Dynatrace (DT) Reports Earnings Tomorrow. What To Expect

Adam Hejl /
2023/05/16 6:48 am EDT

Application performance monitoring software provider Dynatrace (NYSE:DT) will be announcing earnings results tomorrow before market hours. Here's what you need to know.

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

Is Dynatrace buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting Dynatrace's revenue to grow 20.6% year on year to $304.6 million, slowing down from the 28.5% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.22 per share.

Dynatrace Total Revenue

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company has a history of exceeding Wall St's expectations, beating revenue estimates every single time over the past two years on average by 2.76%.

Looking at Dynatrace's peers in the software development segment, some of them have already reported Q4 earnings results, giving us a hint what we can expect. F5 Networks delivered top-line growth of 10.9% year on year, beating analyst estimates by 0.62% and Cloudflare reported revenues up 36.8% year on year, missing analyst estimates by 0.22%. F5 Networks traded up 0.52% on the results, Cloudflare was down 23.2%. Read our full analysis of F5 Networks's results here and Cloudflare's results here.

There is still much uncertainty in the markets. The Federal Reserve's hawkish stance on rates, meant to tame inflation, remains a key market narrative. There is an added wrinkle now with troubles in the banking sector, triggered by Silicon Valley Bank's fairly sudden and surprising collapse. Given these, the question is whether higher rates (which dampen economic activity) and potentially less lending from the overall banking sector will trigger a recession. While some tech stocks have recovered year-to-date, most are still well off their 52-week highs. Dynatrace is up 9.21% over the last month, and is heading into the earnings with analyst price target of $47.8, compared to share price of $46.58.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

The author has no position in any of the stocks mentioned.