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Datadog (DDOG) to Post Q3 Earnings: What's in the Offing?

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Datadog (DDOG - Free Report) is set to release third-quarter 2021 results on Nov 4.

For the quarter, the company expects revenues between $246 million and $248 million. Non-GAAP earnings are expected between 5 cents and 6 cents per share.

The Zacks Consensus Estimate for revenues is pegged at $247.4 million, suggesting an improvement of 60% from the year-ago quarter’s reported figure.

The consensus mark for earnings is pegged at 6 cents per share, unchanged over the past 30 days and indicating growth of 20% from the figure reported in the year-ago quarter.

Datadog’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters, delivering an earnings surprise of 225%, on average.
 

Datadog, Inc. Price and EPS Surprise

Datadog, Inc. Price and EPS Surprise

Datadog, Inc. price-eps-surprise | Datadog, Inc. Quote

 

Let’s see how things have shaped up for Datadog prior to this announcement.

Factors to Consider

Datadog’s performance in third-quarter 2021 is expected to have benefited from higher uptake of its cloud-based monitoring and analytics platform on the back of accelerated digital transformation and cloud migration across business enterprises.

Solid adoption of Synthetics and Network Performance Monitoring products is expected to have aided customer wins in the to-be-reported quarter.

Moreover, contributions from a strong cloud partner base, which includes Google Cloud, Microsoft Azure and Amazon Web Services, has been a key growth driver.

Datadog’s expanding portfolio of integrated solutions has been a major catalyst in expanding its customer base. The company ended second-quarter 2021 with 1,610 customers with ARR of more than $100K, up 59% year over year. The firm’s dollar-based net retention rate was more than 130% in the last-reported quarter.

However, increasing expenses on research & development, marketing and headcount expansion amid stiff competition in the on-premises infrastructure monitoring space are likely to exert pressure on margin expansion in the third quarter.

What Our Model Says

Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

Datadog has an Earnings ESP of 0.00% and carries a Zacks Rank #3 currently. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are a few companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases:

Applied Materials (AMAT - Free Report) has an Earnings ESP of +0.52% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Synaptics (SYNA - Free Report) has an Earnings ESP of +0.38% and a Zacks Rank #2.

PerkinElmer has an Earnings ESP of +5.20% and a Zacks Rank #2.


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