In the latest trading session, Datadog (DDOG) saw its stock close at $136.50, representing a decline of 1.9% from the previous day. This performance fell short compared to the broader market, with the S&P 500 losing 0.05% and the Dow experiencing a sharper downturn of 0.59%. Conversely, the tech-focused Nasdaq managed a slight gain of 0.45%.
Before this recent downturn, Datadog had shown strong performance in the market, with shares rising 11.75% leading up to these latest trading figures. This increase significantly outpaced the performance of the Computer and Technology sector, which saw a growth of 5.42%, and the S&P 500, which rose by 3.44% during the same timeframe.
As investors await the company’s upcoming earnings report, all eyes are on expected performance metrics. Analysts forecast that Datadog will report earnings per share (EPS) of $0.45, which would represent a decline of 2.17% compared to the same quarter last year. However, revenue projections tell a different story, with expectations set at $849.77 million, reflecting a robust increase of 23.15% from the previous year’s quarter.
For the full fiscal year, the Zacks Consensus Estimates suggest earnings growth of 0.55% year-over-year to $1.83 per share, with revenue anticipated to reach $3.32 billion, up 23.65% from the prior fiscal year. Investors are encouraged to monitor potential adjustments in analyst estimates for Datadog, as these modifications often highlight current business trends that may influence stock performance. Upward revisions of expectations are commonly interpreted as positive indicators for the company.
The Zacks Rank, a proprietary model that evaluates estimate changes and trends, plays a crucial role in gauging Datadog’s outlook. The model assigns a rank from #1 (Strong Buy) to #5 (Strong Sell), with historically high-performing stocks generally ranked #1 producing an average annual return of +25% since 1988. In the past month, the consensus EPS projection for Datadog increased by 0.25%, resulting in a current Zacks Rank of #3 (Hold) for the company.
From a valuation perspective, Datadog trades at a Forward P/E ratio of 75.98, which is considerably above the industry average of 32, indicating that it is priced at a premium relative to its peers. Additionally, the company has a PEG ratio of 9.07, a figure that incorporates growth expectations into its valuation. In contrast, the average PEG ratio within the Internet – Software industry sits at 2.25, further underscoring Datadog’s premium valuation.
As the market continues to evolve, both analysts and investors remain vigilant in assessing Datadog’s forthcoming performance amid these fluctuating metrics.
