Why Is Dynatrace Stock Up More Than 25% Over The Last Month?

Dynatrace (NYSE: DT) is a company that provides a software intelligence platform designed for the enterprise cloud. While the stock saw some volatility post its early-August IPO, it has rallied by close to 28% over the last month, trading at levels of over $26 currently. The recent rally is due to stronger than expected Q2 results (FY ends March 31), with adjusted EPS coming in at $0.06, about $0.02 ahead of estimates. Moreover, the company’s revenues also grew by 27% year-over-year to $129 million, driven by a growing customer base. The company has also upped its full-year guidance to $533 million to $535 million, up about 2.2% at the mid-point, while marginally raising EPS guidance as well.

We ‘step back’ from these recent swings to review Dynatrace’s performance over the last few years, as a context for what might come next. Our Interactive dashboard, Why Dynatrace Stock Is Up Over The Last Month? reviews the near term reasons and the big picture.

The context for the last few years:

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A closer look at Dynatrace’s Total Revenues over the last few years and the outlook

Total Revenues for Dynatrace increased from $398 Mil in 2018 to $431 Mil in 2019, marking an increase of 8%, driven by higher Subscription revenues, although this was partly offset by lower License revenue. This compares with Total Revenues growth of -2% in 2018, due to a decline in licensing revenue. We expect Total Revenues growth to be 25% in 2020, driven by a growing user base.

A closer look At Dynatrace’s Total Expenses over the last few years and the outlook

Total Expense for Dynatrace increased from $450 Mil in 2018 to about $570 Mil in 2019, an increase of 27%. This compares with Total Expense growth of  6.4% in 2018. We expect Total Expense growth to be 5% in 2020.

How has  Dynatrace’s  EBT trended?

EBT for Dynatrace decreased from -$52 million in 2018 to -$140 million in 2019, as Operating Expenses grew faster than Revenues.

We expect EBT to increase to -$60 million in 2020.

How has Dynatrace’s Net Income and EPS trended?

For more details on Dynatrace’s net income, view our interactive dashboard analysis.


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