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718500.0
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2022-10-21 00:00:00 UTC
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2 Remarkable Growth Stocks Near 52-Week Lows to Buy Right Now and Hold Forever
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DDOG
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https://www.nasdaq.com/articles/2-remarkable-growth-stocks-near-52-week-lows-to-buy-right-now-and-hold-forever
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nan
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nan
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Macroeconomic uncertainty continues to weigh on the stock market this year. The growth-focused Nasdaq Composite is down 32% from its high, and many individual growth stocks got hit even harder. For instance, Datadog (NASDAQ: DDOG) and Fiverr International (NYSE: FVRR) saw share prices plunge roughly 54% and 75%, respectively, this year and both stocks currently sit near 52-week lows.
Nothing material has changed about the business operations of Datadog or Fiverr, and the future still looks bright for both businesses. Some investors have simply lost their taste for richly valued equities and other potentially volatile assets. But for patient investors, now is a great time to pick up a few shares of these two remarkable growth stocks.
Here's why.
1. Datadog: The pack leader in application performance monitoring
In 2010, Datadog launched its first product, a platform for real-time data integration. But the company has since innovated at a remarkable pace, building out a robust suite of monitoring and security software, as well as a powerful artificial intelligence (AI) engine. Today its platform helps thousands of businesses keep their digital ecosystems performant and secure, and it leans on AI to reduce time to resolution through proactive insights and automated root cause analysis.
Datadog also developed more than 500 out-of-the-box integrations, allowing customers to deploy its software quickly and easily. Additionally, Datadog is cloud-agnostic -- its platform can be deployed across all public clouds and private data centers -- and that gives it an edge over cloud service providers like Amazon and Microsoft, both of which have reason to favor their own cloud infrastructure.
In June, research company Gartner recognized Datadog as the leader in application performance monitoring and observability for the second consecutive year, citing its broad portfolio and AI engine as key strengths. But Datadog also achieved a strong market presence in other software verticals, including cloud infrastructure monitoring, server monitoring, and network monitoring.
Financially, Datadog delivers remarkable results on a consistent basis. Its customer count increased 29% to 21,200 over the past year, and its net retention rate exceeded 130% in 20 consecutive quarters. That means the average customer is spending north of 30% more each year. As a result, revenue rocketed 79% to $1.4 billion over the past year, and free cash flow more than doubled to reach $354 million.
Going forward, investors should expect more of the same. Datadog has always been a trailblazer. For instance, it was the first company to unify the three pillars of observability -- metrics, traces, and logs -- on a single platform. And that capacity for innovation should keep Datadog on the cutting edge of performance monitoring software.
With that in mind, the company estimates its addressable market at $42 billion this year, but management expects that figure to reach $53 billion by 2025. And with shares trading at 18.6 times sales -- a bargain compared to the three-year average of 38.5 times sales -- now is a good time to buy this growth stock.
2. Fiverr International: The gateway to the gig economy
Fiverr is a cornerstone of the gig economy. Its marketplace-style platform connects buyers and sellers of digital services. The buyers (businesses) benefit from access to a global pool of talent, while sellers (freelancers) get the freedom to work whenever and wherever they choose. The Fiverr catalog comprises over 550 digital service categories that span nine verticals, including graphics and design, video and animation, and programming.
That alone is hardly revolutionary, but Fiverr differentiates its platform through adjacent products and services. It offers marketing tools, learning content, and task management software to freelancers, and it provides freelancer management and collaboration tools to businesses. Fiverr more recently launched Togetherr, an AI-powered platform that builds freelancer teams (from a highly vetted pool of talent) for specific brands' projects.
Those value-added products are an important growth driver. Active buyers on Fiverr increased 6% to 4.2 million over the past year, and spending per buyer climbed 14% to $259. In turn, revenue climbed 29% to $326 million and free cash flow jumped 6% to $29 million. But no metric is more remarkable than Fiverr's take rate (revenue as a percentage of total spend), which clocked in at 29.8% in the most recent quarter. That means Fiverr monetizes its business much more effectively than rival Upwork, which achieved a take rate of 15% during the same time period.
In the near term, high inflation may be a headwind for Fiverr, as businesses may scale back on their freelancer workforce. But the long-term investment thesis is still intact. According to Statista, nearly 87 million people in the U.S. will work as freelancers by 2027, meaning more than half of the workforce will participate in the gig economy. For that reason, Fiverr puts its addressable market at $247 billion, leaving a long runway for future growth.
With that in mind, shares currently trade at three times sales, their cheapest valuation in three years. That creates a buying opportunity for risk-tolerant investors.
10 stocks we like better than Datadog
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Datadog wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of September 30, 2022
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Trevor Jennewine has positions in Amazon and Fiverr International. The Motley Fool has positions in and recommends Amazon, Datadog, Fiverr International, and Microsoft. The Motley Fool recommends Gartner and Upwork. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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For instance, Datadog (NASDAQ: DDOG) and Fiverr International (NYSE: FVRR) saw share prices plunge roughly 54% and 75%, respectively, this year and both stocks currently sit near 52-week lows. Today its platform helps thousands of businesses keep their digital ecosystems performant and secure, and it leans on AI to reduce time to resolution through proactive insights and automated root cause analysis. In June, research company Gartner recognized Datadog as the leader in application performance monitoring and observability for the second consecutive year, citing its broad portfolio and AI engine as key strengths.
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For instance, Datadog (NASDAQ: DDOG) and Fiverr International (NYSE: FVRR) saw share prices plunge roughly 54% and 75%, respectively, this year and both stocks currently sit near 52-week lows. Datadog: The pack leader in application performance monitoring In 2010, Datadog launched its first product, a platform for real-time data integration. But Datadog also achieved a strong market presence in other software verticals, including cloud infrastructure monitoring, server monitoring, and network monitoring.
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For instance, Datadog (NASDAQ: DDOG) and Fiverr International (NYSE: FVRR) saw share prices plunge roughly 54% and 75%, respectively, this year and both stocks currently sit near 52-week lows. Datadog: The pack leader in application performance monitoring In 2010, Datadog launched its first product, a platform for real-time data integration. And with shares trading at 18.6 times sales -- a bargain compared to the three-year average of 38.5 times sales -- now is a good time to buy this growth stock.
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For instance, Datadog (NASDAQ: DDOG) and Fiverr International (NYSE: FVRR) saw share prices plunge roughly 54% and 75%, respectively, this year and both stocks currently sit near 52-week lows. Datadog: The pack leader in application performance monitoring In 2010, Datadog launched its first product, a platform for real-time data integration. That's right -- they think these 10 stocks are even better buys.
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e052f49c-7b13-4850-beda-d0e18e472ec7
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718501.0
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2022-10-20 00:00:00 UTC
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Why Datadog Stock Was Surging Today
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DDOG
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https://www.nasdaq.com/articles/why-datadog-stock-was-surging-today
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nan
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nan
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What happened
Shares of Datadog (NASDAQ: DDOG) were up 8.7% as of 11:23 a.m. ET on Thursday after the company held an investor meeting late Wednesday to discuss new product launches and opportunities for growth.
Analysts who attended the event walked away with a positive read on Datadog's near- and long-term growth trajectory. Software-as-a-service stocks (SaaS) have fallen out of favor with the market decline, but more robust growth will be needed to turn the stock around, since it has dropped 51% year to date. Here's the buzz that was driving the stock higher today.
So what
Datadog announced several new products across observability, cloud security, and DevOps to tackle a $53 billion addressable market opportunity. Bank of America analyst Koji Ikeda spoke to customers and partners of the company to get a feel for current demand trends. Based on the feedback, Ikeda believes the demand trends remain healthy and that Datadog is likely to report revenue above guidance for 2022.
BTIG analyst Gray Powell came away with the same take on current demand but noted that there is still the potential for a slowdown in spending on Datadog's DevOps platform if the economy worsens in the next 12 months.
Now what
Datadog is guiding for third-quarter revenue growth of approximately 53% year over year, which would be a steep deceleration from the 74% growth in Q2 and 83% in Q1. That said, management is typically conservative with guidance, and given the near-term demand trends, that will likely prove the case again when the company announces earnings results on Thursday, Nov. 3.
10 stocks we like better than Datadog
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Datadog wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of September 30, 2022
Bank of America is an advertising partner of The Ascent, a Motley Fool company. John Ballard has positions in Datadog. The Motley Fool has positions in and recommends Datadog. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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What happened Shares of Datadog (NASDAQ: DDOG) were up 8.7% as of 11:23 a.m. Bank of America analyst Koji Ikeda spoke to customers and partners of the company to get a feel for current demand trends. BTIG analyst Gray Powell came away with the same take on current demand but noted that there is still the potential for a slowdown in spending on Datadog's DevOps platform if the economy worsens in the next 12 months.
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What happened Shares of Datadog (NASDAQ: DDOG) were up 8.7% as of 11:23 a.m. Bank of America analyst Koji Ikeda spoke to customers and partners of the company to get a feel for current demand trends. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.
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What happened Shares of Datadog (NASDAQ: DDOG) were up 8.7% as of 11:23 a.m. Software-as-a-service stocks (SaaS) have fallen out of favor with the market decline, but more robust growth will be needed to turn the stock around, since it has dropped 51% year to date. 10 stocks we like better than Datadog When our award-winning analyst team has a stock tip, it can pay to listen.
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What happened Shares of Datadog (NASDAQ: DDOG) were up 8.7% as of 11:23 a.m. ET on Thursday after the company held an investor meeting late Wednesday to discuss new product launches and opportunities for growth. Bank of America analyst Koji Ikeda spoke to customers and partners of the company to get a feel for current demand trends.
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5b8fb5c9-b26d-49f7-add4-5b320845b34a
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718502.0
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2022-10-20 00:00:00 UTC
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Datadog (DDOG) Cloud Security Management Debuts on Secure Cloud
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DDOG
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https://www.nasdaq.com/articles/datadog-ddog-cloud-security-management-debuts-on-secure-cloud
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nan
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nan
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Datadog DDOG recently announced the launch of Cloud Security Management, bringing together capabilities from Cloud Security Posture Management and Cloud Workload Security to identify misconfigurations, detect threats and secure cloud-native applications.
Cloud Security Management helps in observability and security insights across an organization's entire cloud environment without the need to deploy additional agents.
This provides quick solutions to issues by providing a single platform as opposed to multiple-point solutions, which deliver a complete view of an organization's infrastructure and risk exposure.
DataDog Enhances its Cloud Business With New Features
Besides cloud application security, Datadog has made several other announcements recently to bolster its cloud business.
It introduced cloud cost management that unifies cost and observability data for finance, finOps and engineering teams to understand and keep cloud costs in check. Teams now can drill down and investigate changes in cloud spending by cost center, application, service and resource.
Datadog also launched Datadog Continuous Testing, a new product that helps developers and quality engineers to quickly create, manage and run end-to-end tests for their web applications. It provides a complete testing workbench that simplifies test creation and maintenance and makes running tests much faster.
Additionally, its Datadog Observability Pipelines allow customers to control their cost and volume of data, pick up all data sources from their destination, standardize and improve on data quality and redact sensitive data to help maintain compliance.
Datadog, Inc. Price and Consensus
Datadog, Inc. price-consensus-chart | Datadog, Inc. Quote
The APM suite and Log Management of Datadog have shown growth in recent quarters and now exceed $0.750 billion of Annual Recurring Revenue. It has achieved PCI (Payment Card Industry) compliance for its Log Management and Application Performance Management (APM) products.
By achieving PCI compliance, businesses can now fully leverage Datadog’s Log Management and APM products in parts of their applications requiring compliance to process and store payment and transaction data.
These enhancements are expected to track users and boost the company’s top line. The company’s third-quarter 2022 revenues are anticipated to be in the range of $410-$414 million, which represents 52% year-over-year growth at the midpoint.
Datadog Faces Stiff Competition in the Cloud Computing Industry
Shares of Datadog, which currently has a Zacks Rank #3 (Hold), have declined 55.6% year to date compared with the Zacks Computer & Technology Sector’s decline of 36%. It faces stiff competition from Microsoft Corporation’s MSFT Azure, Amazon’s AMZN AWS and Alphabet’s GOOGL Google Cloud.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Microsoft Azure has become the key growth driver for Microsoft. The company is currently riding on the robust adoption of Azure cloud offerings. Azure is increasing the number of available zones and regions globally as it gears up for opening five data centers in the APAC region.
Amazon continues to dominate the global cloud computing space on the back of an increasing number of availability zones and regions served by Amazon Web Services as it recently opened one in Bangkok, Thailand.
Alphabet’s Google Cloud services have been growing investments in infrastructure, security, data management, analytics and AI, and are expanding its footprint worldwide as the company is about to open a data center in Japan in 2023, marking its third such establishment in Asia.
Datadog is suffering from cost escalations in the form of research and development (R&D), sales and marketing expenses and general and administrative expenses, which are expected to hurt its bottom line.
However, the company is positive about its investments in R&D, sales and marketing and is expecting a future pay-off.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock And 4 Runners Up
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
Amazon.com, Inc. (AMZN): Free Stock Analysis Report
Microsoft Corporation (MSFT): Free Stock Analysis Report
Alphabet Inc. (GOOGL): Free Stock Analysis Report
Datadog, Inc. (DDOG): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Datadog DDOG recently announced the launch of Cloud Security Management, bringing together capabilities from Cloud Security Posture Management and Cloud Workload Security to identify misconfigurations, detect threats and secure cloud-native applications. Datadog, Inc. (DDOG): Free Stock Analysis Report Teams now can drill down and investigate changes in cloud spending by cost center, application, service and resource.
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Datadog DDOG recently announced the launch of Cloud Security Management, bringing together capabilities from Cloud Security Posture Management and Cloud Workload Security to identify misconfigurations, detect threats and secure cloud-native applications. Datadog, Inc. (DDOG): Free Stock Analysis Report Datadog also launched Datadog Continuous Testing, a new product that helps developers and quality engineers to quickly create, manage and run end-to-end tests for their web applications.
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Datadog DDOG recently announced the launch of Cloud Security Management, bringing together capabilities from Cloud Security Posture Management and Cloud Workload Security to identify misconfigurations, detect threats and secure cloud-native applications. Datadog, Inc. (DDOG): Free Stock Analysis Report DataDog Enhances its Cloud Business With New Features Besides cloud application security, Datadog has made several other announcements recently to bolster its cloud business.
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Datadog DDOG recently announced the launch of Cloud Security Management, bringing together capabilities from Cloud Security Posture Management and Cloud Workload Security to identify misconfigurations, detect threats and secure cloud-native applications. Datadog, Inc. (DDOG): Free Stock Analysis Report Datadog, Inc. Price and Consensus Datadog, Inc. price-consensus-chart | Datadog, Inc. Quote The APM suite and Log Management of Datadog have shown growth in recent quarters and now exceed $0.750 billion of Annual Recurring Revenue.
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02d4f23c-effd-4458-9597-5fa0b0297541
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718503.0
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2022-10-19 00:00:00 UTC
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1 Sensational Stock You'll Wish You'd Bought on the Dip
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DDOG
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https://www.nasdaq.com/articles/1-sensational-stock-youll-wish-youd-bought-on-the-dip
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nan
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nan
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Being a technology investor has rarely been more challenging than in 2022. Most portfolios with a high concentration of tech stocks are likely deep in the red for the year, with many individual companies losing over half of their value.
But some really high-quality opportunities were discarded alongside the rest of the market, and that presents a unique chance for investors to pick them up at a steep discount to where they might otherwise be trading in more normal conditions.
Datadog (NASDAQ: DDOG) is one of these discards. The company, which helps businesses make sense of their increasing amounts of data, raised its 2022 sales guidance three times since the end of last year. That places it in a small circle of technology companies actually growing faster than expected even in this tough economy. With Datadog stock trading down 59% from its all-time high, here's why investors might want to give this stock a closer look.
Making the most of the cloud
Cloud computing technology is revolutionary for a few reasons. It allows businesses to migrate their operations online, and it powers the digital connections they have with their customers. But it comes with significant challenges, especially for companies that aren't used to running a digital ecosystem.
The cloud tends to generate mountains of data that need to be stored and managed, but that data also has significant value waiting to be unlocked by proper analysis. Not all businesses are equipped to extract those insights, but thanks to tools like Datadog, it's far less of a hurdle.
At-home exercise equipment maker Peloton Interactive uses Datadog to monitor its virtual classes, which thousands of users are typically interacting with at any one time. The company used the insights gathered through Datadog's dashboard to improve responsiveness by a factor of four when a Peloton customer is searching for an online class. Ultimately, Peloton management said the platform is key to improving Peloton's user experience.
Online rental and experience planning platform Airbnb deploys Datadog to collect and display data to create a stable metrics system it can trust and build on top of. The company said it gains valuable insights into consumer trends, which is important for a business that can depend heavily on seasonality.
No economic downturn for Datadog
A consequence of the slowing economy is that many technology companies, including some of the world's largest, trimmed their revenue expectations for this year. But not Datadog -- it raised its 2022 revenue guidance three times, and it now expects to generate up to $1.63 billion.
The most recent bout of optimism follows a stellar second-quarter result where the company grew its revenue by a whopping 74% year over year. It also reported that 2,420 customers spent a minimum of $100,000 annually, a 54% jump.
Datadog is also on the cusp of profitability, which is an important milestone in an environment like this where investors are shunning loss-making enterprises. The company made $4.8 million in net income in the first six months of 2022, and while that's not an eye-popping amount, it beats the $20.7 million loss from the 2021 full year.
In any case, Datadog can afford to stumble on that quest for consistent profits because it's supported by a rock-solid balance sheet with over $1.7 billion in cash, equivalents, and marketable securities.
Why Datadog stock is a buy now
Datadog is one of very few companies taking an optimistic tone this year, and yet its stock price remains down 59% from its all-time high. That suggests a buying opportunity.
Plus, the stock has the vote of 31 Wall Street analysts who gave it a consensus overweight (bullish) rating, according to The Wall Street Journal. Not a single analyst recommends selling, and 20 analysts have given Datadog stock the highest-possible buy rating. The stock could rise by 68% from where it trades today if it hits the analysts' average price target of $135.88, and one analyst set a price target of $188, representing a potential 132% upside.
With a business on the cusp of profitability combined with the backing of professional analysts and thousands of high-spending customers, Datadog is one stock you might wish you'd bought on this dip.
10 stocks we like better than Datadog
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Datadog wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of September 30, 2022
Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Airbnb, Inc., Datadog, and Peloton Interactive. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Datadog (NASDAQ: DDOG) is one of these discards. But some really high-quality opportunities were discarded alongside the rest of the market, and that presents a unique chance for investors to pick them up at a steep discount to where they might otherwise be trading in more normal conditions. Online rental and experience planning platform Airbnb deploys Datadog to collect and display data to create a stable metrics system it can trust and build on top of.
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Datadog (NASDAQ: DDOG) is one of these discards. Ultimately, Peloton management said the platform is key to improving Peloton's user experience. Not a single analyst recommends selling, and 20 analysts have given Datadog stock the highest-possible buy rating.
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Datadog (NASDAQ: DDOG) is one of these discards. With Datadog stock trading down 59% from its all-time high, here's why investors might want to give this stock a closer look. Why Datadog stock is a buy now Datadog is one of very few companies taking an optimistic tone this year, and yet its stock price remains down 59% from its all-time high.
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Datadog (NASDAQ: DDOG) is one of these discards. With Datadog stock trading down 59% from its all-time high, here's why investors might want to give this stock a closer look. Not a single analyst recommends selling, and 20 analysts have given Datadog stock the highest-possible buy rating.
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267e5b16-232e-4f05-ab67-00e74e9b72d4
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718504.0
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2022-10-18 00:00:00 UTC
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Why CrowdStrike, Snowflake, and Datadog Stocks Rallied Tuesday Morning
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DDOG
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https://www.nasdaq.com/articles/why-crowdstrike-snowflake-and-datadog-stocks-rallied-tuesday-morning
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nan
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nan
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What happened
A wide cross-section of the stock market gained ground Tuesday morning, continuing its upswing from Monday. As a result, shares of many high-growth stocks got a lift, catching a tailwind from a rally by the broader market indexes. After being beaten down since late last year, investors appear to be shopping for shares of beaten-down stocks, mainly in the hopes that the worst of the bear market is over.
As a result, CrowdStrike Holdings (NASDAQ: CRWD) surged 3.7%, Snowflake (NYSE: SNOW) jumped 3.4%, and Datadog (NASDAQ: DDOG) gained 2.3% as of 11:35 a.m. ET.
Image source: Getty Images.
So what
To be clear, there was no company-specific news driving CrowdStrike, Snowflake, and Datadog higher today. Rather, investors appear to be increasingly optimistic that the market could sustain its recent momentum, sending them bargain-hunting for high-growth stocks that have been dragged lower by macroeconomic headwinds.
This year has been particularly trying for technology stocks, pushing the tech-heavy Nasdaq Composite down more than 32% thus far in 2022. As a result, some investors dumped high-growth companies, opting instead for safer harbors to dock their cash until the economic squall has passed. In a great example of the effect of this market on technology stocks, CrowdStrike is down by 34%, Snowflake has fallen 49%, and Datadog has dropped 53% from highs reached late last year.
Over the past couple of days, however, investors appear to contemplating moves by the British government and an early round of bullish earnings reports as signs that things might finally be turning around. This pushed the broader market indexes higher, at least temporarily, as the S&P 500 and the Nasdaq gained 0.7% and 0.6%, respectively.
The optimistic mood came on the heels of a brutal start to October, as the S&P and the Nasdaq have lost 3% and 4.4%, respectively, through the market close yesterday.
Now what
While investors appear increasingly upbeat this week, it's important to keep in mind that sentiment can change from moment to moment, which means there's much more volatility on the horizon for Snowflake, CrowdStrike, and Datadog shareholders, and even more so until this economic storm has passed.
The latest read on inflation came in higher than expected last week, as the core Consumer Price Index rose 0.4% sequentially and up 8.2% year over year, according to data compiled by the U.S. Bureau of Labor Statistics. The Federal Reserve Bank has pulled no punches regarding its dedication to get relentless inflation under control. This will likely cause additional rising interest rates well into 2023, further pressuring the economy, which could in turn weigh on this trio of businesses.
Snowflake's livelihood depends on companies using its data cloud and analytics platforms, and demand could soften if macroeconomic conditions persist. Likewise, CrowdStrike has thus far been insulated from the pain as companies have been reticent to cut back on cybersecurity services for fear of suffering the consequences, but that too could change. Furthermore, Datadog's system monitoring and analytics could be viewed as a luxury during a prolonged downturn, hurting the company's growth prospects.
Yet, there are reasons to be bullish. Snowflake's revenue grew an impressive 83% over the preceding 12 months. At the same time, CrowdStrike's sales surged 58%, with much of this the result from recurring revenue, while Datadog's sales jumped 74%. Perhaps as importantly, while they're not profitable, CrowdStrike, Snowflake, and Datadog each generate strong free cash flow, which suggests profits are merely a matter of time. Furthermore, revenue growth of this magnitude is particularly impressive given the economic backdrop, which suggests that -- at least thus far -- the value these businesses provide currently outweighs companies' need to cut spending.
The declining share prices have presented investors with much more compelling entry points than just a year ago. That isn't to suggest the stocks won't decline further -- they almost certainly will. However, history suggests that calling a bottom is an exercise in futility, and each of these stocks is currently trading near their lowest valuations in years.
Still, these high-growth stocks aren't for everyone, as they're still not cheap in terms of traditional valuation metrics. Snowflake, CrowdStrike, and Datadog are currently selling for 17 times, 12 times, and 11 times next year's sales, when a reasonable price-to-sales ratio is between one and two. However, given their well above average growth rates, I'd submit that each of these stocks is deserving of a premium.
For those with an investing time horizon of three to five years out, buying shares of these disruptive companies while their valuations are near all-time lows could be a solid, long-term investing choice that results in market-beating returns.
Find out why CrowdStrike Holdings, Inc. is one of the 10 best stocks to buy now
Our award-winning analyst team has spent more than a decade beating the market. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed their ten top stock picks for investors to buy right now. CrowdStrike Holdings, Inc. is on the list -- but there are nine others you may be overlooking.
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*Stock Advisor returns as of September 30, 2022
Danny Vena has positions in CrowdStrike Holdings, Inc., Datadog, and Snowflake Inc. The Motley Fool has positions in and recommends CrowdStrike Holdings, Inc., Datadog, and Snowflake Inc. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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As a result, CrowdStrike Holdings (NASDAQ: CRWD) surged 3.7%, Snowflake (NYSE: SNOW) jumped 3.4%, and Datadog (NASDAQ: DDOG) gained 2.3% as of 11:35 a.m. Rather, investors appear to be increasingly optimistic that the market could sustain its recent momentum, sending them bargain-hunting for high-growth stocks that have been dragged lower by macroeconomic headwinds. In a great example of the effect of this market on technology stocks, CrowdStrike is down by 34%, Snowflake has fallen 49%, and Datadog has dropped 53% from highs reached late last year.
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As a result, CrowdStrike Holdings (NASDAQ: CRWD) surged 3.7%, Snowflake (NYSE: SNOW) jumped 3.4%, and Datadog (NASDAQ: DDOG) gained 2.3% as of 11:35 a.m. This pushed the broader market indexes higher, at least temporarily, as the S&P 500 and the Nasdaq gained 0.7% and 0.6%, respectively. The Motley Fool has positions in and recommends CrowdStrike Holdings, Inc., Datadog, and Snowflake Inc.
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As a result, CrowdStrike Holdings (NASDAQ: CRWD) surged 3.7%, Snowflake (NYSE: SNOW) jumped 3.4%, and Datadog (NASDAQ: DDOG) gained 2.3% as of 11:35 a.m. In a great example of the effect of this market on technology stocks, CrowdStrike is down by 34%, Snowflake has fallen 49%, and Datadog has dropped 53% from highs reached late last year. Snowflake, CrowdStrike, and Datadog are currently selling for 17 times, 12 times, and 11 times next year's sales, when a reasonable price-to-sales ratio is between one and two.
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As a result, CrowdStrike Holdings (NASDAQ: CRWD) surged 3.7%, Snowflake (NYSE: SNOW) jumped 3.4%, and Datadog (NASDAQ: DDOG) gained 2.3% as of 11:35 a.m. This pushed the broader market indexes higher, at least temporarily, as the S&P 500 and the Nasdaq gained 0.7% and 0.6%, respectively. Snowflake, CrowdStrike, and Datadog are currently selling for 17 times, 12 times, and 11 times next year's sales, when a reasonable price-to-sales ratio is between one and two.
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768992a6-0904-4f4f-a24d-d7954b06c523
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718505.0
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2022-10-17 00:00:00 UTC
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Why Snowflake, Datadog, and MongoDB Rebounded on Monday
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DDOG
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https://www.nasdaq.com/articles/why-snowflake-datadog-and-mongodb-rebounded-on-monday
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nan
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nan
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What happened
Shares of enterprise software companies Snowflake (NYSE: SNOW), Datadog (NASDAQ: DDOG), and MongoDB (NASDAQ: MDB) bounced back strong today, up 9.1%, 7%, and 7.2%, respectively, as of 1:35 p.m. ET.
There wasn't much in the way of company-specific news on Monday, as the broader software sector was roaring higher, bouncing back from big declines at the end of last week.
Overall, the macroeconomic picture seemed to improve slightly today, as the United Kingdom's new government announced it would be reversing its prior tax cut plan, which caused chaos in the currency and government bond markets. Long-term U.S. bond yields also retreated slightly, perhaps helping sentiment for high-growth software stocks.
Even though several Wall Street analysts actually cut their price targets on some of these names today, it appears the market was already anticipating such reductions, and the stocks flew higher anyway.
So what
On Monday, several Wall Street analysts lowered their price targets on these software names, though most kept their previous "buy" ratings on these best-of-breed stocks.
Datadog saw price target cuts from analysts at both Mizuho and RBC Capital on Monday, with Mizuho cutting its target from $130 to $108, while RBC cut its price target from $125 to $105. However, both Wall Street firms reiterated their "buy" ratings, as these targets are still much higher than Datadog shares today.
Meanwhile, Morgan Stanley analysts also said in a note that investors had perhaps become too negative on software stocks that have corrected mightily this year, saying a lot of the risks around an economic slowdown, strong dollar, and higher interest rates were "priced in." The analysts pointed to Datadog and MongoDB specifically as being attractive within a broader group of software names.
Also helping matters today was new United Kingdom Finance Minister Jeremy Hunt putting forward a new tax and spending plan, which reversed virtually all the tax cuts proposed by former finance minister Kwasi Kwarteng, who resigned last week. That seemed to reassure markets that the U.K. economy and currency won't spin out of control and likely relieved some currency concerns of a strong dollar relative to European currencies.
Technology stocks are somewhat sensitive to the strong dollar, since many of them have significant international businesses. If the dollar strengthens, tech companies will either have to raise their prices in other currencies or see revenue declines in dollar terms.
Finally, the 10-year Treasury bond yield backed off its recent highs and fell slightly below 4% to 3.99% as of this writing. Although that was just a very small movement, the pause in the 10-year bond yield's rapid rise over the past few months seemed to point to stabilization. The relative action of long-term bond yields can affect unprofitable or low-profit growth stocks, such as these three names, in a big way.
Now what
Investors should expect these types of high-growth but not-profiting enterprise software stocks to remain highly volatile amid rapid changes in interest rates. On the one hand, we could be in a new higher-rate regime relative to the past few years, which could mean these types of stocks will find it harder to rise as their valuations compress, even if their businesses do well.
Even though each stock has come down quite a bit off its highs, each has still made substantial gains since their IPOs over the past few years. MongoDB went public at $24 in late 2017 and trades at $180 today. Datadog went public at $27 in 2019 and now trades at $81. Meanwhile, Snowflake went public at $120 in late 2020 and trades at $166 today.
On the other hand, each of these cloud-native stocks are at the forefront of helping companies use data to make better decisions and drive efficiency, which becomes all the more important amid inflation and other business disruptions from geopolitics.
The increasing use of big data and AI could keep revenue growth intact, even through a softer period for the global economy. Therefore, there will be an interesting dance between rising revenue and concerns over very high valuations if interest rates don't come down from recent heights.
Snowflake at 31 times sales, Datadog at 19 times sales, and MongoDB at 11 times sales are still historically high valuations for companies prior to the zero-interest rate regime of 2020 and 2021, so the hurdles for these companies to clear for their stocks to go up significantly still remains high.
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*Stock Advisor returns as of September 30, 2022
Billy Duberstein has no position in any of the stocks mentioned. His clients may own shares of the companies mentioned. The Motley Fool has positions in and recommends Datadog, MongoDB, and Snowflake Inc. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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What happened Shares of enterprise software companies Snowflake (NYSE: SNOW), Datadog (NASDAQ: DDOG), and MongoDB (NASDAQ: MDB) bounced back strong today, up 9.1%, 7%, and 7.2%, respectively, as of 1:35 p.m. There wasn't much in the way of company-specific news on Monday, as the broader software sector was roaring higher, bouncing back from big declines at the end of last week. Meanwhile, Morgan Stanley analysts also said in a note that investors had perhaps become too negative on software stocks that have corrected mightily this year, saying a lot of the risks around an economic slowdown, strong dollar, and higher interest rates were "priced in."
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What happened Shares of enterprise software companies Snowflake (NYSE: SNOW), Datadog (NASDAQ: DDOG), and MongoDB (NASDAQ: MDB) bounced back strong today, up 9.1%, 7%, and 7.2%, respectively, as of 1:35 p.m. Datadog saw price target cuts from analysts at both Mizuho and RBC Capital on Monday, with Mizuho cutting its target from $130 to $108, while RBC cut its price target from $125 to $105. Snowflake at 31 times sales, Datadog at 19 times sales, and MongoDB at 11 times sales are still historically high valuations for companies prior to the zero-interest rate regime of 2020 and 2021, so the hurdles for these companies to clear for their stocks to go up significantly still remains high.
