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Dynatrace (DT) to Report Q3 Earnings: What's in the Cards?
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Dynatrace (DT - Free Report) is set to report third-quarter fiscal 2021 results on Feb 3.
For the fiscal third quarter, non-GAAP earnings are projected between 12 cents and 13 cents per share.
Revenues are estimated to lie between $171 million and $173 million, indicating an 18-20% increase year over year, adjusted for forex.
The Zacks Consensus Estimate for fiscal third-quarter has been unrevised at 13 cents per share over the past 30 days, suggesting 30% growth from the figure reported in the year-ago quarter.
The consensus mark for revenues is pegged at $172.3 million, calling for an increase of 20.2% from the year-ago quarter’s reported figure.
Notably, Dynatrace’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters, the average surprise being 53.5%.
Let’s see how things have shaped up prior to the upcoming announcement.
Dynatrace is anticipated to have benefited from strong demand for its APM solutions, DEM module and an expanding clientele in the to-be-reported quarter. Markedly, the company’s target addressable market is worth more than $32 billion and comprises 15K global large enterprises with greater than $1 billion in revenues.
Moreover, the coronavirus-led disruption has accelerated digital transformation among global enterprises. Dynatrace’s robust portfolio is anticipated to have helped it tap into this massive opportunity, thereby driving top-line growth in the fiscal third quarter.
Additionally, Dynatrace continues to expand its product portfolio by introducing new capabilities, which is likely to have been a key growth driver.
During the fiscal third quarter, the company rolled out PurePath 4, a distributed tracing technology which automatically collects and analyzes transaction traces along with supporting hybrid-cloud environments.
Further, the company ventured into the cloud application security market by launching the Dynatrace Application Security Module, which offers runtime application self-protection (RASP) capabilities for production and preproduction environments.
Apart from this, extension of its Software Intelligence Platform to support all services from Amazon Web Services as well as the integration with ServiceNow’s (NOW - Free Report) Service Graph Connector Program are expected to have fortified Dynatrace’s portfolio, thereby helping it win new customers.
Additionally, Dynatrace expanded its partnership with SAP to make its AI-powered observability and digital experience monitoring capabilities available in the SAP Commerce Cloud. This integration is anticipated to have driven the adoption of Dynatrace’s monitoring capabilities.
Notably, Dynatrace added 133 net new customers, ending the second quarter of fiscal 2021 with 2,594 customers. Further, net expansion rate was more than 120% for the 10th consecutive quarter.
Apart from this, the company’s solid recurring-revenue base is a key catalyst. Total annual recurring revenues (ARR) at the end of the fiscal second quarter surged 33% year on year (at constant currency) to $628.6 million. The ARR per Dynatrace customer also increased 14% year over year to $234K.
This trend is likely to have continued in the fiscal third quarter as well, thereby boosting subscription revenues.
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 carries a Zacks Rank #3 currently. 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:
CDW Corporation (CDW - Free Report) , another Zacks #2 Ranked stock, has an Earnings ESP of +6.74% at present.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
Dynatrace (DT) to Report Q3 Earnings: What's in the Cards?
Dynatrace (DT - Free Report) is set to report third-quarter fiscal 2021 results on Feb 3.
For the fiscal third quarter, non-GAAP earnings are projected between 12 cents and 13 cents per share.
Revenues are estimated to lie between $171 million and $173 million, indicating an 18-20% increase year over year, adjusted for forex.
The Zacks Consensus Estimate for fiscal third-quarter has been unrevised at 13 cents per share over the past 30 days, suggesting 30% growth from the figure reported in the year-ago quarter.
The consensus mark for revenues is pegged at $172.3 million, calling for an increase of 20.2% from the year-ago quarter’s reported figure.
Notably, Dynatrace’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters, the average surprise being 53.5%.
Let’s see how things have shaped up prior to the upcoming announcement.
Dynatrace, Inc. Price and EPS Surprise
Dynatrace, Inc. price-eps-surprise | Dynatrace, Inc. Quote
Factors to Note
Dynatrace is anticipated to have benefited from strong demand for its APM solutions, DEM module and an expanding clientele in the to-be-reported quarter. Markedly, the company’s target addressable market is worth more than $32 billion and comprises 15K global large enterprises with greater than $1 billion in revenues.
Moreover, the coronavirus-led disruption has accelerated digital transformation among global enterprises. Dynatrace’s robust portfolio is anticipated to have helped it tap into this massive opportunity, thereby driving top-line growth in the fiscal third quarter.
Additionally, Dynatrace continues to expand its product portfolio by introducing new capabilities, which is likely to have been a key growth driver.
During the fiscal third quarter, the company rolled out PurePath 4, a distributed tracing technology which automatically collects and analyzes transaction traces along with supporting hybrid-cloud environments.
Further, the company ventured into the cloud application security market by launching the Dynatrace Application Security Module, which offers runtime application self-protection (RASP) capabilities for production and preproduction environments.
Apart from this, extension of its Software Intelligence Platform to support all services from Amazon Web Services as well as the integration with ServiceNow’s (NOW - Free Report) Service Graph Connector Program are expected to have fortified Dynatrace’s portfolio, thereby helping it win new customers.
Additionally, Dynatrace expanded its partnership with SAP to make its AI-powered observability and digital experience monitoring capabilities available in the SAP Commerce Cloud. This integration is anticipated to have driven the adoption of Dynatrace’s monitoring capabilities.
Notably, Dynatrace added 133 net new customers, ending the second quarter of fiscal 2021 with 2,594 customers. Further, net expansion rate was more than 120% for the 10th consecutive quarter.
Apart from this, the company’s solid recurring-revenue base is a key catalyst. Total annual recurring revenues (ARR) at the end of the fiscal second quarter surged 33% year on year (at constant currency) to $628.6 million. The ARR per Dynatrace customer also increased 14% year over year to $234K.
This trend is likely to have continued in the fiscal third quarter as well, thereby boosting subscription revenues.
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 carries a Zacks Rank #3 currently. 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:
PerkinElmer has an Earnings ESP of +12.68% and carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
CDW Corporation (CDW - Free Report) , another Zacks #2 Ranked stock, has an Earnings ESP of +6.74% at present.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>