Datadog (DDOG) Registers a Bigger Fall Than the Market: Important Facts to Note

In the latest close session, Datadog (DDOG) was down 2.08% at $124.52. This change lagged the S&P 500's daily loss of 0.61%. At the same time, the Dow lost 0.26%, and the tech-heavy Nasdaq lost 0.93%.

The stock of data analytics and cloud monitoring company has risen by 0.82% in the past month, leading the Computer and Technology sector's loss of 1.56% and the S&P 500's loss of 2.25%.

The investment community will be paying close attention to the earnings performance of Datadog in its upcoming release. The company's upcoming EPS is projected at $0.5, signifying a 8.70% increase compared to the same quarter of the previous year. At the same time, our most recent consensus estimate is projecting a revenue of $956.97 million, reflecting a 25.66% rise from the equivalent quarter last year.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $2.12 per share and revenue of $4.08 billion, indicating changes of +3.41% and +19.17%, respectively, compared to the previous year.

It's also important for investors to be aware of any recent modifications to analyst estimates for Datadog. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. 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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 25.94% downward. Currently, Datadog is carrying a Zacks Rank of #3 (Hold).

In terms of valuation, Datadog is presently being traded at a Forward P/E ratio of 59.89. This signifies a premium in comparison to the average Forward P/E of 19.75 for its industry.

We can also see that DDOG currently has a PEG ratio of 5.19. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Internet - Software was holding an average PEG ratio of 1.1 at yesterday's closing price.

The Internet - Software industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 152, this industry ranks in the bottom 38% of all industries, numbering over 250.

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.

Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.

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This article originally published on Zacks Investment Research (zacks.com).

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