Dynatrace, Inc. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

Dynatrace, Inc. (NYSE:DT) just released its third-quarter report and things are looking bullish. It was overall a positive result, with revenues beating expectations by 2.1% to hit US$365m. Dynatrace also reported a statutory profit of US$0.14, which was an impressive 40% above what the analysts had forecast. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Dynatrace

Taking into account the latest results, the current consensus from Dynatrace's 30 analysts is for revenues of US$1.69b in 2025. This would reflect a major 24% increase on its revenue over the past 12 months. Statutory earnings per share are forecast to decline 13% to US$0.58 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$1.68b and earnings per share (EPS) of US$0.52 in 2025. Although the revenue estimates have not really changed, we can see there's been a nice increase in earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.

The consensus price target rose 6.3% to US$63.71, suggesting that higher earnings estimates flow through to the stock's valuation as well. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Dynatrace, with the most bullish analyst valuing it at US$75.00 and the most bearish at US$50.00 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that Dynatrace's revenue growth is expected to slow, with the forecast 19% annualised growth rate until the end of 2025 being well below the historical 24% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 13% annually. Even after the forecast slowdown in growth, it seems obvious that Dynatrace is also expected to grow faster than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Dynatrace following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Dynatrace going out to 2026, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Dynatrace , and understanding these should be part of your investment process.

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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.