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Datadog (DDOG) Expands Reach With New Data Center in Japan

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Datadog (DDOG - Free Report) recently launched its first data center in Asia, in Tokyo, Japan. This expands its existing locations in the United States, Europe and AWS GovCloud.

Datadog's new data center in Japan will enable local storage and processing of data, ensuring compliance with data privacy and security regulations in the region. Additionally, all existing Datadog products will be accessible through the new data center.

The new data center in Tokyo enables its customers to retain their data in Japan by offering fast and low-latency observability and security for hybrid-cloud environments.

Data Center Growth Prospects

The latest move of the company positions it well to capitalize on the growth prospects present in the data center market.

According to a report from The Allied Market Research , the global data center market is anticipated to hit $517.17 billion by 2030 by witnessing a CAGR of 10.5% between 2021 and 2030 .

A P&S Intelligence report shows that the underlined market is expected to reach $602.76 billion by 2030 by registering a CAGR of 10.9% between 2022 and 2030.

 

We believe that DDOG’s’ solid prospects in this promising market will likely contribute well to its financial performance in the days ahead. This, in turn, will continue helping it win investors’ confidence.

Coming to the price performance, DDOG has lost 47.1% in a year compared with the Zacks Internet- Software industry’s and the Zacks Computer and Technology sector’s decline of 16.2% and 8.1% respectively.

Datadog’s Strong Portfolio to Aid Prospects

Datadog recently announced the general availability of Application Vulnerability Management, which automatically detects and prioritizes critical vulnerabilities in open-source libraries, thereby enhancing its application security capabilities.

Datadog has also integrated Bottomline into its Marketplace. Datadog, a monitoring and security platform for cloud applications, has added value by integrating Bottomline to provide financial technology to its Marketplace.

Datadog’s expanding portfolio is expected to drive its top-line growth in 2023. A solid cloud partner base, including Google Cloud, Microsoft Azure and Amazon Web Services, remain a key growth driver in addition to an expanding portfolio.

For the first quarter of 2023, Datadog expects revenues between $466 million and $470 million, suggesting a year-over-year increase of 28%-29%.

The Zacks Consensus Estimate for DDOG’s first-quarter 2023 earnings is pegged at 23 cents per share, indicating a year-over-year decline of 4.17%.

The consensus mark for revenues in 2023 is pegged at $2.08 billion, indicating year-over-year growth of 24.36%.

Zacks Rank & Stocks to Consider

Currently, Datadog carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the broader sector are Agilent Technologies (A - Free Report) , Adobe (ADBE - Free Report) and Analog Devices (ADI - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Agilent shares have gained 9.5% in the past year. The long-term earnings growth rate for A is currently projected at 12%.

Adobe shares have lost 13.5% in the past year. ADBE’s long-term earnings growth rate is currently projected at 13.36%.

Analog Devices shares have gained 16.8% in the past year. The long-term earnings growth rate for ADI is currently projected at 12.25%.

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