On Thursday, BofA Securities adjusted its outlook on Dynatrace Inc. (NYSE: NYSE:DT) shares, reducing the price target to $68 from $70 while maintaining a Buy rating.
Dynatrace, a software intelligence company, reported fourth-quarter fiscal year 2024 results that surpassed expectations in Annual Recurring Revenue (ARR), revenue, operating income, and free cash flow.
Despite the positive performance, the company's initial fiscal year 2025 guidance for ARR growth was set at 15-16% in constant currency, slightly below the expected 17.5% year-over-year growth forecasted by analysts.
The reported guidance figures are at 14-15%. The more conservative guidance is attributed to two main factors: the ongoing challenging macroeconomic environment and changes within the sales organization.
BofA Securities highlighted that while the potential for near-term growth could be debated, the first-quarter fiscal year 2024 results reinforce a long-term positive view.
Dynatrace's performance is seen as indicative of its competitive edge in the enterprise DevSecOps market, a sector that involves integrating security practices within the software development and deployment processes.
The analyst from BofA Securities has reiterated a Buy rating on Dynatrace, signaling confidence in the company's long-term growth prospects despite the current conservative guidance.
The price target adjustment reflects a balance between the near-term challenges faced by the company and the underlying strength observed in the recent financial outcomes.
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