A Fresh Look at Dynatrace (DT) Valuation Following Upbeat Earnings and Upgraded Revenue Guidance

Dynatrace (DT) grabbed investor focus this week after raising its full-year revenue outlook for fiscal 2026 and delivering higher revenue and net income in its second quarter. This updated guidance hints at ongoing momentum.

See our latest analysis for Dynatrace.

Dynatrace has kept investors watching with a raised fiscal outlook, upbeat earnings, and a new strategic integration that further enforces its relevance in cloud reliability. Despite these positive updates, the company’s one-year total shareholder return is still down 13.2%. However, strong three- and five-year gains of 27% and 30% respectively suggest that longer-term momentum is holding up even as shorter-term sentiment remains cautious.

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Given these signals and a recent stretch of underperformance, the question now is whether Dynatrace is trading at a discount with upside ahead or if the market has already accounted for its future growth potential.

Most Popular Narrative: 24.3% Undervalued

Simply Wall St’s most widely followed narrative puts Dynatrace’s fair value at $61.79, a significant premium to the last close of $46.78. This valuation is built on aggressive revenue targets and robust profit margins, with the model favoring Dynatrace’s integration of AI and expansion into strategic enterprise accounts.

*The company's unified platform approach, particularly the growing success of Grail-powered log management (over 100% YoY log consumption growth and targeting $100M in annualized consumption), is driving multi-product adoption and higher customer stickiness. This should improve net retention rates, recurring revenue, and long-term earnings predictability.*

Read the complete narrative.

Want to know the math behind that bullish price target? The narrative hinges on a rapid shift in product mix, big expansion deals, and profit assumptions that may surprise you. Find out what’s fueling this outsized fair value and see if you agree with the growth story.

Result: Fair Value of $61.79 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, intensifying competition from cloud giants and delays in large strategic deals could challenge Dynatrace’s projected revenue and margin growth in the future.

Find out about the key risks to this Dynatrace narrative.

Build Your Own Dynatrace Narrative

If you see the story differently or want to dig deeper into the numbers yourself, you can put together your own view in just a few minutes. So why not Do it your way

A good starting point is our analysis highlighting 5 key rewards investors are optimistic about regarding Dynatrace.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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