Shares of Dynatrace (NYSE:DT) rose sharply higher on Wednesday, climbing as much as 9.9%. As of 11:10 a.m. EST, however, the stock was up about 7%.
The growth stock's gain Wednesday morning follows an analyst's move on Tuesday afternoon to initiate coverage of the cloud software company with a buy rating.
Truist analyst Joel Fishbein started Dynatrace stock coverage at a $50 price target on Tuesday. Giving shares a buy rating, the analyst said the company's recent transition to a subscription model enables Dynatrace to deliver strong growth and substantial profitability in the coming years.
Dynatrace, which provides a software intelligence platform for enterprise cloud applications, saw subscription revenue rise 36% year over year in its most recent quarter. Subscription revenue represented $157.7 million of the company's total $168.6 million of revenue during the period.
Investors will get another update on Dynatrace's business when the company reports results for its third quarter of fiscal 2021. The company is scheduled to release this earnings report before market open on Feb. 3.