Morgan Stanley analyst Sanjit Singh assigned a Hold rating on Dynatrace (DT – Research Report) today and set a price target of $60.00.
Sanjit Singh has given his Hold rating due to a combination of factors involving the market potential for Observability and Dynatrace’s strategic positioning. Observability is increasingly critical for enterprises as digital interactions surge, representing a $28 billion opportunity by 2027. Dynatrace is poised to capture market share given its robust technology platform that employs AI and machine learning to diagnose system issues, comprehensive product offerings, and capacity to monitor varied environments. Despite these strengths, a resurgence in growth is expected to be gradual, requiring patience from investors.
The rating also reflects the potential for Dynatrace to consolidate its position as a beneficiary amidst a market crowded with monitoring tools, which often lead to increased costs and complexity. Dynatrace’s ability to offer a unified solution could drive customer consolidation towards their platform. Furthermore, new pricing and packaging strategies could further enhance their market position. Sanjit Singh’s projection of a 14% growth in net-new ARR (Annual Recurring Revenue) between CY23 and CY25, leading to a 19% revenue growth and 27% free cash flow (FCF) margins, solidifies the Hold rating. The $60 price target is based on 35 times the CY25 FCF estimate, correlating with the anticipated growth rate and aligning with the performance of other companies generating similar FCF growth.
In another report released on February 9, Loop Capital Markets also maintained a Hold rating on the stock with a $56.00 price target.
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Dynatrace (DT) Company Description:
Dynatrace, Inc. offers software intelligence platform, purpose-built for the enterprise cloud. The firm’s platform utilizes artificial intelligence at its core and advanced automation to provide answers, not just data, about the performance of applications, the underlying hybrid cloud infrastructure, and the experience of the customers’ users. It specializes in cloud ecosystem integration, incident and alert management integration, DevOps CI/CD integration, user experience and business intelligence insights. The company was founded in 2014 and is headquartered in Waltham, MA.
Read More on DT:
- 3 Best Stocks to Buy Now, 2/12/2024, According to Top Analysts
- Dynatrace price target raised to $58 from $52 at Macquarie
- Dynatrace price target raised to $56 from $50 at Loop Capital
- Dynatrace price target raised to $59 from $52 at Barclays
- Dynatrace price target raised to $65 from $61 at Goldman Sachs