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What happened Shares of enterprise software companies Snowflake (NYSE: SNOW), Datadog (NASDAQ: DDOG), and MongoDB (NASDAQ: MDB) bounced back strong today, up 9.1%, 7%, and 7.2%, respectively, as of 1:35 p.m. Even though several Wall Street analysts actually cut their price targets on some of these names today, it appears the market was already anticipating such reductions, and the stocks flew higher anyway. Snowflake at 31 times sales, Datadog at 19 times sales, and MongoDB at 11 times sales are still historically high valuations for companies prior to the zero-interest rate regime of 2020 and 2021, so the hurdles for these companies to clear for their stocks to go up significantly still remains high.
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What happened Shares of enterprise software companies Snowflake (NYSE: SNOW), Datadog (NASDAQ: DDOG), and MongoDB (NASDAQ: MDB) bounced back strong today, up 9.1%, 7%, and 7.2%, respectively, as of 1:35 p.m. On the one hand, we could be in a new higher-rate regime relative to the past few years, which could mean these types of stocks will find it harder to rise as their valuations compress, even if their businesses do well. The Motley Fool has positions in and recommends Datadog, MongoDB, and Snowflake Inc.
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3a8d3a1e-0f01-4b73-b790-65f54c79f3c7
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718506.0
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2022-10-13 00:00:00 UTC
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Datadog (DDOG) Stock Sinks As Market Gains: What You Should Know
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DDOG
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https://www.nasdaq.com/articles/datadog-ddog-stock-sinks-as-market-gains%3A-what-you-should-know-4
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nan
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nan
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Datadog (DDOG) closed at $80.90 in the latest trading session, marking a -1.76% move from the prior day. This move lagged the S&P 500's daily gain of 2.6%.
Coming into today, shares of the data analytics and cloud monitoring company had lost 15.13% in the past month. In that same time, the Computer and Technology sector lost 15.89%, while the S&P 500 lost 12.9%.
Investors will be hoping for strength from Datadog as it approaches its next earnings release. The company is expected to report EPS of $0.16, up 23.08% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $412.61 million, up 52.54% from the year-ago period.
DDOG's full-year Zacks Consensus Estimates are calling for earnings of $0.78 per share and revenue of $1.62 billion. These results would represent year-over-year changes of +62.5% and +57.75%, respectively.
Any recent changes to analyst estimates for Datadog should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 2.14% lower within the past month. Datadog is currently a Zacks Rank #3 (Hold).
In terms of valuation, Datadog is currently trading at a Forward P/E ratio of 105.31. This valuation marks a premium compared to its industry's average Forward P/E of 41.02.
Investors should also note that DDOG has a PEG ratio of 2.49 right now. 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. The Internet - Software was holding an average PEG ratio of 1.98 at yesterday's closing price.
The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 86, which puts it in the top 35% of all 250+ industries.
The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
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It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
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Datadog, Inc. (DDOG): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Datadog (DDOG) closed at $80.90 in the latest trading session, marking a -1.76% move from the prior day. DDOG's full-year Zacks Consensus Estimates are calling for earnings of $0.78 per share and revenue of $1.62 billion. Investors should also note that DDOG has a PEG ratio of 2.49 right now.
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Datadog, Inc. (DDOG): Free Stock Analysis Report Datadog (DDOG) closed at $80.90 in the latest trading session, marking a -1.76% move from the prior day. DDOG's full-year Zacks Consensus Estimates are calling for earnings of $0.78 per share and revenue of $1.62 billion.
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Datadog (DDOG) closed at $80.90 in the latest trading session, marking a -1.76% move from the prior day. DDOG's full-year Zacks Consensus Estimates are calling for earnings of $0.78 per share and revenue of $1.62 billion. Investors should also note that DDOG has a PEG ratio of 2.49 right now.
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Datadog (DDOG) closed at $80.90 in the latest trading session, marking a -1.76% move from the prior day. DDOG's full-year Zacks Consensus Estimates are calling for earnings of $0.78 per share and revenue of $1.62 billion. Investors should also note that DDOG has a PEG ratio of 2.49 right now.
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ba81c1a2-7d09-4cd8-a6e3-48cc531a241d
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718507.0
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2022-10-13 00:00:00 UTC
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Why Snowflake, Datadog, and MongoDB Plunged Today
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DDOG
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https://www.nasdaq.com/articles/why-snowflake-datadog-and-mongodb-plunged-today-1
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nan
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nan
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What happened
Shares of high-growth enterprise software stocks Snowflake (NYSE: SNOW), Datadog (NASDAQ: DDOG), and MongoDB (NASDAQ: MDB) were falling hard again today -- down 2.9%, 2.7%, and 2.7%, respectively, as of 12:48 p.m. ET -- even as the broader market was up. They were down much more to start the day, before the market roared back into the green on what looks like a short-covering rally.
The relative underperformance can be attributed to, like most things these days, inflation and interest rates. This morning, the Consumer Price Index (CPI) report for September came in hotter than expected for the second month in a row, putting upward pressure on interest rates and pushing down the valuations of high-growth, more expensive software stocks.
In addition, one Wall Street analyst conducted a survey of IT professionals concluding that demand for software investment would weaken in the year ahead.
So what
On Thursday, analysts at Citibank released a recent survey of chief information officers (CIOs) showing a slowdown in the intention to grow IT services. Expectations for IT budget growth came in at 1.8% for this year, down from the 2.2% mark logged in the prior survey in June. Unsurprisingly, much of the weakness came from Europe, which is being battered by steep energy costs and fallout from the Russia-Ukraine war.
The survey came out on the heels of today's CPI report, which showed hotter-than-expected inflation for the second month in a row. The CPI increased 0.4% month over month, above expectations of 0.3%, while the core CPI, which excludes food and energy prices, rose a more problematic 0.6%, above estimates of 0.4%.
The core number was especially disappointing, as this is one of the main inputs the Federal Reserve uses to calculate how much it should raise interest rates. In response, long-term bond yields spiked, with the 10-year Treasury note spiking above 4%, before reverting back below 4% to 3.95% as of this writing.
Expensive growth stocks are some of the most sensitive to long-term rates, as higher interest rates mean future earnings are discounted by a greater amount. With Snowflake, Datadog, and MongoDB trading at high valuations of 30, 19, and 11 times sales, respectively, it's no wonder the inflation report caused these stocks to sell off more than the market, especially when combined with the downbeat CIO survey.
Now what
One silver lining in the Citi survey was that it noted cloud and consumption-based software models would be relative winners, even within an overall slowdown.
That should actually benefit these three companies, as each has some degree of usage-based pricing, as opposed to fixed subscriptions. Snowflake in particular is a 100% consumption-based model, which earns revenue depending on how its customers use the platform. That's an attractive model for cash-strapped customers looking to limit fixed costs and employ more variable cost models.
If the economy does eventually slow or even go into a recession, these types of stocks could actually eventually benefit. That's because a recession would likely spur lower inflation and interest rates and get us back to the pre-pandemic environment. Meanwhile, "mission critical" software like these three would still probably grow, though maybe not as fast as they would otherwise.
However, since inflation has been more persistent than expected, it's really unclear if rates will come back down anytime soon. The higher-rate environment could last for a while, so it may be a good idea own a diversified mix of lower-valued dividend stocks, which may be less affected by higher rates, along with super high-growth names like these three.
10 stocks we like better than Snowflake Inc.
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Snowflake Inc. wasn't one of them! That's right -- they think these 10 stocks are even better buys.
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*Stock Advisor returns as of September 30, 2022
Citigroup is an advertising partner of The Ascent, a Motley Fool company. Billy Duberstein has no position in any of the stocks mentioned. His clients may own shares of the companies mentioned. The Motley Fool has positions in and recommends Datadog, MongoDB, and Snowflake Inc. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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What happened Shares of high-growth enterprise software stocks Snowflake (NYSE: SNOW), Datadog (NASDAQ: DDOG), and MongoDB (NASDAQ: MDB) were falling hard again today -- down 2.9%, 2.7%, and 2.7%, respectively, as of 12:48 p.m. This morning, the Consumer Price Index (CPI) report for September came in hotter than expected for the second month in a row, putting upward pressure on interest rates and pushing down the valuations of high-growth, more expensive software stocks. So what On Thursday, analysts at Citibank released a recent survey of chief information officers (CIOs) showing a slowdown in the intention to grow IT services.
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What happened Shares of high-growth enterprise software stocks Snowflake (NYSE: SNOW), Datadog (NASDAQ: DDOG), and MongoDB (NASDAQ: MDB) were falling hard again today -- down 2.9%, 2.7%, and 2.7%, respectively, as of 12:48 p.m. This morning, the Consumer Price Index (CPI) report for September came in hotter than expected for the second month in a row, putting upward pressure on interest rates and pushing down the valuations of high-growth, more expensive software stocks. Expensive growth stocks are some of the most sensitive to long-term rates, as higher interest rates mean future earnings are discounted by a greater amount.
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What happened Shares of high-growth enterprise software stocks Snowflake (NYSE: SNOW), Datadog (NASDAQ: DDOG), and MongoDB (NASDAQ: MDB) were falling hard again today -- down 2.9%, 2.7%, and 2.7%, respectively, as of 12:48 p.m. This morning, the Consumer Price Index (CPI) report for September came in hotter than expected for the second month in a row, putting upward pressure on interest rates and pushing down the valuations of high-growth, more expensive software stocks. With Snowflake, Datadog, and MongoDB trading at high valuations of 30, 19, and 11 times sales, respectively, it's no wonder the inflation report caused these stocks to sell off more than the market, especially when combined with the downbeat CIO survey.
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What happened Shares of high-growth enterprise software stocks Snowflake (NYSE: SNOW), Datadog (NASDAQ: DDOG), and MongoDB (NASDAQ: MDB) were falling hard again today -- down 2.9%, 2.7%, and 2.7%, respectively, as of 12:48 p.m. That's because a recession would likely spur lower inflation and interest rates and get us back to the pre-pandemic environment. 10 stocks we like better than Snowflake Inc.
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e1b0e5d5-2164-45f3-bab0-152340f2d949
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718508.0
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2022-10-12 00:00:00 UTC
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Datadog (DDOG) Dips More Than Broader Markets: What You Should Know
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DDOG
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https://www.nasdaq.com/articles/datadog-ddog-dips-more-than-broader-markets%3A-what-you-should-know-3
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nan
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nan
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Datadog (DDOG) closed the most recent trading day at $82.35, moving -0.45% from the previous trading session. This change lagged the S&P 500's daily loss of 0.33%. Meanwhile, the Dow lost 0.1%, and the Nasdaq, a tech-heavy index, lost 0.24%.
Heading into today, shares of the data analytics and cloud monitoring company had lost 14.4% over the past month, outpacing the Computer and Technology sector's loss of 14.71% and lagging the S&P 500's loss of 11.67% in that time.
Datadog will be looking to display strength as it nears its next earnings release. On that day, Datadog is projected to report earnings of $0.16 per share, which would represent year-over-year growth of 23.08%. Our most recent consensus estimate is calling for quarterly revenue of $412.61 million, up 52.54% from the year-ago period.
DDOG's full-year Zacks Consensus Estimates are calling for earnings of $0.78 per share and revenue of $1.62 billion. These results would represent year-over-year changes of +62.5% and +57.75%, respectively.
Any recent changes to analyst estimates for Datadog should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable 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. Within the past 30 days, our consensus EPS projection has moved 2.14% lower. Datadog is currently sporting a Zacks Rank of #3 (Hold).
Valuation is also important, so investors should note that Datadog has a Forward P/E ratio of 105.78 right now. This valuation marks a premium compared to its industry's average Forward P/E of 42.03.
We can also see that DDOG currently has a PEG ratio of 2.5. 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 1.99 at yesterday's closing price.
The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 85, putting it in the top 34% 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.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
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Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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Datadog, Inc. (DDOG): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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DDOG's full-year Zacks Consensus Estimates are calling for earnings of $0.78 per share and revenue of $1.62 billion. Datadog (DDOG) closed the most recent trading day at $82.35, moving -0.45% from the previous trading session. We can also see that DDOG currently has a PEG ratio of 2.5.
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Datadog (DDOG) closed the most recent trading day at $82.35, moving -0.45% from the previous trading session. DDOG's full-year Zacks Consensus Estimates are calling for earnings of $0.78 per share and revenue of $1.62 billion. We can also see that DDOG currently has a PEG ratio of 2.5.
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DDOG's full-year Zacks Consensus Estimates are calling for earnings of $0.78 per share and revenue of $1.62 billion. Datadog (DDOG) closed the most recent trading day at $82.35, moving -0.45% from the previous trading session. We can also see that DDOG currently has a PEG ratio of 2.5.
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Datadog (DDOG) closed the most recent trading day at $82.35, moving -0.45% from the previous trading session. DDOG's full-year Zacks Consensus Estimates are calling for earnings of $0.78 per share and revenue of $1.62 billion. We can also see that DDOG currently has a PEG ratio of 2.5.
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1d97c927-154a-4907-95e1-6d719032203c
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718509.0
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2022-10-12 00:00:00 UTC
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Datadog, Inc.'s (NASDAQ:DDOG) latest 13% decline adds to one-year losses, institutional investors may consider drastic measures
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DDOG
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https://www.nasdaq.com/articles/datadog-inc.s-nasdaq%3Addog-latest-13-decline-adds-to-one-year-losses-institutional
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nan
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nan
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Every investor in Datadog, Inc. (NASDAQ:DDOG) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 74% to be precise, is institutions. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
And so it follows that institutional investors was the group most impacted after the company's market cap fell to US$26b last week after a 13% drop in the share price. Needless to say, the recent loss which further adds to the one-year loss to shareholders of 43% might not go down well especially with this category of shareholders. Institutions or "liquidity providers" control large sums of money and therefore, these types of investors usually have a lot of influence over stock price movements. As a result, if the decline continues, institutional investors may be pressured to sell Datadog which might hurt individual investors.
Let's take a closer look to see what the different types of shareholders can tell us about Datadog.
NasdaqGS:DDOG Ownership Breakdown October 12th 2022
What Does The Institutional Ownership Tell Us About Datadog?
Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.
We can see that Datadog does have institutional investors; and they hold a good portion of the company's stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Datadog's historic earnings and revenue below, but keep in mind there's always more to the story.
NasdaqGS:DDOG Earnings and Revenue Growth October 12th 2022
Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. Hedge funds don't have many shares in Datadog. Looking at our data, we can see that the largest shareholder is The Vanguard Group, Inc. with 7.4% of shares outstanding. With 5.6% and 5.3% of the shares outstanding respectively, RTP Ventures and T. Rowe Price Group, Inc. are the second and third largest shareholders. Furthermore, CEO Olivier Pomel is the owner of 2.6% of the company's shares.
After doing some more digging, we found that the top 17 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over the company.
Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.
Insider Ownership Of Datadog
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.
Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.
Shareholders would probably be interested to learn that insiders own shares in Datadog, Inc.. Insiders own US$2.0b worth of shares (at current prices). we sometimes take an interest in whether they have been buying or selling.
General Public Ownership
The general public-- including retail investors -- own 12% stake in the company, and hence can't easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.
Private Equity Ownership
Private equity firms hold a 5.6% stake in Datadog. This suggests they can be influential in key policy decisions. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider risks, for instance. Every company has them, and we've spotted 3 warning signs for Datadog you should know about.
But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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NasdaqGS:DDOG Earnings and Revenue Growth October 12th 2022 Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. Every investor in Datadog, Inc. (NASDAQ:DDOG) should be aware of the most powerful shareholder groups. NasdaqGS:DDOG Ownership Breakdown October 12th 2022 What Does The Institutional Ownership Tell Us About Datadog?
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NasdaqGS:DDOG Earnings and Revenue Growth October 12th 2022 Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. Every investor in Datadog, Inc. (NASDAQ:DDOG) should be aware of the most powerful shareholder groups. NasdaqGS:DDOG Ownership Breakdown October 12th 2022 What Does The Institutional Ownership Tell Us About Datadog?
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Every investor in Datadog, Inc. (NASDAQ:DDOG) should be aware of the most powerful shareholder groups. NasdaqGS:DDOG Ownership Breakdown October 12th 2022 What Does The Institutional Ownership Tell Us About Datadog? NasdaqGS:DDOG Earnings and Revenue Growth October 12th 2022 Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions.
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NasdaqGS:DDOG Earnings and Revenue Growth October 12th 2022 Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. Every investor in Datadog, Inc. (NASDAQ:DDOG) should be aware of the most powerful shareholder groups. NasdaqGS:DDOG Ownership Breakdown October 12th 2022 What Does The Institutional Ownership Tell Us About Datadog?
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13b149b7-197c-4cc4-915a-6a5980cbda43
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718510.0
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2022-10-10 00:00:00 UTC
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3 High-Growth Stocks Down 39.7% to 53.8% to Buy Now and Hold for Decades
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DDOG
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https://www.nasdaq.com/articles/3-high-growth-stocks-down-39.7-to-53.8-to-buy-now-and-hold-for-decades
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nan
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nan
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It doesn't matter if you're a seasoned investor or barely beginning: This has been an exceptionally tough year. The S&P 500, Dow Jones Industrial Average and Nasdaq Composite have all suffered their worst first nine months of a calendar year in 20 years. With apologies to Thomas Paine, "These are the times that try investor's souls."
Yet every cloud has a silver lining, and this one is no different. During bear markets, stocks that can deliver life-changing returns are beaten down just as much as their lukewarm counterparts. Case in point: These three high-growth stocks have all the ingredients needed to produce multibagger returns, yet have fallen between 40% and 54% from their highs reached late last year. Here's a look at each.
Image source: Getty Images.
1. CrowdStrike
Even as the economy suffers from the "is-it-or-isn't-it" recession, business leaders have been reluctant to cut back on cybersecurity. All too often, headlines remind them of the folly of those that seek to cut corners, only to become the victim of a hack, intrusion, or breach. Cybersecurity specialist CrowdStrike (NASDAQ: CRWD) has benefited enormously from this ominous trend, but its stock fallen 40% from its recent highs.
Yet this decline belies the surging growth in the company's core endpoint security business. In its fiscal 2023 second quarter (ended July 31), CrowdStrike's revenue climbed 58% year over year, while subscription revenue rose even more quickly, up 60%. This helped annual recurring revenue (ARR) jump 59%, which highlights the company's growing future potential. While it isn't yet profitable, CrowdStrike boasts strong cash flow from operations and free cash flow, which shows that profits are simply a matter of time.
Equally important is the company's quickly expanding total addressable market (TAM), which management expects to top $126 billion by 2025. Viewed in the context of its full-year fiscal 2022 revenue of $1.45 billion helps illustrate the vast opportunity ahead.
2. Datadog
As more businesses join the digital transformation, they rely on web traffic, data centers, and cloud computing to stay connected with their customers. Unfortunately, downtime can result in customer losses, lower revenue, and a damaged reputation. Datadog (NASDAQ: DDOG) solves those issues with its state-of-the-art monitoring and analytics platform, but the stock has lost some of its luster, down 52% from its peak.
Yet a look under the hood shows a business that is firing on all cylinders, even as the stock price suffers. In the second quarter, Datadog generated revenue that grew 83% year over year, surging from just 51% gains in the prior-year quarter. The company also isn't profitable, but consistent free cash flow provides the outline for the strong profits to come.
Furthermore, Datadog has a large, growing opportunity that shouldn't be underestimated. The company generated revenue of just over $1 billion last year, which pales in comparison to its TAM, which management estimates at roughly $53 billion by 2025.
3. Snowflake
Given the current economic climate, and its pay-as-you-go pricing structure, you'd think that data warehouse, storage, and analytics company Snowflake (NYSE: SNOW) would be suffering. After all, the stock has cratered 54% since late last year. But pulling back the curtain reveals that just the opposite is true -- the company's growth is quite robust.
For the fiscal 2023 second quarter (ended July 31), Snowflake's revenue grew 83% year over year while also increasing its gross profit margin. It isn't profitable just yet, but management is guiding for non-GAAP net income for the full fiscal year. Furthermore, Snowflake's strong free cash flow provides investors with assurances that its current losses are the result of noncash charges, including depreciation.
Its future growth should be equally strong, as evidenced by its remaining performance obligation (RPO) -- a leading indicator of a company's future revenues -- which surged 78%.
Finally, Snowflake has a large, growing opportunity. Management puts the company's TAM at $248 billion by 2026, which eclipses its fiscal 2022 revenue of $1.2 billion.
Data by YCharts
Every rose has its thorn
I'd be remiss if I didn't address the elephant in the room: All this growth comes at a cost. Even after the recent stock price declines, CrowdStrike, Datadog, and Snowflake are currently selling for 13 times, 13 times, and 19 times next years' sales, when a reasonable price-to-sales ratio for many types of stocks is between 1 and 2. Furthermore, current macroeconomic conditions could be a source of significant price volatility in the near term, so investing in these stocks isn't for the faint of heart.
That said, given their robust revenue growth, brisk secular tailwinds, large addressable markets, and discounted prices, I'd argue that these stocks are a bargain, even at these somewhat frothy valuations. Buying CrowdStrike, Datadog, and Snowflake now and holding them for decades would be a wise investment indeed.
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*Stock Advisor returns as of September 30, 2022
Danny Vena has positions in CrowdStrike Holdings, Inc., Datadog, and Snowflake Inc. The Motley Fool has positions in and recommends CrowdStrike Holdings, Inc., Datadog, and Snowflake Inc. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Datadog (NASDAQ: DDOG) solves those issues with its state-of-the-art monitoring and analytics platform, but the stock has lost some of its luster, down 52% from its peak. Datadog As more businesses join the digital transformation, they rely on web traffic, data centers, and cloud computing to stay connected with their customers. Furthermore, Snowflake's strong free cash flow provides investors with assurances that its current losses are the result of noncash charges, including depreciation.
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Datadog (NASDAQ: DDOG) solves those issues with its state-of-the-art monitoring and analytics platform, but the stock has lost some of its luster, down 52% from its peak. While it isn't yet profitable, CrowdStrike boasts strong cash flow from operations and free cash flow, which shows that profits are simply a matter of time. For the fiscal 2023 second quarter (ended July 31), Snowflake's revenue grew 83% year over year while also increasing its gross profit margin.
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Datadog (NASDAQ: DDOG) solves those issues with its state-of-the-art monitoring and analytics platform, but the stock has lost some of its luster, down 52% from its peak. In its fiscal 2023 second quarter (ended July 31), CrowdStrike's revenue climbed 58% year over year, while subscription revenue rose even more quickly, up 60%. For the fiscal 2023 second quarter (ended July 31), Snowflake's revenue grew 83% year over year while also increasing its gross profit margin.
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Datadog (NASDAQ: DDOG) solves those issues with its state-of-the-art monitoring and analytics platform, but the stock has lost some of its luster, down 52% from its peak. While it isn't yet profitable, CrowdStrike boasts strong cash flow from operations and free cash flow, which shows that profits are simply a matter of time. Viewed in the context of its full-year fiscal 2022 revenue of $1.45 billion helps illustrate the vast opportunity ahead.
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2c801539-0347-472a-befc-9f76684be095
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718511.0
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2022-10-07 00:00:00 UTC
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Why Snowflake, Datadog, and MongoDB Plunged Today
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DDOG
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https://www.nasdaq.com/articles/why-snowflake-datadog-and-mongodb-plunged-today-0
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nan
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nan
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What happened
Shares of high-powered software stocks Snowflake (NYSE: SNOW), Datadog (NASDAQ: DDOG), and MongoDB (NASDAQ: MDB) all plunged today, down 7.4%, 6.3%, and 5.4%, respectively, as of 3:45 p.m. ET.
The pain across the technology sector came on the heels of this morning's stronger-than-expected jobs report, which brought back fears of steeper interest rate hikes from the Federal Reserve. Technology stocks, especially high-growth, unprofitable tech stocks with the bulk of their earnings power far in the future, are quite sensitive to long-term interest rates.
Today's losses are really just a give-back from the gains seen earlier this week, when some softer economic data spurred hopes the Fed would ease off the brakes.
So what
These all-star software companies have repeatedly beat revenue estimates this year, but it's not hard to figure out why they're down so much. The culprit was today's September jobs report, which came in slightly stronger than expected, with 266,000 new jobs added and the unemployment rate falling to 3.5%, versus expectations of 255,000 and 3.7%.
In the software industry, a lot of times good news on the economy is bad news for these stocks. That's because the hotter the economy is running, the higher long-term bond yields will go, and the more the Federal Reserve may have to hike interest rates. After falling from around 4% to roughly 3.6% in the beginning of the week on lower job openings data, the 10-year Treasury bond yield is bouncing back higher today, to around 3.88% as of this writing.
As you can see, these companies generate either no profits or significant losses, and they trade on high multiples of their sales. Therefore, when rates go up, future earnings are discounted by a greater amount, compressing their valuations. So it's no surprise to see Snowflake, the most expensive stock, down the most.
COMPANY
Q2 REVENUE GROWTH (YOY)
NET INCOME (TTM)
PRICE-TO-SALES RATIO
Snowflake
82.7%
($675.6 million)
35.9
Datadog
73.9%
$6.5 million
22.9
MongoDB
52.8%
($362 million)
12.4
Data source: Yahoo! Finance. YOY = year over year. TTM = trailing 12 months.
As you can see, though Datadog is slightly profitable, none of these companies generate lots of earnings under generally accepted accounting principles (GAAP), and they probably won't for a while as they reinvest in growth. Furthermore, price-to-sales ratios above 10 were once considered expensive, before the recent era of ultra low interest rates since the financial crisis of 2008. So, a 20 or 30-plus price-to-sales ratio is very vulnerable to a sharp rise in interest rates.
Now what
These three stocks have high-growth characteristics and appear to have much-desired products in the new era of big data and artificial intelligence applications. Snowflake is becoming a preferred data lake application for cloud customers, Datadog's observability products appear to have a lead in monitoring crucial software applications, and MongoDB's new-age document database product is becoming widely adopted over traditional relational databases.
However, that doesn't mean their stocks will perform as well as their businesses. Each stock is still expensive based on conventional metrics, and each is still far, far above their respective initial public offering prices from just a few years ago.
Make no mistake, these are great companies that one should look to own, albeit at the right price. At the very least, they should be on investors' watch lists should software investors eventually capitulate.
Still, these growth stocks are a risky bet, given that it's really not known where interest rates will settle over the next few years, or what these companies' ultimate profit margins will be.
Sure, if inflation comes down fast and bond yields come down to levels seen before inflation spiked, these stocks could go higher again. However, there seems to be more downside risk than upside risk, at least until inflation shows clear and convincing signs of coming down in a big way.
10 stocks we like better than Snowflake Inc.
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*Stock Advisor returns as of September 30, 2022
Billy Duberstein has no position in any of the stocks mentioned. His clients may own shares of the companies mentioned. The Motley Fool has positions in and recommends Datadog, MongoDB, and Snowflake Inc. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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What happened Shares of high-powered software stocks Snowflake (NYSE: SNOW), Datadog (NASDAQ: DDOG), and MongoDB (NASDAQ: MDB) all plunged today, down 7.4%, 6.3%, and 5.4%, respectively, as of 3:45 p.m. The pain across the technology sector came on the heels of this morning's stronger-than-expected jobs report, which brought back fears of steeper interest rate hikes from the Federal Reserve. After falling from around 4% to roughly 3.6% in the beginning of the week on lower job openings data, the 10-year Treasury bond yield is bouncing back higher today, to around 3.88% as of this writing.
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What happened Shares of high-powered software stocks Snowflake (NYSE: SNOW), Datadog (NASDAQ: DDOG), and MongoDB (NASDAQ: MDB) all plunged today, down 7.4%, 6.3%, and 5.4%, respectively, as of 3:45 p.m. That's because the hotter the economy is running, the higher long-term bond yields will go, and the more the Federal Reserve may have to hike interest rates. Snowflake 82.7% ($675.6 million) 35.9 Datadog 73.9% $6.5 million 22.9 MongoDB 52.8% ($362 million) 12.4 Data source: Yahoo!
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What happened Shares of high-powered software stocks Snowflake (NYSE: SNOW), Datadog (NASDAQ: DDOG), and MongoDB (NASDAQ: MDB) all plunged today, down 7.4%, 6.3%, and 5.4%, respectively, as of 3:45 p.m. Technology stocks, especially high-growth, unprofitable tech stocks with the bulk of their earnings power far in the future, are quite sensitive to long-term interest rates. Still, these growth stocks are a risky bet, given that it's really not known where interest rates will settle over the next few years, or what these companies' ultimate profit margins will be.
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What happened Shares of high-powered software stocks Snowflake (NYSE: SNOW), Datadog (NASDAQ: DDOG), and MongoDB (NASDAQ: MDB) all plunged today, down 7.4%, 6.3%, and 5.4%, respectively, as of 3:45 p.m. After falling from around 4% to roughly 3.6% in the beginning of the week on lower job openings data, the 10-year Treasury bond yield is bouncing back higher today, to around 3.88% as of this writing. * They just revealed what they believe are the ten best stocks for investors to buy right now... and Snowflake Inc. wasn't one of them!
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7613bbfd-e3d2-4c1e-b10b-2a88e6b0a28c
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718512.0
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2022-10-07 00:00:00 UTC
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Datadog (DDOG) to Launch Datadog Certification Program
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DDOG
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https://www.nasdaq.com/articles/datadog-ddog-to-launch-datadog-certification-program
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nan
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nan
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Datadog DDOG recently announced the launch of the Datadog Certification Program that will help developers to enhance their observability skills.
The program offers these professionals a path to build and demonstrate their knowledge of both Datadog’s platform and the industry’s best practices, and also allows partners to showcase their Datadog competency to potential customers.
The launch includes three certifications, the Datadog Fundamentals for beginners, Log Management Fundamentals and APM & Distributed Tracing Fundamentals, which require six months of experience with the Datadog platform.
These certifications will validate the practiced competency of cloud professionals in monitoring with Datadog and signal peers and employers that they have proficiency in the industry’s leading observability platform and have demonstrated the ability to apply that knowledge.
Datadog’s Strong Product Line to Aid Top-Line Growth
The company’s third-quarter 2022 revenues are anticipated to be in the range of $410-$414 million, which implies 52% year-over-year growth at the midpoint. These programs are expected to be beneficial for professionals as Datadog sees continued momentum of cloud migration and digital transformation projects.
It had about 21,200 customers in second-quarter 2022, almost 30% up on a year-over-year basis.
Datadog, Inc. Price and Consensus
Datadog, Inc. price-consensus-chart | Datadog, Inc. Quote
The three pillars of observability, which are infrastructure, APM and Log Management, have shown positive growth in the recent quarter. The APM suite and Log Management now exceed $0.750 billion of annual recurring revenues.
Additionally, it has also launched Datadog Observability Pipelines, through which, customers can control their cost and volume of data, pick up all data sources from their destination, standardize and improve on data quality, and redact sensitive data to help maintain compliance.
Datadog signed a seven-figure upsell with a multi-national media company that has aggressive expansion plans for a streaming service, including in international markets, and a global service and audit company that is going through a large-scale digital transformation, including migration from on-premises data centers to multiple clouds, and Azure.
Datadog is also organizing Dash 2022, a user conference in October at the Javits Center in New York City. This is an occasion for them to showcase the latest product innovations and organize an investor meeting.
