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Datadog (DDOG) Gains But Lags Market: What You Should Know

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In the latest trading session, Datadog (DDOG - Free Report) closed at $101.23, marking a +0.35% move from the previous day. This move lagged the S&P 500's daily gain of 0.99%. At the same time, the Dow added 0.51%, and the tech-heavy Nasdaq lost 0.31%.

Prior to today's trading, shares of the data analytics and cloud monitoring company had gained 10.75% over the past month. This has outpaced the Computer and Technology sector's loss of 11.18% and the S&P 500's gain of 7.91% in that time.

Investors will be hoping for strength from Datadog as it approaches its next earnings release, which is expected to be August 4, 2022. In that report, analysts expect Datadog to post earnings of $0.14 per share. This would mark year-over-year growth of 55.56%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $378.05 million, up 61.87% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $0.72 per share and revenue of $1.61 billion, which would represent changes of +50% and +56.57%, respectively, from the prior year.

Any recent changes to analyst estimates for Datadog should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Datadog is currently sporting a Zacks Rank of #3 (Hold).

In terms of valuation, Datadog is currently trading at a Forward P/E ratio of 139.87. Its industry sports an average Forward P/E of 45.82, 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 group has a Zacks Industry Rank of 134, putting it in the bottom 47% 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.

To follow DDOG in the coming trading sessions, be sure to utilize Zacks.com.


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