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

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Datadog (DDOG - Free Report) closed at $88.96 in the latest trading session, marking a +1.29% move from the prior day. The stock outpaced the S&P 500's daily gain of 0.59%. Meanwhile, the Dow gained 0.35%, and the Nasdaq, a tech-heavy index, added 0.83%.

Heading into today, shares of the data analytics and cloud monitoring company had lost 6.72% over the past month, lagging the Computer and Technology sector's loss of 2.71% and the S&P 500's loss of 2.84% in that time.

Wall Street will be looking for positivity from Datadog as it approaches its next earnings report date. The company is expected to report EPS of $0.34, up 47.83% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $523.3 million, up 19.88% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $1.32 per share and revenue of $2.06 billion, which would represent changes of +34.69% and +22.75%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for Datadog. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

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. Within the past 30 days, our consensus EPS projection remained stagnant. Datadog is holding a Zacks Rank of #3 (Hold) right now.

Investors should also note Datadog's current valuation metrics, including its Forward P/E ratio of 66.72. Its industry sports an average Forward P/E of 36.56, so we one might conclude that Datadog is trading at a premium comparatively.

It is also worth noting that DDOG currently has a PEG ratio of 2.63. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Internet - Software stocks are, on average, holding a PEG ratio of 1.52 based on yesterday's closing prices.

The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 74, putting it in the top 30% 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.

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


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