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

Zacks Equity Research
·2 min read

Datadog, Inc. (DDOG) closed the most recent trading day at $91.33, moving -1.83% from the previous trading session. This change lagged the S&P 500's daily gain of 0.57%. At the same time, the Dow added 1.44%, and the tech-heavy Nasdaq lost 0.61%.

Coming into today, shares of the company had lost 6.83% in the past month. In that same time, the Computer and Technology sector gained 1.94%, while the S&P 500 gained 0.83%.

DDOG will be looking to display strength as it nears its next earnings release. In that report, analysts expect DDOG to post earnings of $0.01 per share. This would mark 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.

Any recent changes to analyst estimates for DDOG should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

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.

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. DDOG currently has a Zacks Rank of #3 (Hold).

In terms of valuation, DDOG is currently trading at a Forward P/E ratio of 554.48. This valuation marks a premium compared to its industry's average Forward P/E of 82.95.

The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 212, which puts it in the bottom 17% 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.

To follow DDOG in the coming trading sessions, be sure to utilize Zacks.com.


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