Application performance monitoring software provider Dynatrace (NYSE:DT) will be reporting results tomorrow before market open. Here’s what investors should know.
Dynatrace beat analysts’ revenue expectations by 1.8% last quarter, reporting revenues of $399.2 million, up 19.9% year on year. It was a satisfactory quarter for the company, with an impressive beat of analysts’ EBITDA estimates but a decline in its gross margin.
Is Dynatrace a buy or sell going into earnings? Read our full analysis here, it’s free.
This quarter, analysts are expecting Dynatrace’s revenue to grow 15.6% year on year to $406.4 million, slowing from the 25.9% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.32 per share.
The majority of analysts covering the company have reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Dynatrace has a history of exceeding Wall Street’s expectations, beating revenue estimates every single time over the past two years by 2.4% on average.
Looking at Dynatrace’s peers in the software development segment, some have already reported their Q3 results, giving us a hint as to what we can expect. Bandwidth delivered year-on-year revenue growth of 27.5%, beating analysts’ expectations by 6.5%, and Twilio reported revenues up 9.7%, topping estimates by 3.7%. Bandwidth’s stock price was unchanged after the results, while Twilio was up 14.3%.
Read our full analysis of Bandwidth’s results here and Twilio’s results here.
There has been positive sentiment among investors in the software development segment, with share prices up 7% on average over the last month. Dynatrace is up 2.7% during the same time and is heading into earnings with an average analyst price target of $58.67 (compared to the current share price of $54.70).
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