Dynatrace Inc (DT)
NYSE:DT
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Dynatrace
(NYSE:DT)
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Rating:72Outperform
Price Target:
$36.00
▲(6.67% Upside)
Action:ReiteratedDate:02/10/26
The score is supported primarily by strong financial quality (high margins, low leverage, strong cash conversion) and an earnings call that raised guidance and expanded buybacks. These positives are tempered by weak technicals (price below all key moving averages with negative MACD) and a demanding valuation (high P/E) amid signs of slowing growth.
Positive Factors
Margin Sustainability
Consistently very high gross margins (~81%) and scaled net margins (~27–28%) give Dynatrace durable operating leverage typical of SaaS. These margins support sustained R&D, go-to-market investment and shareholder returns, cushioning slower top-line periods and enabling cash generation.
Negative Factors
Revenue Growth Deceleration
A pronounced slowdown from prior high-growth years to near-flat 2025 results and low TTM growth reduces the operating leverage premium investors expect from enterprise SaaS. Slower ARR expansion constrains future operating leverage, R&D tailwinds and long-term revenue compounding.
Read all positive and negative factors
Positive Factors
Negative Factors
Margin Sustainability
Consistently very high gross margins (~81%) and scaled net margins (~27–28%) give Dynatrace durable operating leverage typical of SaaS. These margins support sustained R&D, go-to-market investment and shareholder returns, cushioning slower top-line periods and enabling cash generation.
Read all positive factors
Dynatrace (DT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$10.07B
Dividend YieldN/A
Average Volume (3M)7.00M
Price to Earnings (P/E)81.5
Beta (1Y)0.88
Revenue Growth18.50%
EPS Growth207.45%
CountryUS
Employees4,700
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)0.44
Shares Outstanding298,251,130
10 Day Avg. Volume5,072,195
30 Day Avg. Volume6,999,380
Financial Highlights & Ratios
PEG Ratio0.14
Price to Book (P/B)5.37
Price to Sales (P/S)8.28
P/FCF Ratio32.47
Enterprise Value/Market Cap0.90
Enterprise Value/Revenue4.71
Enterprise Value/Gross Profit5.77
Enterprise Value/Ebitda30.17
Forecast
1Y Price Target
$49.10Price Target Upside45.48% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering26
EPS Forecast (FY)1.91
Revenue Forecast (FY)$2.30B
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, infrast...
How the Company Makes Money
Dynatrace primarily makes money by selling subscriptions to its software platform, with revenue recognized over the contract term. Its key revenue stream is recurring subscription revenue from enterprises that license access to Dynatrace’s observa...
Dynatrace Key Performance Indicators (KPIs)
Any
Annual Recurring Revenue
Indicates the predictable revenue generated from subscriptions or contracts, reflecting the company's stability and potential for sustained growth.
Indicates the predictable revenue generated from subscriptions or contracts, reflecting the company's stability and potential for sustained growth.
Data provided by:
The Fly
The FlyDynatrace Earnings Call Summary
Earnings Call Date:Feb 09, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:May 20, 2026
Earnings Call Sentiment Positive
The call conveyed strong operational and financial momentum: ARR and revenue growth of 16% YoY, robust net new ARR and new-logo metrics, logs consumption exceeding $100M with >100% YoY growth, profitability and cash-generation beats, and an expanded $1B buyback program. Management raised full-year guidance and highlighted product differentiation (Grail, SmartScape, Dynatrace Intelligence), strategic hyperscaler integrations, and customer outcomes. Risks discussed included quarter-seasonal free cash flow variability, a lag between consumption growth and ARR realization, ongoing reliance on expansion within the installed base, cautious customer adoption timelines for agentic AI, and competitive/LLM-related questions. On balance, the positives — sustained ARR stabilization, accelerating consumption, product differentiation, and upgraded guidance — materially outweigh the noted challenges.Positive Updates
ARR Growth and Stabilization
ARR ended Q3 at $1.97 billion, up 16% year-over-year, representing three consecutive quarters of stabilized ARR growth and positioning the company on track to surpass $2.0B ARR in FY2026.
Negative Updates
Quarterly Free Cash Flow Seasonality
Q3 free cash flow was modest at $27 million, reflecting quarter-to-quarter seasonality; management emphasizes trailing twelve-month FCF for a clearer view and noted a ~600 basis point drag from cash taxes on trailing results.
Read all updates
Q3-2026 Updates
Positive
Negative
ARR Growth and Stabilization
ARR ended Q3 at $1.97 billion, up 16% year-over-year, representing three consecutive quarters of stabilized ARR growth and positioning the company on track to surpass $2.0B ARR in FY2026.
