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Investing.com - Stifel has raised its price target on Dynatrace Inc. (NYSE:DT) to $63.00 from $62.00 while maintaining a Buy rating following the company’s strong first-quarter fiscal 2026 results. According to InvestingPro analysis, the company appears undervalued, with impressive gross profit margins of 82% and a robust financial health score.
Dynatrace reported constant currency annual recurring revenue (ARR) growth of 16.5%, approximately 100 basis points above expectations, as the company’s increased focus on strategic accounts drives robust expansion bookings. This growth aligns with the company’s strong revenue performance, showing an 18.75% increase over the last twelve months.
The software intelligence firm secured approximately 12 seven-figure annual contract value deals during the quarter, with its Dynatrace Software (ETR:SOWGn) Platform (DSP) now contributing 65% of ARR, up from 60% in the previous quarter.
Subscription revenue growth aligned with the high end of guidance at approximately 17%, excluding a one-time $7 million observability data center true-up as the company transitions to a more ratable revenue recognition model for DSP consumption overages.
Despite the strong performance, management maintained its fiscal 2026 constant currency ARR guidance, which Stifel views positively alongside management’s commentary about a strong deal pipeline and no appreciable impact from macroeconomic conditions.
In other recent news, Dynatrace Inc. reported its financial results for the first quarter of fiscal year 2026, surpassing both earnings and revenue forecasts. The company posted an earnings per share (EPS) of $0.42, which exceeded the forecast of $0.38. Revenue reached $477.3 million, surpassing expectations of $466.99 million. These results indicate a strong performance for the company in the recent quarter. Following the announcement, investor sentiment appeared positive. Analysts had projected lower figures, making the actual results noteworthy. The financial community will likely keep a close eye on Dynatrace’s future announcements.
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