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Dynatrace, Inc. (DT) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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Dynatrace, Inc. (DT)

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Intrinsic Value (DCF)

Current$39.38
→
Intrinsic$53.54
+36%
$37.44$53.54$84.08
Market implies 16% growth for 5 years
DCF analysis suggests DT could have 36% upside at 25% growth — verify assumptions match your view.
At $39, the market prices in continued high-teens cash flow growth (16%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $37 → Bull $84. Current price implies expectations below the base case, but well above the bear case.
Discount ↓Growth →21%23%25%27%
8%$65$70$75$81
10%$47$50$54$57
12%$36$39$41$44
14%$30$32$34$36

Bull Case

  • Bull case ($84) offers 114% upside at 30% growth, 9% discount
  • 26% margin of safety vs. base case estimate
  • Market-implied growth (16%) ≤ historical CAGR (25%)

Bear Case

  • Bear case ($37) implies 5% downside at 20% growth, 12% discount
  • Using 25% growth — aggressive, watch for mean reversion
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5-Year Free Cash Flow Projection

Year 1$541.64M
Year 2$677.05M
Year 3$846.31M
Year 4$1.06B
Year 5$1.32B
Terminal$19.46B

📐 Model Inputs

Growth Rate25.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$433.31MTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

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Frequently Asked Questions

Is DT stock undervalued or overvalued?
🟡 FAIRLY VALUED

DT trades at $39.38, within 10% of our $44.88 intrinsic value estimate. At 10.0% WACC and 25.0% FCF growth, the market is pricing in assumptions roughly aligned with the 5-year historical CAGR. The valuation range spans $30.51 (bear) to $66.06 (bull).

What is DT's intrinsic value?

Using a 5-year DCF model: Base FCF of $433M, projected at 25.0% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $-942M net debt and dividing by 0.30B shares: Bear $30.51 | Base $44.88 | Bull $66.06. Current price $39.38 implies +5% to base case.

How is DT's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 25.0% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($12.69B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 29.3x.