Dynatrace (DT) Dips More Than Broader Market: What You Should Know

Dynatrace (DT) ended the recent trading session at $39.06, demonstrating a -2.93% change from the preceding day's closing price. This change lagged the S&P 500's daily loss of 0.28%. At the same time, the Dow lost 0.44%, and the tech-heavy Nasdaq lost 0.28%.

The stock of software intellegence company has risen by 10.49% in the past month, leading the Computer and Technology sector's loss of 2.12% and the S&P 500's loss of 3.59%.

The investment community will be paying close attention to the earnings performance of Dynatrace in its upcoming release. It is anticipated that the company will report an EPS of $0.39, marking a 18.18% rise compared to the same quarter of the previous year. At the same time, our most recent consensus estimate is projecting a revenue of $520.17 million, reflecting a 16.85% rise from the equivalent quarter last year.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $1.68 per share and revenue of $2 billion. These totals would mark changes of +20.86% and +18.02%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for Dynatrace. Such recent modifications usually signify the changing landscape of near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 0.15% increase. Dynatrace presently features a Zacks Rank of #3 (Hold).

Investors should also note Dynatrace's current valuation metrics, including its Forward P/E ratio of 24.01. This expresses a premium compared to the average Forward P/E of 12.98 of its industry.

Meanwhile, DT's PEG ratio is currently 1.69. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. By the end of yesterday's trading, the Computers - IT Services industry had an average PEG ratio of 1.16.

The Computers - IT Services industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 74, placing it within the top 31% of over 250 industries.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.

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This article originally published on Zacks Investment Research (zacks.com).

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