Software maker Dynatrace (DT) provides an artificial-intelligence based platform that lets companies and government agencies modernize and update their IT operations. Dynatrace has put up excellent sales and profit growth numbers this past year, earning it a jump in its IBD Relative Strength (RS) Rating Wednesday, from 69 to 72.
↑ XThe upgraded 72 RS Rating shows that Dynatrace tops more than 70% of all stocks in IBD's database for price performance this past year. The upgrade puts it just a few points below the 80 threshold for top growth stocks. Market research shows that the market's biggest winners tend to have an RS Rating north of 80 as they begin their largest price moves.
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Dynatrace stock is building a cup without handle with a 61.41 entry. The stock dipped to 35.82 on Aug. 5 at the bottom of the cup base, then it began surging up the right side of the cup. On Aug. 7 it jumped 14.7% on strong earnings and it hasn't looked back. Wednesday afternoon Dynatrace traded above 53, up about 1% for the day.
Sales grew 20% last quarter to $399.2 million, while earnings per share grew 22% to 33 cents per share. Quarterly EPS growth this past year ranged from -3% to 41%. After reporting EPS gains of 41% and 28% late last year, the company reported 30 cents EPS for the March 31-ended period, a penny less than the same quarter a year earlier. Last quarter Dynatrace bounced back though, posting a 22% year-over-year gain.
Revenue growth this past year on a quarterly basis ranged from 21% to 26%. The Street expects the company will report its latest results on or around Oct. 31. Analysts polled by FactSet project a mild 4% hike in EPS this quarter on a 15% rise in revenue to $406.1 million.
Among its other ratings Dynatrace has a strong 92 Earnings Per Share Rating out of 99 and a 92 Composite Rating. It boasts an outstanding A SMR Rating (sales + profit margins + return on equity) on an A-to-E scale. Additionally, its B- Accumulation/Distribution Rating shows that big funds are buying more of its shares than selling.
Dynatrace earns the No. 13 rank among its peers in the Computer Software-Enterprise industry group. Palantir Technologies (PLTR), Manhattan Associates (MANH) and Smartsheet (SMAR) are among the top 5 highly rated stocks within the group.
The unique IBD Relative Strength Rating identifies technical performance by showing how a stock's price movement over the last 52 weeks measures up against that of the other stocks in our database.
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