Dynatrace's (DT) long-term prospects are positive and is positioned for fiscal Q3 growth due to a "strong pipeline" as it enters the quarter, Oppenheimer said in a Monday note.
The Dynatrace Platform Subscription is crucial in reaccelerating the company's growth, Oppenheimer analysts said, adding that they are optimistic on its potential to drive consumption and multi-product usage. Adoption is strong, with about 50% customer usage and driving roughly 70% of annual recurring revenue in Q2, according to the analysts.
With the sales team promoting the licensing model, renewals and upselling should rise, the analysts said.
A steady competitive environment and an uptick in sales execution should lead to solid fiscal Q3 results for Dynatrace, according to the note.
Dynatrace is expected to release its fiscal Q3 financial results on Feb. 9.
Oppenheimer has an outperform rating on the company's stock, with a price target of $65.
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