Datadog Inc. (DDOG) ended the latest trading day at $134.33, representing a notable increase of 1.7% from the previous session. This performance outstripped the S&P 500’s gain of 0.52%, while the Dow and Nasdaq saw gains of 0.63% and 0.48%, respectively.
Over the past month, Datadog’s stock has appreciated by 12.05%, significantly outperforming the Computer and Technology sector, which grew by 7.56%, and the S&P 500 that saw an increase of 4.27%. This momentum positions Datadog favorably as it heads toward the release of its upcoming earnings report.
Analysts forecast that Datadog will report earnings per share (EPS) of $0.41 for the latest quarter, reflecting a decline of 4.65% year-over-year. However, revenue estimates suggest a promising growth trajectory, with expectations set at $789.55 million – a 22.36% increase from the same quarter last year.
Looking at the broader picture for the fiscal year, the Zacks Consensus Estimates predict an EPS of $1.70 and a revenue of $3.23 billion, indicating a year-over-year decrease in earnings of 6.59% but a revenue growth of 20.18%.
Investors are encouraged to monitor revisions to analyst estimates for Datadog, which are indicative of the company’s short-term performance trends. Positive revisions often signal a favorable business outlook, and such adjustments have been shown to correlate with stock price changes.
Using the Zacks Rank system—an established model that tracks these estimate changes—Datadog currently holds a rank of #4 (Sell), which suggests a cautious view from analysts despite its recent stock performance.
From a valuation standpoint, Datadog is trading at a Forward P/E ratio of 77.92, significantly higher than the industry average of 28.15, indicating that it is considered a premium investment. Moreover, the company has a PEG ratio of 9.66, which takes into account expected earnings growth, while the Internet – Software industry averages a PEG ratio of 2.25.
Overall, despite some mixed signals indicated by the EPS projections and the current Zacks ranking, Datadog’s growth in revenue and positive analyst revisions could provide a path for potential long-term benefits for investors.