Back to top

Image: Bigstock

Dynatrace (DT) to Report Q1 Earnings: What's in the Cards?

Read MoreHide Full Article

Dynatrace (DT - Free Report) is set to report first-quarter fiscal 2021 results on Jul 29.

For first-quarter fiscal 2021, non-GAAP earnings are expected between 9 cents and 10 cents per share.

Revenues are expected between $148 million and $150 million, implying a 24-25% increase year over year, adjusted for forex. The company expects the negative impact of coronavirus to be maximum on first-quarter revenues.

The Zacks Consensus Estimate for first-quarter fiscal 2021 earnings has stayed at 10 cents per share over the past 30 days, suggesting 66.7% growth from the figure reported in the year-ago quarter.

The consensus mark for revenues is pegged at $149.2 million, indicating an increase of 21.7% from the year-ago quarter’s reported figure.

Dynatrace, Inc. Price and EPS Surprise

 

Dynatrace, Inc. Price and EPS Surprise

Dynatrace, Inc. price-eps-surprise | Dynatrace, Inc. Quote

Notably, Dynatrace’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average being 46.9%.

Let’s see how things are shaping up for the upcoming announcement.

Factors to Note

Dynatrace is expected to have benefited from strong demand for its solutions and an expanding clientele in the to-be-reported quarter. BARBRI and ERT are some of the new customers that have started using the company’s solutions.

Early April, Dynatrace announced that it’s in the process of attaining the Federal Risk and Authorization Management Program’s authorization at a moderate-impact level. This authorization boosts confidence among clients about Dynatrace’s solutions and also accelerates adoption among federal agencies.

Moreover, Gartner named the company a Leader along with Cisco’s (CSCO - Free Report) AppDynamics and New Relic in its latest Magic Quadrant for Application Performance Monitoring.

Both the developments reflect Dynatrace’s solid portfolio, which is expected to have aided top-line growth.

Notably, the company generated the majority of its fourth-quarter fiscal 2020 annual recurring revenues from enterprise customers belonging to industries that showed resilience amid disruptions caused by  coronavirus. The trend is expected to have continued in fiscal first quarter, thereby driving subscription revenues.

Although ongoing digital transformation bodes well for Dynatrace’s quarterly results, coronavirus is expected to have negatively impacted net expansion rates.

What Our Model Says

Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

Dynatrace has an Earnings ESP of 0.00% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are a couple of companies worth considering as our model shows that these have the right combination of elements to beat on earnings in their upcoming releases:

Analog Devices (ADI - Free Report) has an Earnings ESP of +1.72% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Carrier Global (CARR - Free Report) has an Earnings ESP of +20.00% and is #2 Ranked.

Zacks Top 10 Stocks for 2020

In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2020?

Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.

Access Zacks Top 10 Stocks for 2020 today >>

Published in