Dynatrace (DT) Rises Yet Lags Behind Market: Some Facts Worth Knowing

Zacks
2024-09-20

The latest trading session saw Dynatrace (DT) ending at $52.20, denoting a +0.71% adjustment from its last day's close. This move lagged the S&P 500's daily gain of 1.7%. Elsewhere, the Dow gained 1.26%, while the tech-heavy Nasdaq added 2.51%.

The software intellegence company's shares have seen an increase of 2.57% over the last month, surpassing the Computer and Technology sector's loss of 1.45% and the S&P 500's gain of 1.27%.

The upcoming earnings release of Dynatrace will be of great interest to investors. It is anticipated that the company will report an EPS of $0.32, marking a 3.23% rise compared to the same quarter of the previous year. Meanwhile, our latest consensus estimate is calling for revenue of $404.39 million, up 14.98% from the prior-year quarter.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $1.28 per share and revenue of $1.63 billion. These totals would mark changes of +6.67% and +13.69%, respectively, from last year.

Investors should also pay attention to any latest changes in analyst estimates for Dynatrace. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has remained steady. Dynatrace is currently sporting a Zacks Rank of #3 (Hold).

From a valuation perspective, Dynatrace is currently exchanging hands at a Forward P/E ratio of 40.49. This represents a premium compared to its industry's average Forward P/E of 26.96.

Also, we should mention that DT has a PEG ratio of 4.32. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. DT's industry had an average PEG ratio of 3.03 as of yesterday's close.

The Computers - IT Services industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 49, positioning it in the top 20% of all 250+ industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.

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