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

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Datadog (DDOG - Free Report) closed the most recent trading day at $120.94, moving +1.84% from the previous trading session. This move lagged the S&P 500's daily gain of 2.14%. Meanwhile, the Dow gained 1.82%, and the Nasdaq, a tech-heavy index, lost 0.01%.

Heading into today, shares of the data analytics and cloud monitoring company had lost 27.74% over the past month, lagging the Computer and Technology sector's loss of 10.13% and the S&P 500's loss of 5.01% in that time.

Datadog will be looking to display strength as it nears its next earnings release. In that report, analysts expect Datadog to post earnings of $0.11 per share. This would mark year-over-year growth of 83.33%. Meanwhile, our latest consensus estimate is calling for revenue of $337.3 million, up 69.88% from the prior-year quarter.

DDOG's full-year Zacks Consensus Estimates are calling for earnings of $0.49 per share and revenue of $1.52 billion. These results would represent year-over-year changes of +2.08% and +48.07%, respectively.

Investors might also notice recent changes to analyst estimates for Datadog. These recent revisions tend to reflect the evolving nature of short-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. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. Datadog currently has a Zacks Rank of #3 (Hold).

In terms of valuation, Datadog is currently trading at a Forward P/E ratio of 240.19. This represents a premium compared to its industry's average Forward P/E of 40.59.

The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 189, putting it in the bottom 26% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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