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

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Datadog (DDOG - Free Report) closed the latest trading day at $149.46, indicating a +1.72% change from the previous session's end. The stock's performance was ahead of the S&P 500's daily gain of 1.09%. Elsewhere, the Dow saw an upswing of 1.18%, while the tech-heavy Nasdaq appreciated by 1.03%.

The data analytics and cloud monitoring company's shares have seen an increase of 2.13% over the last month, surpassing the Computer and Technology sector's gain of 1.8% and the S&P 500's loss of 0.71%.

Investors will be eagerly watching for the performance of Datadog in its upcoming earnings disclosure. The company is forecasted to report an EPS of $0.43, showcasing a 2.27% downward movement from the corresponding quarter of the prior year. In the meantime, our current consensus estimate forecasts the revenue to be $711.66 million, indicating a 20.69% growth compared to the corresponding quarter of the prior year.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $1.76 per share and a revenue of $2.66 billion, representing changes of +33.33% and +24.9%, respectively, from the prior year.

Furthermore, it would be beneficial for investors to monitor any recent shifts in analyst projections for Datadog. These revisions help to show the ever-changing nature of near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the company's business and profitability.

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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 1.05% increase. Datadog presently features a Zacks Rank of #2 (Buy).

Digging into valuation, Datadog currently has a Forward P/E ratio of 83.31. This indicates a premium in contrast to its industry's Forward P/E of 32.84.

Investors should also note that DDOG has a PEG ratio of 5.6 right now. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. As the market closed yesterday, the Internet - Software industry was having an average PEG ratio of 2.33.

The Internet - Software industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 33, finds itself in the top 14% echelons of all 250+ industries.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.


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