Datadog Faces Stiff Competition in the Cloud Computing Industry
Shares of Datadog, which currently has a Zacks Rank #3 (Hold), have declined 47.4% year to date compared with the Zacks Computer & Technology Sector’s decline of 32.8%. It faces stiff competition from Microsoft Corporation’s MSFT Azure, Amazon’s AMZN AWS and Alphabet’s GOOGL Google Cloud.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Microsoft shares have declined 26.7% year to date. Microsoft has doubled down on the cloud computing opportunity as Azure increased availability in more than 60 regions globally. In the fourth quarter of 2022 cloud services’ revenues surged 40% year over year that was driven by robust growth in consumption-based business.
Amazon’s shares have declined 27.9% year to date. Amazon is the leading provider of cloud infrastructure as a service to enterprise customers and is gaining momentum with customers including Boeing, Geisinger, British Telecom, Jefferies, Meta, Roche, adidas and many more.
Alphabet’s shares have declined 30% in the same time frame. The company’s cloud services have been growing investments in infrastructure, security, data management, analytics and AI and are expanding its footprint worldwide as it recently opened four new cloud regions which are located in Warsaw (Poland), Delhi (India), Melbourne (Australia) and Toronto (Canada).
Datadog is suffering from cost escalations in the form of research and development (R&D), sales and marketing expenses and general and administrative expenses that are expected to hurt its bottom line.
However, the company is positive about its investments in R&D, sales and marketing and is expecting a future pay-off.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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
Amazon.com, Inc. (AMZN): Free Stock Analysis Report
Microsoft Corporation (MSFT): Free Stock Analysis Report
Alphabet Inc. (GOOGL): Free Stock Analysis Report
Datadog, Inc. (DDOG): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Datadog DDOG recently announced the launch of the Datadog Certification Program that will help developers to enhance their observability skills. Datadog, Inc. (DDOG): Free Stock Analysis Report These certifications will validate the practiced competency of cloud professionals in monitoring with Datadog and signal peers and employers that they have proficiency in the industry’s leading observability platform and have demonstrated the ability to apply that knowledge.
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Datadog DDOG recently announced the launch of the Datadog Certification Program that will help developers to enhance their observability skills. Datadog, Inc. (DDOG): Free Stock Analysis Report Datadog Faces Stiff Competition in the Cloud Computing Industry Shares of Datadog, which currently has a Zacks Rank #3 (Hold), have declined 47.4% year to date compared with the Zacks Computer & Technology Sector’s decline of 32.8%.
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Datadog DDOG recently announced the launch of the Datadog Certification Program that will help developers to enhance their observability skills. Datadog, Inc. (DDOG): Free Stock Analysis Report Datadog, Inc. Price and Consensus Datadog, Inc. price-consensus-chart | Datadog, Inc. Quote The three pillars of observability, which are infrastructure, APM and Log Management, have shown positive growth in the recent quarter.
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Datadog DDOG recently announced the launch of the Datadog Certification Program that will help developers to enhance their observability skills. Datadog, Inc. (DDOG): Free Stock Analysis Report Datadog, Inc. Price and Consensus Datadog, Inc. price-consensus-chart | Datadog, Inc. Quote The three pillars of observability, which are infrastructure, APM and Log Management, have shown positive growth in the recent quarter.
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f831cfe3-f6b4-4dda-9911-c4dbedbb62a7
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718513.0
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2022-10-06 00:00:00 UTC
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Datadog (DDOG) Dips More Than Broader Markets: What You Should Know
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DDOG
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https://www.nasdaq.com/articles/datadog-ddog-dips-more-than-broader-markets%3A-what-you-should-know-2
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nan
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nan
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Datadog (DDOG) closed at $93.66 in the latest trading session, marking a -1.52% move from the prior day. This change lagged the S&P 500's daily loss of 1.03%. At the same time, the Dow lost 1.15%, and the tech-heavy Nasdaq gained 0.33%.
Heading into today, shares of the data analytics and cloud monitoring company had lost 0.53% over the past month, outpacing the Computer and Technology sector's loss of 4.49% and the S&P 500's loss of 3.51% in that time.
Datadog will be looking to display strength as it nears its next earnings release. On that day, Datadog is projected to report earnings of $0.16 per share, which would represent year-over-year growth of 23.08%. Our most recent consensus estimate is calling for quarterly revenue of $412.61 million, up 52.54% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $0.78 per share and revenue of $1.62 billion, which would represent changes of +62.5% and +57.75%, respectively, from the prior year.
It is also important to note the recent changes to analyst estimates for Datadog. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 2.14% lower within the past month. Datadog is currently sporting a Zacks Rank of #3 (Hold).
Investors should also note Datadog's current valuation metrics, including its Forward P/E ratio of 121.62. This represents a premium compared to its industry's average Forward P/E of 46.25.
It is also worth noting that DDOG currently has a PEG ratio of 2.88. 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 2.33 as of yesterday's close.
The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 80, which puts it in the top 32% of all 250+ industries.
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.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock And 4 Runners Up
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
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Datadog (DDOG) closed at $93.66 in the latest trading session, marking a -1.52% move from the prior day. It is also worth noting that DDOG currently has a PEG ratio of 2.88. Datadog, Inc. (DDOG): Free Stock Analysis Report
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Datadog (DDOG) closed at $93.66 in the latest trading session, marking a -1.52% move from the prior day. It is also worth noting that DDOG currently has a PEG ratio of 2.88. Datadog, Inc. (DDOG): Free Stock Analysis Report
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Datadog (DDOG) closed at $93.66 in the latest trading session, marking a -1.52% move from the prior day. It is also worth noting that DDOG currently has a PEG ratio of 2.88. Datadog, Inc. (DDOG): Free Stock Analysis Report
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Datadog (DDOG) closed at $93.66 in the latest trading session, marking a -1.52% move from the prior day. It is also worth noting that DDOG currently has a PEG ratio of 2.88. Datadog, Inc. (DDOG): Free Stock Analysis Report
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290d9f20-6dd8-4ce4-af20-ab3bdb3a1761
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718514.0
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2022-10-04 00:00:00 UTC
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Why CrowdStrike, Snowflake, and Datadog Stocks Are Surging Higher Today
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DDOG
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https://www.nasdaq.com/articles/why-crowdstrike-snowflake-and-datadog-stocks-are-surging-higher-today
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nan
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nan
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What happened
Shares of a number of high-growth stocks charged sharply higher Tuesday, following a rally by the broader market indexes. After taking a beating over the past year, investors are wading back into stocks on the chance that the worst of the bear market is behind us.
As a result, CrowdStrike Holdings (NASDAQ: CRWD) gained 3.6%, Snowflake (NYSE: SNOW) jumped 5.3%, and Datadog (NASDAQ: DDOG) surged 5.7% as of 2:44 p.m. ET.
Image source: Getty Images.
So what
There was no company-specific news driving CrowdStrike, Snowflake, and Datadog higher today. Instead, it appears that investors were more optimistic about the prospect for the market to notch gains from here and were snatching up shares of beaten-down, high-growth stocks.
The past year has been particularly rough on technology stocks, pushing the tech-heavy Nasdaq Composite down more than 30% from its high reached late last year. Some investors had abandoned high-growth companies, searching for safer places to park their cash until the economic storm has passed. This sent CrowdStrike's stock price tumbling 40%, while Datadog and Snowflake stocks have fallen 51% and 55%, respectively, from their November highs.
Today, the tide appeared to turn, at least temporarily, as the S&P 500 and the Nasdaq gained 2.6% and 2.9%, respectively.
The upbeat sentiment came on the heels of a brutal month for stocks, as the S&P and the Nasdaq lost 12.8% and 13.8%, respectively, during September.
Now what
While Wall Street has been increasingly optimistic in October, market moves driven by fear can turn on a dime -- particularly during a bear market -- which means that there is likely more volatility in store for CrowdStrike, Snowflake, and Datadog shareholders, at least over the short term.
The Federal Reserve has telegraphed its continued commitment to getting inflation under control, which will likely result in rising interest rates well into next year. This could result in further pain for the economy, which could, in turn, hurt this trio of businesses.
CrowdStrike's business depends on companies committing to its endpoint cybersecurity services. If the economy falls further, executives looking to cut costs could skimp on computer and network security. Likewise, businesses could forego Snowflake's data cloud and analytics services, instead hunkering down until the macroeconomic situation stabilizes. Similarly, they could sacrifice Datadog's monitoring and analytics services and hope for the best while they ride out the economic storm.
That said, there are reasons to be optimistic for the future. CrowdStrike grew its revenue by 58% year over year in the second quarter, and much of its sales are subscription based, giving the company a measure of stability. During the same period, Datadog's sales jumped 74%, while Snowflake's revenue jumped a remarkable 83%. These results suggest that companies are reluctant to cut back on CrowdStrike's, Datadog's, and Snowflake's services, even in the face of economic headwinds.
Given how far their share prices have fallen over the preceding 12 months, now is the best time in years to pick up these high-growth stocks at a discount. That's not to say that they won't fall lower -- they certainly could. However, each of these stocks is currently trading at or near their lowest valuations in years, providing investors with compelling opportunities.
That said, none of these stocks are cheap in terms of traditional valuation metrics. Snowflake, Datadog, and CrowdStrike stocks are currently selling for 19 times, 14 times, and 13 times next year's sales, when a reasonable price-to-sales ratio is between 1 and 2.
However, given their above-average growth rates -- even in the face of economic headwinds -- I'd argue that each of these stocks is well worth the premium. Furthermore, for investors looking three to five years down the road, buying shares in these innovative, world-class companies while their valuations are near historic lows will seem like a brilliant move, indeed.
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Danny Vena has positions in CrowdStrike Holdings, Inc., Datadog, and Snowflake Inc. The Motley Fool has positions in and recommends CrowdStrike Holdings, Inc., Datadog, and Snowflake Inc. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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As a result, CrowdStrike Holdings (NASDAQ: CRWD) gained 3.6%, Snowflake (NYSE: SNOW) jumped 5.3%, and Datadog (NASDAQ: DDOG) surged 5.7% as of 2:44 p.m. What happened Shares of a number of high-growth stocks charged sharply higher Tuesday, following a rally by the broader market indexes. These results suggest that companies are reluctant to cut back on CrowdStrike's, Datadog's, and Snowflake's services, even in the face of economic headwinds.
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As a result, CrowdStrike Holdings (NASDAQ: CRWD) gained 3.6%, Snowflake (NYSE: SNOW) jumped 5.3%, and Datadog (NASDAQ: DDOG) surged 5.7% as of 2:44 p.m. During the same period, Datadog's sales jumped 74%, while Snowflake's revenue jumped a remarkable 83%. These results suggest that companies are reluctant to cut back on CrowdStrike's, Datadog's, and Snowflake's services, even in the face of economic headwinds.
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As a result, CrowdStrike Holdings (NASDAQ: CRWD) gained 3.6%, Snowflake (NYSE: SNOW) jumped 5.3%, and Datadog (NASDAQ: DDOG) surged 5.7% as of 2:44 p.m. This sent CrowdStrike's stock price tumbling 40%, while Datadog and Snowflake stocks have fallen 51% and 55%, respectively, from their November highs. Snowflake, Datadog, and CrowdStrike stocks are currently selling for 19 times, 14 times, and 13 times next year's sales, when a reasonable price-to-sales ratio is between 1 and 2.
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As a result, CrowdStrike Holdings (NASDAQ: CRWD) gained 3.6%, Snowflake (NYSE: SNOW) jumped 5.3%, and Datadog (NASDAQ: DDOG) surged 5.7% as of 2:44 p.m. These results suggest that companies are reluctant to cut back on CrowdStrike's, Datadog's, and Snowflake's services, even in the face of economic headwinds. Given how far their share prices have fallen over the preceding 12 months, now is the best time in years to pick up these high-growth stocks at a discount.
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3e35afe9-4db2-4c7f-a4d9-18dc65e53679
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718515.0
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2022-10-04 00:00:00 UTC
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Here is What to Know Beyond Why Datadog, Inc. (DDOG) is a Trending Stock
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DDOG
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https://www.nasdaq.com/articles/here-is-what-to-know-beyond-why-datadog-inc.-ddog-is-a-trending-stock
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nan
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nan
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Datadog (DDOG) has recently been on Zacks.com's list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future.
Shares of this data analytics and cloud monitoring company have returned -6.2% over the past month versus the Zacks S&P 500 composite's -6.2% change. The Zacks Internet - Software industry, to which Datadog belongs, has lost 10.7% over this period. Now the key question is: Where could the stock be headed in the near term?
Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.
Earnings Estimate Revisions
Here at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.
We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
Datadog is expected to post earnings of $0.16 per share for the current quarter, representing a year-over-year change of +23.1%. Over the last 30 days, the Zacks Consensus Estimate has changed -1%.
The consensus earnings estimate of $0.78 for the current fiscal year indicates a year-over-year change of +62.5%. This estimate has changed -2.1% over the last 30 days.
For the next fiscal year, the consensus earnings estimate of $0.96 indicates a change of +22.3% from what Datadog is expected to report a year ago. Over the past month, the estimate has changed +1.1%.
Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Datadog is rated Zacks Rank #2 (Buy).
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Projected Revenue Growth
Even though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.
For Datadog, the consensus sales estimate for the current quarter of $412.61 million indicates a year-over-year change of +52.5%. For the current and next fiscal years, $1.62 billion and $2.2 billion estimates indicate +57.8% and +35.7% changes, respectively.
Last Reported Results and Surprise History
Datadog reported revenues of $406.14 million in the last reported quarter, representing a year-over-year change of +73.9%. EPS of $0.24 for the same period compares with $0.09 a year ago.
Compared to the Zacks Consensus Estimate of $378.05 million, the reported revenues represent a surprise of +7.43%. The EPS surprise was +71.43%.
The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates each time over this period.
Valuation
Without considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.
While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S) and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.
As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Datadog is graded D on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
Conclusion
The facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Datadog. However, its Zacks Rank #2 does suggest that it may outperform the broader market in the near term.
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Datadog, Inc. (DDOG): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Datadog (DDOG) has recently been on Zacks.com's list of the most searched stocks. Datadog, Inc. (DDOG): Free Stock Analysis Report We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends.
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Datadog (DDOG) has recently been on Zacks.com's list of the most searched stocks. Datadog, Inc. (DDOG): Free Stock Analysis Report The chart below shows the evolution of the company's forward 12-month consensus EPS estimate: 12 Month EPS Projected Revenue Growth Even though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues.
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Datadog (DDOG) has recently been on Zacks.com's list of the most searched stocks. Datadog, Inc. (DDOG): Free Stock Analysis Report Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions.
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Datadog (DDOG) has recently been on Zacks.com's list of the most searched stocks. Datadog, Inc. (DDOG): Free Stock Analysis Report And if earnings estimates go up for a company, the fair value for its stock goes up.
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0827f3ba-4b42-41c4-b365-efabf6345c91
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718516.0
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2022-10-01 00:00:00 UTC
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3 Safe Tech Stocks You'll Regret Not Buying on the Dip
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DDOG
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https://www.nasdaq.com/articles/3-safe-tech-stocks-youll-regret-not-buying-on-the-dip
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nan
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nan
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Inflation is soaring, interest rates are rising, and the stock market is in decline. It's entirely normal for an investor to feel challenged in this environment. The most positive thing to do in such a situation is to focus on the long term because history proves that, given enough time, the broader markets tend to recover to new highs. With that said, it can be helpful to identify companies that have significant future growth potential but can also weather difficult economic periods.
That could mean they have strong balance sheets, are profitable, or are simply growing rapidly in the face of these challenging times. Three Motley Fool contributors were asked which tech stocks are doing this. Datadog (NASDAQ: DDOG), Veeva Systems (NYSE: VEEV), and PayPal Holdings (NASDAQ: PYPL) were their answers. Here's what they had to say about these stocks and why they are great options to buy on the dip.
1. A crucial piece of the cloud-based future
Anthony Di Pizio (Datadog): Cloud computing technology is playing an increasingly important role in the corporate sector. It's revitalizing age-old business practices by shifting them online to increase efficiency and unlock hidden value. Not to mention, it allows large organizations to connect their teams not only across departments, but across borders.
The cloud does come with its own challenges -- though they're not necessarily drawbacks. As more parts of a business migrate online, mountains of data are being generated. Companies often struggle to manage that data, let alone go a step further and leverage it to make more money. Enter Datadog, a platform that can deliver actionable insights from data gathered across digital platforms like mobile applications and websites.
Take an e-commerce business, for example. Datadog can be used to monitor infrastructure to provide real-time insights into the customer experience online, or to immediately alert the business of any technical issues, which can dramatically reduce response times. For a high-traffic event like Cyber Monday, Datadog can assist with running load tests and historical analysis in advance, to learn from past challenges and prevent them from reoccurring.
But what makes Datadog stock safe? A couple of things. First, it's in a hot industry and the company's growth is soaring even in this difficult economy. Second, the company is on the verge of profitability, which significantly de-risks it as an investment. Datadog expects to generate up to $1.63 billion in revenue during 2022, an increase of 58% compared to 2021. And halfway through the year, it has delivered positive net income of $4.8 million, which might seem insignificant, but it's an improvement over a loss in the year-ago period, and it marks an important milestone on the way to full-year profits.
Datadog stock represents an opportunity to buy into an important part of the cloud-based future, at a 55% discount to its all-time high right now.
2. A stable cash machine trading at a bargain
Jamie Louko (Veeva Systems): Veeva Systems is perhaps one of the safest tech stocks on the market today. Veeva provides software and data management tools for the life sciences space, and it is the far-and-away leader.
The company has software tools ranging across an entire pharmaceutical company's lifespan, from data management tools to operate clinical drug trials, to customer relationship management tools to help sell those drugs. With over 1,200 customers, including some of the leading pharma companies on the market today, Veeva is the dominant player in the space. Considering no other player has an offering as extensive as Veeva's, the company will likely continue to dominate the market.
This leadership has helped the company remain relatively resilient during 2022, both stock-wise and operationally. In terms of the company's stock, shares have fallen just 18% over the past six months versus the Nasdaq Composite index's drop of 24%.
Operationally, Veeva has continued to post stable results despite inflation and tightening business budgets. Veeva posted 16% and 17% year-over-year revenue growth in the first and second quarters, respectively, and the company continued to gush cash. Over the trailing 12 months, Veeva generated more than $741 million in free cash flow and $394 million in net income, producing margins of 37% and 20%, respectively.
With this immense cash flow, Veeva has invested in developing new products to further its stability and dominance, making it an increasingly safer tech stock to own for the long haul. While Veeva might not be the fastest-growing tech stock out there, its high switching costs and hard-to-replicate leadership could allow the company to post steady results over the long term. At 35 times free cash flow, Veeva's valuation is near an all-time low since the company went public in 2013. Therefore, investors can buy this safe stock close to its cheapest valuation in almost a decade.
3. A leader in digital payments
Trevor Jennewine (PayPal Holdings): Several factors have beaten PayPal down over the past year, including high inflation and the loss of eBay as a partner. Those obstacles caused top-line growth to decelerate while operating costs continued to climb quickly, which led to a loss under generally accepted accounting principles (GAAP) in the most recent quarter. More broadly, PayPal's underwhelming financial results in the last few quarters have caused some investors to lose confidence in the company, and that sent shares tumbling. The stock currently trades 67% off its high.
Fortunately, the skies are starting to clear for PayPal. The migration of eBay away from the platform will cease to be a headwind in the second half of the year, and CEO Dan Schulman said on theearnings conference callin August that the company will see cost savings of $900 million in 2022 and $1.3 billion in 2023 as it works to rein in operating expenses. Schulman also noted that PayPal will reinvest that cash across three areas where it has a "tremendous advantage" due to scale: digital wallets, PayPal checkout, and Braintree.
PayPal is the most accepted digital wallet in North America and Europe, and it ranked as the most-downloaded mobile finance app worldwide in the first half of 2022, according to Apptopia. Moreover, the trust inspired by its reliable payments platform actually boosts conversion rates for merchants. According to management, consumers are nearly three times more likely to complete a purchase when PayPal is available at checkout. In light of those advantages, investors have good reason to believe PayPal can regain its momentum.
In the near term, the launch of Pay with Venmo on Amazon is a particularly exciting development, and it builds on partnerships with other retailers like Booking Holdings and Revolve. And in the long term, the continued adoption of e-commerce and digital wallets should be a powerful growth driver for PayPal.
On that note, management puts its market opportunity at $110 trillion, meaning this fintech company has only scratched the surface of its full potential. And with shares trading at 4.1 times sales -- a sizable discount compared to its three-year average of 9.5 times sales -- this tech stock looks like a relatively safe investment for patient investors.
10 stocks we like better than Datadog
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*Stock Advisor returns as of August 17, 2022
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Anthony Di Pizio has no position in any of the stocks mentioned. Jamie Louko has positions in Amazon, Datadog, PayPal Holdings, and Veeva Systems. Trevor Jennewine has positions in Amazon and PayPal Holdings. The Motley Fool has positions in and recommends Amazon, Booking Holdings, Datadog, PayPal Holdings, Revolve Group Inc, and Veeva Systems. The Motley Fool recommends eBay and recommends the following options: short October 2022 $50 calls on eBay. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Datadog (NASDAQ: DDOG), Veeva Systems (NYSE: VEEV), and PayPal Holdings (NASDAQ: PYPL) were their answers. Datadog can be used to monitor infrastructure to provide real-time insights into the customer experience online, or to immediately alert the business of any technical issues, which can dramatically reduce response times. Those obstacles caused top-line growth to decelerate while operating costs continued to climb quickly, which led to a loss under generally accepted accounting principles (GAAP) in the most recent quarter.
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Datadog (NASDAQ: DDOG), Veeva Systems (NYSE: VEEV), and PayPal Holdings (NASDAQ: PYPL) were their answers. A crucial piece of the cloud-based future Anthony Di Pizio (Datadog): Cloud computing technology is playing an increasingly important role in the corporate sector. Jamie Louko has positions in Amazon, Datadog, PayPal Holdings, and Veeva Systems.
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Datadog (NASDAQ: DDOG), Veeva Systems (NYSE: VEEV), and PayPal Holdings (NASDAQ: PYPL) were their answers. A stable cash machine trading at a bargain Jamie Louko (Veeva Systems): Veeva Systems is perhaps one of the safest tech stocks on the market today. While Veeva might not be the fastest-growing tech stock out there, its high switching costs and hard-to-replicate leadership could allow the company to post steady results over the long term.
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Datadog (NASDAQ: DDOG), Veeva Systems (NYSE: VEEV), and PayPal Holdings (NASDAQ: PYPL) were their answers. Veeva posted 16% and 17% year-over-year revenue growth in the first and second quarters, respectively, and the company continued to gush cash. Schulman also noted that PayPal will reinvest that cash across three areas where it has a "tremendous advantage" due to scale: digital wallets, PayPal checkout, and Braintree.
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718517.0
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2022-09-30 00:00:00 UTC
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Datadog (DDOG) Gains As Market Dips: What You Should Know
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DDOG
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https://www.nasdaq.com/articles/datadog-ddog-gains-as-market-dips%3A-what-you-should-know-7
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nan
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nan
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Datadog (DDOG) closed the most recent trading day at $88.78, moving +1.52% from the previous trading session. This move outpaced the S&P 500's daily loss of 1.51%. Elsewhere, the Dow lost 1.71%, while the tech-heavy Nasdaq lost 0.02%.
Prior to today's trading, shares of the data analytics and cloud monitoring company had lost 9.98% over the past month. This has was narrower than the Computer and Technology sector's loss of 11.76% and lagged the S&P 500's loss of 9.52% in that time.
Investors will be hoping for strength from Datadog as it approaches its next earnings release. On that day, Datadog is projected to report earnings of $0.16 per share, which would represent year-over-year growth of 23.08%. Our most recent consensus estimate is calling for quarterly revenue of $412.61 million, up 52.54% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $0.78 per share and revenue of $1.62 billion, which would represent changes of +62.5% and +57.75%, respectively, from the prior year.
Investors might also notice recent changes to analyst estimates for Datadog. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 2.14% lower within the past month. Datadog is holding a Zacks Rank of #3 (Hold) right now.
Investors should also note Datadog's current valuation metrics, including its Forward P/E ratio of 111.83. For comparison, its industry has an average Forward P/E of 44.79, which means Datadog is trading at a premium to the group.
It is also worth noting that DDOG currently has a PEG ratio of 2.65. 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 2.35 as of yesterday's close.
The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 93, putting it in the top 37% of all 250+ industries.
The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.
Zacks Names "Single Best Pick to Double"
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It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
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Datadog, Inc. (DDOG): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Datadog (DDOG) closed the most recent trading day at $88.78, moving +1.52% from the previous trading session. It is also worth noting that DDOG currently has a PEG ratio of 2.65. Datadog, Inc. (DDOG): Free Stock Analysis Report
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Datadog (DDOG) closed the most recent trading day at $88.78, moving +1.52% from the previous trading session. It is also worth noting that DDOG currently has a PEG ratio of 2.65. Datadog, Inc. (DDOG): Free Stock Analysis Report
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Datadog (DDOG) closed the most recent trading day at $88.78, moving +1.52% from the previous trading session. It is also worth noting that DDOG currently has a PEG ratio of 2.65. Datadog, Inc. (DDOG): Free Stock Analysis Report
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Datadog (DDOG) closed the most recent trading day at $88.78, moving +1.52% from the previous trading session. It is also worth noting that DDOG currently has a PEG ratio of 2.65. Datadog, Inc. (DDOG): Free Stock Analysis Report
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4dd5efcf-1429-4298-840d-c2c99cef6c90
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718518.0
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2022-09-30 00:00:00 UTC
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Notable Friday Option Activity: BECN, DDOG, IRTC
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DDOG
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https://www.nasdaq.com/articles/notable-friday-option-activity%3A-becn-ddog-irtc
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nan
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nan
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Looking at options trading activity among components of the Russell 3000 index, there is noteworthy activity today in Beacon Roofing Supply Inc (Symbol: BECN), where a total volume of 3,221 contracts has been traded thus far today, a contract volume which is representative of approximately 322,100 underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 44.2% of BECN's average daily trading volume over the past month, of 728,420 shares. Especially high volume was seen for the $50 strike put option expiring October 21, 2022, with 3,022 contracts trading so far today, representing approximately 302,200 underlying shares of BECN. Below is a chart showing BECN's trailing twelve month trading history, with the $50 strike highlighted in orange:
Datadog Inc (Symbol: DDOG) options are showing a volume of 17,709 contracts thus far today. That number of contracts represents approximately 1.8 million underlying shares, working out to a sizeable 42.2% of DDOG's average daily trading volume over the past month, of 4.2 million shares. Particularly high volume was seen for the $140 strike call option expiring June 16, 2023, with 2,001 contracts trading so far today, representing approximately 200,100 underlying shares of DDOG. Below is a chart showing DDOG's trailing twelve month trading history, with the $140 strike highlighted in orange:
And iRhythm Technologies Inc (Symbol: IRTC) options are showing a volume of 1,867 contracts thus far today. That number of contracts represents approximately 186,700 underlying shares, working out to a sizeable 41% of IRTC's average daily trading volume over the past month, of 455,810 shares. Particularly high volume was seen for the $135 strike call option expiring October 21, 2022, with 508 contracts trading so far today, representing approximately 50,800 underlying shares of IRTC. Below is a chart showing IRTC's trailing twelve month trading history, with the $135 strike highlighted in orange:
For the various different available expirations for BECN options, DDOG options, or IRTC options, visit StockOptionsChannel.com.
Today's Most Active Call & Put Options of the S&P 500 »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Particularly high volume was seen for the $140 strike call option expiring June 16, 2023, with 2,001 contracts trading so far today, representing approximately 200,100 underlying shares of DDOG. Below is a chart showing BECN's trailing twelve month trading history, with the $50 strike highlighted in orange: Datadog Inc (Symbol: DDOG) options are showing a volume of 17,709 contracts thus far today. That number of contracts represents approximately 1.8 million underlying shares, working out to a sizeable 42.2% of DDOG's average daily trading volume over the past month, of 4.2 million shares.
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Below is a chart showing BECN's trailing twelve month trading history, with the $50 strike highlighted in orange: Datadog Inc (Symbol: DDOG) options are showing a volume of 17,709 contracts thus far today. That number of contracts represents approximately 1.8 million underlying shares, working out to a sizeable 42.2% of DDOG's average daily trading volume over the past month, of 4.2 million shares. Particularly high volume was seen for the $140 strike call option expiring June 16, 2023, with 2,001 contracts trading so far today, representing approximately 200,100 underlying shares of DDOG.
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Below is a chart showing BECN's trailing twelve month trading history, with the $50 strike highlighted in orange: Datadog Inc (Symbol: DDOG) options are showing a volume of 17,709 contracts thus far today. That number of contracts represents approximately 1.8 million underlying shares, working out to a sizeable 42.2% of DDOG's average daily trading volume over the past month, of 4.2 million shares. Particularly high volume was seen for the $140 strike call option expiring June 16, 2023, with 2,001 contracts trading so far today, representing approximately 200,100 underlying shares of DDOG.
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Below is a chart showing IRTC's trailing twelve month trading history, with the $135 strike highlighted in orange: For the various different available expirations for BECN options, DDOG options, or IRTC options, visit StockOptionsChannel.com. Below is a chart showing BECN's trailing twelve month trading history, with the $50 strike highlighted in orange: Datadog Inc (Symbol: DDOG) options are showing a volume of 17,709 contracts thus far today. That number of contracts represents approximately 1.8 million underlying shares, working out to a sizeable 42.2% of DDOG's average daily trading volume over the past month, of 4.2 million shares.
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5debee4e-830e-4419-851c-33116ef7505a
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718519.0
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2022-09-30 00:00:00 UTC
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5 Ways to Stress-Test a Stock in a Bear Market
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DDOG
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https://www.nasdaq.com/articles/5-ways-to-stress-test-a-stock-in-a-bear-market
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nan
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nan
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An old Warren Buffett saying goes, "Price is what you pay, value is what you get."
The volatile price action of the stock market can lead to fear of missing out on the upside and panic selling on the downside. But in reality, the true value of many companies is much more constant. Even a single quarterly earnings report rarely makes or breaks a company despite potentially sizable moves in the stock price.
In this bear market, there are many stocks that are down 50% or more from their all-time highs. In some cases, stock prices clearly got disconnected from true value, leading to a steep sell-off. But for many other companies, the stock price may be lower for little more than a downturn in the business cycle.
If your investment portfolio is down big and you want to stress-test a few stocks, you've come to the right place. Here are five methods you can use to make sure a company can outlast a prolonged bear market.
Image source: Getty Images.
1. Is the company reliant on debt or diluting its stock to run its business?
Companies that generate positive earnings and free cash flow can organically fund their operational and capital expenses. Most familiar industry-leading companies fall into this category. Apple (NASDAQ: AAPL) generates positive earnings and free cash flow and isn't reliant on diluting its share count or taking on debt to run its business. In fact, it tends to reduce its outstanding share count by buying back stock and therefore increasing earnings per share.
However, many less established and unprofitable companies may have impeccable growth potential. But that potential is dependent on bringing products to market and growing sales, which may not be possible without debt and/or equity financing. Debt financing is less attractive now that interest rates are rising. And declining stock prices and lower valuations make it a bad time to raise cash by diluting stock.
2. Does the company have a competitive advantage?
Large companies like Apple have brand power, pricing power, plenty of cash, and clear competitive advantages through product and service integration. However, there are many small companies that also have competitive advantages.