Read all positive updates
Company Guidance
Management raised full‑year guidance, increasing ARR growth by 125 basis points to 15.5%‑16% (with ARR on track to surpass $2.0B after Q3 ARR of $1.97B, +16%), and lifting total and subscription revenue growth by 75 basis points to about 16% at the midpoint; they also raised non‑GAAP operating income by $9M (implying a 29% non‑GAAP operating margin), increased free cash flow guidance by $13M (26% FCF margin), and bumped non‑GAAP EPS to $1.67–$1.69 (up $0.05 at midpoint) on an expected ~304M diluted shares, while authorizing a new $1.0B share repurchase program (doubling the prior $500M program); management cited continued momentum — Q3 net new ARR $75M (adjusted FX, +11% YoY), 164 new logos (avg ARR per new logo >$160k; avg land >$200k), nearly $500k average ARR per customer, mid‑90s gross retention, 111% NRR TTM, logs annualized consumption >$100M (logs growth >100% YoY) and platform consumption growth >20% — as drivers of the upgraded guidance.Dynatrace Financial Statement Overview
Summary
Income Statement
84
Very Positive
Balance Sheet
92
Very Positive
Cash Flow
80
Positive
| Breakdown | TTM | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.93B | 1.70B | 1.43B | 1.16B | 929.45M | 703.51M |
| Gross Profit | 1.58B | 1.38B | 1.16B | 935.64M | 756.57M | 575.80M |
| EBITDA | 301.36M | 227.54M | 183.34M | 147.42M | 138.18M | 153.02M |
| Net Income | 184.56M | 483.68M | 154.63M | 107.96M | 52.45M | 75.71M |
Balance Sheet | ||||||
| Total Assets | 4.10B | 4.14B | 3.41B | 2.77B | 2.54B | 2.26B |
| Cash, Cash Equivalents and Short-Term Investments | 1.19B | 1.11B | 836.87M | 555.35M | 462.97M | 324.96M |
| Total Debt | 154.09M | 75.36M | 69.53M | 75.17M | 338.76M | 439.61M |
| Total Liabilities | 1.35B | 1.52B | 1.39B | 1.16B | 1.24B | 1.14B |
| Stockholders Equity | 2.75B | 2.62B | 2.02B | 1.60B | 1.30B | 1.11B |
Cash Flow | ||||||
| Free Cash Flow | 465.73M | 433.31M | 351.65M | 333.35M | 233.22M | 206.36M |
| Operating Cash Flow | 498.51M | 459.42M | 378.11M | 354.88M | 250.92M | 220.44M |
| Investing Cash Flow | -41.22M | -69.31M | -193.05M | -21.54M | -30.89M | -13.88M |
| Financing Cash Flow | -289.04M | -151.63M | 50.66M | -232.34M | -80.66M | -97.80M |
Dynatrace Technical Analysis
Negative
33.75
Price Trends
36.75
Negative
39.97
Negative
45.02
Negative
Market Momentum
-0.91
Positive
37.63
Neutral
15.75
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 33.75 is below the 20-day moving average (MA) of 37.05, below the 50-day MA of 36.75, and below the 200-day MA of 45.02, indicating a bearish trend. The MACD of -0.91 indicates Positive momentum. The RSI at 37.63 is Neutral, neither overbought nor oversold. The STOCH value of 15.75 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 |
|---|---|---|---|---|---|---|---|
72 Outperform | $10.07B | 81.46 | 6.81% | ― | 18.50% | 207.45% | |
72 Outperform | $10.51B | 49.66 | 12.92% | ― | 22.80% | 198.93% | |
65 Neutral | $3.41B | -103.64 | -6.24% | ― | 27.35% | 18.18% | |
63 Neutral | $4.72B | 224.68 | -9.44% | ― | 16.98% | -265.85% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
56 Neutral | $9.87B | -46.16 | -12.57% | ― | -8.23% | 48.57% |
* Technology Sector Average
DT
Dynatrace
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-10.20
-23.46%
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Dynatrace Corporate Events
Business Operations and StrategyStock BuybackFinancial Disclosures
Dynatrace Delivers Strong Q3 Results and Boosts Share Buybacks
Positive
Feb 9, 2026
On February 9, 2026, Dynatrace reported third-quarter fiscal 2026 results for the period ended December 31, 2025, beating the high end of its guidance on all key growth and profitability metrics and raising full-year guidance. The company posted a...
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.