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Datadog (DDOG) Gains As Market Dips: What You Should Know

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Datadog (DDOG - Free Report) closed the most recent trading day at $97.34, moving +0.02% from the previous trading session. The stock outpaced the S&P 500's daily loss of 0.45%. At the same time, the Dow lost 0.67%, and the tech-heavy Nasdaq lost 0.06%.

Heading into today, shares of the data analytics and cloud monitoring company had gained 11.72% over the past month, outpacing the Computer and Technology sector's loss of 2.03% and the S&P 500's loss of 1.89% in that time.

Datadog will be looking to display strength as it nears its next earnings release. On that day, Datadog is projected to report earnings of $0.15 per share, which would represent year-over-year growth of 66.67%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $378.37 million, up 62.01% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $0.72 per share and revenue of $1.61 billion. These totals would mark changes of +50% and +56.8%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for Datadog. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable 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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Datadog is currently sporting a Zacks Rank of #2 (Buy).

Investors should also note Datadog's current valuation metrics, including its Forward P/E ratio of 134.7. Its industry sports an average Forward P/E of 43.84, so we one might conclude that Datadog is trading at a premium comparatively.

The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 133, which puts it in the bottom 48% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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