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Datadog, Inc. (DDOG) Hits Fresh High: Is There Still Room to Run?
DDOGDatadog(DDOG) ZACKS·2024-12-05 15:15

Stock Performance - Datadog shares have surged 29 2% over the past month and hit a new 52-week high of 16608[1]−Thestockhasgained367166 08 [1] - The stock has gained 36 7% since the start of the year outperforming the Zacks Computer and Technology sector (33 3%) but underperforming the Zacks Internet - Software industry (40 8%) [1] Earnings and Revenue - Datadog has consistently beaten earnings consensus estimates in the last four quarters with the latest EPS of 0 46 surpassing the estimate of 039andrevenuebeatingtheconsensusby4150 39 and revenue beating the consensus by 4 15% [2] - For the current fiscal year Datadog is expected to post earnings of 1 76 per share on 266billioninrevenuesrepresentinga33332 66 billion in revenues representing a 33 33% increase in EPS and a 24 9% increase in revenue [3] - For the next fiscal year earnings are projected to grow 9 89% to 1 94 per share with revenue expected to increase 20 08% to 319billion[3]ValuationMetrics−Datadogtradesat941XcurrentfiscalyearEPSestimatessignificantlyhigherthanthepeerindustryaverageof337X[7]−Thestocktradesat4247Xtrailingcashflowcomparedtothepeergroupaverageof29XandhasaPEGratioof632[7]−ThecompanyhasaValueScoreofFbutstrongGrowthandMomentumScoresofAandArespectivelyresultinginaVGMScoreofB[6]ZacksRankandStyleScores−DatadogholdsaZacksRankof2(Buy)duetofavorableearningsestimaterevisions[8]−ThestockmeetstherecommendedcriteriaofZacksRank1or2andStyleScoresofAorBsuggestingpotentialforfurthergains[8]IndustryComparison−ODDITYTechLtd(ODD)apeerintheInternet−SoftwareindustryhasaZacksRankof1(StrongBuy)withaValueScoreofCGrowthScoreofBandMomentumScoreofA[9]−ODDITYTechLtdbeatconsensusearningsestimatesby45453 19 billion [3] Valuation Metrics - Datadog trades at 94 1X current fiscal year EPS estimates significantly higher than the peer industry average of 33 7X [7] - The stock trades at 424 7X trailing cash flow compared to the peer group average of 29X and has a PEG ratio of 6 32 [7] - The company has a Value Score of F but strong Growth and Momentum Scores of A and A respectively resulting in a VGM Score of B [6] Zacks Rank and Style Scores - Datadog holds a Zacks Rank of 2 (Buy) due to favorable earnings estimate revisions [8] - The stock meets the recommended criteria of Zacks Rank 1 or 2 and Style Scores of A or B suggesting potential for further gains [8] Industry Comparison - ODDITY Tech Ltd (ODD) a peer in the Internet - Software industry has a Zacks Rank of 1 (Strong Buy) with a Value Score of C Growth Score of B and Momentum Score of A [9] - ODDITY Tech Ltd beat consensus earnings estimates by 45 45% last quarter and is expected to post earnings of 1 75 per share on revenue of $639 27 million for the current fiscal year [10] - Shares of ODDITY Tech Ltd have gained 4 8% over the past month and trade at a forward P/E of 24 3X and a P/CF of 38 43X [11] - The Internet - Software industry is in the top 16% of all industries indicating favorable conditions for both Datadog and ODDITY Tech Ltd [11]