Here's Why Datadog (DDOG) Fell More Than Broader Market
Datadog (DDOG) closed the latest trading day at $124.44, indicating a -1.88% change from the previous session's end. This change lagged the S&P 500's daily loss of 1.61%. Meanwhile, the Dow experienced a drop of 0.82%, and the technology-dominated Nasdaq saw a decrease of 2.23%.
Shares of the data analytics and cloud monitoring company witnessed a gain of 10.21% over the previous month, beating the performance of the Computer and Technology sector with its gain of 5.53% and the S&P 500's gain of 3.28%.
Investors will be eagerly watching for the performance of Datadog in its upcoming earnings disclosure. The company's earnings report is set to be unveiled on February 13, 2024. The company is predicted to post an EPS of $0.43, indicating a 65.38% growth compared to the equivalent quarter last year. At the same time, our most recent consensus estimate is projecting a revenue of $566.7 million, reflecting a 20.73% rise from the equivalent quarter last year.
Investors should also pay attention to any latest changes in analyst estimates for Datadog. These revisions typically reflect the latest short-term business trends, which can change frequently. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.
Our research shows that these estimate changes are directly correlated with near-term stock prices. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 1.08% higher. Datadog is currently a Zacks Rank #3 (Hold).
From a valuation perspective, Datadog is currently exchanging hands at a Forward P/E ratio of 74.11. This valuation marks a premium compared to its industry's average Forward P/E of 33.45.
Also, we should mention that DDOG has a PEG ratio of 2.6. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Internet - Software industry currently had an average PEG ratio of 1.71 as of yesterday's close.
The Internet - Software industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 73, positioning it in the top 29% of all 250+ industries.
The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Datadog, Inc. (DDOG) : Free Stock Analysis Report
