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Datadog (DDOG) Dips More Than Broader Markets: What You Should Know

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Datadog (DDOG - Free Report) closed at $69.56 in the latest trading session, marking a -0.64% move from the prior day. This change lagged the S&P 500's 0.01% loss on the day. Elsewhere, the Dow lost 0.23%, while the tech-heavy Nasdaq added 0.97%.

Coming into today, shares of the data analytics and cloud monitoring company had gained 0.47% in the past month. In that same time, the Computer and Technology sector gained 4.02%, while the S&P 500 gained 6.23%.

Wall Street will be looking for positivity from Datadog as it approaches its next earnings report date. This is expected to be May 4, 2023. 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.

It is also important to note the recent changes to analyst estimates for Datadog. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

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.

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 remained stagnant. Datadog is currently a Zacks Rank #4 (Sell).

Looking at its valuation, Datadog is holding a Forward P/E ratio of 66.56. Its industry sports an average Forward P/E of 42.36, so we one might conclude that Datadog is trading at a premium comparatively.

Also, we should mention that DDOG has a PEG ratio of 1.67. 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 industry currently had an average PEG ratio of 1.72 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 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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