A good example of a company with a strong competitive advantage is Datadog (NASDAQ: DDOG), a cloud monitoring and analytics platform. The company doesn't generate consistent positive earnings. But it has been free cash flow positive for years. What's more, it has industry-leading customer retention and growth despite the difficult business climate. It also has more cash on its balance sheet than debt, giving it a nice failsafe in case growth slows.
Datadog is an excellent example of a smaller company that lacks earnings power but is still a great long-term buy for the reasons discussed.
3. Is the company well run?
When times are tough, companies with excellent management teams can limit excess spending, make key acquisitions, and emerge on the other side of a downturn with a leg up on their peers. Looking at the track record of a management team through past cycles is an excellent way to determine if the top brass is well equipped for challenges.
Chevron (NYSE: CVX) is a good example of the impact a strong management team can have on a business. For years, the company has kept a rock-solid balance sheet, which gave it the ability to sustain dividend growth throughout the COVID-19-induced oil and gas downturn. Chevron also made key acquisitions and was able to buy oil and gas reserves and invest in alternative energy when so many smaller oil and gas companies didn't have the resources to do so.
Today, the oil and gas industry is one of the few bright spots in the stock market, so it's not surprising that Chevron is doing well. However, the company's present position results from several key decisions made in past years. Chevron's prudence during the last oil and gas downturn, as well as its ability to capitalize on upside, makes it an excellent dividend stock to own over the long term.
4. Does the company deploy capital well?
A metric called return on capital employed (ROCE) takes earnings before interest and taxes (EBIT) and divides it by total assets minus current liabilities (also known as capital employed). In simple terms, this profitability metric shows how much EBIT a company can generate based on capital employed. The higher the ROCE, the better.
One of the big reasons Apple and Microsoft stocks are both still up big over the last three years and have grown to become the two largest U.S.-based companies by market cap is because of their ability to use capital effectively. Despite being large companies, Apple and Microsoft continue to find ways to expand into new markets and use capital effectively, something that many mature companies struggle with. As a result, both companies currently have higher ROCE ratios than their five-year medians.
AAPL Return on Capital Employed data by YCharts.
To further illustrate the point, notice how Apple and Microsoft have higher ROCE ratios than smaller and faster-growing companies like Advanced Micro Devices or Netflix -- a testament to their competitive advantages and effective execution.
5. Does the company have a path toward multi-decade growth?
No matter how old a company is or the industry it is in -- the company must have a path toward long-term growth. Without growth, companies can't boost dividends, make acquisitions, or achieve product penetration into new markets. Growing revenue and earnings justify rising stock prices. The opposite is true for companies that fail to sustain growth.
Keep even-keeled and make a calculated decision
A silver lining of bear markets is that investors get to see how their favorite companies hold up during a period of heightened volatility and downward selling pressure. What's more, they also get to see how management responds to challenges and how vulnerable a business is to macroeconomic and secular headwinds.
By stress-testing your holdings, an investor can see if a position is worth adding to, holding, or selling, thereby making a decision independent of the price action the market throws at you.
10 stocks we like better than Datadog
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They just revealed what they believe are the ten best stocks for investors to buy right now… and Datadog wasn't one of them! That's right -- they think these 10 stocks are even better buys.
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Daniel Foelber has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Apple, Datadog, Microsoft, and Netflix. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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A good example of a company with a strong competitive advantage is Datadog (NASDAQ: DDOG), a cloud monitoring and analytics platform. Apple (NASDAQ: AAPL) generates positive earnings and free cash flow and isn't reliant on diluting its share count or taking on debt to run its business. To further illustrate the point, notice how Apple and Microsoft have higher ROCE ratios than smaller and faster-growing companies like Advanced Micro Devices or Netflix -- a testament to their competitive advantages and effective execution.
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A good example of a company with a strong competitive advantage is Datadog (NASDAQ: DDOG), a cloud monitoring and analytics platform. Apple (NASDAQ: AAPL) generates positive earnings and free cash flow and isn't reliant on diluting its share count or taking on debt to run its business. A metric called return on capital employed (ROCE) takes earnings before interest and taxes (EBIT) and divides it by total assets minus current liabilities (also known as capital employed).
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A good example of a company with a strong competitive advantage is Datadog (NASDAQ: DDOG), a cloud monitoring and analytics platform. One of the big reasons Apple and Microsoft stocks are both still up big over the last three years and have grown to become the two largest U.S.-based companies by market cap is because of their ability to use capital effectively. Despite being large companies, Apple and Microsoft continue to find ways to expand into new markets and use capital effectively, something that many mature companies struggle with.
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A good example of a company with a strong competitive advantage is Datadog (NASDAQ: DDOG), a cloud monitoring and analytics platform. Apple (NASDAQ: AAPL) generates positive earnings and free cash flow and isn't reliant on diluting its share count or taking on debt to run its business. Chevron also made key acquisitions and was able to buy oil and gas reserves and invest in alternative energy when so many smaller oil and gas companies didn't have the resources to do so.
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49cc55ce-1934-46c1-b7e1-fbc8a3612cb9
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718520.0
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2022-09-27 00:00:00 UTC
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Datadog (DDOG) Gains As Market Dips: What You Should Know
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DDOG
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https://www.nasdaq.com/articles/datadog-ddog-gains-as-market-dips%3A-what-you-should-know-6
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nan
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nan
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Datadog (DDOG) closed the most recent trading day at $87.74, moving +1.54% from the previous trading session. The stock outpaced the S&P 500's daily loss of 0.21%. At the same time, the Dow lost 0.43%, and the tech-heavy Nasdaq gained 0.03%.
Prior to today's trading, shares of the data analytics and cloud monitoring company had lost 17.93% over the past month. This has lagged the Computer and Technology sector's loss of 11.89% and the S&P 500's loss of 9.7% in that time.
Wall Street will be looking for positivity from Datadog as it approaches its next earnings report date. On that day, Datadog is projected to report earnings of $0.16 per share, which would represent year-over-year growth of 23.08%. Meanwhile, our latest consensus estimate is calling for revenue of $412.61 million, up 52.54% from the prior-year quarter.
For the full year, our Zacks Consensus Estimates are projecting earnings of $0.78 per share and revenue of $1.62 billion, which would represent changes of +62.5% and +57.75%, respectively, from the prior year.
Investors should also note any recent changes to analyst estimates for Datadog. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable 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 moved 2.14% lower. Datadog is currently a Zacks Rank #3 (Hold).
Valuation is also important, so investors should note that Datadog has a Forward P/E ratio of 110.5 right now. For comparison, its industry has an average Forward P/E of 43.07, which means Datadog is trading at a premium to the group.
Investors should also note that DDOG has a PEG ratio of 2.62 right now. 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 industry currently had an average PEG ratio of 2.27 as of yesterday's close.
The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 96, which puts it in the top 39% of all 250+ industries.
The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
You can find more information on all of these metrics, and much more, on Zacks.com.
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Datadog, Inc. (DDOG): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Datadog (DDOG) closed the most recent trading day at $87.74, moving +1.54% from the previous trading session. Investors should also note that DDOG has a PEG ratio of 2.62 right now. Datadog, Inc. (DDOG): Free Stock Analysis Report
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Datadog (DDOG) closed the most recent trading day at $87.74, moving +1.54% from the previous trading session. Investors should also note that DDOG has a PEG ratio of 2.62 right now. Datadog, Inc. (DDOG): Free Stock Analysis Report
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Datadog (DDOG) closed the most recent trading day at $87.74, moving +1.54% from the previous trading session. Investors should also note that DDOG has a PEG ratio of 2.62 right now. Datadog, Inc. (DDOG): Free Stock Analysis Report
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Datadog (DDOG) closed the most recent trading day at $87.74, moving +1.54% from the previous trading session. Investors should also note that DDOG has a PEG ratio of 2.62 right now. Datadog, Inc. (DDOG): Free Stock Analysis Report
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71ccfa5f-690d-49f2-bf3c-e0c5c00996ec
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718521.0
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2022-09-27 00:00:00 UTC
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2 Leading Tech Stocks to Buy in 2022 and Beyond
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DDOG
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https://www.nasdaq.com/articles/2-leading-tech-stocks-to-buy-in-2022-and-beyond-4
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nan
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nan
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It's a tough time to be a technology investor, but the current share price drops that most stocks are experiencing won't last forever.
And when the market eventually rebounds, there are some leading companies that investors will wish they had purchased and held onto. Here are two that are worth buying right now and holding onto for years: The Trade Desk (NASDAQ: TTD) and Datadog (NASDAQ: DDOG) are both gaining ground in their respective markets.
Image source: Getty Images.
1. The Trade Desk
The advertising industry is undergoing some big changes at the moment, and The Trade Desk is trying to tap into them. The first trend it's tapping into is the shift from traditional advertising mediums to digital ones. The company's platform allows advertisers to buy ads and put them on internet-connected devices including laptops, cellphones, and connected TVs.
These markets offer fast-growing opportunities in the digital ad space that is expected to grow from a market size of $220 billion in 2022 to $278 billion just two years from now. Research from eMarketer estimates that connected TV advertising will more than double from 2021 to 2024, reaching $30 billion.
The Trade Desk is also helping companies move away from online trackers, called cookies, with its own anonymized identifier, called Unified ID 2.0, which also helps companies display relevant advertising. Already, some large companies have adopted Unified ID 2.0, including The Washington Post, fuboTV, and, most recently, Amazon's Amazon Web Services.
If all of that weren't enough, The Trade Desk's second-quarter financial results were very impressive. The company's sales spiked 35% from the year-ago quarter to $377 million -- outpacing management's guidance and analysts' average estimate.
The strong results in the quarter come as many companies in the digital ad space -- including Meta Platforms, Snap, and Roku -- all faced significant advertising headwinds.
The Trade Desk's recent quarterly results prove the company's resiliency during some tough times for the ad industry. And with the company's huge digital advertising market potential, now might be a good time to snatch up some shares as The Trade Desk continues to gain a foothold in the ad market.
The Trade Desk's stock is currently trading at 21 times sales. That may seem a bit high, but unlike many other growth stocks, The Trade Desk has been profitable for years and has $1.2 billion in cash, which puts it in a better financial state than some other growth tech stocks.
2. Datadog
If advertising companies aren't your thing, then perhaps highly successful data monitoring and analytics company Datadog could be what you're looking for. Keeping track of web servers and company data is big business, and Datadog estimates that its total addressable market will reach $53 billion by 2025.
But investors don't need to wait until then to understand just how great this company is. In the second quarter, Datadog's sales surged by 74% to $406 million, an impressive feat while many other tech stocks experienced a slowdown in sales.
Even more impressive is the fact that its customers continue to increase their spending with the company, with Datadog's net revenue retention rate hovering around 130% for the 20th consecutive quarter. And the number of companies spending $100,000 or more with Datadog increased 54% in the quarter to 2,420.
If all of that weren't enough to show Datadog's strong position in the monitoring and analytics space, consider that the company raised its full-year outlook following its second-quarter earnings results -- an unusual move for any company right now.
Datadog now expects a 57% increase in sales for 2022, to $1.62 billion, up from the company's previous guidance of $1.61 billion.
With the company's strong customer growth, skyrocketing sales, and ability to increase its number of lucrative customers, Datadog looks like a resilient tech leader that should continue growing its position for years to come.
Datadog's current valuation is also making its stock look more enticing. The company's current price-to-sales ratio is 21.5,, the lowest it's been in more than two years. And with the company recently posting a quarterly profit, it's clear Datadog's bottom line is moving in the right direction as well.
Investors need to be patient right now
The market is very volatile at the moment and many tech stocks have experienced significant declines over the past year. But for investors who take a buy-and-hold approach, putting some money into these two tech companies and holding onto them for years could be a great way to benefit from the recent tech stock sell-off.
Find out why The Trade Desk is one of the 10 best stocks to buy now
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They just revealed their ten top stock picks for investors to buy right now. The Trade Desk is on the list -- but there are nine others you may be overlooking.
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*Stock Advisor returns as of August 17, 2022
Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Chris Neiger has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Datadog, Meta Platforms, Inc., Roku, The Trade Desk, and fuboTV, Inc. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Here are two that are worth buying right now and holding onto for years: The Trade Desk (NASDAQ: TTD) and Datadog (NASDAQ: DDOG) are both gaining ground in their respective markets. The strong results in the quarter come as many companies in the digital ad space -- including Meta Platforms, Snap, and Roku -- all faced significant advertising headwinds. Keeping track of web servers and company data is big business, and Datadog estimates that its total addressable market will reach $53 billion by 2025.
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Here are two that are worth buying right now and holding onto for years: The Trade Desk (NASDAQ: TTD) and Datadog (NASDAQ: DDOG) are both gaining ground in their respective markets. The Trade Desk's recent quarterly results prove the company's resiliency during some tough times for the ad industry. With the company's strong customer growth, skyrocketing sales, and ability to increase its number of lucrative customers, Datadog looks like a resilient tech leader that should continue growing its position for years to come.
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Here are two that are worth buying right now and holding onto for years: The Trade Desk (NASDAQ: TTD) and Datadog (NASDAQ: DDOG) are both gaining ground in their respective markets. The Trade Desk is also helping companies move away from online trackers, called cookies, with its own anonymized identifier, called Unified ID 2.0, which also helps companies display relevant advertising. And with the company's huge digital advertising market potential, now might be a good time to snatch up some shares as The Trade Desk continues to gain a foothold in the ad market.
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Here are two that are worth buying right now and holding onto for years: The Trade Desk (NASDAQ: TTD) and Datadog (NASDAQ: DDOG) are both gaining ground in their respective markets. The Trade Desk's stock is currently trading at 21 times sales. Datadog now expects a 57% increase in sales for 2022, to $1.62 billion, up from the company's previous guidance of $1.61 billion.
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fab3e334-1ddf-483c-aac4-8671a749778e
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718522.0
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2022-09-26 00:00:00 UTC
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2022 Bear Market: 2 Monster Growth Stocks I'd Buy Now Without Hesitation
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DDOG
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https://www.nasdaq.com/articles/2022-bear-market%3A-2-monster-growth-stocks-id-buy-now-without-hesitation
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nan
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nan
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Inflation came in hotter than expected in August, prompting the Federal Reserve to raise interest rates by 75 basis points for the third consecutive time. Those events sent an already-battered stock market deeper into bear market territory. The tech-heavy Nasdaq Composite is now 32% off its high, and the broader S&P 500 is down 23%.
While those losses are painful, patient investors know downturns are an opportunity to buy. The stock market has never failed to recover in the past, and there is no reason to think this bear market is any different.
Here are two growth stocks I'd buy now without hesitation.
Datadog: A leader in application performance monitoring and observability
In 2018, Datadog (NASDAQ: DDOG) became the first company to combine the three pillars of observability -- metrics, traces, and logs -- with the introduction of its log management product. It has since continued to innovate, and its platform now comprises a broad range of monitoring and security tools that help businesses protect and prevent downtime in applications, networks, and infrastructure.
Among other advantages, Datadog benefits from a powerful network effect. Its platform processes more than 10 trillion signals each day from across its customers' IT ecosystems, and each data point makes its artificial intelligence (AI) models better at predicting and identifying performance issues. Its platform also features over 500 pre-built integrations that reduce friction and accelerate time to value for customers.
Those virtues have helped Datadog establish itself as a key vendor of observability software. In fact, research company Gartner recently recognized Datadog as the leader in the market for application performance monitoring and observability, citing its broad portfolio and AI engine as key strengths.
Datadog grew its customer base 29% over the past year, and the average customer increased spend by more than 30%. In turn, revenue climbed 79% to $1.4 billion and free cash flow soared 168% to $354 million. But investors have good reason to believe that monster momentum will continue.
Datadog puts its addressable market at $53 billion by 2025, and the company is innovating rapidly to capitalize on that opportunity. For instance, it recently launched Audit Trail, a service that helps businesses meet compliance requirements. The company also extended its database monitoring product to support Microsoft SQL Server (the third-most-popular database worldwide) and Azure Database Platform.
Currently, shares trade at 20.5 times sales, a discount to its three-year average of 38.2 times sales, but still a pricey valuation. That said, Datadog is a high-quality business that is growing exceptionally quickly, and businesses like that often warrant a premium valuation. That is why I'd buy this growth stock without hesitation.
Cloudflare: A leader in content delivery and edge development
Cloudflare (NYSE: NET) operates a global edge cloud that accelerates and protects business-critical applications and infrastructure. Its platform essentially makes the internet faster and safer, while freeing customers from the cost and complexity of managing network hardware in private data centers.
Tech giants Amazon and Microsoft dominate the cloud computing industry, but Cloudflare has still managed to distinguish itself through product innovation and performance. Its edge cloud interconnects with 11,000 other networks -- including every major internet service provider, cloud vendor, and enterprise -- which make it exceptionally fast. In fact, internal tests suggest that Cloudflare is actually the fastest cloud provider in North America, Australia, Japan, most of South America, and most of Europe. That advantage has helped it become the leading content delivery network, according to business software reviewer G2 Grid.
Cloudflare has further differentiated itself with its Workers development platform, a suite of tools that empower businesses to build fast and secure applications and websites directly on its edge cloud. In the fourth quarter of 2021, Forrester Research recognized Cloudflare as the leader in edge development, citing a stronger current product and a better growth strategy. And Cloudflare has since continued to showcase its capacity for innovation, as it recently debuted R2 Storage for unstructured data and announced D1 (a SQL database) for structured data. Both products should reinforce its leadership in edge development by extending the utility of its Workers platform.
Turning to financial performance, Cloudflare continued to wow investors with rapid growth over the past year. Its customer count increased 20% and the average customer spent 26% more. In turn, revenue rose 53% to $813 million and the company generated $36 million in cash from operations. That meager cash flow might seem concerning, but management plans to run the business at breakeven for the foreseeable future, citing its massive market opportunity.
On that note, Cloudflare puts its total addressable market at $135 billion by 2024, leaving a long runway for growth. And with shares trading at 21.5 times sales -- an absolute bargain compared to the three-year average of 41.5 times sales -- I would not hesitate to buy this growth stock today.
10 stocks we like better than Datadog
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Datadog wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of August 17, 2022
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Trevor Jennewine has positions in Amazon. The Motley Fool has positions in and recommends Amazon, Cloudflare, Inc., Datadog, and Microsoft. The Motley Fool recommends Gartner. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Datadog: A leader in application performance monitoring and observability In 2018, Datadog (NASDAQ: DDOG) became the first company to combine the three pillars of observability -- metrics, traces, and logs -- with the introduction of its log management product. It has since continued to innovate, and its platform now comprises a broad range of monitoring and security tools that help businesses protect and prevent downtime in applications, networks, and infrastructure. Its platform processes more than 10 trillion signals each day from across its customers' IT ecosystems, and each data point makes its artificial intelligence (AI) models better at predicting and identifying performance issues.
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Datadog: A leader in application performance monitoring and observability In 2018, Datadog (NASDAQ: DDOG) became the first company to combine the three pillars of observability -- metrics, traces, and logs -- with the introduction of its log management product. In fact, research company Gartner recently recognized Datadog as the leader in the market for application performance monitoring and observability, citing its broad portfolio and AI engine as key strengths. Cloudflare: A leader in content delivery and edge development Cloudflare (NYSE: NET) operates a global edge cloud that accelerates and protects business-critical applications and infrastructure.
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Datadog: A leader in application performance monitoring and observability In 2018, Datadog (NASDAQ: DDOG) became the first company to combine the three pillars of observability -- metrics, traces, and logs -- with the introduction of its log management product. In fact, research company Gartner recently recognized Datadog as the leader in the market for application performance monitoring and observability, citing its broad portfolio and AI engine as key strengths. See the 10 stocks *Stock Advisor returns as of August 17, 2022 John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors.
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Datadog: A leader in application performance monitoring and observability In 2018, Datadog (NASDAQ: DDOG) became the first company to combine the three pillars of observability -- metrics, traces, and logs -- with the introduction of its log management product. That advantage has helped it become the leading content delivery network, according to business software reviewer G2 Grid. That's right -- they think these 10 stocks are even better buys.
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07c2ff06-22a6-4fdd-8340-13abc430a8e0
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718523.0
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2022-09-25 00:00:00 UTC
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Why I'm Buying Datadog Stock Right Now
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DDOG
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https://www.nasdaq.com/articles/why-im-buying-datadog-stock-right-now
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nan
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nan
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With shares down substantially in 2022, Datadog (NASDAQ: DDOG) is looking more appealing to own now. In this video, Jamie explains how Datadog has continued to succeed during this challenging macroeconomic environment, and he breaks down why he recently bought shares of this growth stock. Check out the short video to learn more, consider subscribing, and click the special offer link below.
*Stock prices used were the after-market prices of Sept. 21, 2022. The video was published on Sept. 24, 2022.
10 stocks we like better than Datadog
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They just revealed what they believe are the ten best stocks for investors to buy right now... and Datadog wasn't one of them! That's right -- they think these 10 stocks are even better buys.
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*Stock Advisor returns as of August 17, 2022
Jamie Louko has positions in Datadog. The Motley Fool has positions in and recommends Datadog. The Motley Fool has a disclosure policy. Jamie Louko is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through fool.com/interninvesting, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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With shares down substantially in 2022, Datadog (NASDAQ: DDOG) is looking more appealing to own now. In this video, Jamie explains how Datadog has continued to succeed during this challenging macroeconomic environment, and he breaks down why he recently bought shares of this growth stock. Check out the short video to learn more, consider subscribing, and click the special offer link below.
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With shares down substantially in 2022, Datadog (NASDAQ: DDOG) is looking more appealing to own now. *Stock prices used were the after-market prices of Sept. 21, 2022. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.
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With shares down substantially in 2022, Datadog (NASDAQ: DDOG) is looking more appealing to own now. In this video, Jamie explains how Datadog has continued to succeed during this challenging macroeconomic environment, and he breaks down why he recently bought shares of this growth stock. 10 stocks we like better than Datadog When our award-winning analyst team has a stock tip, it can pay to listen.
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With shares down substantially in 2022, Datadog (NASDAQ: DDOG) is looking more appealing to own now. In this video, Jamie explains how Datadog has continued to succeed during this challenging macroeconomic environment, and he breaks down why he recently bought shares of this growth stock. See the 10 stocks *Stock Advisor returns as of August 17, 2022 Jamie Louko has positions in Datadog.
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ec2e1cda-f1eb-433f-9922-3e0e774c80ad
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718524.0
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2022-09-25 00:00:00 UTC
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Nasdaq Bear Market: 1 Growth Stock You'll Wish You Bought on the Dip
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DDOG
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https://www.nasdaq.com/articles/nasdaq-bear-market%3A-1-growth-stock-youll-wish-you-bought-on-the-dip
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nan
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nan
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The tech bear market is in full swing with the Nasdaq Composite index down more than 31% year to date. Many tech stocks are down even more, including Datadog (NASDAQ: DDOG), which has declined 51% in 2022.
The need for application performance observability and monitoring has been omnipresent as businesses have adopted more digital platforms. This is a large industry, and Datadog (NASDAQ: DDOG) is the top player in this space, according to Gartner's Magic Quadrant. As the leader, this company has seen incredible adoption across the board. I took advantage of this recent decline and bought more shares. Here's why you should too.
Image source: Getty Images.
The leader in a $53 billion industry
Saying that the observability and performance monitoring space is large and growing is an understatement. In reality, it's massive: Datadog believes its current opportunity is worth $42 billion, and it's predicted to rise to $53 billion by 2025. Talk about fishing in a stocked pond.
More importantly, Datadog looks poised to capitalize on this for a few reasons. The first is the company's switching costs. It is likely painful and expensive to migrate all of a business's data and operations to another platform once it has embraced multiple tools from Datadog, meaning the company will retain much of its current customer base. With over 21,000 customers -- 2,420 of which are spending $100,000 annually -- this gives Datadog a strong foundation. Additionally, the company has seen consistent churn in the mid to low single digits, showing that these switching costs are already playing out in the company's favor.
The second reason Datadog could capitalize on this market is because of its history of out-innovating its peers. The company continues to roll out new solutions to its customers, making its product suite of over 30 tools increasingly valuable. This year alone, the company has already launched six new tools with plans to launch more by the year's end.
How can it do this? Cash flow. With $354 million in free cash flow on a trailing-12-month basis, the company is generating more cash than its two main rivals -- Dynatrace and New Relic -- combined. The company uses this cash to develop best-in-class products, making its value proposition more attractive within the industry.
This top dog is posting jaw-dropping growth
These sturdy competitive advantages and the criticality of its services have resulted in healthy, stable demand. Even during the second quarter, when businesses saw budgets tighten and inflation rise, Datadog reported incredible adoption. Second-quarter revenue soared 74% year over year to $406 million while the number of customers spending over $100,00 annually shot 54% higher over the same period.
Datadog further impresses with its ability to expand its relationship with customers -- 14% of all customers use six or more products as of the most recent quarter and 37% use four or more. Just two years ago, no customers were using six or more products, and just 15% were using four or more. This trend has been a considerable driver of its outstanding top-line expansion, and as the company continues to roll out new best-in-class tools, it will likely become more prevalent.
Not only is Datadog improving its top line but also its profitability. Over the past six months, Datadog's free cash flow reached $190 million, representing a 25% margin and a year-over-year increase of 119%. Additionally, while generating net income is not the current focus for Datadog, this has also shot higher. GAAP net income over the past six months reached $4.9 million, up from the $22.4 million loss it posted in the year-ago period.
You get what you pay for
Given how strong this business is, shares trade at a staggering premium. Paying 20 times sales and 79 times free cash flow is expensive for any company. Despite this, Datadog looks like one of the highest-quality software stocks on the market today, given its cash generation, deepening customer relationships, and competitive advantages. When you find a high-quality business, you often have to pay a premium, which is certainly the case with Datadog.
In this light, Datadog is a stock tech investors should own. Shares could surge higher from these depressed levels, and that's why I recently bought more shares on the dip.
10 stocks we like better than Datadog
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Datadog wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of August 17, 2022
Jamie Louko has positions in Datadog. The Motley Fool has positions in and recommends Datadog. The Motley Fool recommends Gartner and New Relic. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Many tech stocks are down even more, including Datadog (NASDAQ: DDOG), which has declined 51% in 2022. This is a large industry, and Datadog (NASDAQ: DDOG) is the top player in this space, according to Gartner's Magic Quadrant. It is likely painful and expensive to migrate all of a business's data and operations to another platform once it has embraced multiple tools from Datadog, meaning the company will retain much of its current customer base.
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Many tech stocks are down even more, including Datadog (NASDAQ: DDOG), which has declined 51% in 2022. This is a large industry, and Datadog (NASDAQ: DDOG) is the top player in this space, according to Gartner's Magic Quadrant. The leader in a $53 billion industry Saying that the observability and performance monitoring space is large and growing is an understatement.
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Many tech stocks are down even more, including Datadog (NASDAQ: DDOG), which has declined 51% in 2022. This is a large industry, and Datadog (NASDAQ: DDOG) is the top player in this space, according to Gartner's Magic Quadrant. It is likely painful and expensive to migrate all of a business's data and operations to another platform once it has embraced multiple tools from Datadog, meaning the company will retain much of its current customer base.
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Many tech stocks are down even more, including Datadog (NASDAQ: DDOG), which has declined 51% in 2022. This is a large industry, and Datadog (NASDAQ: DDOG) is the top player in this space, according to Gartner's Magic Quadrant. With $354 million in free cash flow on a trailing-12-month basis, the company is generating more cash than its two main rivals -- Dynatrace and New Relic -- combined.
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515c9aa1-0149-4d97-88e3-cbcb5108f00e
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718525.0
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2022-09-23 00:00:00 UTC
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Nasdaq Sell-Off: 2 High-Growth Tech Stocks You'll Regret Not Buying on the Dip
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DDOG
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https://www.nasdaq.com/articles/nasdaq-sell-off%3A-2-high-growth-tech-stocks-youll-regret-not-buying-on-the-dip
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nan
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nan
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Technology stocks have taken a beating since late last year, as economic uncertainty caused investors to review their priorities. As a result, many ditched stocks with high valuations, regardless of their growth rates. Adding fuel to the fire was rising interest rates, 40-year-high inflation, and the potential for a prolonged recession.
These factors have punished the Nasdaq Composite, sending it down roughly 23% as of this writing from its November 2021 high -- when a decline of 20% or more signals a bear market. Some stocks listed on the storied index have slumped even more.
It's important for investors to remember that not all growth is created equal, resulting in some compelling opportunities for long-term investors. Let's look at two high-growth stocks that investors will regret not buying on the dip.
CrowdStrike
One of the biggest threats to business these days are the hacks, ransomware attacks, and data breaches that make headlines far too often. As a result, companies can no longer skimp on cybersecurity, lest they end up members of this fraternity of victims. That's where CrowdStrike (NASDAQ: CRWD) comes in. As the leading provider of endpoint security, CrowdStrike's cloud-based system is designed to stop intrusions at the source -- the endpoint devices.
The company's multipronged strategy uses a local "agent" to handle many simpler tasks, while transferring more sophisticated, data-intensive issues to its Threat Graph for analysis and action. CrowdStrike has artificial intelligence at the core of its process, which helps it stop the next attack all the more quickly. In fact, it analyzes trillions of high-value data points each week, allowing CrowdStrike to neutralize breaches, often within minutes or even seconds.
Business is booming. In its fiscal 2023 second quarter, ended July 31, revenue grew 58% year over year, while subscription revenue increased 60%. At the same time, annual recurring revenue jumped 59%. While the company isn't yet profitable, its strong cash flow from operations and free cash flow, both of which roughly doubled year over year, suggest that profitability is merely a matter of time.
CrowdStrike's impressive financial results are fueled by equally compelling customer metrics. The company added a record 1,741 net new customers during the quarter, a 51% year-over-year increase, bringing the total to 19,686. Furthermore, users are expanding their relationship with CrowdStrike, as customers adopting five or more, six or more, and seven or more modules climbed to 59%, 36%, and 20%, respectively.
It's worth noting that this impressive growth comes at a cost. CrowdStrike stock is currently selling for 13 times next year's sales, its lowest rate in years. However, I would argue that the premium is deserved, given its impressive revenue growth -- even in the face of economic headwinds.
Furthermore, the company's strong financial metrics and customer growth suggest that the weakness in CrowdStrike's stock price is the result of macroeconomic uncertainty -- not the company's performance. This further suggests that once the economy regains its footing, CrowdStrike stock is likely to rebound with a vengeance.
Datadog
The digital transformation is ongoing, and more companies than ever before are relying on cloud-based systems. That can be a double-edged sword, however, as downtime can result in lost customers, while wreaking havoc on employee productivity. Diagnosing issues and raising the red flag before these problems reach critical mass is of paramount importance, and Datadog (NASDAQ: DDOG) is on the hunt.
The company's integrated software monitors cloud systems, servers, databases, tools, services, and apps, using a combination of monitoring services and real-time analytics to not only detect problems but also keep them from recurring. Datadog is so successful at what it does, it's been acknowledged by Gartner's Magic Quadrant as a leader in application performance monitoring and observability for 2022.
In the second quarter, Datadog generated revenue growth of 74% year over year, accelerating from 67% growth in the year-ago quarter. The company isn't yet profitable, but it generates strong and growing free cash flow. That suggests that losses are the result of noncash items, including depreciation, and profits are on the horizon.
There's more. Datadog's strong financial performance is buttressed by equally impressive customer metrics. While its customer rolls grew by 29% year over year, the number of enterprise customers grew even faster, as those spending $100,000 in annual recurring revenue climbed 54%. Furthermore, existing customers continue to spend more, as seen in Datadog's dollar-based net revenue retention rate, which has been 130%, or higher, for every quarter going back five years.
