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Cloud Monitoring Stocks Q4 Results: Benchmarking Dynatrace (NYSE:DT)


Kayode Omotosho /
2023/03/23 3:47 am EDT

The end of an earnings season can be a great time to assess how companies are handling the current business environment and discover new stocks. Let’s have a look at how Dynatrace (NYSE:DT) and the rest of the cloud monitoring stocks fared in Q4.

Software is eating the world, increasing organizations’ reliance on digital-only solutions. As more workloads and applications move to the cloud, the reliability of the underlying cloud infrastructure becomes ever more critical, and ever more complex. To solve the challenge, companies and their engineering teams have turned to a range of cloud monitoring tools that provide them with visibility to troubleshoot the issues in real time.

The 5 cloud monitoring stocks we track reported a mixed Q4; on average, revenues beat analyst consensus estimates by 4.05%, while on average next quarter revenue guidance was 0.64% above consensus. Tech multiples have reverted to the historical mean after reaching all time levels in early 2021, but cloud monitoring stocks held their ground better than others, with the share prices up 11% since the previous earnings results, on average.

Dynatrace (NYSE:DT)

Founded in Austria in 2005, Dynatrace (NYSE:DT) provides companies with software that allows them to monitor the performance of their full technology stack, from software applications to the infrastructure they run on.

Dynatrace reported revenues of $297.5 million, up 23.5% year on year, beating analyst expectations by 4.46%. It was a strong quarter for the company, with very optimistic guidance for the next quarter and a decent beat of analyst estimates.

“Dynatrace delivered another strong quarter, beating expectations across the board and demonstrating the durability of our business model that supports a balance of growth and profitability,” said Rick McConnell, Chief Executive Officer.

Dynatrace Total Revenue

The stock is down 0.73% since the results and currently trades at $38.16.

Is now the time to buy Dynatrace? Access our full analysis of the earnings results here, it's free.

Best Q4: Sumo Logic (NASDAQ:SUMO)

Founded in 2010 by Christian Beegden who went from driving a cab in Germany to landing an internship at Amazon, Sumo Logic (NASDAQ:SUMO) is software as a service data analytics platform that helps companies get insight into what is happening in their servers and applications.

Sumo Logic reported revenues of $79 million, up 27.3% year on year, beating analyst expectations by 6.41%. It was a very strong quarter for the company, with a significant improvement in gross margin and a solid beat of analyst estimates.

Sumo Logic Total Revenue

Sumo Logic scored the strongest analyst estimates beat and highest full year guidance raise among its peers. The stock is up 65% since the results and currently trades at $11.88.

Is now the time to buy Sumo Logic? Access our full analysis of the earnings results here, it's free.

Slowest Q4: New Relic (NYSE:NEWR)

With the name being an anagram of its founder, Lew Cirne, New Relic (NYSE:NEWR) makes a monitoring software that collects, scores, and analyses performance data about a client's IT stack.

New Relic reported revenues of $239.8 million, up 17.8% year on year, beating analyst expectations by 2.93%. It was an ok quarter for the company, with a significant improvement in gross margin and revenue guidance for the next quarter above analysts' estimates.

New Relic had the slowest revenue growth in the group. The stock is up 6.36% since the results and currently trades at $68.69.

Read our full analysis of New Relic's results here.

PagerDuty (NYSE:PD)

Started by three former Amazon engineers, PagerDuty (NYSE:PD) is a software as a service platform that helps companies respond to IT incidents fast and make sure that any downtime is minimized.

PagerDuty reported revenues of $101 million, up 28.6% year on year, beating analyst expectations by 1.99%. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and decelerating customer growth.

PagerDuty had the weakest performance against analyst estimates among the peers. The company lost 21 customers and ended up with a total of 15,244. The stock is up 14% since the results and currently trades at $31.75.

Read our full, actionable report on PagerDuty here, it's free.

Datadog (NASDAQ:DDOG)

Named after a database the founders had to painstakingly look after at their previous company, Datadog (NASDAQ:DDOG) is a software as a service platform that makes it easier to monitor cloud infrastructure and applications.

Datadog reported revenues of $469.4 million, up 43.9% year on year, beating analyst expectations by 4.44%. It was a weaker quarter for the company, with a full year guidance missing analysts' expectations and underwhelming guidance for the next year.

Datadog pulled off the fastest revenue growth but had the weakest full year guidance update among the peers. The company added 180 enterprise customers paying more than $100,000 annually to a total of 2,780. The stock is down 25.2% since the results and currently trades at $66.4.

Read our full, actionable report on Datadog here, it's free.

The author has no position in any of the stocks mentioned