Spain’s credit rating upgraded to ’A+’ by S&P on strong growth
Investing.com - Stifel maintained its Buy rating and $63.00 price target on Dynatrace Inc. (NYSE:DT) following investor meetings with the company’s CFO Jim Benson this week. The target aligns with InvestingPro’s Fair Value calculation, suggesting the stock may be undervalued at its current price of $50.65.
The meetings revealed sustained business momentum as Dynatrace continues its transformation into a full platform Observability vendor with evolving go-to-market strategies aimed at driving increased consumption across its customer base. The company’s impressive 81.94% gross profit margin and 18.7% revenue growth demonstrate strong execution of these strategies.
According to Stifel, these strategic efforts are already yielding results, with recent consumption growth accelerating and outpacing subscription and Annual Recurring Revenue (ARR) gains. InvestingPro data reveals 20 analysts have recently revised their earnings expectations upward, suggesting growing confidence in the company’s trajectory.
Due to Dynatrace’s ratable-revenue-recognition model, Stifel believes meaningful subscription and ARR acceleration may not be visible to investors until fiscal year 2027, when the first three-year DPS contracts begin to renew at potentially higher rates.
Despite ongoing macroeconomic uncertainty that may keep management’s guidance conservative, Stifel expects Dynatrace’s improving consumption metrics, DPS contracting tailwinds in FY27, and enhanced salesforce productivity to generate accelerating growth.
In other recent news, Dynatrace has reported strong financial performance, with its latest earnings showing robust growth in annual recurring revenue (ARR). The company achieved a net new ARR increase of $51 million, surpassing the $46 million growth from the same quarter last year. Guggenheim noted this strong performance by raising its price target to $68, while Stifel increased its target to $63, both maintaining positive ratings. Meanwhile, BMO Capital adjusted its price target slightly downward to $62, citing modest growth but still maintaining an Outperform rating.
Additionally, Oppenheimer has initiated coverage on Dynatrace with an Outperform rating, highlighting the company’s leadership in observability technology. In corporate governance news, Dynatrace’s shareholders recently elected three directors and approved executive compensation at the annual meeting. The elected directors, Lisa Campbell, Amol Kulkarni, and Steve Rowland, will serve until 2028. These developments reflect a period of strategic growth and strong investor confidence in Dynatrace’s future prospects.
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