Datadog (DDOG) Outpaces Stock Market Gains: What You Should Know

In the latest close session, Datadog (DDOG) was up +1.42% at $120.36. The stock’s change was more than the S&P 500’s daily gain of 0.11%. Elsewhere, the Dow lost 0.13%, while the tech-heavy Nasdaq added 0.18%.

Heading into today, shares of the data analytics and cloud monitoring company had gained 0.29% over the past month, outpacing the Computer and Technology sector’s loss of 3.85% and the S&P 500’s loss of 4.28%.

The investment community will be closely monitoring the performance of Datadog in its forthcoming earnings report. The company is expected to report EPS of $0.5, up 8.7% from the prior-year quarter. Alongside, our most recent consensus estimate is anticipating revenue of $956.97 million, indicating a 25.66% upward movement from the same quarter last year.

For the full year, the Zacks Consensus Estimates are projecting earnings of $2.12 per share and revenue of $4.08 billion, which would represent changes of +3.41% and +19.17%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for Datadog. These recent revisions tend to reflect the evolving nature of short-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To capitalize on this, we’ve crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. As of now, Datadog holds a Zacks Rank of #3 (Hold).

Investors should also note Datadog’s current valuation metrics, including its Forward P/E ratio of 55.9. This denotes a premium relative to the industry average Forward P/E of 19.11.

It’s also important to note that DDOG currently trades at a PEG ratio of 4.84. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock’s expected earnings growth rate. The average PEG ratio for the Internet – Software industry stood at 1.04 at the close of the market yesterday.

The Internet – Software industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 152, positioning it in the bottom 38% of all 250+ industries.