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Investing.com - TD Cowen has reiterated its Buy rating and $65.00 price target on Dynatrace Inc. (NYSE:DT), citing positive signals across multiple business segments. This target represents a 39% upside from the current price of $46.84, aligning with InvestingPro data showing the stock is currently undervalued according to Fair Value calculations.
The firm highlighted "green shoots" in DPS, consumption, go-to-market changes, and the Logs business after hosting a meeting with Dynatrace CFO Jim Benson and VP of Investor Relations Noelle Faris.
TD Cowen believes Dynatrace’s second-half NNARR (Net New Annual Recurring Revenue) guidance appears de-risked, and expects the company’s Net Revenue Retention (NRR) to gain upward momentum with more consistent execution. This optimism is supported by Dynatrace’s impressive 81.84% gross profit margin and solid revenue growth of 18.5% over the last twelve months.
The research firm noted Dynatrace is positioned to benefit from artificial intelligence as "AI generates more workloads & significantly more complexity" in computing environments.
TD Cowen also emphasized Dynatrace’s "unique position" to address the needs of companies like those in financial services that will maintain on-premises infrastructure "for a long time," highlighting the software company’s strength in hybrid cloud environments. With an overall Financial Health Score of "GREAT" according to InvestingPro, which offers a comprehensive Pro Research Report on Dynatrace among 1,400+ US equities, the company appears well-positioned to execute on these opportunities.
In other recent news, Dynatrace has reported its fiscal Q2 2026 earnings, surpassing Wall Street expectations with an earnings per share (EPS) of $0.44, compared to the forecast of $0.41. Revenue also exceeded predictions, reaching $494 million, surpassing the anticipated $487.3 million. The company saw a 16% growth in constant currency net new annual recurring revenue, outperforming the 1% growth in the same quarter last year. Dynatrace’s annual recurring revenue and subscription revenue both exceeded consensus estimates by 1.3%.
Goldman Sachs has adjusted its price target for Dynatrace, lowering it to $59 while maintaining a Buy rating. The company has also announced a new AI-powered cloud operations solution for Microsoft Azure, currently available in preview, with a broader release planned for early 2026. Additionally, Dynatrace has integrated with Microsoft Azure SRE Agent, becoming the first observability platform to do so, enhancing its capabilities in resolving complex IT problems efficiently. These developments highlight Dynatrace’s strategic focus on expanding its cloud operations and improving service reliability.
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