Dynatrace, Inc. (DT), a software intelligence company that simplifies cloud complexity and accelerates digital transformation, completed the acquisition of SpectX, a high-speed parsing and query analytics company. Shares rose 2.1% on the news, closing at $70.61 on September 14. (See Dynatrace stock charts on TipRanks)
With digital transformation at its peak, more and more companies are turning to the cloud for their day-to-day operations and applications, resulting in large volumes of data being produced. These data need to be analyzed in real-time to ensure the security and performance of both the cloud and the applications that run on it.
The combination of both Dynatrace and SpectX will boost this process by using their high-speed, artificial intelligence-driven analytics platform’s observability and security analytics capabilities even further.
Commenting on the acquisition, Bernd Greifeneder, founder, and CTO of Dynatrace said, “SpectX’s advanced analytics solution fits seamlessly into our product roadmap, while its exceptionally talented team will extend our ability to help the world’s leading organizations accelerate digital innovation. Ultimately, this acquisition will empower us to leap even further ahead of our competition in terms of differentiation and value for these organizations.”
Following the acquisition news, William Blair analyst Kamil Mielczarek maintained a Buy rating on the stock and said, “SpectX adds flexibility as the product is able to ingest raw log files across multiple local and remote sources including on-premises log servers and multi-cloud environments…The technology and headcount that joins Dynatrace through the acquisition pulls forward the company’s product roadmap, particularly as Dynatrace builds out its security capabilities.”
Mielczarek expects Dynatrace to enhance its annual recurring revenue (ARR) and revenue growth rates in the high 30% range in the coming years based on recent headcount investments, productivity improvements, and the decline in perpetual license headwinds.
Overall, the stock commands a Strong Buy consensus rating based on 12 Buys and 1 Hold. The average Dynatrace price target of $69.67 implies 1.3% downside potential to current levels. Shares have gained 74.2% over the past year.