The digital transformation and the move to cloud computing is no doubt helping fuel Datadog's growth, but, as in the previous example, this strong growth comes with a hefty price tag. Datadog is selling for 13 times next year's sales. While that's Datadog's lowest valuation in years, it's still expensive by traditional standards. However, given its revenue growth, which is well above average, it's deserving of an above-average valuation.
Given its robust financial performance and quickly growing customer metrics, this is another highflier investors will regret not buying before it starts to soar.
Find out why CrowdStrike is one of the 10 best stocks to buy now
Our award-winning analyst team has spent more than a decade beating the market. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed their ten top stock picks for investors to buy right now. CrowdStrike Holdings is on the list -- but there are nine others you may be overlooking.
Click here to get access to the full list!
*Stock Advisor returns as of August 17, 2022
Danny Vena has positions in CrowdStrike Holdings and Datadog. The Motley Fool has positions in and recommends CrowdStrike Holdings and Datadog. The Motley Fool recommends Gartner. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Diagnosing issues and raising the red flag before these problems reach critical mass is of paramount importance, and Datadog (NASDAQ: DDOG) is on the hunt. The company's multipronged strategy uses a local "agent" to handle many simpler tasks, while transferring more sophisticated, data-intensive issues to its Threat Graph for analysis and action. Furthermore, existing customers continue to spend more, as seen in Datadog's dollar-based net revenue retention rate, which has been 130%, or higher, for every quarter going back five years.
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Diagnosing issues and raising the red flag before these problems reach critical mass is of paramount importance, and Datadog (NASDAQ: DDOG) is on the hunt. While the company isn't yet profitable, its strong cash flow from operations and free cash flow, both of which roughly doubled year over year, suggest that profitability is merely a matter of time. CrowdStrike's impressive financial results are fueled by equally compelling customer metrics.
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Diagnosing issues and raising the red flag before these problems reach critical mass is of paramount importance, and Datadog (NASDAQ: DDOG) is on the hunt. CrowdStrike stock is currently selling for 13 times next year's sales, its lowest rate in years. Furthermore, the company's strong financial metrics and customer growth suggest that the weakness in CrowdStrike's stock price is the result of macroeconomic uncertainty -- not the company's performance.
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Diagnosing issues and raising the red flag before these problems reach critical mass is of paramount importance, and Datadog (NASDAQ: DDOG) is on the hunt. CrowdStrike One of the biggest threats to business these days are the hacks, ransomware attacks, and data breaches that make headlines far too often. Furthermore, the company's strong financial metrics and customer growth suggest that the weakness in CrowdStrike's stock price is the result of macroeconomic uncertainty -- not the company's performance.
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718526.0
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2022-09-23 00:00:00 UTC
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3 Cloud Stocks That Could Go Parabolic
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DDOG
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https://www.nasdaq.com/articles/3-cloud-stocks-that-could-go-parabolic
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nan
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nan
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Plenty of high-growth cloud stocks skyrocketed in value over the past two years, yet quickly surrendered all those gains this year as rising interest rates drove investors back toward more conservative investments. Those declines were painful for investors who hopped on the bandwagon last year, but they've also created fresh buying opportunities for more patient investors.
So today I'll take a closer look at three cloud stocks that were crushed over the past year, but are now more reasonably valued and primed for parabolic comebacks once the macroeconomic headwinds wane.
Image source: Getty Images.
1. Twilio
Twilio's (NYSE: TWLO) cloud-based communication platform handles text messages, voice calls, videos, and other integrated features in mobile apps. Instead of building those features from scratch -- which can be buggy, time-consuming, and difficult to scale as an app gains more users -- developers can outsource the work to Twilio with just a few lines of code.
Twilio established a first-mover advantage in this niche market, and its annual revenue grew at a whopping compound annual growth rate (CAGR) of 59% between 2016 and 2021. However, Twilio has also consistently struggled to turn a profit, and its margins are being squeezed by higher carrier fees (which are charged when mobile apps access their wireless networks). It's also increasingly relied on acquisitions to drive its sales growth.
But despite these near-term challenges, Twilio expects its revenue to grow about 30% organically through at least 2024, and for its gross margins to expand from 49% in 2021 to more than 60% over the long term. If you believe Twilio can achieve those ambitious goals, then its stock looks like a screaming bargain right now at just three times this year's sales.
2. JFrog
JFrog's (NASDAQ: FROG) main cloud-based platform, Artifactory, is a universal repository that automatically updates an organization's software across multiple computing platforms. That automated approach eliminates the need for time-consuming manual updates and keeps the company secure. Aritfactory's Xray feature also scans a company's entire software infrastructure for various vulnerabilities and security issues.
JFrog went public just two years ago. Its annual revenue rose 44% in 2020 and grew 37% to $207 million in 2021, and it anticipates 35%-36% growth this year. Those growth rates are impressive, but JFrog still isn't profitable by GAAP (generally accepted accounting principles) yet -- and it expects its non-GAAP operating margin to decline this year as it integrates its acquisitions of the product security company Vdoo and the connected device management software company Upswift. Those elevated spending plans spooked investors as interest rates rose.
But after being nearly cut in half over the past 12 months, Jfrog's stock now trades at a more reasonable seven times this year's sales. That's a reasonable price-to-sales ratio if it can maintain an annual growth rate of more than 30%.
3. Datadog
Datadog's (NASDAQ: DDOG) cloud-based platform pulls diagnostic data from a company's entire network of databases, servers, desktop software, mobile apps, and cloud-based services, then aggregates all of that information into unified real-time dashboards. That streamlined view makes it much easier for IT professionals to diagnose problems.
Datadog went public three years ago, and its annual revenue soared 83% in 2019, grew 66% in 2020, and jumped 70% to $1.03 billion in 2021. It expects its revenue to increase another 56%-58% this year.
Those growth rates are impressive, but Datadog's stock still plunged nearly 50% this year as investors fretted over its declining operating margins, which were squeezed by higher R&D, sales, and marketing expenses. Investors were also concerned about its sequential loss of large customers (meaning those that generated over $100,000 in annual recurring revenue) last quarter, which it blamed on slower spending from e-commerce, food, and delivery companies in a post-lockdown world.
Datadog isn't profitable by GAAP measures yet, but it's stayed profitable by non-GAAP measures since 2020. It expects its non-GAAP EPS to grow 54%-69% for the full year. Its stock still isn't cheap at 18 times this year's sales, but it looks more reasonably valued than it did last year -- and it could command a much higher valuation if the macro situation improves.
10 stocks we like even better than Twilio
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Twilio wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of August 17, 2022
Leo Sun has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Datadog, JFrog Ltd., and Twilio. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Datadog Datadog's (NASDAQ: DDOG) cloud-based platform pulls diagnostic data from a company's entire network of databases, servers, desktop software, mobile apps, and cloud-based services, then aggregates all of that information into unified real-time dashboards. However, Twilio has also consistently struggled to turn a profit, and its margins are being squeezed by higher carrier fees (which are charged when mobile apps access their wireless networks). Those growth rates are impressive, but Datadog's stock still plunged nearly 50% this year as investors fretted over its declining operating margins, which were squeezed by higher R&D, sales, and marketing expenses.
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Datadog Datadog's (NASDAQ: DDOG) cloud-based platform pulls diagnostic data from a company's entire network of databases, servers, desktop software, mobile apps, and cloud-based services, then aggregates all of that information into unified real-time dashboards. Those growth rates are impressive, but JFrog still isn't profitable by GAAP (generally accepted accounting principles) yet -- and it expects its non-GAAP operating margin to decline this year as it integrates its acquisitions of the product security company Vdoo and the connected device management software company Upswift. Those growth rates are impressive, but Datadog's stock still plunged nearly 50% this year as investors fretted over its declining operating margins, which were squeezed by higher R&D, sales, and marketing expenses.
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Datadog Datadog's (NASDAQ: DDOG) cloud-based platform pulls diagnostic data from a company's entire network of databases, servers, desktop software, mobile apps, and cloud-based services, then aggregates all of that information into unified real-time dashboards. Plenty of high-growth cloud stocks skyrocketed in value over the past two years, yet quickly surrendered all those gains this year as rising interest rates drove investors back toward more conservative investments. Those growth rates are impressive, but JFrog still isn't profitable by GAAP (generally accepted accounting principles) yet -- and it expects its non-GAAP operating margin to decline this year as it integrates its acquisitions of the product security company Vdoo and the connected device management software company Upswift.
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Datadog Datadog's (NASDAQ: DDOG) cloud-based platform pulls diagnostic data from a company's entire network of databases, servers, desktop software, mobile apps, and cloud-based services, then aggregates all of that information into unified real-time dashboards. Those growth rates are impressive, but JFrog still isn't profitable by GAAP (generally accepted accounting principles) yet -- and it expects its non-GAAP operating margin to decline this year as it integrates its acquisitions of the product security company Vdoo and the connected device management software company Upswift. But after being nearly cut in half over the past 12 months, Jfrog's stock now trades at a more reasonable seven times this year's sales.
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718527.0
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2022-09-21 00:00:00 UTC
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Is Trending Stock Datadog, Inc. (DDOG) a Buy Now?
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DDOG
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https://www.nasdaq.com/articles/is-trending-stock-datadog-inc.-ddog-a-buy-now
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nan
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nan
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Datadog (DDOG) has recently been on Zacks.com's list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future.
Over the past month, shares of this data analytics and cloud monitoring company have returned -9.2%, compared to the Zacks S&P 500 composite's -8.7% change. During this period, the Zacks Internet - Software industry, which Datadog falls in, has lost 10.2%. The key question now is: What could be the stock's future direction?
Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.
Earnings Estimate Revisions
Here at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.
We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For the current quarter, Datadog is expected to post earnings of $0.16 per share, indicating a change of +23.1% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
For the current fiscal year, the consensus earnings estimate of $0.78 points to a change of +62.5% from the prior year. Over the last 30 days, this estimate has remained unchanged.
For the next fiscal year, the consensus earnings estimate of $0.95 indicates a change of +21.2% from what Datadog is expected to report a year ago. Over the past month, the estimate has remained unchanged.
Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Datadog is rated Zacks Rank #3 (Hold).
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Revenue Growth Forecast
Even though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.
For Datadog, the consensus sales estimate for the current quarter of $412.63 million indicates a year-over-year change of +52.6%. For the current and next fiscal years, $1.62 billion and $2.2 billion estimates indicate +57.7% and +35.6% changes, respectively.
Last Reported Results and Surprise History
Datadog reported revenues of $406.14 million in the last reported quarter, representing a year-over-year change of +73.9%. EPS of $0.24 for the same period compares with $0.09 a year ago.
Compared to the Zacks Consensus Estimate of $378.05 million, the reported revenues represent a surprise of +7.43%. The EPS surprise was +71.43%.
The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates each time over this period.
Valuation
No investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.
Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.
The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an An is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Datadog is graded F on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
Bottom Line
The facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Datadog. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.
This Little-Known Semiconductor Stock Could Be Your Portfolio’s Hedge Against Inflation
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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
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Datadog (DDOG) has recently been on Zacks.com's list of the most searched stocks. Datadog, Inc. (DDOG): Free Stock Analysis Report We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends.
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Datadog (DDOG) has recently been on Zacks.com's list of the most searched stocks. Datadog, Inc. (DDOG): Free Stock Analysis Report For the next fiscal year, the consensus earnings estimate of $0.95 indicates a change of +21.2% from what Datadog is expected to report a year ago.
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Datadog (DDOG) has recently been on Zacks.com's list of the most searched stocks. Datadog, Inc. (DDOG): Free Stock Analysis Report Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions.
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Datadog (DDOG) has recently been on Zacks.com's list of the most searched stocks. Datadog, Inc. (DDOG): Free Stock Analysis Report And if earnings estimates go up for a company, the fair value for its stock goes up.
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5b2b7379-f15f-4b66-9757-e69a733c340a
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718528.0
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2022-09-21 00:00:00 UTC
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Is First Trust NASDAQ100 Equal Weighted ETF (QQEW) a Strong ETF Right Now?
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DDOG
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https://www.nasdaq.com/articles/is-first-trust-nasdaq100-equal-weighted-etf-qqew-a-strong-etf-right-now-3
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nan
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nan
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A smart beta exchange traded fund, the First Trust NASDAQ100 Equal Weighted ETF (QQEW) debuted on 04/19/2006, and offers broad exposure to the Style Box - Large Cap Growth category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is sponsored by First Trust Advisors. It has amassed assets over $1.08 billion, making it one of the average sized ETFs in the Style Box - Large Cap Growth. Before fees and expenses, this particular fund seeks to match the performance of the NASDAQ-100 Equal Weighted Index.
The NASDAQ-100 Equal Weighted Index is the equal-weighted version of the NASDAQ-100 Index which includes 100 of the largest non-financial securities listed on NASDAQ based on market capitalization.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Annual operating expenses for QQEW are 0.57%, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 0.48%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Representing 43.30% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Consumer Discretionary and Healthcare round out the top three.
When you look at individual holdings, Datadog, Inc. (class A) (DDOG) accounts for about 1.15% of the fund's total assets, followed by Okta, Inc. (OKTA) and Zscaler, Inc. (ZS).
The top 10 holdings account for about 10.79% of total assets under management.
Performance and Risk
Year-to-date, the First Trust NASDAQ100 Equal Weighted ETF has lost about -24.21% so far, and is down about -20.82% over the last 12 months (as of 09/21/2022). QQEW has traded between $84.27 and $120.91 in this past 52-week period.
QQEW has a beta of 1.05 and standard deviation of 26.89% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 103 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust NASDAQ100 Equal Weighted ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Growth segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Growth ETF (VUG) tracks CRSP U.S. Large Cap Growth Index and the Invesco QQQ (QQQ) tracks NASDAQ-100 Index. Vanguard Growth ETF has $71.87 billion in assets, Invesco QQQ has $157.63 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Growth.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.
Get it free >>
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First Trust NASDAQ100 Equal Weighted ETF (QQEW): ETF Research Reports
Invesco QQQ (QQQ): ETF Research Reports
Vanguard Growth ETF (VUG): ETF Research Reports
Okta, Inc. (OKTA): Free Stock Analysis Report
Zscaler, Inc. (ZS): Free Stock Analysis Report
Datadog, Inc. (DDOG): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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When you look at individual holdings, Datadog, Inc. (class A) (DDOG) accounts for about 1.15% of the fund's total assets, followed by Okta, Inc. (OKTA) and Zscaler, Inc. (ZS). Datadog, Inc. (DDOG): Free Stock Analysis Report A smart beta exchange traded fund, the First Trust NASDAQ100 Equal Weighted ETF (QQEW) debuted on 04/19/2006, and offers broad exposure to the Style Box - Large Cap Growth category of the market.
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When you look at individual holdings, Datadog, Inc. (class A) (DDOG) accounts for about 1.15% of the fund's total assets, followed by Okta, Inc. (OKTA) and Zscaler, Inc. (ZS). Datadog, Inc. (DDOG): Free Stock Analysis Report A smart beta exchange traded fund, the First Trust NASDAQ100 Equal Weighted ETF (QQEW) debuted on 04/19/2006, and offers broad exposure to the Style Box - Large Cap Growth category of the market.
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When you look at individual holdings, Datadog, Inc. (class A) (DDOG) accounts for about 1.15% of the fund's total assets, followed by Okta, Inc. (OKTA) and Zscaler, Inc. (ZS). Datadog, Inc. (DDOG): Free Stock Analysis Report A smart beta exchange traded fund, the First Trust NASDAQ100 Equal Weighted ETF (QQEW) debuted on 04/19/2006, and offers broad exposure to the Style Box - Large Cap Growth category of the market.
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When you look at individual holdings, Datadog, Inc. (class A) (DDOG) accounts for about 1.15% of the fund's total assets, followed by Okta, Inc. (OKTA) and Zscaler, Inc. (ZS). Datadog, Inc. (DDOG): Free Stock Analysis Report A smart beta exchange traded fund, the First Trust NASDAQ100 Equal Weighted ETF (QQEW) debuted on 04/19/2006, and offers broad exposure to the Style Box - Large Cap Growth category of the market.
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187a411a-a4ff-415e-9e4f-9a2835720717
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718529.0
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2022-09-21 00:00:00 UTC
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3 Cybersecurity Stocks to Buy Now for Extraordinary Gains
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DDOG
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https://www.nasdaq.com/articles/3-cybersecurity-stocks-to-buy-now-for-extraordinary-gains
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nan
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nan
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Last week, I wrote about trends that investors simply cannot ignore right now, even in the midst of a bear market. While a bear market has enveloped the stock market and nearly swallowed individual stocks whole, there are still some bright spots. One such bright spot was cybersecurity stocks.
While the economy has been hitting a few snags and as there’s been destruction in tech, cybersecurity continues to do pretty well. That speaks to the risk that cybercrime, hacking, ransoms and other digital attacks present to companies — in good times or bad.
Companies have to secure their business. As more and more things become digital — whether it is patents, product secrets or customer information — these companies need to be proactive in protecting them. That means ponying up and paying the cybersecurity firms who specialize in this field.
When we look at the companies with earnings momentum, we’re seeing strength in cybersecurity stocks.
PANW Palo Alto Networks $175.02
CRWD CrowdStrike $173.87
DDOG Datadog $93.57
Palo Alto Networks (PANW)
Source: Sundry Photography / Shutterstock.com
Palo Alto Networks (NASDAQ:PANW) is the big dog among cybersecurity stocks and this company is doing just fine.
It weighs in with a $52 billion market capitalization and recently underwent a 3-for-1 stock split. While a stock split historically tends to help a stock price over the next 12 months, it doesn’t seem to have as strong of an effect during a bear market. At least not yet, anyway.
When the company reported earnings in May, it knocked the cover off the ball. So did many others. However, many companies then struggled in the most recent quarter. When Palo Alto delivered its FY Q4 results in late August, it again delivered a top- and bottom-line beat with a full-year guide that reassured investors. This company simply continues to execute at a very high level.
Analysts expect 25% revenue growth this year and more than 20% growth next year. That’s roughly in line with the earnings expectations too. While shares have rebounded nicely from the lows, Palo Alto is still down about 18% from the highs.
If we get further selling pressure in this name — or revisit the 2022 lows — it may be worth accumulating shares of this great company.
CrowdStrike (CRWD)
Source: VDB Photos / Shutterstock.com
CrowdStrike (NASDAQ:CRWD) is not all that different from Palo Alto Networks. It’s one of the larger cybersecurity stocks, as it commands a $40 billion market cap. However, the stock is more expensive.
Shares trade at 18 times this year’s revenue. While that may startle some investors, realize that analysts expect revenue to grow about 54% this year and for earnings to double. That’s quite a bit more growth than Palo Alto Networks is giving us right now.
There’s nothing wrong with either company and both are great stocks — hence both of them being put on this list. But one has a higher valuation and higher growth and the other has a lower valuation and lower growth.
Further, CrowdStrike stock is down about 41% from the high and fell as much as 56% from the all-time high.
When the company last reported earnings in August, it beat on earnings and revenue estimates. Management also raised its full-year guidance. Not many companies can do this right now, particularly in tech. When momentum comes back to tech stocks, cybersecurity stocks will benefit.
Datadog (DDOG)
Source: Karol Ciesluk / Shutterstock.com
The action in Datadog (NASDAQ:DDOG) has investors howling, as this has been the worst-performing stock of the three mentioned here. But that makes sense, given its newcomer status in the public markets. With a market cap just under $30 billion, it’s not necessarily small, but it’s smaller than PANW and CRWD stocks.
The stock went public in the second half of 2019, just a few quarters before the Covid-19 pandemic and the ensuing selloff. After bottoming near $29, shares exploded to a high of $199.68 in November 2021.
In other words, it’s been volatile since it went public (in both directions).
Analysts’ estimates are all over the place with this one but call for almost 60% revenue growth this year. There are some lower estimates — like 36% growth in FY 2023 — but some estimates are as high as 93% in the out-years. The firm is also profitable and growing at a steady rate.
On the date of publication, Bret Kenwell did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell.
The post 3 Cybersecurity Stocks to Buy Now for Extraordinary Gains appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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PANW Palo Alto Networks $175.02 CRWD CrowdStrike $173.87 DDOG Datadog $93.57 Palo Alto Networks (PANW) Source: Sundry Photography / Shutterstock.com Palo Alto Networks (NASDAQ:PANW) is the big dog among cybersecurity stocks and this company is doing just fine. Datadog (DDOG) Source: Karol Ciesluk / Shutterstock.com The action in Datadog (NASDAQ:DDOG) has investors howling, as this has been the worst-performing stock of the three mentioned here. That speaks to the risk that cybercrime, hacking, ransoms and other digital attacks present to companies — in good times or bad.
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PANW Palo Alto Networks $175.02 CRWD CrowdStrike $173.87 DDOG Datadog $93.57 Palo Alto Networks (PANW) Source: Sundry Photography / Shutterstock.com Palo Alto Networks (NASDAQ:PANW) is the big dog among cybersecurity stocks and this company is doing just fine. Datadog (DDOG) Source: Karol Ciesluk / Shutterstock.com The action in Datadog (NASDAQ:DDOG) has investors howling, as this has been the worst-performing stock of the three mentioned here. CrowdStrike (CRWD) Source: VDB Photos / Shutterstock.com CrowdStrike (NASDAQ:CRWD) is not all that different from Palo Alto Networks.
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PANW Palo Alto Networks $175.02 CRWD CrowdStrike $173.87 DDOG Datadog $93.57 Palo Alto Networks (PANW) Source: Sundry Photography / Shutterstock.com Palo Alto Networks (NASDAQ:PANW) is the big dog among cybersecurity stocks and this company is doing just fine. Datadog (DDOG) Source: Karol Ciesluk / Shutterstock.com The action in Datadog (NASDAQ:DDOG) has investors howling, as this has been the worst-performing stock of the three mentioned here. InvestorPlace - Stock Market News, Stock Advice & Trading Tips Last week, I wrote about trends that investors simply cannot ignore right now, even in the midst of a bear market.
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PANW Palo Alto Networks $175.02 CRWD CrowdStrike $173.87 DDOG Datadog $93.57 Palo Alto Networks (PANW) Source: Sundry Photography / Shutterstock.com Palo Alto Networks (NASDAQ:PANW) is the big dog among cybersecurity stocks and this company is doing just fine. Datadog (DDOG) Source: Karol Ciesluk / Shutterstock.com The action in Datadog (NASDAQ:DDOG) has investors howling, as this has been the worst-performing stock of the three mentioned here. Shares trade at 18 times this year’s revenue.
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bdc485f3-c4f8-4db1-8b91-56431c8b1509
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718530.0
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2022-09-20 00:00:00 UTC
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2 Growth Stocks Down 54% and 68% to Buy Hand Over Fist
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DDOG
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https://www.nasdaq.com/articles/2-growth-stocks-down-54-and-68-to-buy-hand-over-fist
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nan
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nan
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The Nasdaq-100 market index is where investors turn for a sense of how the technology sector is doing, and -- spoiler alert -- it's not having a great year. The index has lost 27.2% of its value during 2022, placing it firmly in bear market territory with many individual tech stocks faring even worse.
For short-term investors, it's horrible news. But for long-term investors, the steep drop presents a potential opportunity to put their money to work buying stock in rapidly growing companies at a steep discount. After all, history suggests the broader markets always recover to new highs, given enough time. To have the best odds of generating positive returns when the market does turn around, good stock selection is key.
Today, we will discuss two businesses that make the most of their cloud-powered digital operations and operate in an industry that will be in high demand for the foreseeable future. You may want to consider buying their stocks hand over fist.
1. Datadog: Down 52.5% from its all-time high
Datadog (NASDAQ: DDOG) stock is down 52.5% from its all-time high, largely because of macroeconomic factors hitting so many tech and growth stocks right now. It's certainly not a reflection of the company's operating performance, which has been stellar.
Companies are constantly shifting more of their operations online using cloud technology and are generating truckloads of data each time a customer interacts with them. While that data can appear noisy on the surface, there are actually mountains of value waiting to be unlocked with proper analysis. That's where Datadog comes in.
It helps organizations draw unique, actionable insights from user data on digital platforms, like websites and mobile applications. In some cases, this analysis can indicate whether customers are having a positive experience down to an individual level. Occasionally, a company's users in specific geographic locations or who are using certain mobile devices will encounter issues that don't affect the rest of the customer base and management can miss the problem. Datadog helps the client company ensure these are alerted and resolved within minutes.
In its most recent quarter, Datadog said it had 2,420 customers spending at least $100,000 with the company annually, a total that's up 54% year over year. The customers range from financial services companies to game developers, highlighting how digital transformation is affecting so much of the economy.
Datadog management expects revenue will grow 58% for the 2022 full year and total $1.63 billion. The company is also on the cusp of full-year profitability. After losing $20.7 million in 2021, it has generated $4.8 million in GAAP net income in the first half of 2022.
As an added bonus, Wall Street analysts are very bullish on Datadog stock, and not a single one who's tracked by The Wall Street Journal is recommending owners sell the stock.
2. DigitalOcean: Down 68.5% from its all-time high
While Datadog helps companies extract the most out of their cloud operations, DigitalOcean (NYSE: DOCN) is responsible for putting them there in the first place. It's a specialist in delivering cloud services to small- to mid-sized organizations with under 500 employees, which the company believes is a segment of the market that large providers like Amazon Web Services and Microsoft Azure often neglect.
So DigitalOcean does compete against trillion-dollar giants, but it does so by going after customers that don't feel the big guys offer the right services at the right price. This has helped DigitalOcean sign on more than 600,000 customers by delivering personalized service, simple deployment mechanisms, and affordable pricing suited to businesses that tend to be more in the start-up phase of their operations. Around 105,400 of DigitalOcean's customers spend at least $50 per month and account for the majority of the company's revenue, which totaled $492 million over the last four quarters.
DigitalOcean could be entering a major growth phase because management thinks the company could generate $1 billion in annual revenue by 2024. The company is steadily growing into its addressable market, which it estimates is worth $72 billion this year but could double to $145 billion in 2025. That suggests there's still a significantly large runway for this company to expand further.
DigitalOcean's stock price is down 68.5% from all-time highs set in November 2021. It has suffered amid the broader sell-off in the technology sector, but also because it's an unprofitable company that investors perceive as high risk at the moment. But in reality, a company with an opportunity as large as DigitalOcean's should invest as much as possible in growth and aim for profits at a later date, once it achieves scale.
It does have a strong balance sheet with over $1.1 billion in cash and marketable securities, so it can comfortably navigate this period, having lost only $6 million in the most recent quarter.
Buying DigitalOcean stock might be a long-term bet worth making, especially because it's available now at a price-to-sales ratio of just 9.1, which is near the cheapest level since it listed on the public markets more than a year ago.
10 stocks we like better than Datadog
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They just revealed what they believe are the ten best stocks for investors to buy right now... and Datadog wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of August 17, 2022
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Datadog, DigitalOcean Holdings, Inc., and Microsoft. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Datadog: Down 52.5% from its all-time high Datadog (NASDAQ: DDOG) stock is down 52.5% from its all-time high, largely because of macroeconomic factors hitting so many tech and growth stocks right now. Occasionally, a company's users in specific geographic locations or who are using certain mobile devices will encounter issues that don't affect the rest of the customer base and management can miss the problem. This has helped DigitalOcean sign on more than 600,000 customers by delivering personalized service, simple deployment mechanisms, and affordable pricing suited to businesses that tend to be more in the start-up phase of their operations.
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Datadog: Down 52.5% from its all-time high Datadog (NASDAQ: DDOG) stock is down 52.5% from its all-time high, largely because of macroeconomic factors hitting so many tech and growth stocks right now. DigitalOcean could be entering a major growth phase because management thinks the company could generate $1 billion in annual revenue by 2024. See the 10 stocks *Stock Advisor returns as of August 17, 2022 John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors.
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Datadog: Down 52.5% from its all-time high Datadog (NASDAQ: DDOG) stock is down 52.5% from its all-time high, largely because of macroeconomic factors hitting so many tech and growth stocks right now. DigitalOcean: Down 68.5% from its all-time high While Datadog helps companies extract the most out of their cloud operations, DigitalOcean (NYSE: DOCN) is responsible for putting them there in the first place. See the 10 stocks *Stock Advisor returns as of August 17, 2022 John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors.
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Datadog: Down 52.5% from its all-time high Datadog (NASDAQ: DDOG) stock is down 52.5% from its all-time high, largely because of macroeconomic factors hitting so many tech and growth stocks right now. DigitalOcean: Down 68.5% from its all-time high While Datadog helps companies extract the most out of their cloud operations, DigitalOcean (NYSE: DOCN) is responsible for putting them there in the first place. * They just revealed what they believe are the ten best stocks for investors to buy right now... and Datadog wasn't one of them!
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1859cad5-134a-434d-ae11-7b3272b06c78
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718531.0
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2022-09-16 00:00:00 UTC
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Notable Friday Option Activity: DDOG, C, PRU
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DDOG
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https://www.nasdaq.com/articles/notable-friday-option-activity%3A-ddog-c-pru
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nan
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nan
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Looking at options trading activity among components of the Russell 3000 index, there is noteworthy activity today in Datadog Inc (Symbol: DDOG), where a total volume of 17,435 contracts has been traded thus far today, a contract volume which is representative of approximately 1.7 million underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 45.9% of DDOG's average daily trading volume over the past month, of 3.8 million shares. Especially high volume was seen for the $92 strike put option expiring September 16, 2022, with 1,144 contracts trading so far today, representing approximately 114,400 underlying shares of DDOG. Below is a chart showing DDOG's trailing twelve month trading history, with the $92 strike highlighted in orange:
Citigroup Inc (Symbol: C) options are showing a volume of 72,393 contracts thus far today. That number of contracts represents approximately 7.2 million underlying shares, working out to a sizeable 45.1% of C's average daily trading volume over the past month, of 16.1 million shares. Especially high volume was seen for the $52.50 strike call option expiring October 21, 2022, with 3,706 contracts trading so far today, representing approximately 370,600 underlying shares of C. Below is a chart showing C's trailing twelve month trading history, with the $52.50 strike highlighted in orange:
And Prudential Financial Inc (Symbol: PRU) options are showing a volume of 6,875 contracts thus far today. That number of contracts represents approximately 687,500 underlying shares, working out to a sizeable 45% of PRU's average daily trading volume over the past month, of 1.5 million shares. Particularly high volume was seen for the $80 strike put option expiring January 20, 2023, with 932 contracts trading so far today, representing approximately 93,200 underlying shares of PRU. Below is a chart showing PRU's trailing twelve month trading history, with the $80 strike highlighted in orange:
For the various different available expirations for DDOG options, C options, or PRU options, visit StockOptionsChannel.com.
Today's Most Active Call & Put Options of the S&P 500 »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Especially high volume was seen for the $92 strike put option expiring September 16, 2022, with 1,144 contracts trading so far today, representing approximately 114,400 underlying shares of DDOG. Looking at options trading activity among components of the Russell 3000 index, there is noteworthy activity today in Datadog Inc (Symbol: DDOG), where a total volume of 17,435 contracts has been traded thus far today, a contract volume which is representative of approximately 1.7 million underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 45.9% of DDOG's average daily trading volume over the past month, of 3.8 million shares.
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Below is a chart showing DDOG's trailing twelve month trading history, with the $92 strike highlighted in orange: Citigroup Inc (Symbol: C) options are showing a volume of 72,393 contracts thus far today. Looking at options trading activity among components of the Russell 3000 index, there is noteworthy activity today in Datadog Inc (Symbol: DDOG), where a total volume of 17,435 contracts has been traded thus far today, a contract volume which is representative of approximately 1.7 million underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 45.9% of DDOG's average daily trading volume over the past month, of 3.8 million shares.
