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Datadog (DDOG) Registers a Bigger Fall Than the Market: Important Facts to Note

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Datadog (DDOG - Free Report) closed at $124.62 in the latest trading session, marking a -0.95% move from the prior day. The stock's change was less than the S&P 500's daily loss of 0.05%. At the same time, the Dow lost 0.02%, and the tech-heavy Nasdaq gained 0.18%.

The data analytics and cloud monitoring company's stock has climbed by 8.25% in the past month, exceeding the Computer and Technology sector's gain of 3.5% and the S&P 500's gain of 2.76%.

The investment community will be paying close attention to the earnings performance of Datadog in its upcoming release. The company is slated to reveal its earnings on November 7, 2024. The company is predicted to post an EPS of $0.39, indicating a 13.33% decline compared to the equivalent quarter last year. Meanwhile, the latest consensus estimate predicts the revenue to be $662.55 million, indicating a 21% increase compared to the same quarter of the previous year.

For the full year, the Zacks Consensus Estimates are projecting earnings of $1.64 per share and revenue of $2.63 billion, which would represent changes of +24.24% and +23.4%, respectively, from the prior year.

Any recent changes to analyst estimates for Datadog should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the company's business health and profitability.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. 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, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed an unchanged state. Datadog is currently a Zacks Rank #3 (Hold).

Digging into valuation, Datadog currently has a Forward P/E ratio of 76.71. This indicates a premium in contrast to its industry's Forward P/E of 32.36.

Meanwhile, DDOG's PEG ratio is currently 5.88. 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. Internet - Software stocks are, on average, holding a PEG ratio of 2.19 based on yesterday's closing prices.

The Internet - Software industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 57, placing it within the top 23% of over 250 industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these 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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