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Datadog (DDOG) Stock Sinks As Market Gains: What You Should Know

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Zacks Equity Research
·2 min read
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Datadog (DDOG) closed at $106.28 in the latest trading session, marking a -1.08% move from the prior day. This change lagged the S&P 500's daily gain of 0.35%. Elsewhere, the Dow gained 0.23%, while the tech-heavy Nasdaq added 0.26%.

Coming into today, shares of the data analytics and cloud monitoring company had gained 14.9% in the past month. In that same time, the Computer and Technology sector gained 6.75%, while the S&P 500 gained 3.27%.

Investors will be hoping for strength from DDOG as it approaches its next earnings release. On that day, DDOG is projected to report earnings of $0.01 per share, which would represent a year-over-year decline of 66.67%. Meanwhile, our latest consensus estimate is calling for revenue of $163.32 million, up 43.72% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $0.17 per share and revenue of $589.34 million, which would represent changes of +1800% and +62.45%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for DDOG. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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 currently has a Zacks Rank of #4 (Sell).

Valuation is also important, so investors should note that DDOG has a Forward P/E ratio of 615.9 right now. This represents a premium compared to its industry's average Forward P/E of 87.05.

The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 184, putting it in the bottom 28% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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