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Looking at options trading activity among components of the Russell 3000 index, there is noteworthy activity today in Datadog Inc (Symbol: DDOG), where a total volume of 17,435 contracts has been traded thus far today, a contract volume which is representative of approximately 1.7 million underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 45.9% of DDOG's average daily trading volume over the past month, of 3.8 million shares. Especially high volume was seen for the $92 strike put option expiring September 16, 2022, with 1,144 contracts trading so far today, representing approximately 114,400 underlying shares of DDOG.
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Looking at options trading activity among components of the Russell 3000 index, there is noteworthy activity today in Datadog Inc (Symbol: DDOG), where a total volume of 17,435 contracts has been traded thus far today, a contract volume which is representative of approximately 1.7 million underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 45.9% of DDOG's average daily trading volume over the past month, of 3.8 million shares. Especially high volume was seen for the $92 strike put option expiring September 16, 2022, with 1,144 contracts trading so far today, representing approximately 114,400 underlying shares of DDOG.
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48463ba9-5191-4813-9eca-595fcb954dc8
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718532.0
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2022-09-16 00:00:00 UTC
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Why Datadog, Okta, and DocuSign Plunged Today
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DDOG
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https://www.nasdaq.com/articles/why-datadog-okta-and-docusign-plunged-today
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nan
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nan
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What happened
Shares of enterprise software companies Datadog (NASDAQ: DDOG), Okta (NASDAQ: OKTA), and DocuSign (NASDAQ: DOCU) were plunging today, down 5.3%, 6%, and 7.2%, respectively, as of 2 p.m. EDT.
It was a bad day for tech in general, and especially for higher-priced growth stocks such as these three. Interest rates continued to rise this week after the fallout from Tuesday's inflation report. In addition, there have been several preannouncements from major companies that are hinting at a global recession. Finally, today was an expiration day for options, which can cause high volatility.
So what
High-growth stocks with little or no profits, such as these three enterprise software names, have been crushed this year, as the multiple tailwinds seen during the pandemic are all reversing into headwinds.
Enterprises accelerated digital transformation initiatives during the pandemic lockdowns, which may have pulled forward some demand for these companies' offerings. So there is concern over a slowdown this year. Of these three, DocuSign has seen the worst growth deceleration, with operational issues and now major uncertainty with the company now looking for a new CEO. Billings decelerated to just 9% growth last quarter.
Okta has also seen its long-term growth projections come into question, following the messy acquisition of Auth0 and the announcement that its chief operating officer would take a one-year sabbatical.
Therefore, when a large company like FedEx (NYSE: FDX) preannounces a major shortfall on this quarter's earnings per share, as it did last night, and with FedEx CEO Raj Subramaniam hinting that we may be in the midst of a global recession, it doesn't exactly spark hope growth will reaccelerate for these companies anytime soon. So if a company is in transition or going through a difficult operational period, this risk-off mentality will cause a big sell-off.
On the other hand, Datadog's recent financial results have been nothing short of spectacular, with revenue growing 74% last quarter and solid forward guidance. Moreover, Datadog is actually operating close to breakeven in terms of profitability, whereas most software-as-a-service companies may have positive "adjusted" numbers but are actually losing lots of money on a GAAP basis when factoring in stock-based compensation.
So why is Datadog falling in sympathy? Well, not only are recession fears in the air, but inflation and the expectation for higher interest rates are taking down high-priced stocks. While Datadog has been outperforming, it also trades at a whopping 23 times sales, which is now much higher than Okta's 6.3 price-to-sales ratio and DocuSign's 5.8 mark.
After the hotter-than-expected inflation report on Tuesday, the two-year Treasury bond yield jumped and has continued to rise through the end of this week to 3.87% as of this writing. The 10-year bond yield is also much higher on the week and is now at 3.45%, near the June high.
However, note that it is lower than the two-year, making for an inverted yield curve. That's usually a prelude to a recession or slowdown.
All things being equal, higher interest rates make bonds more competitive with stocks and lower the value investors put on future earnings. That is a killer for growth stocks, since the bulk of their earnings power is years away. Thus, Datadog is unable to escape this, despite its operational success.
Now what
Unfortunately, high-growth stocks appear to be at the mercy of inflation data and the movements of the Federal Reserve, regardless of how well a company is performing.
Still, the Federal Reserve is intent on bringing inflation down. It may cause a recession of some kind to do so, but eventually, inflation should come down. That could mark a turning point for these long-suffering growth stocks.
With discounted prices across the software sector, investors may want to begin looking at the sector ahead of a potential recovery. However, tough times ahead may separate the strong from the weak companies in a difficult macroeconomic environment. So it may be different from 2020-2021, when virtually all digital transformation stocks soared amid strong demand and low interest rates. The trick is identifying the eventual winners that are also trading at a reasonable price.
10 stocks we like better than Datadog
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They just revealed what they believe are the ten best stocks for investors to buy right now... and Datadog wasn't one of them! That's right -- they think these 10 stocks are even better buys.
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*Stock Advisor returns as of August 17, 2022
Billy Duberstein has no position in any of the stocks mentioned. His clients may own shares of the companies mentioned. The Motley Fool has positions in and recommends Datadog, DocuSign, FedEx, and Okta. The Motley Fool recommends the following options: long January 2024 $60 calls on DocuSign. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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What happened Shares of enterprise software companies Datadog (NASDAQ: DDOG), Okta (NASDAQ: OKTA), and DocuSign (NASDAQ: DOCU) were plunging today, down 5.3%, 6%, and 7.2%, respectively, as of 2 p.m. EDT. Okta has also seen its long-term growth projections come into question, following the messy acquisition of Auth0 and the announcement that its chief operating officer would take a one-year sabbatical. Moreover, Datadog is actually operating close to breakeven in terms of profitability, whereas most software-as-a-service companies may have positive "adjusted" numbers but are actually losing lots of money on a GAAP basis when factoring in stock-based compensation.
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What happened Shares of enterprise software companies Datadog (NASDAQ: DDOG), Okta (NASDAQ: OKTA), and DocuSign (NASDAQ: DOCU) were plunging today, down 5.3%, 6%, and 7.2%, respectively, as of 2 p.m. EDT. All things being equal, higher interest rates make bonds more competitive with stocks and lower the value investors put on future earnings. The Motley Fool has positions in and recommends Datadog, DocuSign, FedEx, and Okta.
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What happened Shares of enterprise software companies Datadog (NASDAQ: DDOG), Okta (NASDAQ: OKTA), and DocuSign (NASDAQ: DOCU) were plunging today, down 5.3%, 6%, and 7.2%, respectively, as of 2 p.m. EDT. Therefore, when a large company like FedEx (NYSE: FDX) preannounces a major shortfall on this quarter's earnings per share, as it did last night, and with FedEx CEO Raj Subramaniam hinting that we may be in the midst of a global recession, it doesn't exactly spark hope growth will reaccelerate for these companies anytime soon. See the 10 stocks *Stock Advisor returns as of August 17, 2022 Billy Duberstein has no position in any of the stocks mentioned.
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What happened Shares of enterprise software companies Datadog (NASDAQ: DDOG), Okta (NASDAQ: OKTA), and DocuSign (NASDAQ: DOCU) were plunging today, down 5.3%, 6%, and 7.2%, respectively, as of 2 p.m. EDT. All things being equal, higher interest rates make bonds more competitive with stocks and lower the value investors put on future earnings. It may cause a recession of some kind to do so, but eventually, inflation should come down.
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338a7cef-9efd-4a28-b428-ef9383101fe9
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718533.0
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2022-09-15 00:00:00 UTC
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Datadog (DDOG) Dips More Than Broader Markets: What You Should Know
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DDOG
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https://www.nasdaq.com/articles/datadog-ddog-dips-more-than-broader-markets%3A-what-you-should-know-1
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nan
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nan
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Datadog (DDOG) closed the most recent trading day at $95.36, moving -1.72% from the previous trading session. This change lagged the S&P 500's daily loss of 1.13%. At the same time, the Dow lost 0.56%, and the tech-heavy Nasdaq gained 0.16%.
Coming into today, shares of the data analytics and cloud monitoring company had lost 11.81% in the past month. In that same time, the Computer and Technology sector lost 12.18%, while the S&P 500 lost 7.59%.
Investors will be hoping for strength from Datadog as it approaches its next earnings release. In that report, analysts expect Datadog to post earnings of $0.16 per share. This would mark year-over-year growth of 23.08%. Meanwhile, our latest consensus estimate is calling for revenue of $412.63 million, up 52.55% from the prior-year quarter.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $0.78 per share and revenue of $1.62 billion. These totals would mark changes of +62.5% and +57.68%, respectively, from last year.
It is also important to note the recent changes 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 company's business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Datadog is currently sporting a Zacks Rank of #3 (Hold).
Valuation is also important, so investors should note that Datadog has a Forward P/E ratio of 123.69 right now. This represents a premium compared to its industry's average Forward P/E of 44.02.
Also, we should mention that DDOG has a PEG ratio of 2.93. 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 2.54 based on yesterday's closing prices.
The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 143, which puts it in the bottom 44% 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.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
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Datadog, Inc. (DDOG): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Datadog (DDOG) closed the most recent trading day at $95.36, moving -1.72% from the previous trading session. Also, we should mention that DDOG has a PEG ratio of 2.93. Datadog, Inc. (DDOG): Free Stock Analysis Report
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Datadog (DDOG) closed the most recent trading day at $95.36, moving -1.72% from the previous trading session. Also, we should mention that DDOG has a PEG ratio of 2.93. Datadog, Inc. (DDOG): Free Stock Analysis Report
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Datadog (DDOG) closed the most recent trading day at $95.36, moving -1.72% from the previous trading session. Also, we should mention that DDOG has a PEG ratio of 2.93. Datadog, Inc. (DDOG): Free Stock Analysis Report
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Datadog (DDOG) closed the most recent trading day at $95.36, moving -1.72% from the previous trading session. Also, we should mention that DDOG has a PEG ratio of 2.93. Datadog, Inc. (DDOG): Free Stock Analysis Report
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b87cee72-ebca-4da0-8d66-6019ddb760f0
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718534.0
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2022-09-15 00:00:00 UTC
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Should First Trust NASDAQ100 Equal Weighted ETF (QQEW) Be on Your Investing Radar?
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DDOG
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https://www.nasdaq.com/articles/should-first-trust-nasdaq100-equal-weighted-etf-qqew-be-on-your-investing-radar-3
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nan
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nan
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If you're interested in broad exposure to the Large Cap Growth segment of the US equity market, look no further than the First Trust NASDAQ100 Equal Weighted ETF (QQEW), a passively managed exchange traded fund launched on 04/19/2006.
The fund is sponsored by First Trust Advisors. It has amassed assets over $1.12 billion, making it one of the average sized ETFs attempting to match the Large Cap Growth segment of the US equity market.
Why Large Cap Growth
Large cap companies typically have a market capitalization above $10 billion. They tend to be stable companies with predictable cash flows and are usually less volatile than mid and small cap companies.
While growth stocks do boast higher than average sales and earnings growth rates, and they are expected to grow faster than the wider market, investors should note these kinds of stocks have higher valuations. Something to keep in mind is the higher level of volatility that is affiliated with growth stocks. When you consider growth versus value, growth stocks are usually the clear winner in strong bull markets but tend to fall flat in nearly all other environments.
Costs
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.57%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.47%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector--about 44.20% of the portfolio. Consumer Discretionary and Healthcare round out the top three.
Looking at individual holdings, Datadog, Inc. (class A) (DDOG) accounts for about 1.15% of total assets, followed by Okta, Inc. (OKTA) and Zscaler, Inc. (ZS).
The top 10 holdings account for about 10.79% of total assets under management.
Performance and Risk
QQEW seeks to match the performance of the NASDAQ-100 Equal Weighted Index before fees and expenses. The NASDAQ-100 Equal Weighted Index is the equal-weighted version of the NASDAQ-100 Index which includes 100 of the largest non-financial securities listed on NASDAQ based on market capitalization.
The ETF has lost about -21.98% so far this year and is down about -19.93% in the last one year (as of 09/15/2022). In the past 52-week period, it has traded between $84.27 and $120.91.
The ETF has a beta of 1.05 and standard deviation of 26.85% for the trailing three-year period, making it a medium risk choice in the space. With about 103 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust NASDAQ100 Equal Weighted ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, QQEW is a reasonable option for those seeking exposure to the Style Box - Large Cap Growth area of the market. Investors might also want to consider some other ETF options in the space.
The Vanguard Growth ETF (VUG) and the Invesco QQQ (QQQ) track a similar index. While Vanguard Growth ETF has $73.07 billion in assets, Invesco QQQ has $161.34 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.
Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.
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First Trust NASDAQ100 Equal Weighted ETF (QQEW): ETF Research Reports
Invesco QQQ (QQQ): ETF Research Reports
Vanguard Growth ETF (VUG): ETF Research Reports
Okta, Inc. (OKTA): Free Stock Analysis Report
Zscaler, Inc. (ZS): Free Stock Analysis Report
Datadog, Inc. (DDOG): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Looking at individual holdings, Datadog, Inc. (class A) (DDOG) accounts for about 1.15% of total assets, followed by Okta, Inc. (OKTA) and Zscaler, Inc. (ZS). Datadog, Inc. (DDOG): Free Stock Analysis Report If you're interested in broad exposure to the Large Cap Growth segment of the US equity market, look no further than the First Trust NASDAQ100 Equal Weighted ETF (QQEW), a passively managed exchange traded fund launched on 04/19/2006.
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Looking at individual holdings, Datadog, Inc. (class A) (DDOG) accounts for about 1.15% of total assets, followed by Okta, Inc. (OKTA) and Zscaler, Inc. (ZS). Datadog, Inc. (DDOG): Free Stock Analysis Report If you're interested in broad exposure to the Large Cap Growth segment of the US equity market, look no further than the First Trust NASDAQ100 Equal Weighted ETF (QQEW), a passively managed exchange traded fund launched on 04/19/2006.
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Looking at individual holdings, Datadog, Inc. (class A) (DDOG) accounts for about 1.15% of total assets, followed by Okta, Inc. (OKTA) and Zscaler, Inc. (ZS). Datadog, Inc. (DDOG): Free Stock Analysis Report Alternatives First Trust NASDAQ100 Equal Weighted ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors.
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Looking at individual holdings, Datadog, Inc. (class A) (DDOG) accounts for about 1.15% of total assets, followed by Okta, Inc. (OKTA) and Zscaler, Inc. (ZS). Datadog, Inc. (DDOG): Free Stock Analysis Report If you're interested in broad exposure to the Large Cap Growth segment of the US equity market, look no further than the First Trust NASDAQ100 Equal Weighted ETF (QQEW), a passively managed exchange traded fund launched on 04/19/2006.
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bfcf40c2-8958-4583-8800-badec49816f8
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718535.0
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2022-09-14 00:00:00 UTC
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Datadog (DDOG) Outpaces Stock Market Gains: What You Should Know
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DDOG
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https://www.nasdaq.com/articles/datadog-ddog-outpaces-stock-market-gains%3A-what-you-should-know-0
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nan
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nan
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In the latest trading session, Datadog (DDOG) closed at $97.03, marking a +0.41% move from the previous day. The stock outpaced the S&P 500's daily gain of 0.34%. Meanwhile, the Dow gained 0.1%, and the Nasdaq, a tech-heavy index, added 0.02%.
Coming into today, shares of the data analytics and cloud monitoring company had lost 14.89% in the past month. In that same time, the Computer and Technology sector lost 12.4%, while the S&P 500 lost 7.95%.
Investors will be hoping for strength from Datadog as it approaches its next earnings release. In that report, analysts expect Datadog to post earnings of $0.16 per share. This would mark year-over-year growth of 23.08%. Meanwhile, our latest consensus estimate is calling for revenue of $412.63 million, up 52.55% from the prior-year quarter.
For the full year, our Zacks Consensus Estimates are projecting earnings of $0.78 per share and revenue of $1.62 billion, which would represent changes of +62.5% and +57.68%, respectively, from the prior year.
Any recent changes to analyst estimates for Datadog should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Datadog currently has a Zacks Rank of #3 (Hold).
In terms of valuation, Datadog is currently trading at a Forward P/E ratio of 123.18. Its industry sports an average Forward P/E of 43.85, so we one might conclude that Datadog is trading at a premium comparatively.
We can also see that DDOG currently has a PEG ratio of 2.92. 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 industry currently had an average PEG ratio of 2.51 as of yesterday's close.
The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 140, which puts it in the bottom 45% 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.
To follow DDOG in the coming trading sessions, be sure to utilize Zacks.com.
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Datadog, Inc. (DDOG): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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In the latest trading session, Datadog (DDOG) closed at $97.03, marking a +0.41% move from the previous day. We can also see that DDOG currently has a PEG ratio of 2.92. To follow DDOG in the coming trading sessions, be sure to utilize Zacks.com.
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In the latest trading session, Datadog (DDOG) closed at $97.03, marking a +0.41% move from the previous day. We can also see that DDOG currently has a PEG ratio of 2.92. To follow DDOG in the coming trading sessions, be sure to utilize Zacks.com.
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In the latest trading session, Datadog (DDOG) closed at $97.03, marking a +0.41% move from the previous day. We can also see that DDOG currently has a PEG ratio of 2.92. To follow DDOG in the coming trading sessions, be sure to utilize Zacks.com.
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In the latest trading session, Datadog (DDOG) closed at $97.03, marking a +0.41% move from the previous day. We can also see that DDOG currently has a PEG ratio of 2.92. To follow DDOG in the coming trading sessions, be sure to utilize Zacks.com.
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4d06003d-ad4b-43dd-8570-498a69a256df
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718536.0
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2022-09-13 00:00:00 UTC
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Why Snowflake, MongoDB, and Datadog Plunged Today
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DDOG
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https://www.nasdaq.com/articles/why-snowflake-mongodb-and-datadog-plunged-today
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nan
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nan
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What happened
Shares of big data enterprise software companies Snowflake (NYSE: SNOW), MongoDB (NASDAQ: MDB) and Datadog (NASDAQ: DDOG) plunged today, each falling by the high single digits before recovering slightly to respective declines of 4.6%, 6.3%, and 8.2% as of 11:41 a.m. ET.
This doesn't have anything to do with these companies' operational performance. In fact, these three companies reported strong growth and outlooks during the recent earnings season and are generally considered best of breed in the up-and-coming software-as-a-service sector for big data applications.
However, this morning's Consumer Price Index (CPI) inflation report came in hotter than expected, which decimated virtually all technology stocks.
So what
This morning, the Bureau of Labor Statistics released the August CPI report. While many were hoping to see a rapid decline in inflation, instead they got the opposite. While the year-over-year inflation print of 8.3% marked a deceleration from the 8.5% print in July, it was higher than expected. Perhaps more disturbing were the month-over-month numbers. Overall, inflation rose 0.1% from July to August, but that was higher than expectations for a 0.1% decline. Core inflation, which strips out volatile food and energy prices, rose 0.6% month over month, much higher than the 0.3% that was expected. Both accelerated over the July numbers.
The report unfortunately means that some parts of the inflationary picture could be "stickier" than assumed. That also means the Federal Reserve is likely to continue hiking interest rates aggressively. In response to this morning's report, the 10-year Treasury Bond yield rose to 3.43%, within shouting distance of the June highs.
High-growth stocks like Snowflake, Datadog, and MongoDB are highly sensitive to rising interest rates in two ways. First, they tend to be expensive stocks. Snowflake trades at 35 times sales, Datadog at 23 times sales, and MongoDB at 16 times sales. Those are all quite expensive by historical measures and assume lots of growth -- and eventually profits -- well into the future.
When long-term interest rates go up on the assumption of higher inflation, equity investors tend to use a higher discount rate on companies' future profits to judge intrinsic value. That means the further out in the future those profits are, the less they are worth today, all else being equal.
Second, the purpose of higher interest rates is, obviously, to cool down the economy. However, interest rates are a pretty blunt tool, and it's possible the Federal Reserve could tip the economy into a recession. Last quarter, Snowflake grew revenue 83%, Datadog grew 74%, and MongoDB grew 57%.
If the economy slows meaningfully, it may be difficult for these companies to keep up high growth rates, even though their data-based offerings are seeing increasing adoption. Investors tend to extrapolate current performance, so if a hyper-growth stock slows down meaningfully, it usually means bad things for the share price.
Now what
It is interesting that Snowflake is the most expensive of these stocks on a price-to-sales basis, but it's down relatively less than the others. That may be because Snowflake operates on a consumption model, whereby customers pay more as they use more. That's in contrast to most other software-as-a-service models, which operate on a subscription basis.
If the economy is currently running hotter than expected, businesses may use more of Snowflake's cloud-based data lake than normal, which could help increase Snowflake's revenue. However, a fixed subscription under a one-, two-, or three-year contract can't increase in price until the contract ends. If the SaaS company is experiencing inflationary pressures from, say, labor, it may see margin compression.
However, with such a large surprise in inflation, most stocks in the same sector will be moving in the same direction by similar magnitudes.
But there is a silver lining for long-term investors. When stocks have a big move down due to macroeconomic factors, investors should think about buying or adding to their favorite high-quality stocks at a discount -- that is, as long as the stocks are reasonably priced and highly likely to make it through a potential economic downturn.
10 stocks we like better than Snowflake Inc.
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Snowflake Inc. wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of August 17, 2022
Billy Duberstein has no position in any of the stocks mentioned. His clients may own shares of the companies mentioned. The Motley Fool has positions in and recommends Datadog, MongoDB, and Snowflake Inc. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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What happened Shares of big data enterprise software companies Snowflake (NYSE: SNOW), MongoDB (NASDAQ: MDB) and Datadog (NASDAQ: DDOG) plunged today, each falling by the high single digits before recovering slightly to respective declines of 4.6%, 6.3%, and 8.2% as of 11:41 a.m. In fact, these three companies reported strong growth and outlooks during the recent earnings season and are generally considered best of breed in the up-and-coming software-as-a-service sector for big data applications. However, this morning's Consumer Price Index (CPI) inflation report came in hotter than expected, which decimated virtually all technology stocks.
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What happened Shares of big data enterprise software companies Snowflake (NYSE: SNOW), MongoDB (NASDAQ: MDB) and Datadog (NASDAQ: DDOG) plunged today, each falling by the high single digits before recovering slightly to respective declines of 4.6%, 6.3%, and 8.2% as of 11:41 a.m. Snowflake trades at 35 times sales, Datadog at 23 times sales, and MongoDB at 16 times sales. When long-term interest rates go up on the assumption of higher inflation, equity investors tend to use a higher discount rate on companies' future profits to judge intrinsic value.
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What happened Shares of big data enterprise software companies Snowflake (NYSE: SNOW), MongoDB (NASDAQ: MDB) and Datadog (NASDAQ: DDOG) plunged today, each falling by the high single digits before recovering slightly to respective declines of 4.6%, 6.3%, and 8.2% as of 11:41 a.m. When long-term interest rates go up on the assumption of higher inflation, equity investors tend to use a higher discount rate on companies' future profits to judge intrinsic value. When stocks have a big move down due to macroeconomic factors, investors should think about buying or adding to their favorite high-quality stocks at a discount -- that is, as long as the stocks are reasonably priced and highly likely to make it through a potential economic downturn.
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What happened Shares of big data enterprise software companies Snowflake (NYSE: SNOW), MongoDB (NASDAQ: MDB) and Datadog (NASDAQ: DDOG) plunged today, each falling by the high single digits before recovering slightly to respective declines of 4.6%, 6.3%, and 8.2% as of 11:41 a.m. Overall, inflation rose 0.1% from July to August, but that was higher than expectations for a 0.1% decline. When long-term interest rates go up on the assumption of higher inflation, equity investors tend to use a higher discount rate on companies' future profits to judge intrinsic value.
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bc43fea8-f355-4761-a6a8-f56b927fda89
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718537.0
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2022-09-13 00:00:00 UTC
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Nasdaq 100 Movers: DDOG, NTES
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DDOG
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https://www.nasdaq.com/articles/nasdaq-100-movers%3A-ddog-ntes
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nan
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nan
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In early trading on Tuesday, shares of NetEase, topped the list of the day's best performing components of the Nasdaq 100 index, trading up 0.5%. Year to date, NetEase, has lost about 13.7% of its value.
And the worst performing Nasdaq 100 component thus far on the day is Datadog, trading down 7.1%. Datadog is lower by about 45.5% looking at the year to date performance.
Two other components making moves today are Meta Platforms, trading down 6.3%, and Activision Blizzard, trading down 0.5% on the day.
VIDEO: Nasdaq 100 Movers: DDOG, NTES
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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VIDEO: Nasdaq 100 Movers: DDOG, NTES The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. In early trading on Tuesday, shares of NetEase, topped the list of the day's best performing components of the Nasdaq 100 index, trading up 0.5%. And the worst performing Nasdaq 100 component thus far on the day is Datadog, trading down 7.1%.
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VIDEO: Nasdaq 100 Movers: DDOG, NTES The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. In early trading on Tuesday, shares of NetEase, topped the list of the day's best performing components of the Nasdaq 100 index, trading up 0.5%. Year to date, NetEase, has lost about 13.7% of its value.
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VIDEO: Nasdaq 100 Movers: DDOG, NTES The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. In early trading on Tuesday, shares of NetEase, topped the list of the day's best performing components of the Nasdaq 100 index, trading up 0.5%. And the worst performing Nasdaq 100 component thus far on the day is Datadog, trading down 7.1%.
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VIDEO: Nasdaq 100 Movers: DDOG, NTES The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. And the worst performing Nasdaq 100 component thus far on the day is Datadog, trading down 7.1%. Datadog is lower by about 45.5% looking at the year to date performance.
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1319d399-e75b-447c-b7bf-84d9fde337d8
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718538.0
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2022-09-13 00:00:00 UTC
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1 Growth Stock Set to Soar 163% From Its 52-Week Low, According to Wall Street
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DDOG
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https://www.nasdaq.com/articles/1-growth-stock-set-to-soar-163-from-its-52-week-low-according-to-wall-street
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nan
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nan
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The bear market in the technology sector has been brutal this year, with many individual stocks declining by 50% or more as soaring inflation hits the pocket of the consumer. The sell-off has been largely indiscriminate as investors expected the financial results of the tech industry to take a hit across the board.
But that hasn't been the case. In a few unique cases, companies have maintained their strong growth rates from 2021, especially those in the software space that sell their technology to other businesses rather than consumers.
Datadog (NASDAQ: DDOG) is one of them, with sales soaring in the first half of 2022. Its stock hit a 52-week low of $81.12 in June, and one Wall Street investment bank predicts it could soar to $214 within the next 12 to 18 months. It has already recovered to $103.84 as of this writing, but that still leaves plenty of room to the upside for investors who buy it now.
A new era in cloud monitoring
Almost everything is done online now, from banking and financial services to retail and commerce. Even the most popular console games, which have historically been enjoyed in story mode, have an online component to them. It's because consumers continue to demand more convenience and more excitement from their everyday activities.
Cloud technology has facilitated this big shift into the online realm, and while it has provided countless opportunities for businesses to tap new revenue streams, it has also presented challenges as organizations are receiving mountains of data about their customers' experiences. Helping to make sense of this information is where Datadog shines.
A financial services firm, for example, might have millions of customers tapping into its mobile application or website in a single day. How does that firm ensure each customer is having a positive, bug-free experience? Developers and engineers can use Datadog's dashboard to gain as much of an insight as they could possibly need, complete with alerts that can bring incident response times down to minutes instead of hours or days.
For gaming companies, Datadog can help to identify issues triggered by scaling or usage spikes. It can even track each player's experience by geographic region and operating system to uncover bugs affecting small subsets of users, which might have otherwise gone unnoticed. Plus, the company helps improve monetization by giving developers visibility over the in-game purchase process -- for example, it can be useful to know at what point a potential customer abandoned a shopping cart.
Datadog's financial growth is soaring
Even in the face of a broad global economic slowdown, Datadog is delivering blistering growth. In the recent second quarter of 2022 (ended June 30), the company generated $406 million in revenue, which was a 74% jump compared with the year-ago period.
Additionally, it reported that 2,420 customers now fall into its highest-spending category of $100,000 annually, which was up 54% from 1,570 in the second quarter last year. It highlights the growing need for observability tools as large organizations shift more of their workloads and customer experiences into the cloud.
Datadog has also marginally increased its sales guidance for the 2022 full year to $1.63 billion, and if it hits that mark, it will mean the company has grown at a compound annual rate of 65% since it went public during 2019.
The company hasn't been consistently profitable yet on a generally accepted accounting principles (GAAP) basis, though it's knocking on the door. It lost just $20.7 million in 2021 on over $1 billion in revenue, and it has eked out a small profit of $4.8 million in the first half of 2022.
Given Datadog is growing so quickly, it's acceptable to continue investing aggressively in customer acquisition and sacrificing profits (for now), especially since it has plenty of resources at its disposal with over $1.7 billion in cash, equivalents, and marketable securities on its balance sheet. Put simply, making money doesn't have to be the company's No. 1 goal right now.
Wall Street is on board with Datadog stock
The Wall Street Journal tracks 26 analysts covering Datadog stock, and not a single one recommends selling. That's a remarkable stat given the negative sentiment toward the technology sector this year. Of the 26 analysts, 17 have given the stock the highest possible buy rating, with four rating it overweight (bullish), and the remaining five holding a neutral stance.
But Wall Street investment bank Goldman Sachs is particularly bullish, betting that Datadog stock could soar to $214 over the next year or so. That would be a 112% jump from where it trades today, and if it gets there, it will mark a 163% gain since the stock hit its 52-week low just three months ago.
Datadog is rapidly adding big-spending customers, its sales are soaring, and it appears to be on the cusp of true GAAP profitability on a more consistent basis. With Wall Street firmly in its corner, investors might do well to buy the stock now and strap in for the long run.
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They just revealed what they believe are the ten best stocks for investors to buy right now... and Datadog wasn't one of them! That's right -- they think these 10 stocks are even better buys.
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Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Datadog and Goldman Sachs. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Datadog (NASDAQ: DDOG) is one of them, with sales soaring in the first half of 2022. Cloud technology has facilitated this big shift into the online realm, and while it has provided countless opportunities for businesses to tap new revenue streams, it has also presented challenges as organizations are receiving mountains of data about their customers' experiences. Datadog has also marginally increased its sales guidance for the 2022 full year to $1.63 billion, and if it hits that mark, it will mean the company has grown at a compound annual rate of 65% since it went public during 2019.
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Datadog (NASDAQ: DDOG) is one of them, with sales soaring in the first half of 2022. Its stock hit a 52-week low of $81.12 in June, and one Wall Street investment bank predicts it could soar to $214 within the next 12 to 18 months. Wall Street is on board with Datadog stock The Wall Street Journal tracks 26 analysts covering Datadog stock, and not a single one recommends selling.
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Datadog (NASDAQ: DDOG) is one of them, with sales soaring in the first half of 2022. Wall Street is on board with Datadog stock The Wall Street Journal tracks 26 analysts covering Datadog stock, and not a single one recommends selling. But Wall Street investment bank Goldman Sachs is particularly bullish, betting that Datadog stock could soar to $214 over the next year or so.
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Datadog (NASDAQ: DDOG) is one of them, with sales soaring in the first half of 2022. Datadog has also marginally increased its sales guidance for the 2022 full year to $1.63 billion, and if it hits that mark, it will mean the company has grown at a compound annual rate of 65% since it went public during 2019. With Wall Street firmly in its corner, investors might do well to buy the stock now and strap in for the long run.
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f095a49e-526e-49aa-bb5e-7b976d8db932
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718539.0
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2022-09-08 00:00:00 UTC
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Is Most-Watched Stock Datadog, Inc. (DDOG) Worth Betting on Now?
