Datadog (DDOG) Beats Stock Market Upswing: What Investors Need to Know

The latest trading session saw Datadog (DDOG) close at $101.06, marking a gain of +1.86% compared to the previous day's close. This performance surpassed the S&P 500, which recorded a smaller daily increase of 0.38%. Meanwhile, the Dow experienced a slight decline of 0.03%, while the tech-focused Nasdaq index rose by 0.87%.

However, it is important to note that Datadog's stock has faced challenges recently, losing 12.34% over the past month. This decline is steeper than the losses seen in the Computer and Technology sector, which fell by 8.94%, and the S&P 500, down by 5.59% during the same period.

Investors will be closely watching Datadog's upcoming earnings report. Analysts expect the company to report an earnings per share (EPS) of $0.42, which indicates a decrease of 4.55% from the same quarter last year. On the revenue side, projections suggest Datadog will generate $739.51 million, reflecting a significant increase of 20.98% compared to the previous year's quarter.

For the entire fiscal year, Zacks Consensus Estimates predict Datadog will achieve earnings of $1.69 per share and revenue totaling $3.19 billion. This suggests a decline in earnings of 7.14% but an increase in revenue of 18.85% year-over-year.

In addition to watching earnings, investors should keep an eye on any recent changes to analyst forecasts for Datadog. These revisions often provide insights into current business trends. Positive adjustments to estimates can indicate analysts' growing confidence in Datadog's business performance and potential profitability.

Research has demonstrated a direct link between estimate changes and future stock performance. To help track this, the Zacks Rank system, which rates stocks from #1 (Strong Buy) to #5 (Strong Sell), is a useful tool. Historically, stocks rated #1 have delivered an impressive average annual return of +25% since 1988. Currently, Datadog holds a Zacks Rank of #3, which indicates a Hold position.

When considering valuations, Datadog's stock is trading at a Forward P/E ratio of 58.82, a premium compared to the industry average of 26.28. Furthermore, the company has a PEG ratio of 7.02, which accounts for its expected earnings growth rate. For reference, the average PEG ratio in the Internet - Software industry is estimated at 2.01 as of the last trading session.

The Internet - Software industry is positioned within the broader Computer and Technology sector and has a Zacks Industry Rank of 74, placing it in the top 30% of over 250 industries. The Zacks Industry Rank evaluates the strength of industry groups based on the average Zacks Rank of individual stocks in those groups. Historical data shows that stocks in the top half of ranked industries tend to outperform those in the bottom half significantly.

For those looking to follow Datadog's performance in the coming sessions, utilizing platforms dedicated to stock analysis may be beneficial.

Datadog, Investors, Earnings