KeyBanc has commenced coverage on Dynatrace (DT, Financial), assigning the company an Overweight rating and setting a price target of $69. This reflects a positive outlook on Dynatrace's future performance, suggesting that KeyBanc sees potential for growth or valuation increase in the stock. The Overweight rating indicates a belief that the stock will outperform its market peers in the foreseeable future.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 28 analysts, the average target price for Dynatrace Inc (DT, Financial) is $62.65 with a high estimate of $70.00 and a low estimate of $52.00. The average target implies an upside of 15.58% from the current price of $54.21. More detailed estimate data can be found on the Dynatrace Inc (DT) Forecast page.
Based on the consensus recommendation from 34 brokerage firms, Dynatrace Inc's (DT, Financial) average brokerage recommendation is currently 2.0, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Dynatrace Inc (DT, Financial) in one year is $72.11, suggesting a upside of 33.02% from the current price of $54.21. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Dynatrace Inc (DT) Summary page.
DT Key Business Developments
Release Date: May 14, 2025
- Subscription Revenue Growth: 20% increase.
- Annual Recurring Revenue (ARR): $1.73 billion, representing 17% growth.
- Non-GAAP Operating Margin: Expanded by more than 100 basis points.
- Pretax Free Cash Flow Margin: Improved by roughly 250 basis points.
- Customer Base: Surpassed 4,000 customers.
- Employee Count: Surpassed 5,000 employees.
- New Logos Added in Q4: 171 new logos.
- Average New Logo Land Size: $130,000 on a trailing 12-month basis.
- Gross Retention Rate: Mid-90s percentage.
- Net Retention Rate (NRR): 110% in the fourth quarter.
- DPS Licensing Model: Over 40% of customer base and more than 60% of ARR.
- On-Demand Consumption Revenue (ODC): $9 million in Q4, $21 million trailing 12 months.
- Total Revenue for Q4: $445 million, growing 19%.
- Non-GAAP Net Income for Q4: $99 million or $0.33 per diluted share.
- Full Year Total Revenue: $1.7 billion, growing 20%.
- Full Year Non-GAAP Operating Margin: 29%.
- Full Year Free Cash Flow: $431 million or 25% of revenue.
- Cash and Investments: Nearly $1.2 billion as of March 31.
- Share Repurchase Program: 787,000 shares repurchased for $43 million in Q4.
- Fiscal '26 ARR Guidance: $1.975 billion to $1.99 billion, 13% to 14% growth.
- Fiscal '26 Total Revenue Guidance: $1.95 billion to $1.965 billion, 14% to 15% growth.
- Fiscal '26 Non-GAAP Operating Income Guidance: $560 million to $570 million.
- Fiscal '26 Free Cash Flow Guidance: $505 million to $515 million, 26% of revenue.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Dynatrace Inc (DT, Financial) achieved a 20% growth in subscription revenue and surpassed $1.7 billion in ARR.
- The company expanded its non-GAAP operating margin by over 100 basis points and pretax free cash flow margin by roughly 250 basis points.
- Dynatrace Inc (DT) surpassed 4,000 customers and 5,000 employees, indicating strong market presence and growth.
- The company announced major platform innovations, including AI-powered log management and analytics, enhancing its competitive edge.
- Dynatrace Inc (DT) was consistently named a leader in major analyst reports for observability and AI Ops, reinforcing its industry leadership.
Negative Points
- The economic environment remains uncertain, which could impact future growth and customer spending.
- On-demand consumption revenue (ODC) is not captured in ARR or NRR metrics, potentially distorting growth visibility.
- The transition to a consumption-oriented model may lead to variability in revenue recognition and forecasting challenges.
- Despite strong pipeline growth, there is a concern about longer sales cycles, especially for large strategic accounts.
- The company faces competition from peers with broader portfolios, such as Datadog, which may impact market share.
