Wedbush Has Lowered Expectations for Dynatrace (NYSE:DT) Stock Price

Key Points

• Wedbush cut its Dynatrace price target to $50 from $54 and maintained a Neutral rating, implying about 6% upside from the prior close.
• Analyst sentiment overall remains more positive: 24 analysts rate the stock Buy and eight Hold, with a Moderate Buy consensus and an average target of $63.21.
• Dynatrace beat quarterly earnings and revenue estimates, with sales up 17.4% year over year, and authorized a $1 billion share repurchase program; however, reports cited reduced profit and cash-flow expectations as a near-term concern.

Dynatrace (NYSE:DT - Get Free Report) had its target price dropped by investment analysts at Wedbush from $54.00 to $50.00 in a research report issued to clients and investors on Wednesday, Benzinga reports. The brokerage presently has a "neutral" rating on the stock. Wedbush's target price suggests a potential upside of 5.99% from the stock's previous close.

A number of other research firms have also commented on DT. Wells Fargo & Company boosted their price objective on Dynatrace from $60.00 to $75.00 and gave the stock an "overweight" rating in a research note on Wednesday, October 28th. TD Cowen raised their target price on Dynatrace from $62.00 to $68.00 and gave the company a "buy" rating in a research note on Monday, October 26th. Yorkville Ives assumed coverage on Dynatrace in a report on Tuesday, October 6th. They issued an "in-line" rating and a $62.00 price target for the company. Scotiabank reissued an "outperform" rating and set a $61.00 price objective on shares of Dynatrace in a report on Thursday, August 6th. Finally, Canaccord Genuity Group raised their price objective on shares of Dynatrace from $46.00 to $60.00 and gave the company a "buy" rating in a research report on Thursday, August 6th. Twenty-four research analysts have rated the stock with a Buy rating and eight have given a Hold rating to the company. According to MarketBeat, the stock currently has an average rating of "Moderate Buy" and an average price target of $63.21.

Dynatrace Trading Up 0.3%

NYSE DT opened at $47.17 on Wednesday. Dynatrace has a 1-year low of $31.64 and a 1-year high of $66.30. The company has a 50 day moving average of $57.67 and a 200-day moving average of $44.62. The firm has a market cap of $13.63 billion, a price-to-earnings ratio of 93.72, a PEG ratio of 3.38 and a beta of 0.76.

Dynatrace (NYSE:DT - Get Free Report) last announced its earnings results on Tuesday, November 3rd. The company reported $0.54 EPS for the quarter, topping the consensus estimate of $0.49 by $0.05. The business had revenue of $579.92 million for the quarter, compared to the consensus estimate of $568.03 million. Dynatrace had a return on equity of 11.07% and a net margin of 7.22%. Dynatrace's revenue was up 17.4% compared to the same quarter last year. During the same period in the previous year, the business earned $0.44 EPS. On average, analysts forecast that Dynatrace will post 1.11 earnings per share for the current year.

Dynatrace announced that its Board of Directors has approved a stock repurchase program on Tuesday, November 3rd that allows the company to repurchase $1 billion in outstanding shares. This buyback authorization allows the company to reacquire up to 6.3% of its stock through open market purchases. Stock buyback programs are usually a sign that the company's board of directors believes its shares are undervalued.

Insider Activity at Dynatrace

In related news, EVP Bernd Greifeneder sold 50,000 shares of the business's stock in a transaction that occurred on Friday, September 18th. The shares were sold at an average price of $57.21, for a total transaction of $2,860,500.00. Following the completion of the sale, the executive vice president directly owned 904,846 shares of the company's stock, valued at $51,766,239.66. The trade was a 5.24% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which is available at this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. 0.69% of the stock is currently owned by corporate insiders.

Hedge Funds Weigh In On Dynatrace

A number of hedge funds and other institutional investors have recently bought and sold shares of the business. Bank of America Corp DE increased its holdings in shares of Dynatrace by 304.7% in the first quarter. Bank of America Corp DE now owns 9,357,612 shares of the company's stock worth $346,044,000 after acquiring an additional 7,045,591 shares in the last quarter. First Trust Advisors LP increased its stake in Dynatrace by 706.8% during the 1st quarter. First Trust Advisors LP now owns 6,801,507 shares of the company's stock worth $251,520,000 after purchasing an additional 5,958,505 shares in the last quarter. Arrowstreet Capital Limited Partnership bought a new stake in Dynatrace during the 1st quarter worth approximately $190,890,000. Amundi raised its holdings in Dynatrace by 461.5% during the 1st quarter. Amundi now owns 6,238,938 shares of the company's stock worth $230,716,000 after buying an additional 5,127,910 shares during the period. Finally, Bank of New York Mellon Corp acquired a new stake in Dynatrace during the 2nd quarter worth approximately $114,885,000. 94.28% of the stock is owned by institutional investors.

Key Dynatrace News

Here are the key news stories impacting Dynatrace this week:

• Positive Sentiment: Q2 adjusted earnings of $0.54 per share beat the $0.49 consensus, while revenue of $579.92 million topped estimates of $568.03 million and grew 17.4% year over year. Dynatrace Q2 results
• Positive Sentiment: The board authorized a $1 billion share repurchase program, which could support shareholder returns and signal management confidence in the company’s valuation.
• Positive Sentiment: Dynatrace’s strategic partnership with CrowdStrike links its observability platform with CrowdStrike’s security capabilities, potentially strengthening its offering to enterprise customers. Partnership announcement
• Neutral Sentiment: Rosenblatt, Needham, and BTIG lowered their price targets but maintained Buy ratings, indicating continued optimism alongside more cautious estimates.
• Negative Sentiment: The earnings beat was overshadowed by reduced profit and cash-flow expectations. Reports attributed the outlook pressure in part to acquisition-related impacts, raising concerns that near-term profitability may be weaker than investors expected. Outlook and stock reaction

About Dynatrace

Dynatrace, Inc provides an observability and application security platform designed to help organizations monitor, analyze and optimize complex digital environments. Its software uses artificial intelligence and automation to provide visibility across applications, infrastructure, cloud services, logs, user experiences and business operations.

The company's products support application performance monitoring, infrastructure monitoring, digital experience monitoring, log and analytics management, cloud automation and application security.

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