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

It's been a good week for Dynatrace, Inc. (NYSE:DT) shareholders, because the company has just released its latest yearly results, and the shares gained 9.7% to US$53.37. The result was positive overall - although revenues of US$1.7b were in line with what the analysts predicted, Dynatrace surprised by delivering a statutory profit of US$1.59 per share, modestly greater than expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Dynatrace after the latest results.

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Following the latest results, Dynatrace's 35 analysts are now forecasting revenues of US$1.96b in 2026. This would be a solid 15% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to dive 49% to US$0.82 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$1.94b and earnings per share (EPS) of US$0.72 in 2026. Although the revenue estimates have not really changed, we can see there's been a substantial gain in earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.

See our latest analysis for Dynatrace

There's been no major changes to the consensus price target of US$63.65, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Dynatrace at US$70.00 per share, while the most bearish prices it at US$55.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Dynatrace's revenue growth is expected to slow, with the forecast 15% annualised growth rate until the end of 2026 being well below the historical 22% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 13% annually. Factoring in the forecast slowdown in growth, it looks like Dynatrace is forecast to grow at about the same rate as 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. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at US$63.65, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Dynatrace analysts - going out to 2028, and you can see them free on our platform here.

You can also see our analysis of Dynatrace's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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.