Dynatrace Inc. Common Stock (DT)

FairStock Score: 38/100 — MIXED

Key Financials

Strengths

• Generates $473 million in annual free cash flow (4.6% yield on market cap)
• Conservative balance sheet with debt-to-equity of just 0.03, providing financial flexibility
• Altman Z-Score of 5.1 confirms minimal bankruptcy risk and strong solvency
• Revenue growth of 18.2% demonstrates strong top-line momentum

Concerns

• Trades significantly above Graham Number ($11) with negative 205% margin of safety—limited downside protection

AI Analysis

Dynatrace Inc. Common Stock is a mid-cap technology company valued at $10.2 billion. The business generates $1.9 billion in annual revenue with a 2.1% net margin and $473 million in free cash flow. From a quality standpoint, Dynatrace shows Altman Z-Score of 5.1 confirms fortress-level solvency and modest 7% ROE. On valuation, the stock is commanding a steep 57.1x multiple, with trades far above its Graham Number ($11) with no margin of safety. Growth dynamics show revenue growing at 18.2% and profit growth of -88.9%. Our composite FairStock Score of 38/100 reflects below-average fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Dynatrace's 18% revenue growth trajectory could accelerate as it captures additional market share in the technology sector. With $473 million in annual free cash flow (4.6% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

At 57x earnings, any growth disappointment triggers rapid multiple compression—a 20% earnings miss plus multiple contraction to 20x implies 40%+ downside. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer