TD Cowen has revised its target price for Dynatrace Inc. (DT) upward to $60.00 from $55.00 and continues to carry a Buy recommendation on the provider of software intelligence. The new target implies substantial upside relative to the recent market price of $36.49, and consensus analyst projections point to roughly a 64% potential increase from current levels.
The firm’s adjustment follows Dynatrace’s report of $75 million in net new annual recurring revenue (NNARR) for the quarter, a figure that exceeded the low-$70 million expectation and represented 11% year-over-year growth. That marked the company’s third straight quarter of double-digit NNARR expansion and supports a 12-month revenue growth rate of 18.5%.
TD Cowen highlighted two main contributors to the stronger-than-expected ARR performance: a record level of new logo ARR and durable expansions within the installed base. Those dynamics led Dynatrace to raise its fiscal year ARR guidance by 125 basis points on a constant currency basis.
Net revenue retention (NRR) for the company remained steady at 111% for the period. TD Cowen’s analysts believe that NRR should improve by fiscal year 2027 as cohorts of the Dynatrace Platform Subscription (DPS) renew, though the firm maintained current estimates pending that cohort-driven improvement.
In addition to top-line momentum, Dynatrace announced a new $1 billion share buyback program. TD Cowen characterized the buyback as a signal of management confidence and flagged the company’s valuation as compelling - roughly 15 times enterprise value to estimated free cash flow for calendar year 2027.
Market-technical indicators noted in the company’s profile indicate the stock has recently been under upward pressure from an oversold reading, with the share price falling 11.41% over the past week and relative strength metrics in oversold territory. Additional analytical material referenced for investors includes 11 further insights and extended research coverage on Dynatrace, with visualized research on more than 1,400 prominent equities available through specialized Pro research services.
Dynatrace also reported solid results for the third quarter of fiscal 2026, beating analyst expectations on both the bottom and top lines. The company posted adjusted earnings per share of $0.44, above the forecast of $0.41, while quarterly revenue reached $515 million versus an anticipated $505.8 million. These results underscore the operating strength cited by analysts in support of the higher price target and Buy rating.
Taken together, the combination of above-consensus NNARR, an upgraded ARR outlook, steady NRR against the backdrop of anticipated cohort renewals, a material buyback authorization and better-than-expected quarterly results shaped TD Cowen’s reassessment of Dynatrace’s near-term value proposition.
What this means for investors
- Analysts now see meaningful upside to the share price based on improved recurring revenue dynamics and attractive forward free cash flow multiples.
- The buyback program and upgraded guidance contribute to a more favorable risk-reward profile in the view of the covering analyst.
- Recent earnings and revenue beats provide operational confirmation of ARR strength.
Observations and caveats
- NRR has held at 111% this quarter; meaningful improvement is expected only as DPS cohorts come up for renewal in fiscal 2027.
- Technical indicators show the stock recently moved into oversold readings after an 11.41% decline in the past week, which may influence near-term price action.
Bottom line
TD Cowen’s $60 price target on Dynatrace rests on recurring revenue momentum, management’s capital return decision and valuation metrics calibrated against estimated free cash flow in 2027. The firm retains a Buy stance ahead of what it views as an improving NRR profile and continued expansion in ARR cohorts.