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Datadog (DDOG) Stock Sinks As Market Gains: What You Should Know

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Datadog (DDOG - Free Report) closed at $67.91 in the latest trading session, marking a -0.28% move from the prior day. This move lagged the S&P 500's daily gain of 0.57%. Elsewhere, the Dow gained 0.43%, while the tech-heavy Nasdaq added 0.33%.

Prior to today's trading, shares of the data analytics and cloud monitoring company had lost 9.47% over the past month. This has lagged the Computer and Technology sector's gain of 7.94% and the S&P 500's gain of 1.72% in that time.

Investors will be hoping for strength from Datadog as it approaches its next earnings release. In that report, analysts expect Datadog to post earnings of $0.23 per share. This would mark a year-over-year decline of 4.17%. Our most recent consensus estimate is calling for quarterly revenue of $468.13 million, up 28.95% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $1.05 per share and revenue of $2.08 billion, which would represent changes of +7.14% and +24.36%, respectively, from the prior year.

Any recent changes to analyst estimates for Datadog should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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 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 has moved 7.05% lower within the past month. Datadog is currently sporting a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that Datadog has a Forward P/E ratio of 64.75 right now. This valuation marks a premium compared to its industry's average Forward P/E of 43.14.

It is also worth noting that DDOG currently has a PEG ratio of 1.63. 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. DDOG's industry had an average PEG ratio of 1.66 as of yesterday's close.

The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 58, putting it in the top 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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