Dynatrace, Inc. (NYSE: DT)

Sector: Technology Industry: Software - Application CIK: 0001773383
Market Cap 11.08 Bn
P/B 4.03
P/E 60.05
P/S 5.74
ROIC (Qtr) 4.18
Div Yield % 0.00
Rev 1y % (Qtr) 18.18
Total Debt (Qtr) 85.82 Mn
Debt/Equity (Qtr) 0.03
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About

Dynatrace, Inc. (DT), a software company, operates in the observability, security, and automation sector. The company's main business activities revolve around developing and marketing software products that offer observability, security, and automation capabilities for IT environments. Dynatrace's operations span various countries, with a customer base comprising some of the world's largest organizations in industries such as banking and financial services, government, insurance, retail and wholesale, transportation, and software companies. Dynatrace's...

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Investment thesis

Bull case

  • Strong operating cash flow of 498.28M provides robust 5.81x coverage of total debt 85.82M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 1.09B provide 62.22x coverage of short-term debt 17.54M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 2.73B provides 31.84x coverage of total debt 85.82M, indicating robust asset backing and low credit risk.
  • Robust free cash flow of 462.61M exceeds capital expenditure of 35.67M by 12.97x, indicating strong organic growth funding capability.
  • Long-term investments of 58.29M provide solid 0.85x coverage of long-term debt 68.28M, indicating strategic financial planning.

Bear case

  • Operating cash flow of 498.28M barely covers its investment activities of (41.22M), with a coverage ratio of -12.09, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (41.22M) provide weak support for R&D spending of 447.02M, which is -0.09x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Operating cash flow of 498.28M provides insufficient coverage of deferred revenue obligations of 977.46M, which is 0.51x, raising concerns about future service delivery capabilities.
  • The company's operating cash flow of 498.28M shows concerning coverage of stock compensation expenses of 296.83M, with a 1.68 ratio indicating potential earnings quality issues.
  • Retained earnings of 430.18M provide limited buffer against comprehensive income items of (33.64M), which is -12.79x, indicating elevated exposure to market risks.

Product and Service Breakdown of Revenue (2025)

Geographical Breakdown of Revenue (2025)

Peer comparison

Companies in the Software - Application
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 SAP Sap Se 235.43 Bn 27.31 5.44 9.50 Bn
2 SHOP Shopify Inc. 147.12 Bn 119.52 12.73 0.19 Bn
3 UBER Uber Technologies, Inc 147.10 Bn 14.63 2.83 12.08 Bn
4 CRM Salesforce, Inc. 122.20 Bn 594.48 15.45 11.14 Bn
5 INTU Intuit Inc. 113.93 Bn 178.01 32.63 6.78 Bn
6 ADBE Adobe Inc. 111.00 Bn 15.57 4.67 6.65 Bn
7 NOW ServiceNow, Inc. 109.54 Bn 62.67 8.25 2.40 Bn
8 ADP Automatic Data Processing Inc 86.44 Bn 20.41 4.07 4.37 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 2.43 2.08
EV to Cash from Ops. EV/CFO 19.96 11.38
EV to Debt EV to Debt 115.88 47.67
EV to EBIT EV/EBIT 38.19 6.78
EV to EBITDA EV/EBITDA 36.09 7.15
EV to Free Cash Flow [EV/FCF] EV/FCF 21.50 14.44
EV to Market Cap EV to Market Cap 0.90 -8.88
EV to Revenue EV/Rev 5.15 4.04
Price to Book Value [P/B] P/B 4.03 3.65
Price to Earnings [P/E] P/E 60.05 -117.75
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -4.05
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 4.38
Dividend per Basic Share Div per Share (Qtr) 0.00 0.15
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 2.48
Interest Coverage Int. cover (Qtr) -5.39 -43.57
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -62.51 -222.46
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 20.28 281.53
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 1.78
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -60.23 -327.55
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 28.03 30.09
EBIT Growth (1y) % EBIT 1y % (Qtr) 62.18 -213.00
EBT Growth (1y) % EBT 1y % (Qtr) 56.02 -86.84
EPS Growth (1y) % EPS 1y % (Qtr) -62.35 108.58
FCF Growth (1y) % FCF 1y % (Qtr) 13.84 6.29
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 18.72 94.58
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.47 0.58
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.02
Cash Ratio Cash Ratio (Qtr) 0.91 3.78
Current Ratio Curr Ratio (Qtr) 1.57 8.27
Debt to Equity Ratio Debt/Equity (Qtr) 0.03 0.14
Interest Cover Ratio Int Coverage (Qtr) -5.39 -43.57
Times Interest Earned Times Interest Earned (Qtr) -5.39 -43.57
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 14.70 -105.03
EBIT Margin % EBIT Margin % (Qtr) 13.48 -130.16
EBT Margin % EBT Margin % (Qtr) 15.98 -121.17
Gross Margin % Gross Margin % (Qtr) 81.60 58.37
Net Profit Margin % Net Margin % (Qtr) 9.60 -126.13