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If You Had Bought Dynatrace (NYSE:DT) Shares A Year Ago You'd Have Earned106% Returns

Dynatrace, Inc. (NYSE:DT) shareholders have seen the share price descend 11% over the month. But that doesn't change the fact that the returns over the last year have been very strong. During that period, the share price soared a full 106%. So we think most shareholders won't be too upset about the recent fall. More important, going forward, is how the business itself is going.

See our latest analysis for Dynatrace

Dynatrace wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. When a company doesn't make profits, we'd generally expect to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In the last year Dynatrace saw its revenue grow by 27%. We respect that sort of growth, no doubt. The revenue growth is decent but the share price had an even better year, gaining 106%. If the profitability is on the horizon then now could be a very exciting time to be a shareholder. But investors need to be wary of how the 'fear of missing out' could influence them to buy without doing thorough research.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

earnings-and-revenue-growth
earnings-and-revenue-growth

We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. This free report showing analyst forecasts should help you form a view on Dynatrace

A Different Perspective

Dynatrace shareholders should be happy with the total gain of 106% over the last twelve months. Unfortunately the share price is down 5.9% over the last quarter. It may simply be that the share price got ahead of itself, although there may have been fundamental developments that are weighing on it. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Dynatrace you should know about.

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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