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On Wednesday, Jefferies analyst Brent Thill increased the price target for Dynatrace Inc. (NYSE:DT) shares to $65 from $60, while reaffirming a Buy rating on the stock. Thill highlighted the company’s solid performance in a challenging macroeconomic environment, noting a 20% year-over-year constant currency subscription revenue growth, a 26% operating margin, and a 45% growth in the pipeline. According to InvestingPro data, Dynatrace maintains impressive gross profit margins of 82.2% and shows strong financial health with an overall score of "GREAT." The company appears undervalued based on InvestingPro’s Fair Value analysis.
Dynatrace’s momentum in its Dynamic Portfolio Solutions (DPS) was emphasized, with the company reporting $9 million in on-demand consumption revenue, an increase from $7 million in the previous quarter. Looking ahead, Thill pointed out that Dynatrace’s guidance for fiscal year 2026 was slightly above expectations, suggesting that conservative assumptions about on-demand consumption could lead to upward revisions in revenue projections through fiscal year 2026. With revenue growth of 19.8% in the last twelve months and analyst consensus remaining bullish, InvestingPro subscribers can access over 10 additional key insights and a comprehensive Pro Research Report about Dynatrace’s growth prospects.
The analyst underlined the strength of Dynatrace’s fundamentals and expressed confidence that the stock has the potential to appreciate further as sales productivity increases. "Fundamentals are robust, and we believe the stock can grind higher on ramping sales productivity. Maintain Buy, PT to $65," Thill stated.
Dynatrace’s recent financial performance and forward-looking guidance appear to position the company favorably for future growth, as reflected in the analyst’s maintained Buy rating and increased price target. Investors will likely monitor the company’s progress in the coming quarters to see if the positive trends continue as anticipated.
In other recent news, Dynatrace Inc. reported its fourth-quarter 2025 earnings, surpassing expectations with an earnings per share (EPS) of $0.33 compared to the forecasted $0.30. The company also exceeded revenue projections, reporting $445 million against an anticipated $434.96 million, marking a 19% year-over-year revenue increase. This performance has been attributed to strong innovations in AI-powered solutions and platform expansions. JPMorgan and DA Davidson both raised their price targets for Dynatrace to $65, citing the company’s strong quarterly performance and increased market share, particularly with its log management product. JPMorgan highlighted the success of Dynatrace’s Drive Productivity Sales (DPS) contracting model, which now accounts for 60% of the Annual Recurring Revenue (ARR). DA Davidson emphasized the company’s strategic changes in its go-to-market approach as a key factor contributing to its sales pipeline growth. Dynatrace’s optimistic outlook for FY2026 projects ARR between $1.975 billion and $1.990 billion, indicating a continued growth trajectory. The company’s emphasis on innovation and strategic adjustments is seen as a driving force behind its expanding customer pipeline and market penetration.
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