Datadog (DDOG) to Report Q2 Earnings: What's in the Cards?
Datadog DDOG is set to release second-quarter 2020 results on Aug 6.
For the quarter, the company expects to report between break-even and 1 cent. The Zacks Consensus Estimate for earnings is currently pegged at 1 cent per share, unchanged over the past 30 days, but indicates decline from 6 cents reported in the previous quarter.
Moreover, the company expects revenues between $134 million and $136 million. Datadog anticipated coronavirus-led disruptions to hurt net retention rate and new customer additions, and to cause delays in completing deals.
The consensus mark for the top line is currently pegged at $135.2 million, implying 3% growth from the figure reported in the previous quarter.
Markedly, Datadog’s earnings beat the Zacks Consensus Estimate in the trailing three quarters, the average being 350%. The company completed its initial public offering on Sep 19, 2019.
Datadog, Inc. Price and EPS Surprise
Datadog, Inc. price-eps-surprise | Datadog, Inc. Quote
Let’s see how things shaped up prior to this announcement.
Factors to Consider
Datadog’s second-quarter performance is expected to have benefited from increased adoption of its cloud-based monitoring and analytics platform.
The company’s high exposure to industries benefiting from the coronavirus-led lockdowns and shelter-in-place guidelines, like streaming media, gaming, food delivery and e-commerce, is expected to have aided top-line growth in the to-be-reported quarter.
Notably, the company ended first-quarter 2020 with 960 customers with ARR of more than $100K, up 89% year over year, reflecting solid demand for its solutions like Network Performance Monitoring and Real User Monitoring. The momentum is expected to have continued in the to-be-reported quarter.
Moreover, Datadog’s expanding portfolio of integrated solutions has been a key catalyst in expanding clientele. Last quarter, the company released integrations with Amazon Managed Streaming for Apache Kafka, Apache Airflow, Apache Flink, AWS Step Functions, Cisco Meraki, Confluent Platform, ClickHouse, Hashicorp Vault, Tenable Nessus, and VMware Carbon Black.
Additionally, enhanced features of Watchdog and strengthening serverless capabilities are noteworthy. Further, Datadog’s growing international presence is likely to have benefited its performance during the quarter.
What Our Model Indicates
Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.
Datadog has an Earnings ESP of 0.00% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are some companies worth considering from the sector as our model shows that these have the right combination of elements to beat on earnings this reporting cycle:
AMETEK AME has an Earnings ESP of +3.96% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Alteryx AYX has an Earnings ESP of +16.92% and a Zacks Rank #3.
The Trade Desk TTD has an Earnings ESP of +65.06% and is Zacks #3 Ranked.
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