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 Q3.
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 Q3; on average, revenues beat analyst consensus estimates by 3.56%, while on average next quarter revenue guidance was 0.06% above consensus. Technology stocks have been hit hard on fears of higher interest rates as investors search for near-term cash flows, but cloud monitoring stocks held their ground better than others, with the share prices up 1.36% since the previous earnings results, on average.
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 $279.3 million, up 23.4% year on year, beating analyst expectations by 2.22%. It was a slower quarter for the company, with underwhelming revenue guidance for the next quarter and a full year guidance missing analysts' expectations.
“Dynatrace delivered strong second quarter results, demonstrating top to bottom line performance exceeding guidance across all of our key metrics," said Rick McConnell, Chief Executive Officer.
The stock is up 7.63% since the results and currently trades at $36.80.
Is now the time to buy Dynatrace? Access our full analysis of the earnings results here, it's free.
Best Q3: 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 $78.9 million, up 27.3% year on year, beating analyst expectations by 6.4%. 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 delivered the strongest analyst estimates beat and highest full year guidance raise among its peers. The stock is up 3.61% since the results and currently trades at $7.46.
Is now the time to buy Sumo Logic? Access our full analysis of the earnings results here, it's free.
Slowest Q3: 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 $226.9 million, up 15.9% year on year, beating analyst expectations by 1.97%. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and a full year guidance missing analysts' expectations.
New Relic had the slowest revenue growth and weakest full year guidance update in the group. The stock is up 5.5% since the results and currently trades at $54.77.
Read our full analysis of New Relic's results here.
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 $94.2 million, up 31.2% year on year, beating analyst expectations by 1.85%. It was a mixed quarter for the company, with strong top line growth but decelerating customer growth.
PagerDuty had the weakest performance against analyst estimates among the peers. The company added 91 customers to a total of 15,265. The stock is up 11.4% since the results and currently trades at $25.15.
Read our full, actionable report on PagerDuty here, it's free.
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 $436.5 million, up 61.3% year on year, beating analyst expectations by 5.37%. It was a decent quarter for the company, with exceptional revenue growth but a decline in gross margin.
Datadog scored the fastest revenue growth among the peers. The company added 180 enterprise customers paying more than $100,000 annually to a total of 2,600. The stock is down 14.6% since the results and currently trades at $63.55.
Read our full, actionable report on Datadog here, it's free.
The author has no position in any of the stocks mentioned