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Datadog (DDOG) Increases Yet Falls Behind Market: What Investors Need to Know

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In the latest trading session, Datadog (DDOG - Free Report) closed at $102.02, marking a +0.06% move from the previous day. The stock's change was less than the S&P 500's daily gain of 0.49%. On the other hand, the Dow registered a loss of 0.2%, and the technology-centric Nasdaq increased by 1.22%.

The data analytics and cloud monitoring company's shares have seen a decrease of 29.89% over the last month, not keeping up with the Computer and Technology sector's loss of 12.07% and the S&P 500's loss of 8.15%.

Analysts and investors alike will be keeping a close eye on the performance of Datadog in its upcoming earnings disclosure. The company's upcoming EPS is projected at $0.42, signifying a 4.55% drop compared to the same quarter of the previous year. Alongside, our most recent consensus estimate is anticipating revenue of $739.51 million, indicating a 20.98% upward movement from the same quarter last year.

DDOG's full-year Zacks Consensus Estimates are calling for earnings of $1.69 per share and revenue of $3.19 billion. These results would represent year-over-year changes of -7.14% and +18.85%, respectively.

It's also important for investors to be aware of any recent modifications to analyst estimates for Datadog. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 44.75% decrease. Datadog is currently a Zacks Rank #3 (Hold).

In terms of valuation, Datadog is presently being traded at a Forward P/E ratio of 60.43. This valuation marks a premium compared to its industry's average Forward P/E of 26.7.

We can also see that DDOG currently has a PEG ratio of 7.21. 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. The average PEG ratio for the Internet - Software industry stood at 2.05 at the close of the market yesterday.

The Internet - Software industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 81, finds itself in the top 33% echelons of all 250+ industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.


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