Dynatrace Keeps Bringing in Big Money

DT offers a technology security platform that helps protect organizations’ assets across their cloud environments and geographical regions. Most of the company’s revenue comes from software and related services, which heavily focus on AI capabilities, and the company has been able to capitalize on the AI wave. The company has been able to provide customers with end-to-end security visibility, which is helping DT gain market share.

Financially, DT’s third-quarter fiscal 2024 results showed significant revenue growth, especially with recurring and subscription revenue. Annual recurring revenue hit $1.65 billion, an 18% year-over-year rise, and DT has been retaining these customers, with a retention rate in the mid-90s. DT’s subscription revenue rose 21% on a year-over-year basis, to $417 million. As for full-year guidance, DT called for total revenue of up to nearly $1.7 billion, which would be a 19% increase from a year ago, and diluted non-GAAP per-share earnings of up to $1.37.

It’s no wonder DT shares are up 13% this year so far – and they could rise more. MAPsignals data shows how a rare bullish signal reflects Big Money investors are betting heavily on the forward picture of the stock.

Big Money Securing Dynatrace Shares

Institutional volumes reveal plenty. In the last year, DT went from unloved to loved in terms of investor demand. We believe the resurgence to be institutional support.

Each green bar signals unusually large volumes in DT shares. They reflect our proprietary inflow signal, pushing the stock higher:

Plenty of technology names are under accumulation right now. But there’s a powerful fundamental story happening with Dynatrace.

Dynatrace Fundamental Analysis

Institutional support and a healthy fundamental backdrop make this company worth investigating. As you can see, DT has had strong sales and earnings growth:

• 3-year sales growth rate (+26.7%)
• 3-year earnings growth rate (+37.3%)

Source: FactSet

Also, EPS is estimated to ramp higher this year by +12.9%.

Now it makes sense why the stock has been powering to new heights. DT is again delivering strong financial performance.

Marrying great fundamentals with our proprietary software has found some big winning stocks over the long term.

Dynatrace has been a top-rated stock at MAPsignals in the past, and now it’s roaring back again. That means the stock has unusual buy pressure and growing fundamentals. We have a ranking process that showcases stocks like this on a weekly basis.

It’s made the rare Top 20 report multiple times in the last two years. The blue bars below show when DT was a top pick…Big Money inflows make stocks rise:

Tracking unusual volumes reveals the power of money flows.

This is a trait that most outlier stocks exhibit…the best of the best. Big Money demand drives stocks upward.

Dynatrace Price Prediction

The DT rally isn’t new at all. Big Money buying in the shares is signaling to take notice. Given the historical gains in share price and strong fundamentals, this stock could be worth a spot in a diversified portfolio.

Disclosure: the author holds no position in DT at the time of publication.

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