Dynatrace (Dynatrace) Predictability Rank

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What is Dynatrace Predictability Rank?

Not Rated

Warren Buffett said many times that the companies he likes are:

1. Simple businesses that he understands
2. that have predictable and proven earnings and
3. with economic moat
4. those can be bought at a reasonable price.

It is hard to quantify "simple businesses that he (Buffett) understands", so we will focus on the other three characteristics instead. In GuruFocus Research: What worked in the market from 1998-2008? Part I: Introduction of Predictability Rank, we will show that the businesses that have predictable and proven earnings are usually also simple businesses that an average person could understand.

GuruFocus conducted a back test study of Warren Buffett's strategy of "buying good companies at fair prices" for the years from 1998-2008.

Dynatrace Predictability Rank Calculation

In our database there are 2403 stocks that have been traded from Jan. 2, 1998 to Aug. 31, 2008. We have the complete 10-year financial data and trading prices of these companies for this period. We rank the predictability of these companies based on the consistency of their revenue per share and EBITDA (earning before interest, tax, depreciation and amortization) per share over the past ten fiscal years, and study the correlation between the stock performances and the predictability of the business.

Our study may be subject to these biases and assumptions:

Dividend yields are not counted for investment returns
Effects of price changes due to spin-offs may not be fully adjusted
Study is subjected to survivorship bias due to de-listing, bankruptcy, LBO, M&A, etc.

The correlation between business predictability and investment returns of a company is showed below.

Correlation Between Business Predictability and Investment Returns

	Predictables	Non-Predictable	All stocks
Total Number of stocks	570	1833	2403
Total Lost Money	61	830	891
Total Lost More Than 50%	18	412	430
Total Lost More Than 90%	4	86	90
Average Gain	260.6%	100.0%	138.1%
Median Gain	150.0%	13.0%	39.0%
Maximum Gain	2852.0%	11483.0%	11483.0%
Maximum Loss	-100.0%	-100.0%	-100.0%
Annualized Average Gain	12.7%	6.7%	8.4%
Annualized Median Gain	8.9%	1.1%	3.1%

For the 570 predictable companies, we have seen strong correlation between the predictability of businesses and the stock performances over the past 10 years, regardless of the valuation of business at 1998. Accordingly, we have ranked the business predictability from 5-star to 1-star, as shown in this table.

Predictability Rank	5-Star	4.5-Star	4-Star	3.5-Star	3-Star	2.5-Star	2-Star	1-Star (non-predictable)	Average among all
% Out of All 2403 Stocks	3.3%	2.9%	3.7%	3.3%	3.3%	3.7%	3.3%	76.3%	100%
% that are in Loss (10y)	3%	10%	8%	9%	11%	18%	16%	45%	37%
Average Gain (10y)	364.6%	330.9%	278.0%	235.1%	243.5%	227.8%	154.8%	100.0%	138.1%
Median Gain (10y)	238.5%	193.5%	171.0%	159.0%	132.5%	113.5%	87.0%	13.0%	39.0%
Maximum Gainer	2228.0%	2547.0%	2452.0%	2852.0%	2432.0%	1892.0%	1807.0%	11483.0%	11483.0%
Maximum Loser	-82.0%	-53.0%	-67.0%	-100.0%	-83.0%	-100.0%	-78.0%	-100.0%	-100.0%
Annualized Average Gain	15.4%	14.6%	13.2%	12.0%	12.2%	11.7%	9.1%	6.7%	8.4%
Annualized Median Gain	12.1%	10.6%	9.8%	9.3%	8.2%	7.3%	6.0%	1.1%	3.1%

For detailed information about each predictability rank, please go to GuruFocus Research: What worked in the market from 1998-2008? Part I: Introduction of Predictability Rank

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Dynatrace (Dynatrace) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Software » Dynatrace Inc (NYSE:DT) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

N/A

Address

1601 Trapelo Road, Suite 116, Waltham, MA, USA, 02451

Website

https://www.dynatrace.com

Dynatrace is a cloud-native company that focuses on analyzing machine data. Its product portfolio, delivered as software as a service, allows a client to monitor and analyze its entire IT infrastructure. Dynatrace's platform can ingest and analyze large amounts of machine-generated data in real time, allowing clients to use it for a variety of applications throughout their businesses.

Executives

Dan Zugelder	officer: SVP, Chief Revenue Officer	DYNATRACE, INC., 1601 TRAPELO ROAD, SUITE 116, WALTHAM MA 02451
James M Benson	officer: Chief Financial Officer	C/O AKAMAI TECHNOLOGIES, INC., 8 CAMBRIDGE CENTER, CAMBRIDGE MA 02142
Rick M Mcconnell	director, officer: Chief Executive Officer	LATITUDE, 2121 TASMAN DRIVE, SANTA CLARA CA 4089887256
Matthias Dollentz-scharer	officer: Chief Customer Officer	DYNATRACE, INC., 1601 TRAPELO ROAD, SUITE 116, WALTHAM MA 02451
Bernd Greifeneder	officer: SVP, Chief Technology Officer	C/O DYNATRACE HOLDINGS LLC, 1601 TRAPELO ROAD, SUITE 116, WALTHAM MA 02451
Thoma Bravo Ugp, Llc	10 percent owner	110 N. WACKER DRIVE, 32ND FLOOR, CHICAGO IL 60606
Daniel S. Yates	officer: SVP, Chief Accounting Officer	DYNATRACE, INC., 1601 TRAPELO ROAD, SUITE 116, WALTHAM MA 02451
Amol Kulkarni	director	C/O DYNATRACE, INC., 1601 TRAPELO ROAD, SUITE 116, WALTHAM MA 02451
Alicia Allen	officer: Chief Accounting Officer	C/O DYNATRACE, INC., 1601 TRAPELO ROAD SUITE 116, WALTHAM MA 02451
Stephen J. Pace	officer: SVP, Worldwide Sales	C/O DYNATRACE HOLDINGS LLC, 1601 TRAPELO ROAD SUITE 116, WALTHAM MA 02451
Kevin C Burns	officer: See Remarks	C/O DYNATRACE HOLDINGS LLC, 1601 TRAPELO ROAD, SUITE 116, WALTHAM MA 02451
Paul Andrew Zuber	director	C/O HOULIHAN LOKEY, INC., 10250 CONSTELLATION BLVD., 5TH FLOOR, LOS ANGELES CA 90067
Ambika Gadre	director	C/O DYNATRACE, INC., 1601 TRAPELO ROAD SUITE 116, WALTHAM MA 02451
Siclen John Van	director, officer: Chief Executive Officer	C/O DYNATRACE HOLDINGS LLC, 1601 TRAPELO ROAD, SUITE 116, WALTHAM MA 02451
Stephen Eric Rowland	director	1601 TRAPELO ROAD, SUITE 116, WALTHAM MA 02451