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DDOG
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https://www.nasdaq.com/articles/is-most-watched-stock-datadog-inc.-ddog-worth-betting-on-now
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nan
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nan
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Datadog (DDOG) has been one of the most searched-for stocks on Zacks.com lately. So, you might want to look at some of the facts that could shape the stock's performance in the near term.
Over the past month, shares of this data analytics and cloud monitoring company have returned -18.8%, compared to the Zacks S&P 500 composite's -3.8% change. During this period, the Zacks Internet - Software industry, which Datadog falls in, has lost 7.7%. The key question now is: What could be the stock's future direction?
Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.
Revisions to Earnings Estimates
Rather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.
We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
Datadog is expected to post earnings of $0.16 per share for the current quarter, representing a year-over-year change of +23.1%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
For the current fiscal year, the consensus earnings estimate of $0.78 points to a change of +62.5% from the prior year. Over the last 30 days, this estimate has remained unchanged.
For the next fiscal year, the consensus earnings estimate of $0.95 indicates a change of +21.2% from what Datadog is expected to report a year ago. Over the past month, the estimate has remained unchanged.
With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #3 (Hold) for Datadog.
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Revenue Growth Forecast
Even though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.
In the case of Datadog, the consensus sales estimate of $412.63 million for the current quarter points to a year-over-year change of +52.6%. The $1.62 billion and $2.2 billion estimates for the current and next fiscal years indicate changes of +57.7% and +35.6%, respectively.
Last Reported Results and Surprise History
Datadog reported revenues of $406.14 million in the last reported quarter, representing a year-over-year change of +73.9%. EPS of $0.24 for the same period compares with $0.09 a year ago.
Compared to the Zacks Consensus Estimate of $378.05 million, the reported revenues represent a surprise of +7.43%. The EPS surprise was +71.43%.
The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates each time over this period.
Valuation
Without considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.
Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.
The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an An is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Datadog is graded F on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
Bottom Line
The facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Datadog. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.
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Datadog, Inc. (DDOG): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Datadog (DDOG) has been one of the most searched-for stocks on Zacks.com lately. Datadog, Inc. (DDOG): Free Stock Analysis Report We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends.
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Datadog (DDOG) has been one of the most searched-for stocks on Zacks.com lately. Datadog, Inc. (DDOG): Free Stock Analysis Report The chart below shows the evolution of the company's forward 12-month consensus EPS estimate: 12 Month EPS Revenue Growth Forecast Even though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues.
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Datadog (DDOG) has been one of the most searched-for stocks on Zacks.com lately. Datadog, Inc. (DDOG): Free Stock Analysis Report With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions.
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Datadog (DDOG) has been one of the most searched-for stocks on Zacks.com lately. Datadog, Inc. (DDOG): Free Stock Analysis Report And if earnings estimates go up for a company, the fair value for its stock goes up.
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75a141f3-6dac-4fe4-92f0-ebef2136b378
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718540.0
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2022-09-07 00:00:00 UTC
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A Bull Market Is Coming: 2 Monster Growth Stocks to Buy Now and Hold Forever
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DDOG
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https://www.nasdaq.com/articles/a-bull-market-is-coming%3A-2-monster-growth-stocks-to-buy-now-and-hold-forever
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nan
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nan
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High inflation and rising interest rates have dragged the stock market down this year. In the second quarter, the S&P 500 slipped into its seventh bear market in the last 50 years. Each of these events has varied in terms of duration and severity, but all but the latest one ended the exact same way: A bull market came along and sent the index soaring to new highs.
Right now, some investors are obsessing over the short-term fate of the economy and what a recession might mean for the stock market. But smart investors see the situation as an opportunity. Sharp downturns have historically been the best time to buy stocks, simply because bear markets have always been followed by bull markets. And there is no reason to believe this latest one will be any different.
With that in mind, Block (NYSE: SQ) and Datadog (NASDAQ: DDOG) look like smart long-term investments. Here's why.
Block: A fintech with a disruptive approach to commerce and consumer finance
Block breaks its business into two parts: Square and Cash App. Its Square ecosystem is an integrated suite of hardware, software, and financial services that helps merchants operate across physical and digital sales channels. Block's ability to bundle payment processing and banking services with a broad range of business software (e.g., payroll, marketing, scheduling) gives it an edge over traditional payment processors.
The Cash App ecosystem has been a similarly disruptive force in consumer finance. It allows users to deposit funds, spend and borrow money, and invest in stocks and cryptocurrency though a single platform. And the convenience of accessing all those services in one place has driven strong adoption. In fact, Cash App was the most downloaded digital wallet in the U.S. in the first half of 2022, according to Apptopia.
Collectively, the Square and Cash App ecosystems fueled solid financial results over the past year, in spite of the choppy macroeconomic environment. Gross profit jumped 37% to $5.1 billion, and free cash flow soared 178% to $563 million. But Block has captured just 3% of its $190 billion (in gross profit) market opportunity, and several catalysts could accelerate growth in the future.
In the Square ecosystem, premium point-of-sale software for retail and restaurants has been instrumental in driving adoption by larger businesses. In fact, mid-market merchants (i.e., greater than $500,000 in annual gross payment volume, or GPV) accounted for 39% of annualized GPV in the second quarter, up from 27% in the same quarter of 2020. That trend is particularly exciting because larger businesses use more adjacent software products than smaller businesses, and that translates into more revenue and great retention rates for Block.
Additionally, new shopping capabilities in Cash App could turbocharge its popularity. It now features a discovery tab that allows consumers to browse products and make purchases from Afterpay merchants, creating synergies between the ecosystems. And as Cash App evolves into a commerce engine, Block will reinforce those synergies by expanding into digital advertising. Specifically, Afterpay merchants will be able to engage Cash App consumers with relevant product suggestions delivered through the digital wallet.
On that note, with shares currently trading at 2.1 times sales -- an absolute bargain compared to its five-year average of eight times sales -- now is a great time to buy this growth stock.
Datadog: Ensuring the security and performance of business-critical applications
Datadog specializes in monitoring and security. Its platform gathers and analyzes data from applications, networks, and infrastructure, and it leans on artificial intelligence (AI) to predict and identify performance issues. In doing so, Datadog helps businesses secure sensitive data, avoid system downtime, and ensure a positive user experience for its customers.
In 2018, Datadog became the first vendor to unify the "three pillars of observability" on a single platform: metrics, traces, and logs. The company has since continued to innovate like clockwork, turning its platform into a comprehensive suite of monitoring and analytics software. In June, research company Gartner once again recognized Datadog as a leader in application performance monitoring (APM) and observability, citing its broad portfolio and AI engine as key differentiators.
Not surprisingly, Datadog has churned out impressive growth metrics. Its customer base increased approximately 29% over the past year, and the company has maintained a dollar-based net retention rate of more than 130% for 20 consecutive quarters. In other words, existing customers spend at least 30% more with the company from year to year. In turn, revenue has soared 79% to $1.4 billion and free cash flow skyrocketed 168% to $354 million over the past year.
Investors have good reason to be optimistic about the future too. Datadog puts its market opportunity at $53 billion by 2025, and its capacity for innovation has already carried it to the forefront of the APM industry.
On that note, the company recently announced the availability of two new products: Observability Pipelines and Audit Trails. The former is used to collect, transform, and route observability data from any source to any destination, helping businesses control costs and protect sensitive data. And the latter is used to audit changes made to the Datadog platform, helping businesses meet compliance requirements.
Currently, shares trade at 21.7 times sales. That is far from cheap, but it's still a bargain compared to the historical average of 38.5. In light of Datadog's potential for future growth, it seems like a reasonable price to pay. That's why investors should start with a small position in this monster growth stock right now.
10 stocks we like better than Block, Inc.
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*Stock Advisor returns as of August 17, 2022
Trevor Jennewine has positions in Block, Inc. The Motley Fool has positions in and recommends Block, Inc. and Datadog. The Motley Fool recommends Gartner. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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With that in mind, Block (NYSE: SQ) and Datadog (NASDAQ: DDOG) look like smart long-term investments. Collectively, the Square and Cash App ecosystems fueled solid financial results over the past year, in spite of the choppy macroeconomic environment. Its platform gathers and analyzes data from applications, networks, and infrastructure, and it leans on artificial intelligence (AI) to predict and identify performance issues.
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With that in mind, Block (NYSE: SQ) and Datadog (NASDAQ: DDOG) look like smart long-term investments. On that note, with shares currently trading at 2.1 times sales -- an absolute bargain compared to its five-year average of eight times sales -- now is a great time to buy this growth stock. In doing so, Datadog helps businesses secure sensitive data, avoid system downtime, and ensure a positive user experience for its customers.
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With that in mind, Block (NYSE: SQ) and Datadog (NASDAQ: DDOG) look like smart long-term investments. Sharp downturns have historically been the best time to buy stocks, simply because bear markets have always been followed by bull markets. Block: A fintech with a disruptive approach to commerce and consumer finance Block breaks its business into two parts: Square and Cash App.
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With that in mind, Block (NYSE: SQ) and Datadog (NASDAQ: DDOG) look like smart long-term investments. Sharp downturns have historically been the best time to buy stocks, simply because bear markets have always been followed by bull markets. Its Square ecosystem is an integrated suite of hardware, software, and financial services that helps merchants operate across physical and digital sales channels.
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24b70d27-9a67-4592-9f21-3d6e92fb0fad
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718541.0
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2022-09-01 00:00:00 UTC
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Why Snowflake, Datadog, and DocuSign Plunged Today
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DDOG
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https://www.nasdaq.com/articles/why-snowflake-datadog-and-docusign-plunged-today
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nan
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nan
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What happened
Shares of Snowflake (NYSE: SNOW), Datadog (NASDAQ: DDOG), and DocuSign (NASDAQ: DOCU) plunged on Thursday, down 4.8%, 7.5%, and 5.2%, respectively, as of 2:53 p.m. EDT.
There wasn't any company-specific news for these three stocks today, but a toxic combination of slowing growth from two enterprise software peers who reported last night, along with rising long-term interest rates, hit these highly valued stocks hard.
So what
Last night, a couple of fellow enterprise cloud software companies reported earnings, including MongoDB (NASDAQ: MDB) and Okta (NASDAQ: OKTA). Both of those stocks are down severely today, shedding 25% and 35%, respectively.
While each actually beat estimates on their top and bottom lines, MongoDB did notice some marginal slowdown in its Atlas database-as-a-service consumption due to macroeconomic headwinds, and Okta forecast growth to slow, not only from the macroeconomic environment, but also a troubled integration with its Auth0 acquisition.
Both Snowflake and Datadog hit it out of the park in their recent earnings reports last month, as they seem to be mission critical to companies. However, MongoDB's database and Okta's cloud identity products were also thought to be fairly mission critical. And like MongoDB's Atlas product, Snowflake works on a consumption-based model. That could be a tailwind in good times but could also be a headwind if the economy markedly slows down.
Also not helping matters is the fact that while recession fears are in the air, the yield on long-term bond rates are creeping back up again. The 10-year Treasury bond yield rose nearly 13 basis points today to 3.26% as of this writing.
That could be for a number of reasons but likely has to do with increased quantitative tightening. Starting in September, the Federal Reserve is increasing the pace of roll-offs of Treasury bonds from its balance sheet. So less demand for Treasuries could push up yields on government bonds. The Fed has forecast this for quite some time, but it still could be affecting things as the roll-offs take effect.
Higher long-term yields tend to cause sell-offs in long-duration assets such as growth stocks, because high-growth stocks tend to have the bulk of their earnings power well out into the future. The higher the long-term interest rate, the lower the value of future earnings. That's likely another reason for the outsized sell-off in high-growth software companies today.
Now what
It's hard to know exactly where these stocks go from here. While Snowflake and Datadog have each reported stellar earnings results of late, they are still quite expensive by just about any measure, trading at 32.5 and 22.4 times sales, respectively. Therefore, their businesses could continue to do quite well, but their stocks may not respond, due to fears of an economic slowdown, as well as investors using a higher discount rate on future earnings.
DocuSign is much cheaper, at just 4.9 times sales; however, its earnings results have seen a sharp slowdown this year. In June, CEO Dan Springer announced he would be stepping down, with board chair Maggie Wilderotter stepping in as interim CEO. Investors will get more color on the situation there when the company reports second-quarter earnings on Sept. 8.
If inflation cools down and long-term interest rates revert to lower levels, it's possible these stocks could rally. After all, it appears the Federal Reserve is determined to get inflation back down to its 2% target, no matter what happens with the economy. That may actually benefit these high-growth stocks eventually, since they are likely to continue to grow even in a recessionary environment.
However, we also may be in a new era that more resembles the pre-2008 interest rate regime. If that's the case, it may be difficult for stocks with no profits and high price-to-sales ratios to rally.
10 stocks we like better than Snowflake Inc.
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See the 10 stocks
*Stock Advisor returns as of August 17, 2022
Billy Duberstein has no position in any of the stocks mentioned. His clients may own shares of the companies mentioned. The Motley Fool has positions in and recommends Datadog, DocuSign, MongoDB, Okta, and Snowflake Inc. The Motley Fool recommends the following options: long January 2024 $60 calls on DocuSign. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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What happened Shares of Snowflake (NYSE: SNOW), Datadog (NASDAQ: DDOG), and DocuSign (NASDAQ: DOCU) plunged on Thursday, down 4.8%, 7.5%, and 5.2%, respectively, as of 2:53 p.m. EDT. Also not helping matters is the fact that while recession fears are in the air, the yield on long-term bond rates are creeping back up again. While Snowflake and Datadog have each reported stellar earnings results of late, they are still quite expensive by just about any measure, trading at 32.5 and 22.4 times sales, respectively.
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What happened Shares of Snowflake (NYSE: SNOW), Datadog (NASDAQ: DDOG), and DocuSign (NASDAQ: DOCU) plunged on Thursday, down 4.8%, 7.5%, and 5.2%, respectively, as of 2:53 p.m. EDT. There wasn't any company-specific news for these three stocks today, but a toxic combination of slowing growth from two enterprise software peers who reported last night, along with rising long-term interest rates, hit these highly valued stocks hard. So what Last night, a couple of fellow enterprise cloud software companies reported earnings, including MongoDB (NASDAQ: MDB) and Okta (NASDAQ: OKTA).
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What happened Shares of Snowflake (NYSE: SNOW), Datadog (NASDAQ: DDOG), and DocuSign (NASDAQ: DOCU) plunged on Thursday, down 4.8%, 7.5%, and 5.2%, respectively, as of 2:53 p.m. EDT. There wasn't any company-specific news for these three stocks today, but a toxic combination of slowing growth from two enterprise software peers who reported last night, along with rising long-term interest rates, hit these highly valued stocks hard. Higher long-term yields tend to cause sell-offs in long-duration assets such as growth stocks, because high-growth stocks tend to have the bulk of their earnings power well out into the future.
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What happened Shares of Snowflake (NYSE: SNOW), Datadog (NASDAQ: DDOG), and DocuSign (NASDAQ: DOCU) plunged on Thursday, down 4.8%, 7.5%, and 5.2%, respectively, as of 2:53 p.m. EDT. There wasn't any company-specific news for these three stocks today, but a toxic combination of slowing growth from two enterprise software peers who reported last night, along with rising long-term interest rates, hit these highly valued stocks hard. 10 stocks we like better than Snowflake Inc.
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9fdbae8a-afd2-4200-ad71-6400d908c1c1
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718542.0
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2022-09-01 00:00:00 UTC
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Is First Trust NASDAQ100Technology Sector ETF (QTEC) a Strong ETF Right Now?
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DDOG
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https://www.nasdaq.com/articles/is-first-trust-nasdaq100technology-sector-etf-qtec-a-strong-etf-right-now-2
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nan
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nan
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Designed to provide broad exposure to the Technology ETFs category of the market, the First Trust NASDAQ100Technology Sector ETF (QTEC) is a smart beta exchange traded fund launched on 04/19/2006.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
QTEC is managed by First Trust Advisors, and this fund has amassed over $1.68 billion, which makes it one of the larger ETFs in the Technology ETFs. This particular fund, before fees and expenses, seeks to match the performance of the NASDAQ-100 Technology Sector Index.
The NASDAQ-100 Technology Sector Index is an equal-weighted index based on the securities of the NASDAQ-100 Index that are classified as technology.
Cost & Other Expenses
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.56%.
It has a 12-month trailing dividend yield of 0.04%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
QTEC's heaviest allocation is in the Information Technology sector, which is about 91.60% of the portfolio.
Taking into account individual holdings, Datadog, Inc. (class A) (DDOG) accounts for about 2.80% of the fund's total assets, followed by Okta, Inc. (OKTA) and Zscaler, Inc. (ZS).
QTEC's top 10 holdings account for about 25.98% of its total assets under management.
Performance and Risk
The ETF has lost about -31.53% and is down about -28.37% so far this year and in the past one year (as of 09/01/2022), respectively. QTEC has traded between $110.94 and $180.39 during this last 52-week period.
The ETF has a beta of 1.15 and standard deviation of 33.78% for the trailing three-year period, making it a high risk choice in the space. With about 43 holdings, it has more concentrated exposure than peers.
Alternatives
First Trust NASDAQ100Technology Sector ETF is an excellent option for investors seeking to outperform the Technology ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
Technology Select Sector SPDR ETF (XLK) tracks Technology Select Sector Index and the Vanguard Information Technology ETF (VGT) tracks MSCI US Investable Market Information Technology 25/50 Index. Technology Select Sector SPDR ETF has $40.96 billion in assets, Vanguard Information Technology ETF has $43.45 billion. XLK has an expense ratio of 0.10% and VGT charges 0.10%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Technology ETFs.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.
Get it free >>
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
First Trust NASDAQ100Technology Sector ETF (QTEC): ETF Research Reports
Technology Select Sector SPDR ETF (XLK): ETF Research Reports
Vanguard Information Technology ETF (VGT): ETF Research Reports
Okta, Inc. (OKTA): Free Stock Analysis Report
Zscaler, Inc. (ZS): Free Stock Analysis Report
Datadog, Inc. (DDOG): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Taking into account individual holdings, Datadog, Inc. (class A) (DDOG) accounts for about 2.80% of the fund's total assets, followed by Okta, Inc. (OKTA) and Zscaler, Inc. (ZS). Datadog, Inc. (DDOG): Free Stock Analysis Report The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting.
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Taking into account individual holdings, Datadog, Inc. (class A) (DDOG) accounts for about 2.80% of the fund's total assets, followed by Okta, Inc. (OKTA) and Zscaler, Inc. (ZS). Datadog, Inc. (DDOG): Free Stock Analysis Report Technology Select Sector SPDR ETF (XLK) tracks Technology Select Sector Index and the Vanguard Information Technology ETF (VGT) tracks MSCI US Investable Market Information Technology 25/50 Index.
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Taking into account individual holdings, Datadog, Inc. (class A) (DDOG) accounts for about 2.80% of the fund's total assets, followed by Okta, Inc. (OKTA) and Zscaler, Inc. (ZS). Datadog, Inc. (DDOG): Free Stock Analysis Report Designed to provide broad exposure to the Technology ETFs category of the market, the First Trust NASDAQ100Technology Sector ETF (QTEC) is a smart beta exchange traded fund launched on 04/19/2006.
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Taking into account individual holdings, Datadog, Inc. (class A) (DDOG) accounts for about 2.80% of the fund's total assets, followed by Okta, Inc. (OKTA) and Zscaler, Inc. (ZS). Datadog, Inc. (DDOG): Free Stock Analysis Report If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
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2e4bad7a-244a-4809-8a63-3dfad26cf5e9
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718543.0
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2022-08-31 00:00:00 UTC
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Should You Invest in the First Trust NASDAQ100Technology Sector ETF (QTEC)?
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DDOG
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https://www.nasdaq.com/articles/should-you-invest-in-the-first-trust-nasdaq100technology-sector-etf-qtec-3
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nan
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nan
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Launched on 04/19/2006, the First Trust NASDAQ100Technology Sector ETF (QTEC) is a passively managed exchange traded fund designed to provide a broad exposure to the Technology - Broad segment of the equity market.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Technology - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 8, placing it in top 50%.
Index Details
The fund is sponsored by First Trust Advisors. It has amassed assets over $1.69 billion, making it one of the larger ETFs attempting to match the performance of the Technology - Broad segment of the equity market. QTEC seeks to match the performance of the NASDAQ-100 Technology Sector Index before fees and expenses.
The NASDAQ-100 Technology Sector Index is an equal-weighted index based on the securities of the NASDAQ-100 Index that are classified as technology.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.56%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.04%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Information Technology sector--about 91.60% of the portfolio.
Looking at individual holdings, Datadog, Inc. (class A) (DDOG) accounts for about 2.80% of total assets, followed by Okta, Inc. (OKTA) and Zscaler, Inc. (ZS).
The top 10 holdings account for about 25.98% of total assets under management.
Performance and Risk
The ETF has lost about -31.12% so far this year and is down about -28.66% in the last one year (as of 08/31/2022). In that past 52-week period, it has traded between $110.94 and $180.39.
The ETF has a beta of 1.15 and standard deviation of 33.80% for the trailing three-year period, making it a high risk choice in the space. With about 43 holdings, it has more concentrated exposure than peers.
Alternatives
First Trust NASDAQ100Technology Sector ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, QTEC is an excellent option for investors seeking exposure to the Technology ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
Technology Select Sector SPDR ETF (XLK) tracks Technology Select Sector Index and the Vanguard Information Technology ETF (VGT) tracks MSCI US Investable Market Information Technology 25/50 Index. Technology Select Sector SPDR ETF has $41.44 billion in assets, Vanguard Information Technology ETF has $43.89 billion. XLK has an expense ratio of 0.10% and VGT charges 0.10%.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.
Get it free >>
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
First Trust NASDAQ100Technology Sector ETF (QTEC): ETF Research Reports
Technology Select Sector SPDR ETF (XLK): ETF Research Reports
Vanguard Information Technology ETF (VGT): ETF Research Reports
Okta, Inc. (OKTA): Free Stock Analysis Report
Zscaler, Inc. (ZS): Free Stock Analysis Report
Datadog, Inc. (DDOG): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Looking at individual holdings, Datadog, Inc. (class A) (DDOG) accounts for about 2.80% of total assets, followed by Okta, Inc. (OKTA) and Zscaler, Inc. (ZS). Datadog, Inc. (DDOG): Free Stock Analysis Report It has amassed assets over $1.69 billion, making it one of the larger ETFs attempting to match the performance of the Technology - Broad segment of the equity market.
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Looking at individual holdings, Datadog, Inc. (class A) (DDOG) accounts for about 2.80% of total assets, followed by Okta, Inc. (OKTA) and Zscaler, Inc. (ZS). Datadog, Inc. (DDOG): Free Stock Analysis Report Launched on 04/19/2006, the First Trust NASDAQ100Technology Sector ETF (QTEC) is a passively managed exchange traded fund designed to provide a broad exposure to the Technology - Broad segment of the equity market.
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Looking at individual holdings, Datadog, Inc. (class A) (DDOG) accounts for about 2.80% of total assets, followed by Okta, Inc. (OKTA) and Zscaler, Inc. (ZS). Datadog, Inc. (DDOG): Free Stock Analysis Report Technology Select Sector SPDR ETF (XLK) tracks Technology Select Sector Index and the Vanguard Information Technology ETF (VGT) tracks MSCI US Investable Market Information Technology 25/50 Index.
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Looking at individual holdings, Datadog, Inc. (class A) (DDOG) accounts for about 2.80% of total assets, followed by Okta, Inc. (OKTA) and Zscaler, Inc. (ZS). Datadog, Inc. (DDOG): Free Stock Analysis Report Launched on 04/19/2006, the First Trust NASDAQ100Technology Sector ETF (QTEC) is a passively managed exchange traded fund designed to provide a broad exposure to the Technology - Broad segment of the equity market.
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e0a69d05-a87a-4cdf-b5b2-ff9018015de8
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718544.0
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2022-08-31 00:00:00 UTC
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A Bull Market Is Coming. 2 High-Growth Stocks to Buy Now and Hold Forever
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DDOG
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https://www.nasdaq.com/articles/a-bull-market-is-coming.-2-high-growth-stocks-to-buy-now-and-hold-forever
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nan
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nan
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2022 has been a year like no other. Both the S&P 500 and the Nasdaq Composite plunged into bear market territory, though the S&P has recovered somewhat. At the same time, 40-year high inflation, rising interest rates, and economic uncertainty have weighed on consumers and investors alike.
Fortunately, as the old saying goes, "This too shall pass." The stock market has recovered from every other previous downturn, paving the way for the next bull market. That makes now a great time to buy shares of best-in-class businesses, before the next bull run begins. Let's look at two high-growth stocks that stand to benefit from a movement into the next bull market.
1. Datadog: Identifying issues before they become a problem
The adoption of cloud computing is reaching critical mass, driven by the digital transformation. The reliability of cloud-based systems has never been more important, with employee productivity and customer relations hanging in the balance. Keeping systems up and running -- with minimal downtime -- is paramount, which is where Datadog (NASDAQ: DDOG) comes in.
The company's integrated platform keeps tabs on cloud systems, ensuring they stay up and running. The system employs a combination of real-time analytics and monitoring services that keeps watch on servers, databases, apps, tools, and services, and sounds the alarm before a problem has a chance to cascade, which could result in critical downtime. Furthermore, Datadog's system helps get to the root of the problem, so that it can be addressed before it recurs.
Datadog is an industry leader -- but don't take my word for it. The company was identified by Gartner in its vaunted 2022 Magic Quadrant as a leader in application performance monitoring and observability.
As other companies have struggled with slowing demand, Datadog's business is booming. In the second quarter, it reported revenue that grew 74% year over year, accelerating from 67% growth in the prior-year quarter. Datadog isn't consistently profitable, but generates strong and growing free cash flow -- which shows its losses are the result of non-cash items, including depreciation. This suggests that profits are just a matter of time.
The strong financial results were fueled by robust client growth as Datadog's total customer base grew to 21,200, up 29% year over year. Large enterprise customers grew even faster, as those generating $100,000 in annual recurring revenue (ARR) climbed to 2,420, up 54%. The company also has a loyal following that spends more with each passing year, as evidenced by Datadog's dollar-based net revenue retention rate, which has remained above 130% going back five years.
Yet, this could be just the beginning. Datadog generated revenue of $1.03 billion last year, a drop in the bucket compared to its total addressable market, which management estimates will be as much as $53 billion by 2025. And with shares currently trading at roughly 15 times next year's sales -- a bargain compared to its three-year average of 39.4 times sales -- now is the time to buy this growth stock.
2. Snowflake: Thumbing its nose at "subscription" services
Another beneficiary of the move to cloud computing is Snowflake (NYSE: SNOW). The company provides data warehousing, storage, and analytics, breaking down traditional information silos and gathering the data all in one place. The company's proprietary blend of data science and machine learning sifts through all manner of structured and unstructured data and provides users with actionable intelligence.
Many rivals offer such services as part of an ongoing software-as-a-service (SaaS) subscription, but Snowflake bucks the traditional thinking, offering a usage-based model, allowing users to pay for only what they need. This distinction has attracted a large and growing customer base.
Even in the wake of the macroeconomic turmoil that has marked this year, Snowflake's gains were exemplary. For the fiscal 2023 second quarter (ended July 31), Snowflake's revenue grew 83% year over year, and its gross profit margin expanded. The company is also moving closer to profitability and management believes non-GAAP (adjusted) net income could come as early as next quarter. Additionally, Snowflake delivers consistent free cash flow, which is often a precursor to profits.
Furthermore, its remaining performance obligation (RPO) -- or contractually obligated sales that haven't been booked as revenue -- grew 78% year over year, which shows that its growth spurt has legs.
The impressive financial results were underscored by strong user metrics, as its customer base grew 36% year over year, while those spending $1 million or more annually more than doubled. Additionally, customers historically spend more over time, as shown by Snowflake's net revenue retention rate of 171%.
The company has a long runway of growth ahead. Snowflake generated revenue of roughly $1.2 billion in fiscal 2022, which pales in comparison to the $248 billion total addressable market management estimates for 2026. And the stock is a relative bargain, with shares currently trading at roughly 19 times next year's sales -- near the lowest valuation in Snowflake's history.
10 stocks we like better than Datadog
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Danny Vena has positions in Datadog and Snowflake Inc. The Motley Fool has positions in and recommends Datadog and Snowflake Inc. The Motley Fool recommends Gartner. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Keeping systems up and running -- with minimal downtime -- is paramount, which is where Datadog (NASDAQ: DDOG) comes in. Datadog: Identifying issues before they become a problem The adoption of cloud computing is reaching critical mass, driven by the digital transformation. Datadog isn't consistently profitable, but generates strong and growing free cash flow -- which shows its losses are the result of non-cash items, including depreciation.
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Keeping systems up and running -- with minimal downtime -- is paramount, which is where Datadog (NASDAQ: DDOG) comes in. Datadog isn't consistently profitable, but generates strong and growing free cash flow -- which shows its losses are the result of non-cash items, including depreciation. Furthermore, its remaining performance obligation (RPO) -- or contractually obligated sales that haven't been booked as revenue -- grew 78% year over year, which shows that its growth spurt has legs.
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Keeping systems up and running -- with minimal downtime -- is paramount, which is where Datadog (NASDAQ: DDOG) comes in. The strong financial results were fueled by robust client growth as Datadog's total customer base grew to 21,200, up 29% year over year. The company also has a loyal following that spends more with each passing year, as evidenced by Datadog's dollar-based net revenue retention rate, which has remained above 130% going back five years.
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Keeping systems up and running -- with minimal downtime -- is paramount, which is where Datadog (NASDAQ: DDOG) comes in. 2022 has been a year like no other. That makes now a great time to buy shares of best-in-class businesses, before the next bull run begins.
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d127f801-e0f7-4565-9f94-efce8343f4ee
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718545.0
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2022-08-29 00:00:00 UTC
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Sum Up The Parts: VOT Could Be Worth $237
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DDOG
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https://www.nasdaq.com/articles/sum-up-the-parts%3A-vot-could-be-worth-%24237
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nan
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nan
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Looking at the underlying holdings of the ETFs in our coverage universe at ETF Channel, we have compared the trading price of each holding against the average analyst 12-month forward target price, and computed the weighted average implied analyst target price for the ETF itself. For the Vanguard Mid-Cap Growth ETF (Symbol: VOT), we found that the implied analyst target price for the ETF based upon its underlying holdings is $237.31 per unit.
With VOT trading at a recent price near $194.28 per unit, that means that analysts see 22.15% upside for this ETF looking through to the average analyst targets of the underlying holdings. Three of VOT's underlying holdings with notable upside to their analyst target prices are Datadog Inc (Symbol: DDOG), SS&C Technologies Holdings Inc (Symbol: SSNC), and The Trade Desk Inc (Symbol: TTD). Although DDOG has traded at a recent price of $106.73/share, the average analyst target is 34.26% higher at $143.29/share. Similarly, SSNC has 34.13% upside from the recent share price of $57.16 if the average analyst target price of $76.67/share is reached, and analysts on average are expecting TTD to reach a target price of $81.14/share, which is 27.96% above the recent price of $63.41. Below is a twelve month price history chart comparing the stock performance of DDOG, SSNC, and TTD:
Below is a summary table of the current analyst target prices discussed above:
NAME SYMBOL RECENT PRICE AVG. ANALYST 12-MO. TARGET % UPSIDE TO TARGET
Vanguard Mid-Cap Growth ETF VOT $194.28 $237.31 22.15%
Datadog Inc DDOG $106.73 $143.29 34.26%
SS&C Technologies Holdings Inc SSNC $57.16 $76.67 34.13%
The Trade Desk Inc TTD $63.41 $81.14 27.96%
Are analysts justified in these targets, or overly optimistic about where these stocks will be trading 12 months from now? Do the analysts have a valid justification for their targets, or are they behind the curve on recent company and industry developments? A high price target relative to a stock's trading price can reflect optimism about the future, but can also be a precursor to target price downgrades if the targets were a relic of the past. These are questions that require further investor research.
