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On Wednesday, Stifel analysts increased their price target for Dynatrace Inc. (NYSE: NYSE:DT) shares, raising the figure to $69.00 from the previous target of $65.00. The firm has reiterated its Buy rating on the stock. Currently trading at $62.37, the stock appears slightly undervalued according to InvestingPro analysis. This adjustment comes after a survey of approximately 25 Dynatrace clients, with around 70% of them spending more than $300,000 annually. The company, with its impressive $18.61B market capitalization, has demonstrated strong financial performance with a robust 82.24% gross margin.
The survey conducted by Stifel focused on the customers’ expectations for spending growth, as well as their adoption of Dynatrace’s newer modules, which include log management and application security. It also examined the uptake of Dynatrace’s Digital Performance Solutions (DPS) licensing model. The feedback from this survey was used to inform the firm’s decision to raise the price target. InvestingPro data shows the company maintains a "GREAT" financial health score, supported by strong revenue growth of 19.81% over the last twelve months.
According to the survey’s findings, while there is an expected moderation in spending intentions over the next twelve months, there is a strong customer uptake of the newer Log/Grail and Application Security solutions. This is particularly notable following Dynatrace’s acquisition of Splunk (NASDAQ:SPLK). The survey results indicated a positive market response to these recent additions to Dynatrace’s offerings.
Furthermore, the survey highlighted that there is significant interest and positive feedback regarding the DPS licensing model among Dynatrace’s clients. This model appears to be resonating well with the customer base, which may contribute to the company’s financial performance going forward.
The survey results and the subsequent increase in the price target for Dynatrace shares reflect the analyst’s confidence in the company’s growth trajectory and the successful integration of its newer solutions into the market. The maintained Buy rating alongside the raised price target suggests a favorable outlook for Dynatrace’s stock performance in the eyes of Stifel analysts.
In other recent news, Dynatrace reported strong financial results for the third fiscal quarter of 2025, with subscription growth reaching 20%, surpassing expectations by 2%. Despite facing foreign exchange challenges, the company’s top-line guidance was 1% higher than consensus estimates. Analysts at Cantor Fitzgerald adjusted their price target for Dynatrace to $57, maintaining a Neutral rating while noting the company’s ongoing strategic shifts. Meanwhile, DA Davidson raised their price target to $70, highlighting Dynatrace’s robust quarter and successful market capture, particularly through its Dynatrace Performance Suite (DPS).
Goldman Sachs also increased their price target to $70, reaffirming a Buy rating, citing Dynatrace’s potential to expand into a larger platform with new product developments. The firm’s confidence is bolstered by the company’s proprietary data lakehouse, Grail, and its AI-driven solutions. Needham maintained a Hold rating, expressing some concerns about the company’s Security offering and the impact of its On-Demand Consumption model on financials.
During its annual Perform event, Dynatrace announced enhancements to its platform, including improvements to AIOps and expanded security capabilities. These upgrades aim to accelerate problem resolution and enhance security and compliance in hybrid and multi-cloud environments. The company’s focus on AI and a unified platform is intended to empower a broader user base and drive innovation.
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