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Investing.com - Oppenheimer initiated coverage on Dynatrace Inc. (NYSE:DT), a $14.5 billion observability software company with impressive 82% gross margins, with an Outperform rating and a $65.00 price target on Wednesday.
The research firm cited Dynatrace’s position as a leading observability vendor with a platform built on its Grail data lakehouse and Davis AI engine as key factors in the bullish outlook.
Oppenheimer highlighted four main drivers for its positive view: potential revenue growth acceleration from Dynatrace’s DPS pricing plan removing purchasing friction, evolving sales and go-to-market strategies, favorable market dynamics positioning the company for market share gains, and emerging opportunities in log management and security.
The firm believes current consensus projections for Dynatrace are too low, suggesting a high likelihood of growth re-rating and multiple expansion for the stock.
Oppenheimer’s $65 price target reflects an 8.0x multiple, which the firm expects could increase as Dynatrace demonstrates proof-points from its DPS pricing plan and expansion initiatives.
In other recent news, Dynatrace Inc. reported impressive financial results for the first quarter of fiscal year 2026, surpassing earnings and revenue forecasts. The company achieved an earnings per share (EPS) of $0.42, exceeding the projected $0.38, and generated revenue of $477.3 million, surpassing the anticipated $466.99 million. Guggenheim responded to these strong results by raising its price target for Dynatrace to $68, maintaining a Buy rating. Stifel also increased its price target to $63, citing robust annual recurring revenue (ARR) growth of 16.5%, which was above expectations. BMO Capital, while maintaining an Outperform rating, adjusted its price target slightly down to $62 due to modest growth projections. Additionally, Dynatrace’s recent annual meeting saw the election of Lisa Campbell, Amol Kulkarni, and Steve Rowland as Class III directors. These developments highlight the company’s strong performance and strategic direction.
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