One-glance verdict
Undervalued
$94.05 our estimate vs market $61.11
Wall Street consensus: $62.53 (-33.5% lower than our fair-value estimate)
35% below our estimate, below the bear case
Fundamentals snapshot
Dynatrace, Inc.
DT · NYQ · Technology · Software - Application
Current price
$61.11
52-week range
$31.64 - $66.30
Market cap
$17.74B
Balance sheet
Healthy
77.42x Strong cushion
Net cash $949.59M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Revenue grew 3.8% last year.
- Reward Returns 5.9% on equity, ahead of 80% of its peers.
- Risk Stock trades 62.0% above its 5-year average P/E.
- Risk Insider ownership is only 0.6% (peer median: 2.1%).
What this company does
Dynatrace, Inc.
Dynatrace sells a smart software tool that helps businesses understand how their online operations are running, especially as they get more complicated. The money mostly comes from businesses paying to use their software regularly, which is a predictable way to make money (called recurring revenue). This is important because it means the company has a steady income stream to keep improving its product and serving its customers.
Overview
1. "How the company got here" Dynatrace was founded in 2005 in Austria, initially as dynaTrace software. It was acquired by Compuware in 2011, and later, when Compuware was taken private in 2014, Dynatrace emerged as a standalone growth platform. The company eventually went public in 2019, establishing itself as a key player in the enterprise software market, specifically focusing on observability for digital businesses. 2. "What it actually does" Dynatrace provides an AI-powered platform that helps businesses monitor, analyze, and optimize their software and IT systems. Think of it like a super-smart diagnostic tool for a company's digital operations. It keeps an eye on everything from how well applications are running to the security of their systems and the experience of their users, ensuring everything works smoothly and securely. 3. "Software Intelligence Platform" Dynatrace's core offering is its unified software intelligence platform, which is delivered as a software-as-a-service (SaaS). This platform integrates various monitoring and analysis capabilities, including infrastructure monitoring, application performance monitoring, log analytics, digital experience monitoring, and application security. It uses AI, specifically its proprietary "Davis AI" engine, to automatically detect issues, map dependencies within complex IT environments, and provide root-cause analysis, helping businesses resolve problems quickly. 4. "What management is betting on now" Dynatrace's management is focused on leveraging artificial intelligence and automation to enhance its observability platform. They are investing in AI capabilities to provide more precise answers and proactive solutions for their customers, aiming to help businesses manage increasingly complex digital environments more effectively. This includes developing features that can automatically detect anomalies, pinpoint root causes, and even suggest code-level fixes, allowing IT and development teams to operate more efficiently and securely.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2025 Q2
$20.14M
FY2025 Q3
$37.57M
FY2025 Q4
$148.22M
FY2026 Q1
$262.21M
FY2026 Q2
$27.83M
FY2026 Q3
$27.23M
FY2026 Q4
$212.40M
FY2027 Q1
$303.09M
Revenue
$554.55M
Net income
$36.65M
Diluted EPS
0.12
Operating cash flow
$306.24M
Free cash flow
$303.09M
Fetching…
Sources
Revenue
$531.72M
Net income
$17.42M
Diluted EPS
0.06
Operating cash flow
$226.36M
Free cash flow
$212.40M
Fetching…
Sources
Revenue
$515.47M
Net income
$40.05M
Diluted EPS
0.13
Operating cash flow
$33.78M
Free cash flow
$27.23M
Fetching…
Sources
Revenue
$493.85M
Net income
$57.24M
Diluted EPS
0.19
Operating cash flow
$32.02M
Free cash flow
$27.83M
Fetching…
Sources
Revenue
$477.35M
Net income
$47.95M
Diluted EPS
0.16
Operating cash flow
$269.69M
Free cash flow
$262.21M
Fetching…
Sources
Revenue
$445.17M
Net income
$39.30M
Diluted EPS
0.12
Operating cash flow
$162.79M
Free cash flow
$148.22M
Fetching…
Sources
Revenue
$436.17M
Net income
$361.75M
Diluted EPS
1.19
Operating cash flow
$42.24M
Free cash flow
$37.57M
Fetching…
Sources
Revenue
$418.13M
Net income
$44.01M
Diluted EPS
0.15
Operating cash flow
$23.65M
Free cash flow
$20.14M
Fetching…
Sources
Is it cheap or expensive?
Fair value $94.05 vs current price $61.11
Wall Street consensus is the average analyst price target: $62.53 (-33.5% lower than our fair-value estimate).
Our most-likely fair value is $94.05 a share — about 53.9% above today's price of $61.11, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Healthy
Net cash $949.6M - more cash than debt. Interest coverage 77.4x.
Net debt
$-949.59M
Interest coverage
77.42x
Dynatrace, Inc.'s profit covers its interest bill about 77.4 times over. which is stronger than every peer shown here and 4 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Healthy
Worse cushion
Baseline
Better cushion
DT
BASELINE
Dynatrace, Inc.
Total debt $159.27M Interest coverage 77.42x This is the baseline the peer rows are being compared against.
Total debt $1.28B Interest coverage -4.01x -100% vs DT This peer has almost no interest-payment cushion compared with DT.
Total debt $1.87B Interest coverage -33.39x -100% vs DT This peer has almost no interest-payment cushion compared with DT.
Total debt $820.18M Interest coverage -10.47x -100% vs DT This peer has almost no interest-payment cushion compared with DT.
Total debt $2.76B Interest coverage -172.95x -100% vs DT This peer has almost no interest-payment cushion compared with DT.
What you should know
The case for and against DT
3 Rewards
2 Risks
Rewards
-
Revenue grew 3.8% last year.
-
Returns 5.9% on equity, ahead of 80% of its peers.
-
Free cash flow was positive in 8/10 years.
Risks
-
Stock trades 62.0% above its 5-year average P/E.
-
Insider ownership is only 0.6% (peer median: 2.1%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
122.22x
Forward P/E
26.98x
P/B
7.24x
P/S
8.46x
EV/EBITDA
57.34x
PEG ratio
1.24x
Profitability
How much profit each dollar creates
Gross margin
81.6%
Operating margin
12.9%
Net margin
7.2%
ROE
5.9%
ROA
4.2%
Health
Liquidity and balance-sheet strength
Debt / equity
0.06x
Current ratio
1.21x
Quick ratio
1.04x
Total debt
$159.27M
Total cash
$1.11B
Growth
How the business has been compounding
Revenue TTM
$2.10B
Revenue 5Y CAGR
21.4%
EPS TTM
0.50
EPS 5Y CAGR
13.4%
Cash flow
How much cash the business throws off
Operating CF TTM
$598.40M
Free CF TTM
$529.68M
FCF margin
25.3%
Dividend
Shareholder payout
Yield
0.0%
Payout ratio
0.0%
Last ex-div date
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