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Datadog (DDOG) Suffers a Larger Drop Than the General Market: Key Insights

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The latest trading session saw Datadog (DDOG - Free Report) ending at $116.08, denoting a -0.36% adjustment from its last day's close. The stock's performance was behind the S&P 500's daily loss of 0.25%. Elsewhere, the Dow saw an upswing of 0.77%, while the tech-heavy Nasdaq depreciated by 0.79%.

The data analytics and cloud monitoring company's stock has dropped by 5.09% in the past month, falling short of the Computer and Technology sector's gain of 8.85% and the S&P 500's gain of 3.59%.

The investment community will be paying close attention to the earnings performance of Datadog in its upcoming release. The company is expected to report EPS of $0.35, down 2.78% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $622.79 million, up 22.25% from the year-ago period.

For the full year, the Zacks Consensus Estimates project earnings of $1.54 per share and a revenue of $2.6 billion, demonstrating changes of +16.67% and +22.13%, respectively, from the preceding year.

It's also important for investors to be aware of any recent modifications to analyst estimates for Datadog. Such recent modifications usually signify the changing landscape of near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.

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 varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. Currently, Datadog is carrying a Zacks Rank of #1 (Strong Buy).

In the context of valuation, Datadog is at present trading with a Forward P/E ratio of 75.79. This denotes a premium relative to the industry's average Forward P/E of 29.43.

It's also important to note that DDOG currently trades at a PEG ratio of 7.93. 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 was holding an average PEG ratio of 1.63 at yesterday's closing price.

The Internet - Software industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 74, positioning it in the top 30% of all 250+ industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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

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