Back to top

Image: Bigstock

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

Read MoreHide Full Article

In the latest trading session, Datadog (DDOG - Free Report) closed at $77.23, marking a +1.62% move from the previous day. This change outpaced the S&P 500's 0.25% gain on the day. At the same time, the Dow added 0.08%, and the tech-heavy Nasdaq gained 7.26%.

Prior to today's trading, shares of the data analytics and cloud monitoring company had gained 2.79% over the past month. This has lagged the Computer and Technology sector's gain of 12.65% and the S&P 500's gain of 5.73% in that time.

Investors will be hoping for strength from Datadog as it approaches its next earnings release, which is expected to be February 16, 2023. On that day, Datadog is projected to report earnings of $0.19 per share, which would represent a year-over-year decline of 5%. Meanwhile, our latest consensus estimate is calling for revenue of $446.35 million, up 36.83% from the prior-year quarter.

Investors should also note any recent changes to analyst estimates for Datadog. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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 has moved 8.53% higher within the past month. Datadog is currently a Zacks Rank #2 (Buy).

In terms of valuation, Datadog is currently trading at a Forward P/E ratio of 69.04. This represents a premium compared to its industry's average Forward P/E of 41.25.

We can also see that DDOG currently has a PEG ratio of 1.6. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Internet - Software industry currently had an average PEG ratio of 2.28 as of yesterday's close.

The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 59, which puts it in the top 24% 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.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Datadog, Inc. (DDOG) - free report >>

Published in