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Dynatrace (DT) Ascends While Market Falls: Some Facts to Note

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In the latest close session, Dynatrace (DT - Free Report) was up +1.68% at $46.04. The stock outpaced the S&P 500's daily loss of 1.07%. Elsewhere, the Dow lost 0.51%, while the tech-heavy Nasdaq lost 1.69%.

Shares of the software intellegence company witnessed a loss of 3.21% over the previous month, trailing the performance of the Computer and Technology sector with its gain of 1.6%, and the S&P 500's gain of 0.94%.

The upcoming earnings release of Dynatrace will be of great interest to investors. The company's upcoming EPS is projected at $0.41, signifying a 10.81% increase compared to the same quarter of the previous year. Meanwhile, our latest consensus estimate is calling for revenue of $505.77 million, up 15.96% from the prior-year quarter.

For the full year, the Zacks Consensus Estimates project earnings of $1.63 per share and a revenue of $1.99 billion, demonstrating changes of +17.27% and +17.21%, respectively, from the preceding year.

It is also important to note the recent changes to analyst estimates for Dynatrace. These recent revisions tend to reflect the evolving nature of short-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the past month, there's been a 0.09% fall in the Zacks Consensus EPS estimate. As of now, Dynatrace holds a Zacks Rank of #3 (Hold).

In terms of valuation, Dynatrace is currently trading at a Forward P/E ratio of 27.74. This signifies a premium in comparison to the average Forward P/E of 16.72 for its industry.

It's also important to note that DT currently trades at a PEG ratio of 1.96. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. As the market closed yesterday, the Computers - IT Services industry was having an average PEG ratio of 1.93.

The Computers - IT Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 91, putting it in the top 37% of all 250+ industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.


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