Dynatrace Inc

Dynatrace, Inc. (NYSE: DT) offers a unified observability and security platform with analytics and automation for dynamic, hybrid, multi-cloud environments. The Company’s Dynatrace Software Intelligence Platform provides application and micro service monitoring (APM), runtime application security, infrastructure monitoring, digital experience monitoring (DEM), business analytics, and cloud automation.

Recent Financial and Business Updates:

• First Quarter Fiscal 2024 and Other Recent Business Highlights:
  • The financial performance of DT in the first quarter of fiscal 2024 exhibited significant growth compared to the same period in fiscal 2023, with all growth rates measured on a constant currency basis.
  • The company achieved a Total ARR of USD 1,294 million, reflecting a notable 25% increase. Total Revenue reached USD 333 million, also showing a remarkable 25% growth, while Subscription Revenue surged by 27% to USD 316 million.
  • Regarding operating income, DT reported a GAAP Operating Income of USD 34 million and a Non-GAAP Operating Income of USD 92 million. Diluted EPS figures stood at USD 0.13 for GAAP and USD 0.27 for Non-GAAP.
• In addition to strong financial results, DT received recognition from industry analysts. The company was named a Leader and positioned highest for Ability to Execute and furthest for Completeness of Vision in the 2023 Gartner Magic Quadrant for Application Performance Monitoring and Observability. This marks the 13th consecutive time that DT has been recognized as a Leader in this report. Furthermore, in the 2023 Gartner Critical Capabilities for Application Performance Monitoring and Observability report, DT achieved the top ranking in all six Use Cases for its platform.
• To further enhance its platform capabilities, DT announced the expansion of its Davis AI engine, introducing the industry's first hypermodal artificial intelligence (AI). This enhancement combines fact-based predictive and causal AI insights with new generative AI capabilities, empowering users with advanced observability and security features. Additionally, DT made strides in its strategic partnerships, solidifying its position with global system integrators (GSIs). Notably, sales pipeline contribution from one of its largest strategic GSI partners more than doubled compared to the previous year.
• Furthermore, DT entered a new multi-year consumption commitment and go-to-market partnership with Microsoft, aiming to increase adoption of the Dynatrace platform on Microsoft Azure through joint sales enablement and marketing initiatives. Additionally, DT expanded its collaboration with Red Hat by introducing integration capabilities between Dynatrace and Red Hat Event-Driven Ansible, facilitating the automation of DevSecOps use cases, including closed-loop problem and security remediation, application healing, and incident response. These partnerships signify DT's commitment to providing innovative solutions and value to its clients.
  

Technical Observation (on the daily chart)

Currently, the stock has broken an important support level of USD 50.00, from where price has taken support in the past. A healthy correction is expected from these levels before the continuation of the trend. The RSI (14 period) momentum indicator is at a value of 34.51, near the oversold levels, with expectations of some consolidation or a short-term correction. Moreover, the price is currently positioned below both the 21-day SMA and 50-day SMA trend-following indicators, which may act as dynamic short-term resistance levels.

As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘Watch’ rating has been given to Dynatrace, Inc. (NYSE: DT) at the current market price of USD 48.17 as of August 04, 2023, at 06:45 am PDT.

Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario. 

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing. 

Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc. 

How to Read the Charts?

The Green colour line reflects the 21-period simple moving average (SMA) while the red line indicates the 50- period simple moving average (SMA). SMA helps to identify existing price trends. If the prices are trading above the 21-period and 50-period moving average, then it shows prices are currently trading in a bullish trend.

The Black colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period) which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status while a reading of 30 or below suggests an oversold status.

The Blue colour bars in the chart’s lower segment show the volume of the stock. The volume is the number of shares that changed hands during a given day. Stocks with high volumes are more liquid than stocks with lesser volume as liquidity in stocks helps with easier and faster execution of the order.

The Orange colour lines are the trend lines drawn by connecting two or more price points and used for trend identification purposes. The trend line also acts as a line of support and resistance.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock. 

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock. 

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices. 

The reference date for all price data, currency, technical indicators, support, and resistance levels is August 04, 2023. The reference data in this report has been partly sourced from REFINITIV. 

Abbreviations

CMP: Current Market Price

SMA: Simple Moving Average

RSI: Relative Strength Index

USD: United States dollar 

Note: Trading decisions require a thorough analysis by individual. Technical reports in general chart out metrics that may be assessed by individuals before any stock evaluation. The above are illustrative analytical factors used for evaluating the stocks; other parameters can be looked at along with additional risks per se. Past performance is neither an indicator nor a guarantee of future performance.