DT - Dynatrace Q3 Earnings: Requiring Further Patience From Investors (Downgrade)

2024-02-12 10:52:24 ET

Summary

• Dynatrace, Inc. put the patience of investors to the test over the previous year, with its stock performance lagging several SaaS peers.
• The company’s recently published fiscal Q3 earnings release didn’t seem to alter this trend, as growth figures disappointed in a generally improving IT spending environment.
• However, management came to the rescue on the accompanying earnings call, highlighting strong pipeline of larger deals.
• This, combined with some other encouraging data points, shows that the long-awaited turnaround could be truly around the corner.

Introduction and investment thesis

Dynatrace, Inc. ( DT ) is a leading company in the modern IT observability market, providing customers actionable insights what’s happening exactly within their IT infrastructure and applications. Thanks to the company’s services, customers can prevent costly downtimes or quickly debug arising issues. The observability platform of Dynatrace is characterized by a high degree of automation, where AI-based solutions are leveraged for many years. These features grant the company an important competitive advantage in the market. Thanks to strategic acquisitions over the past years, the company has broadened its market scope and is currently offering application security and log management services as well....

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