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Datadog (DDOG) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research
·3 min read

Datadog (DDOG) closed at $100.35 in the latest trading session, marking a -1.57% move from the prior day. This change lagged the S&P 500's 0.03% loss on the day. Elsewhere, the Dow lost 0.24%, while the tech-heavy Nasdaq added 0.04%.

Prior to today's trading, shares of the data analytics and cloud monitoring company had lost 0.69% over the past month. This has lagged the Computer and Technology sector's gain of 6.07% and the S&P 500's gain of 3.1% in that time.

Wall Street will be looking for positivity from DDOG as it approaches its next earnings report date. This is expected to be November 10, 2020. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $144.24 million, up 50.47% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $0.13 per share and revenue of $570.60 million. These totals would mark changes of +1400% and +57.29%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for DDOG. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. DDOG is holding a Zacks Rank of #3 (Hold) right now.

Investors should also note DDOG's current valuation metrics, including its Forward P/E ratio of 811.99. For comparison, its industry has an average Forward P/E of 88.89, which means DDOG is trading at a premium to the group.

The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 186, putting it in the bottom 27% of all 250+ industries.

The Zacks Industry Rank includes is listed in order 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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Zacks Investment Research