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Datadog (DDOG) Gains But Lags Market: What You Should Know

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In the latest trading session, Datadog (DDOG - Free Report) closed at $180.36, marking a +0.38% move from the previous day. This move lagged the S&P 500's daily gain of 0.62%. At the same time, the Dow added 0.55%, and the tech-heavy Nasdaq lost 0.03%.

Heading into today, shares of the data analytics and cloud monitoring company had gained 0.01% over the past month, lagging the Computer and Technology sector's gain of 0.29% and the S&P 500's gain of 0.87% in that time.

Datadog will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $0.11, up 83.33% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $291.17 million, up 64.01% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $0.40 per share and revenue of $993.83 million, which would represent changes of +81.82% and +64.69%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for Datadog. These revisions help to show the ever-changing nature of near-term business trends. 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. 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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 1.28% higher. Datadog is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, Datadog is currently trading at a Forward P/E ratio of 455.97. Its industry sports an average Forward P/E of 65.46, so we one might conclude that Datadog is trading at a premium comparatively.

The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 194, which puts it in the bottom 24% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow DDOG in the coming trading sessions, be sure to utilize Zacks.com.


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