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Why Datadog (DDOG) Dipped More Than Broader Market Today

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In the latest trading session, Datadog (DDOG - Free Report) closed at $123.15, marking a -0.36% move from the previous day. The stock's performance was behind the S&P 500's daily loss of 0.2%. Elsewhere, the Dow saw a downswing of 0.6%, while the tech-heavy Nasdaq appreciated by 0.11%.

Shares of the data analytics and cloud monitoring company have depreciated by 5.08% over the course of the past month, underperforming the Computer and Technology sector's gain of 2.99% and the S&P 500's gain of 3.32%.

The investment community will be closely monitoring the performance of Datadog in its forthcoming earnings report. It is anticipated that the company will report an EPS of $0.34, marking a 21.43% rise compared to the same quarter of the previous year. Meanwhile, our latest consensus estimate is calling for revenue of $590.1 million, up 22.5% from the prior-year quarter.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $1.42 per share and revenue of $2.57 billion, indicating changes of +7.58% and +20.73%, respectively, compared to the previous year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts 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. 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 9.15% lower within the past month. Datadog is currently sporting a Zacks Rank of #3 (Hold).

Investors should also note Datadog's current valuation metrics, including its Forward P/E ratio of 87.26. This indicates a premium in contrast to its industry's Forward P/E of 30.03.

We can additionally observe that DDOG currently boasts a PEG ratio of 10.22. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Internet - Software was holding an average PEG ratio of 1.92 at yesterday's closing price.

The Internet - Software industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 39, finds itself in the top 16% echelons of all 250+ industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Ensure to harness to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.

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