, Europe, the Middle East, Africa, the Asia Pacific, and Latin America. Dynatrace, Inc. was founded in 2005 and is headquartered in Waltham, Massachusetts.

How the Company Makes Money

Dynatrace generates revenue primarily through a subscription-based model, offering its software solutions on a Software-as-a-Service (SaaS) basis. Customers pay for access to the platform based on usage metrics such as the number of hosts or the amount of data monitored. Key revenue streams include annual subscription fees, which provide a predictable income flow, and professional services that include consulting and implementation support. Dynatrace also benefits from significant partnerships with cloud service providers and technology integrators, which help expand its market reach and drive additional sales. The company's focus on innovation and continuous product development ensures that they meet the evolving needs of their customers, further solidifying their revenue base.

Dynatrace Financial Statement Overview

Summary

Dynatrace exhibits strong financial performance with robust revenue and profit growth, efficient cost management, and prudent financial leverage. The company maintains high gross profit margins and a low debt-to-equity ratio, indicating financial stability and profitability.

Income Statement

Dynatrace demonstrates strong revenue growth with a consistent increase in total revenue over the years. The company maintains high gross profit margins, indicative of efficient cost management. Net profit margins have improved significantly, showcasing enhanced profitability. EBIT and EBITDA margins are also healthy, reflecting strong operational performance. The positive revenue growth trajectory and robust profitability metrics position Dynatrace favorably in the competitive software industry.

Balance Sheet

The balance sheet of Dynatrace is characterized by a low debt-to-equity ratio, indicating prudent financial leverage and reduced risk. Return on equity has shown improvement, suggesting effective utilization of shareholder funds to generate profits. The equity ratio is stable, reflecting a strong capital structure. Overall, the balance sheet reflects financial stability and a conservative approach to debt management, which is advantageous for long-term growth.

Cash Flow

Dynatrace exhibits strong cash flow performance with consistent growth in free cash flow. The operating cash flow to net income ratio indicates efficient conversion of earnings into cash. The free cash flow to net income ratio is high, underscoring the company's ability to generate cash relative to its net income. The positive trajectory in cash flow metrics supports Dynatrace's capacity to fund operations and invest in growth opportunities.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.85B	1.70B	1.43B	1.16B	929.45M	703.51M
Gross Profit	1.51B	1.38B	1.16B	935.64M	756.57M	575.80M
EBITDA	272.10M	227.54M	183.34M	147.42M	138.18M	153.02M
Net Income	506.25M	483.68M	154.63M	107.96M	52.45M	75.71M
Balance Sheet
Total Assets	4.08B	4.14B	3.41B	2.77B	2.54B	2.26B
Cash, Cash Equivalents and Short-Term Investments	1.31B	1.11B	836.87M	555.35M	462.97M	324.96M
Total Debt	86.82M	75.36M	69.53M	75.17M	338.76M	439.61M
Total Liabilities	1.30B	1.52B	1.39B	1.16B	1.24B	1.14B
Stockholders Equity	2.78B	2.62B	2.02B	1.60B	1.30B	1.11B
Cash Flow
Free Cash Flow	476.06M	433.31M	351.65M	333.35M	233.22M	206.36M
Operating Cash Flow	506.97M	459.42M	378.11M	354.88M	250.92M	220.44M
Investing Cash Flow	-29.20M	-69.31M	-193.05M	-21.54M	-30.89M	-13.88M
Financing Cash Flow	-166.14M	-151.63M	50.66M	-232.34M	-80.66M	-97.80M

Dynatrace Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 41.38
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DT, the sentiment is Negative. The current price of 41.38 is below the 20-day moving average (MA) of 43.24, below the 50-day MA of 44.68, and below the 200-day MA of 48.78, indicating a bearish trend. The MACD of -0.98 indicates Positive momentum. The RSI at 27.54 is Positive, neither overbought nor oversold. The STOCH value of 12.01 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DT.

Dynatrace Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DT	77 Outperform	$12.05B	23.98	20.57%	―	18.50%	207.45%
DAY	67 Neutral	$11.10B	-73.75	-5.71%	―	11.73%	-376.77%
ESTC	65 Neutral	$7.64B	-70.14	-12.84%	―	16.98%	-265.85%
U	65 Neutral	$17.99B	-40.05	-13.64%	―	-8.23%	48.57%
GTLB	64 Neutral	$6.09B	-139.29	-5.17%	―	27.35%	18.18%
GWRE	63 Neutral	$14.53B	162.02	6.57%	―	22.80%	198.93%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%