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In the latest trading session, Datadog (DDOG) closed at $141.88, marking a +0.34% move from the previous day. The stock exceeded the S&P 500, which registered a gain of 0.16% for the day. Meanwhile, the Dow gained 0.25%, and the Nasdaq, a tech-heavy index, lost 0.06%.
The data analytics and cloud monitoring company's shares have seen a decrease of 9.33% over the last month, not keeping up with the Computer and Technology sector's loss of 0.39% and the S&P 500's loss of 2.7%.
Analysts and investors alike will be keeping a close eye on the performance of Datadog in its upcoming earnings disclosure. The company is expected to report EPS of $0.43, down 2.27% from the prior-year quarter. In the meantime, our current consensus estimate forecasts the revenue to be $711.65 million, indicating a 20.69% growth compared to the corresponding quarter of the prior year.
Investors should also pay attention to any latest changes in analyst estimates for Datadog. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable 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 past month, the Zacks Consensus EPS estimate has shifted 0.43% upward. Datadog currently has a Zacks Rank of #2 (Buy).
In terms of valuation, Datadog is currently trading at a Forward P/E ratio of 73.13. This expresses a premium compared to the average Forward P/E of 28.07 of its industry.
It is also worth noting that DDOG currently has a PEG ratio of 4.91. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Internet - Software stocks are, on average, holding a PEG ratio of 2.1 based on yesterday's closing prices.
The Internet - Software industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 25, positioning it in the top 10% 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.