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Datadog (DDOG) Gains But Lags Market: What You Should Know

Zacks Equity Research
·2 mins read

In the latest trading session, Datadog (DDOG) closed at $104.43, marking a +0.49% move from the previous day. This change lagged the S&P 500's 1.74% gain on the day. Elsewhere, the Dow gained 1.91%, while the tech-heavy Nasdaq added 1.88%.

Prior to today's trading, shares of the data analytics and cloud monitoring company had gained 29.93% over the past month. This has outpaced the Computer and Technology sector's loss of 1.67% and the S&P 500's loss of 1.86% in that time.

Investors will be hoping for strength from DDOG as it approaches its next earnings release. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $144.24 million, up 50.47% from the year-ago period.

DDOG's full-year Zacks Consensus Estimates are calling for earnings of $0.13 per share and revenue of $570.60 million. These results would represent year-over-year changes of +1400% and +57.29%, respectively.

Investors should also note any recent changes to analyst estimates for DDOG. 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.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable 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. The Zacks Consensus EPS estimate has moved 80.95% lower within the past month. DDOG is holding a Zacks Rank of #3 (Hold) right now.

Digging into valuation, DDOG currently has a Forward P/E ratio of 827.68. Its industry sports an average Forward P/E of 79.84, so we one might conclude that DDOG is trading at a premium comparatively.

The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 169, which puts it in the bottom 34% of all 250+ industries.

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

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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Zacks Investment Research