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

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In the latest trading session, Datadog (DDOG - Free Report) closed at $95.72, marking a +1.76% move from the previous day. This move outpaced the S&P 500's daily gain of 1.21%. Elsewhere, the Dow gained 1.03%, while the tech-heavy Nasdaq added 0.14%.

Prior to today's trading, shares of the data analytics and cloud monitoring company had lost 4.38% over the past month. This has lagged the Computer and Technology sector's gain of 2.22% and the S&P 500's gain of 3.2% in that time.

Datadog will be looking to display strength as it nears its next earnings release, which is expected to be August 4, 2022. On that day, Datadog is projected to report earnings of $0.14 per share, which would represent year-over-year growth of 55.56%. Our most recent consensus estimate is calling for quarterly revenue 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 revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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. The Zacks Consensus EPS estimate remained stagnant within the past month. Datadog is currently a Zacks Rank #3 (Hold).

In terms of valuation, Datadog is currently trading at a Forward P/E ratio of 130.41. This valuation marks a premium compared to its industry's average Forward P/E of 43.37.

The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 153, putting it in the bottom 40% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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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