Stock story –
What happened?
Shares of application performance monitoring software provider Dynatrace (NYSE:DT) rose 6.2% in the afternoon session after peer, Elastic (NYSE:), reported third-quarter results that exceeded analyst expectations for revenue and earnings. Additionally, Elastic saw improved demand in key mid-to-large enterprise markets, a promising indicator for other players in the broader visibility and SaaS sectors. Complementing the improved growth trend, Elastic also raised full-year guidance for revenue and earnings. Overall, these results are very encouraging and add to the growing list of enterprise SaaS companies that have delivered impressive performance during earnings season. Shares closed at $55.46. Is Now the Time to Buy Dynatrace? Find out by reading the original article on StockStory, it’s free.
What the market tells us
Dynatrace’s shares are not very volatile and have only had two moves above 5% in the past year. In that context, today’s move indicates that the market sees this news as meaningful, even if it may not be something that would fundamentally change the perception of the company.
The biggest move we wrote about in the past year was 10 months ago, when the stock price fell 15% on news that the company reported third-quarter results, with billings falling short of Wall Street expectations. And while full-year revenue expectations exceeded Wall Street estimates, full-year ARR (annual recurring revenue) fell short of expectations. In addition, the gross margin decreased.
Zooming out, this was a mixed quarter, but with software stocks often expensive from a valuation perspective, small misses can lead to big disappointments. Dynatrace is up 5% since the beginning of the year, and at $55.46 per share, it is. is trading close to its 52-week high of $60.70 from February 2024. Investors who bought $1,000 worth of Dynatrace stock five years ago would now be looking at an investment worth $2,293.
