Dynatrace stock is currently showing signs of being actionable as the shares rebound from a key support level. The Waltham, Mass.-based software developer offers customers an enterprise cloud platform that integrates security, analytics, and automation with the help of three types of artificial intelligence.
One of Dynatrace’s AI models, known as Davis AI, utilizes predictive, causal, and generative AI techniques. This model provides features such as forecasting, machine learning, anomaly detection, automated recommendations, and natural language creation.
In late November, Dynatrace announced that it had received a security competency designation from Amazon Web Services (AWS), indicating its high level of expertise in preventing threats to customers across their AWS environments.
The company also recently raised its earnings and sales projections for the fiscal third quarter and full-year 2024. Additionally, it reported second-quarter earnings of 31 cents per share, surpassing estimates and showing consistent increases for three consecutive quarters. Sales growth has also remained within the range of 23% to 29% for the past seven quarters.
With regards to its upcoming earnings report, Dynatrace is expected to release its third-quarter earnings on February 8, before the market opens. Analysts predict earnings of 28 cents per share on revenue of $357.74 million.
Dynatrace’s stock began forming a cup-with-handle base in July, followed by a breakout in early December. However, the stock initially struggled to move past the 5% buy zone. The marketwide pullback in January also affected DT stock, causing it to test support at the 10-week line.
Fortunately, Dynatrace’s stock recently bounced back from this level with a gain of over 8%. Currently, the shares are just 5.4% above the 10-week line, placing them within a 10% buy zone from the moving average.
IBD gives Dynatrace high ratings, with a 98 Composite Rating and a 98 EPS Rating. The stock has also seen an increase in the number of funds that own it, rising from 1,209 in the March quarter to 1,343 in the December quarter.
In conclusion, Dynatrace’s stock is currently exhibiting positive signs, making it potentially actionable. The company’s strong quarterly earnings, increased sales projections, and recognition from AWS further support its growth potential. Investors should keep an eye on the upcoming earnings report and monitor the stock’s performance.
