The cloud-monitoring firm Dynatrace Inc. (NYSE: DT) is enjoying a great year. Dynatrace’s share price grew from $26.03 on 2 January 2020 to $42.40 on 27 July 2020.
Moreover, Stockrow credits Dynatrace with a 29.62% revenue growth rate in the quarter ending on 31 March 2020. Dyantrace’s revenue growth rate grew from 24.94% in the previous quarter.
Additionally, Dynatrace’s quarterly revenues grew from $143.30 million on 31 December 2019 to $150.58 million on 31 March 2020. Notably, Dynatrace’s quarterly common net income grew from $1.76 million on 31 December 2019 to $46.70 million on 31 March 2020.
Conversely, Dynatrace’s quarterly operating income grew from $7.55 million on 31 December 2019 to $8.03 million on 31 March 2020. Plus, Dyantrace reported a -$154.52 quarterly operating loss on 30 September 2019.
Finally, Dynatrace’s quarterly gross profit rose from $114.59 million to $119.44 million in the first three months of 2020. Thus, Dyantrace is making some money, but it lost money just a few months ago.
How Much Cash Does Dynatrace Have?
Dynatrace (NYSE: DT) is generating more cash. For instance, Dynatrace reported a $64.64 million operating cash flow on 31 March 2020.
That cash flow rose from $11.13 million on 31 December 2019 and -$252.40 million on 30 September 2019. Conversely, Dynatrace reported a -$23.14 ending cash flow on 31 December 2019 to $24.61 million on 31 March 2020. However, Dynatrace reported a $154.24 million ending cash flow on 30 September 2020.
Consequently, Dynatrace had $213.17 million in cash and short-term investments on 31 March 2020. That number rose from $188.56 million on 31 December 2019 and $51.31 million on 31 March 2019.
Dynatrace is generating more cash in the last year. Plus, I think Dynatrace can raise enormous amounts of money from debt. For instance, Dynatrace reported $414.02 million in cash from financing on 30 September 2019. That number fell to -$30.87 million on 31 March 2020.
In the final analysis, I think Dynatrace could become a cash rich company. To explain, Dynatrace’s cloud performance tools could generate enormous amounts of cash.
What is Dynatrace?
Dynatrace develops software that monitors, optimizes, and scales apps in the cloud. In addition to apps, Dynatrace’s platform uses artificial intelligence (AI) to automate operations.
Some functions Dynatrace’s platform enables include advanced observability, continuous automation, AI-assistance, cross-team collaboration, and monitor user experience and business analytics. Dynatrace’s solutions include solutions for cloud operations, DevOps, application performance monitoring (APM), software intelligence, and software as a service (SaaS).
Ecommerce areas Dynatrace helps companies with include Infrastructure Monitoring, Application Performance, Digital Experience, and Digital Business Analytics. Hence, Dyantrace provides a package of services for companies at a time when people are relying on digital platforms for entertainment and business.
Dynatrace claims its customers include Samsung, Experian, SAP (NYSE: SAP), U Haul , Kroger (NYSE: KR), and Dish Network (NYSE: DISH).
Dynatrace is growing with the Cloud
Dynatrace (NYSE: DT) is growing because the cloud is growing. For instance, Report Linker projects the global cloud computing market will grow to $623.3 billion by 2020. Hosting Tribunal estimates the global cloud computing market was worth $272 billion in 2019.
Moreover, Canalysis estimates organizations spent $80 billion on cloud infrastructure in 2018. That number grew from $55 billion in 2017. Dynatrace is in the cloud infrastructure business.
Plus, Hosting Tribunal estimates 89% of companies use one of Dynatrace’s primary products software as a service (SaaS). In addition, Gartner estimates SaaS revenues at $85.1 billion in 2019, those revenues could grow to $113.1 billion.
Finally, Cisco estimates 75% of all cloud workloads will use SaaS by 2021.
Can Dynatrace Grow with Coronavirus?
I think cloud computing will grow with coronavirus. To explain, tens of millions of people are now working from home on the cloud.
Alphabet (NASDAQ: GOOGL) told all of its North American employees to work from home on 10 May 2020, Forbes reports. In addition, Microsoft (NASDAQ: MSFT), Amazon (NASDAQ: AMZN), Apple (NASDAQ: AAPL), and Twitter (NYSE: TWTR) told some employees to work from home.
Moreover, Facebook (NASDAQ: FB) CEO Market Zuckerberg estimates that 50% of his employees could work remotely in five to 10 years, Recode reports. Interestingly, Zuckerberg claims 95% of his employees were working from May 2020 and will stay at home until January 2021. Hence, over half of office workers could work from home in a few years.
A remote workforce will necessitate a bigger, faster, and more efficient cloud. In addition, remote work will require better, faster, and more secure cloud apps. Hence, more companies will need Dynatrace’s products and services.
Is Dynatrace a Good Stock?
I consider Dynatrace an excellent growth stock but a poor investment for ordinary people. Think Dynatrace is a poor investment for ordinary folk because it pays no dividend.
However, if you are seeking a cheap stock with potential for fast growth, Dynatrace (NYSE: DT) is worth a look.