10 ETFs With Most Upside To Analyst Targets »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Although DDOG has traded at a recent price of $106.73/share, the average analyst target is 34.26% higher at $143.29/share. Vanguard Mid-Cap Growth ETF VOT $194.28 $237.31 22.15% Datadog Inc DDOG $106.73 $143.29 34.26% SS&C Technologies Holdings Inc SSNC $57.16 $76.67 34.13% The Trade Desk Inc TTD $63.41 $81.14 27.96% Are analysts justified in these targets, or overly optimistic about where these stocks will be trading 12 months from now? Three of VOT's underlying holdings with notable upside to their analyst target prices are Datadog Inc (Symbol: DDOG), SS&C Technologies Holdings Inc (Symbol: SSNC), and The Trade Desk Inc (Symbol: TTD).
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Three of VOT's underlying holdings with notable upside to their analyst target prices are Datadog Inc (Symbol: DDOG), SS&C Technologies Holdings Inc (Symbol: SSNC), and The Trade Desk Inc (Symbol: TTD). Vanguard Mid-Cap Growth ETF VOT $194.28 $237.31 22.15% Datadog Inc DDOG $106.73 $143.29 34.26% SS&C Technologies Holdings Inc SSNC $57.16 $76.67 34.13% The Trade Desk Inc TTD $63.41 $81.14 27.96% Are analysts justified in these targets, or overly optimistic about where these stocks will be trading 12 months from now? Although DDOG has traded at a recent price of $106.73/share, the average analyst target is 34.26% higher at $143.29/share.
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Three of VOT's underlying holdings with notable upside to their analyst target prices are Datadog Inc (Symbol: DDOG), SS&C Technologies Holdings Inc (Symbol: SSNC), and The Trade Desk Inc (Symbol: TTD). Although DDOG has traded at a recent price of $106.73/share, the average analyst target is 34.26% higher at $143.29/share. Below is a twelve month price history chart comparing the stock performance of DDOG, SSNC, and TTD: Below is a summary table of the current analyst target prices discussed above:
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Vanguard Mid-Cap Growth ETF VOT $194.28 $237.31 22.15% Datadog Inc DDOG $106.73 $143.29 34.26% SS&C Technologies Holdings Inc SSNC $57.16 $76.67 34.13% The Trade Desk Inc TTD $63.41 $81.14 27.96% Are analysts justified in these targets, or overly optimistic about where these stocks will be trading 12 months from now? Three of VOT's underlying holdings with notable upside to their analyst target prices are Datadog Inc (Symbol: DDOG), SS&C Technologies Holdings Inc (Symbol: SSNC), and The Trade Desk Inc (Symbol: TTD). Although DDOG has traded at a recent price of $106.73/share, the average analyst target is 34.26% higher at $143.29/share.
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13c7ca6a-2023-435f-9cbe-b2d56a7929de
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718546.0
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2022-08-27 00:00:00 UTC
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2 Mega-Growth Stocks That Billionaires Can't Stop Buying
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DDOG
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https://www.nasdaq.com/articles/2-mega-growth-stocks-that-billionaires-cant-stop-buying
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nan
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nan
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The S&P 500 had its worst first half since 1970, and the Nasdaq Composite was down 28% at the end of June. But that didn't stop some of the wealthiest investors in the world from buying stocks in the second quarter.
Hedge fund manager Israel Englander of Millennium Management increased his stake in Tesla (NASDAQ: TSLA). And fellow fund manager David Shaw of D. E. Shaw & Company added to his position in Datadog (NASDAQ: DDOG). Both Englander and Shaw have a place on the Bloomberg Billionaires Index, so it's fair to assume they know how to build wealth.
Is it time to buy these growth stocks?
Tesla: An automaker with an ambitious vision
Electric car maker Tesla delivered strong financial results over the past year despite battling several headwinds, including the rising cost of materials, supply chain disruptions, and COVID-19 lockdowns in China. Revenue climbed 60% to $67.2 billion and free cash flow skyrocketed 165% to $6.9 billion, as Tesla posted an industry-leading operating margin of 16.2%.
Elon Musk has often said Tesla would be the best manufacturer in the world, and the company is making good on that promise. The driving forces behind its efficiency include a disruptive direct-to-consumer sales strategy, a sizable cost advantage in battery pack production, and innovations like single-piece casting.
Additionally, Gigafactory Shanghai has localized its business in China, reducing logistics costs because Tesla no longer needs to ship cars into the country. To that end, Tesla should become even more efficient as production continues to scale at Gigafactory Berlin, its first European production facility.
Looking ahead, investors have plenty to be excited about. Tesla expects to grow deliveries 50% per year over a multiyear horizon, and it will soon expand into new verticals of the auto industry. Tesla Semi deliveries will start this year, Cybertruck deliveries will start next year, and the company has a robotaxi slated for production in 2024.
The robotaxi is particularly noteworthy. The vehicle will be designed for full autonomy -- no steering wheel or pedals -- and it will help Tesla achieve its ambitious vision of launching an autonomous ride-hailing network. Notably, Tesla has more autonomous driving data than any other automaker, and that gives it an edge in the race to build a self-driving car. With that in mind, analysts at UBS Investment Bank value the robotaxi market at $2 trillion by 2030, and the electric vehicle market is expected to reach $1.2 trillion by 2027. That puts Tesla in front of a tremendous market opportunity.
Of course, the stock isn't cheap at 15.3 times sales, especially when most automakers have a price-to-sales ratio below 1. But Tesla could revolutionize the transportation industry in the years ahead, so risk-tolerant investors should seriously consider building a small position in this growth stock.
Datadog: The leader in application performance monitoring
Modern IT environments have become quite complex. Businesses depend on an ever-growing number of software and services, and those technologies are often spread across public clouds and private data centers. Datadog provides performance monitoring and security software that helps customers avoid downtime in business-critical applications, networks, and infrastructure.
Datadog offers more than a dozen software products and 500 pre-built integrations, allowing its platform to processes over 10 trillion events each day. Using those data points, Datadog leans on artificial intelligence (AI) to predict and identify performance issues, which accelerates time to detection and resolution for customers.
In June, research company Gartner once again recognized Datadog as a leader in application performance monitoring and observability, citing its broad product portfolio and AI engine as key differentiators. Those assets have fueled a strong land-and-expand growth strategy. Datadog saw its customer base climb 29% over the past year, and its retention rate has exceeded 130% for 20 consecutive quarters, meaning the average spend per customer is rising more than 30% each year.
That has naturally translated into strong financial results. Revenue soared 79% to $1.4 billion over the past year, while free cash flow rocketed 168% to $354 million. Moreover, investors have good reason to believe that momentum will continue. Management puts its market opportunity at $53 billion in 2025, and consistent product innovation has kept Datadog on the leading edge of the observability market.
As a caveat, Datadog isn't exactly cheap at 24.8 times sales, but patient investors with a high risk tolerance should still consider buying the stock. As enterprises continue to invest in digital transformation, monitoring and security software will become increasingly critical, and Datadog is well positioned to benefit from that trend.
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Trevor Jennewine has positions in Tesla. The Motley Fool has positions in and recommends Datadog and Tesla. The Motley Fool recommends Gartner and Nasdaq. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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And fellow fund manager David Shaw of D. E. Shaw & Company added to his position in Datadog (NASDAQ: DDOG). The driving forces behind its efficiency include a disruptive direct-to-consumer sales strategy, a sizable cost advantage in battery pack production, and innovations like single-piece casting. Using those data points, Datadog leans on artificial intelligence (AI) to predict and identify performance issues, which accelerates time to detection and resolution for customers.
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And fellow fund manager David Shaw of D. E. Shaw & Company added to his position in Datadog (NASDAQ: DDOG). Tesla: An automaker with an ambitious vision Electric car maker Tesla delivered strong financial results over the past year despite battling several headwinds, including the rising cost of materials, supply chain disruptions, and COVID-19 lockdowns in China. In June, research company Gartner once again recognized Datadog as a leader in application performance monitoring and observability, citing its broad product portfolio and AI engine as key differentiators.
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And fellow fund manager David Shaw of D. E. Shaw & Company added to his position in Datadog (NASDAQ: DDOG). Tesla: An automaker with an ambitious vision Electric car maker Tesla delivered strong financial results over the past year despite battling several headwinds, including the rising cost of materials, supply chain disruptions, and COVID-19 lockdowns in China. Tesla Semi deliveries will start this year, Cybertruck deliveries will start next year, and the company has a robotaxi slated for production in 2024.
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And fellow fund manager David Shaw of D. E. Shaw & Company added to his position in Datadog (NASDAQ: DDOG). Is it time to buy these growth stocks? Tesla: An automaker with an ambitious vision Electric car maker Tesla delivered strong financial results over the past year despite battling several headwinds, including the rising cost of materials, supply chain disruptions, and COVID-19 lockdowns in China.
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718547.0
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2022-08-25 00:00:00 UTC
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Datadog Continues To Gain
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DDOG
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https://www.nasdaq.com/articles/datadog-continues-to-gain
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nan
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(RTTNews) - Datadog Inc. (DDOG) shares are gaining more than 4 percent on Thursday morning trade. The company has announced yesterday that it has achieved Amazon Web Services Security, networking and retail competencies. The stock has been bullish since August 22.
Currently, the monitoring and security platform for cloud applications shares are trading at 110.44, up 4.89 percent from the previous close of $105.30 on a volume of 901,422.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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(RTTNews) - Datadog Inc. (DDOG) shares are gaining more than 4 percent on Thursday morning trade. The company has announced yesterday that it has achieved Amazon Web Services Security, networking and retail competencies. Currently, the monitoring and security platform for cloud applications shares are trading at 110.44, up 4.89 percent from the previous close of $105.30 on a volume of 901,422.
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(RTTNews) - Datadog Inc. (DDOG) shares are gaining more than 4 percent on Thursday morning trade. Currently, the monitoring and security platform for cloud applications shares are trading at 110.44, up 4.89 percent from the previous close of $105.30 on a volume of 901,422. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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(RTTNews) - Datadog Inc. (DDOG) shares are gaining more than 4 percent on Thursday morning trade. The stock has been bullish since August 22. Currently, the monitoring and security platform for cloud applications shares are trading at 110.44, up 4.89 percent from the previous close of $105.30 on a volume of 901,422.
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(RTTNews) - Datadog Inc. (DDOG) shares are gaining more than 4 percent on Thursday morning trade. The company has announced yesterday that it has achieved Amazon Web Services Security, networking and retail competencies. The stock has been bullish since August 22.
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718548.0
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2022-08-24 00:00:00 UTC
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Datadog (DDOG) Attains AWS Security, Networking Competencies
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https://www.nasdaq.com/articles/datadog-ddog-attains-aws-security-networking-competencies
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Datadog DDOG recently accomplished Amazon AMZN-owned Amazon Web Services (AWS) Security, Networking and Retail competencies.
While AWS Security Competency certifies Datadog's deep technical expertise and proven customer success in securing every stage of cloud adoption, AWS Networking Competency recognizes Datadog as a software partner that enables customers to get deep visibility into networked services and applications across complex native, cloud and hybrid environments.
These latest competencies add to an already significant level of deep expertise with AWS that includes AWS Microsoft Workloads Competency, AWS DevOps Competency, AWS Government Competency and AWS Container Competency among others.
Earlier this year, Datadog entered into a strategic partnership with Amazon’s cloud division AWS. In the second quarter, the company achieved AWS Education Competency Status. This status recognizes Datadog’s demonstration of technical proficiency and success in building solutions that support mission-critical workloads of customers in the higher education, K-12 primary/secondary, research and publishing sectors.
DDOG’s focus on growing partnerships has increased the visibility of its cloud solutions among consumers, contributing to its business growth and customer base.
Datadog, Inc. Price and Consensus
Datadog, Inc. price-consensus-chart | Datadog, Inc. Quote
Datadog Rides on New Product Adoption, Strength in Partner Base
Datadog has been benefiting from the increased adoption of cloud-based monitoring and analytics platforms across the globe. This Zacks Rank #3 (Hold) company’s expanding portfolio of integrated solutions has been acting as a major catalyst in expanding its customer base. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The solid adoption of newer products, including Real User Monitoring, Synthetic Monitoring and Application Performance Monitoring, is expected to aid customer wins in the near term.
Datadog had more than 21,200 customers at the end of the second quarter, up from 16,400 in the year-ago quarter. Of these customers, 2,420 have an annual run rate (ARR) of $100K or more, up from 1,570 in the year-ago quarter. These customers generate about 85% of the total ARR.
As of the end of the second quarter, 79% of customers used two or more products, up from 75% in the year-ago quarter. Additionally, 37% of customers utilized four or more products, up from 28% in the year-ago quarter.
Contributions from a strong cloud partner base, including Alphabet’s GOOGL Google Cloud, Microsoft’s MSFT Azure and AWS, are expected to remain key growth drivers.
Last week, Datadog expanded monitoring for Microsoft Azure and SQL database platforms. In March, Datadog was chosen as a Microsoft partner within the Azure Cloud Adoption Framework. Previously, Datadog had a partnership with Microsoft, owing to which Datadog was available as a first-class service in the Azure console.
Per the Datadog-Microsoft partnership, Datadog will integrate its monitoring and security capabilities with Azure’s full suite of services, thus helping organizations accelerate their cloud adoption process.
Datadog has also extended its strategic partnership with Google Cloud. Datadog and Google Cloud extended this partnership from Europe, the Middle East and Africa (EMEA) to North America.
The extended partnership has made it easier for organizations to access and implement Datadog’s monitoring and security platform, allowing them to secure and optimize migrated and new workloads.
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To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Datadog DDOG recently accomplished Amazon AMZN-owned Amazon Web Services (AWS) Security, Networking and Retail competencies. DDOG’s focus on growing partnerships has increased the visibility of its cloud solutions among consumers, contributing to its business growth and customer base. Datadog, Inc. (DDOG): Free Stock Analysis Report
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Datadog DDOG recently accomplished Amazon AMZN-owned Amazon Web Services (AWS) Security, Networking and Retail competencies. DDOG’s focus on growing partnerships has increased the visibility of its cloud solutions among consumers, contributing to its business growth and customer base. Datadog, Inc. (DDOG): Free Stock Analysis Report
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Datadog DDOG recently accomplished Amazon AMZN-owned Amazon Web Services (AWS) Security, Networking and Retail competencies. DDOG’s focus on growing partnerships has increased the visibility of its cloud solutions among consumers, contributing to its business growth and customer base. Datadog, Inc. (DDOG): Free Stock Analysis Report
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Datadog, Inc. (DDOG): Free Stock Analysis Report Datadog DDOG recently accomplished Amazon AMZN-owned Amazon Web Services (AWS) Security, Networking and Retail competencies. DDOG’s focus on growing partnerships has increased the visibility of its cloud solutions among consumers, contributing to its business growth and customer base.
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2022-08-23 00:00:00 UTC
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3 Cyber Security Stocks To Watch In The Stock Market Today
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https://www.nasdaq.com/articles/3-cyber-security-stocks-to-watch-in-the-stock-market-today
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3 Top Cyber Security Stocks To Check Out Now
Cyber security stocks are a type of investment that is becoming increasingly popular in the stock market as the world becomes more reliant on technology. For the uninitiated, Cyber security stocks are companies that provide products or services that help to protect against cyber attacks. These companies can range from small start-ups to large multinational corporations. Some of the most popular cyber security stocks in thestock market todayare names like Crowdstrike Holdings Inc. (NASDAQ: CRWD) and Datadog Inc. (NASDAQ: DDOG). While there is no guarantee that investing in cyber security stocks will be profitable, many experts believe that they offer a high potential for growth.
Additionally, many people believe that cyber security will become an increasingly important issue in the years to come. As a result, investing in cyber security stocks now may help to ensure a healthy return on investment in the future. With that being said, if you’re interested in investing in cyber security stocks, here are three for your watchlist this week.
Cyber Security Stocks To Buy [Or Avoid] Right Now
Fortinet Inc. (NASDAQ: FTNT)
Palo Alto Networks Inc. (NASDAQ: PANW)
Okta Inc. (NASDAQ: OKTA)
Fortinet (NASDAQ: FTNT)
Fortinet Inc. (FTNT) is an American multinational corporation that provides cybersecurity solutions for businesses and organizations of all sizes. Notably, Fortinet’s primary product is FortiGate, which is a powerful unified threat management system that provides users with complete protection from online threats. Fortinet also offers a wide range of other security products, including FortiAnalyzer and FortiManager, which help businesses effectively manage their network security. In addition to its products, Fortinet also provides services such as managed services, professional services, and training.
Earlier this month, FTNT reported a beat for its second quarter 2022 financial results. Diving in, the company posted second-quarter earnings per share of $0.25 per share. In addition, the company announced a 28.6% revenue increase on a year-over-basis to $1.03 billion. Moreover, Fortinet finished the quarter with bookings of $1.38 billion, which reflects a 42% increase year-over-year. “We delivered strong revenue and billings growth in the second quarter driven by an over 50% year-over-year increase in the number of transactions larger than one million dollars. Large enterprise companies continue to favor Fortinet’s industry leading cost for performance advantage and integrated platform strategy,” commented Ken Xie, Founder, Chairman, and Chief Executive Officer.
Shares of FTNT stock are down 23% year-to-date and currently trade at $50.88 on Tuesday afternoon. With that, could now be a good time to buy FTNT stock at a discount?
Source: TD Ameritrade TOS
[Read More] Stock Market Today: Dow Jones, S&P 500 Mixed; Palo Alto Networks Rallies On Earnings
Palo Alto Networks (NASDAQ: PANW)
Next up, Palo Alto Networks Inc. (PANW) is an American multinational cybersecurity company with headquarters in Palo Alto, California. The company provides a range of network security products, including next-generation firewalls, advanced endpoint protection, and cloud security.
On Monday after market close the company reported stronger-than-expected Q4 2022 financial results. In the report, PANW reported fourth-quarter earnings of $2.39 per share, along with revenue of $1.6 billion. Wall Street consensus estimates were earnings of $2.30 per share, on revenue of $1.5 billion. Additionally, Palo Alto recorded a revenue increase of 27.2% on a year-over-year basis. Meanwhile, its fiscal year 2022 revenue increased 29% year-over-year to $5.5 billion.
On top of that, Palo Alto Networks also announced that its board of directors approved a 3 for 1 stock split. Chairman & CEO of Palo Alto Networks Nikesh Arora commented, “We were pleased by our fourth quarter results, which included GAAP profitability for the first time in four years. Next-Generation Security growth, driven by our rapid pace of innovation and strong sales execution, drove our results. As cybersecurity posture remains critical, our integrated three-platform strategy continues to drive large deal momentum as we consolidate and simplify our customers’ security architectures.“ On Tuesday afternoon, shares of PANW stock rallied over 11% at $568.56 per share.
Source: TD Ameritrade TOS
[Read More] Good Stocks To Invest In Now? 3 Copper Stocks To Check Out
Okta (NASDAQ: OKTA)
Following that, we have, Okta (OKTA). In brief, Okta sells solutions for identity and access management. Its workforce offerings include products to protect and enable employees, contractors, and partners. In addition, the company’s software solutions are delivered via the cloud, and its integrated network provides customers security protection and access across a broad range of applications that are essential to business and government needs. Moving along, earlier this month Okta announced it will report its second quarter fiscal year 2023 financial results on August 31, 2022. In the meantime, let’s recap the company’s most recent quarter’s performance.
During the first quarter of 2023, the company posted revenue of $415 million. This represents a 65% increase year-over-year. Additionally, Okta saw a significant increase in its subscription revenue, which grew 66% year-over-year in Q1 2023. Separate from that, the company previously announced its financial outlook for the second quarter of fiscal 2023. In them, the company estimates total revenue of $428 to $430 million, which signifies a 36% growth rate year-over-year.
Needless to say, investors will likely be paying close tabs on OKTA stock ahead of its August 31st. Similar to the other names mentioned in this article, shares of OKTA stock have been beaten down over 50% year-to-date at $94.27 on Tuesday afternoon. Could this be an opportunity to pick up shares of OKTA stock at value prices?
Source: TD Ameritrade TOS
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Some of the most popular cyber security stocks in thestock market todayare names like Crowdstrike Holdings Inc. (NASDAQ: CRWD) and Datadog Inc. (NASDAQ: DDOG). Large enterprise companies continue to favor Fortinet’s industry leading cost for performance advantage and integrated platform strategy,” commented Ken Xie, Founder, Chairman, and Chief Executive Officer. Chairman & CEO of Palo Alto Networks Nikesh Arora commented, “We were pleased by our fourth quarter results, which included GAAP profitability for the first time in four years.
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Some of the most popular cyber security stocks in thestock market todayare names like Crowdstrike Holdings Inc. (NASDAQ: CRWD) and Datadog Inc. (NASDAQ: DDOG). Cyber Security Stocks To Buy [Or Avoid] Right Now Fortinet Inc. (NASDAQ: FTNT) Palo Alto Networks Inc. (NASDAQ: PANW) Okta Inc. (NASDAQ: OKTA) Fortinet (NASDAQ: FTNT) Fortinet Inc. (FTNT) is an American multinational corporation that provides cybersecurity solutions for businesses and organizations of all sizes. Source: TD Ameritrade TOS [Read More] Stock Market Today: Dow Jones, S&P 500 Mixed; Palo Alto Networks Rallies On Earnings Palo Alto Networks (NASDAQ: PANW) Next up, Palo Alto Networks Inc. (PANW) is an American multinational cybersecurity company with headquarters in Palo Alto, California.
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Some of the most popular cyber security stocks in thestock market todayare names like Crowdstrike Holdings Inc. (NASDAQ: CRWD) and Datadog Inc. (NASDAQ: DDOG). 3 Top Cyber Security Stocks To Check Out Now Cyber security stocks are a type of investment that is becoming increasingly popular in the stock market as the world becomes more reliant on technology. Cyber Security Stocks To Buy [Or Avoid] Right Now Fortinet Inc. (NASDAQ: FTNT) Palo Alto Networks Inc. (NASDAQ: PANW) Okta Inc. (NASDAQ: OKTA) Fortinet (NASDAQ: FTNT) Fortinet Inc. (FTNT) is an American multinational corporation that provides cybersecurity solutions for businesses and organizations of all sizes.
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Some of the most popular cyber security stocks in thestock market todayare names like Crowdstrike Holdings Inc. (NASDAQ: CRWD) and Datadog Inc. (NASDAQ: DDOG). Cyber Security Stocks To Buy [Or Avoid] Right Now Fortinet Inc. (NASDAQ: FTNT) Palo Alto Networks Inc. (NASDAQ: PANW) Okta Inc. (NASDAQ: OKTA) Fortinet (NASDAQ: FTNT) Fortinet Inc. (FTNT) is an American multinational corporation that provides cybersecurity solutions for businesses and organizations of all sizes. Meanwhile, its fiscal year 2022 revenue increased 29% year-over-year to $5.5 billion.
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2022-08-22 00:00:00 UTC
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Should You Invest in the Invesco Dynamic Software ETF (PSJ)?
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https://www.nasdaq.com/articles/should-you-invest-in-the-invesco-dynamic-software-etf-psj-3
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If you're interested in broad exposure to the Technology - Software segment of the equity market, look no further than the Invesco Dynamic Software ETF (PSJ), a passively managed exchange traded fund launched on 06/23/2005.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Technology - Software is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 7, placing it in top 44%.
Index Details
The fund is sponsored by Invesco. It has amassed assets over $226.99 million, making it one of the average sized ETFs attempting to match the performance of the Technology - Software segment of the equity market. PSJ seeks to match the performance of the Dynamic Software Intellidex Index before fees and expenses.
The Dynamic Software Intellidex Index is comprised of stocks of software companies. The Index is designed to provide capital appreciation by thoroughly evaluating companies based on a variety of investment merit criteria, including fundamental growth, stock valuation, investment timeliness and risk factors.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.56%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.69%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Information Technology sector--about 68.10% of the portfolio. Telecom and Healthcare round out the top three.
Looking at individual holdings, Roblox Corp (RBLX) accounts for about 6.33% of total assets, followed by Datadog Inc (DDOG) and Cadence Design Systems Inc (CDNS).
The top 10 holdings account for about 48.46% of total assets under management.
Performance and Risk
The ETF has lost about -17.90% and is down about -25.16% so far this year and in the past one year (as of 08/22/2022), respectively. PSJ has traded between $86.93 and $157.78 during this last 52-week period.
The ETF has a beta of 1.02 and standard deviation of 30.81% for the trailing three-year period, making it a high risk choice in the space. With about 31 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco Dynamic Software ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, PSJ is an excellent option for investors seeking exposure to the Technology ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
SPDR S&P Software & Services ETF (XSW) tracks S&P Software & Services Select Industry Index and the iShares Expanded TechSoftware Sector ETF (IGV) tracks S&P North American Technology-Software Index. SPDR S&P Software & Services ETF has $237.37 million in assets, iShares Expanded TechSoftware Sector ETF has $4.64 billion. XSW has an expense ratio of 0.35% and IGV charges 0.40%.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Invesco Dynamic Software ETF (PSJ): ETF Research Reports
Cadence Design Systems, Inc. (CDNS): Free Stock Analysis Report
SPDR S&P Software & Services ETF (XSW): ETF Research Reports
iShares Expanded TechSoftware Sector ETF (IGV): ETF Research Reports
Datadog, Inc. (DDOG): Free Stock Analysis Report
Roblox Corporation (RBLX): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Looking at individual holdings, Roblox Corp (RBLX) accounts for about 6.33% of total assets, followed by Datadog Inc (DDOG) and Cadence Design Systems Inc (CDNS). Datadog, Inc. (DDOG): Free Stock Analysis Report It has amassed assets over $226.99 million, making it one of the average sized ETFs attempting to match the performance of the Technology - Software segment of the equity market.
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Looking at individual holdings, Roblox Corp (RBLX) accounts for about 6.33% of total assets, followed by Datadog Inc (DDOG) and Cadence Design Systems Inc (CDNS). Datadog, Inc. (DDOG): Free Stock Analysis Report SPDR S&P Software & Services ETF (XSW) tracks S&P Software & Services Select Industry Index and the iShares Expanded TechSoftware Sector ETF (IGV) tracks S&P North American Technology-Software Index.
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Looking at individual holdings, Roblox Corp (RBLX) accounts for about 6.33% of total assets, followed by Datadog Inc (DDOG) and Cadence Design Systems Inc (CDNS). Datadog, Inc. (DDOG): Free Stock Analysis Report Alternatives Invesco Dynamic Software ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors.
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Looking at individual holdings, Roblox Corp (RBLX) accounts for about 6.33% of total assets, followed by Datadog Inc (DDOG) and Cadence Design Systems Inc (CDNS). Datadog, Inc. (DDOG): Free Stock Analysis Report If you're interested in broad exposure to the Technology - Software segment of the equity market, look no further than the Invesco Dynamic Software ETF (PSJ), a passively managed exchange traded fund launched on 06/23/2005.
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2022-08-19 00:00:00 UTC
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Why Palantir, Datadog, and C3.ai Plunged Today
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DDOG
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https://www.nasdaq.com/articles/why-palantir-datadog-and-c3.ai-plunged-today
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What happened
Shares of big data software companies Palantir (NYSE: PLTR), Datadog (NASDAQ: DDOG), and C3.ai (NYSE: AI) all fell hard today, down 6.8%, 4.5%, and 8.9% as of 1 p.m. ET.
There wasn't any company-specific news today from any of these three companies. Rather, they fell as part of a marketwide sell-off in high-growth stocks, likely due to rising long-term bond yields.
So what
Palantir, Datadog, and C3.ai each operate in different corners of the artificial intelligence (AI), machine learning, and big data processing market. Even though many think we are in for an economic downturn, commentary from leading cloud companies thus far has pointed to resilient strength in these big data tools. That's because AI software applications help make businesses more efficient and competitive, so companies are likely loath to cut back on investments in their digital transformation even if the economy slows.
Earlier this month, Datadog reported sizzling 74% revenue growth, as its cloud-based software observability and IT monitoring tools have been gaining favor with companies large and small. While Palantir disappointed in its earnings release, that entirely came from a slowdown in large government contracts; meanwhile, its commercial business recorded much better 46% growth, with enterprise customers more than tripling year over year. C3.ai was the most worrisome of this bunch, as it recorded "only" 38% growth last quarter, but with subscription growth coming in at a lower 31%. Still, that's pretty solid growth for any company in a slowing economy.
The problem, however, is that none of these companies make material profits, and their valuations, while having compressed relative to the go-go era of 2020-2021, are still high on an absolute basis. That makes each company highly susceptible to changes in long-term interest rates and inflation, and it's why each is selling off today.
As a reminder, high-growth but no- or low-profit stocks have the bulk of their profits well out into the future. The further out their earnings, the more those earnings are discounted by higher interest rates. The higher the long-term discount rate, the lower the value of those future profits.
Today, the 10-year Treasury bond yield rose 10 basis points to 2.99% in early morning trading, reaching the highest yield in a month.That means investors may be thinking inflationary pressures aren't receding as fast as thought. Unsurprisingly, virtually all high-growth stocks are selling off hard.
Yesterday afternoon, U.S. Federal Reserve official James Bullard gave an interview and signaled he was in favor of another 75-basis-point rate hike at the upcoming September meeting. That likely surprised some market participants, which interpreted Chair Jay Powell's comments at the late July Fed meeting as more dovish or neutral. Even the minutes from that meeting showed most Fed officials favored decelerating the pace of rate hikes to a 50-basis-point hike at the September meeting.
Bullard's comments seem to indicate that the Fed doesn't believe we are out of the woods in terms of slaying inflation yet. That's despite inflation figures in July showing their first annualized deceleration this year. Basically, Bullard is saying that one month does not make a trend, and inflation is still unacceptably high; therefore, more financial tightening is likely necessary.
The more hawkish tone comes just as growth stocks have rallied fairly hard off of their June lows; therefore, it's no surprise that after this run, largely based on hopes of a Fed pivot, there is some giveback today.
Now what
These three companies are very exciting, as evidenced by their high growth rates and cutting-edge technology. However, lots of excitement usually leads to a high stock price, and none of these companies look particularly cheap, even after today's rout. Palantir and C3.ai continue to log considerable operating losses according to generally accepted accounting principles (GAAP), when factoring in their stock-based compensation, and they still trade at price-to-sales ratios in the high single digits.
Datadog is a much healthier company and is currently operating at about break-even; however, its stock trades at a whopping 25 times sales. Therefore, even though the business may be doing well, rising interest rates may cap how much the stock can go up in the near term. Nevertheless, its near profitability should make it less susceptible to tightening financial conditions than peers that are still generating large losses.
10 stocks we like better than Palantir Technologies Inc.
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Billy Duberstein has no position in any of the stocks mentioned. His clients may own shares of the companies mentioned. The Motley Fool has positions in and recommends Datadog and Palantir Technologies Inc. The Motley Fool recommends C3.ai, Inc. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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What happened Shares of big data software companies Palantir (NYSE: PLTR), Datadog (NASDAQ: DDOG), and C3.ai (NYSE: AI) all fell hard today, down 6.8%, 4.5%, and 8.9% as of 1 p.m. Earlier this month, Datadog reported sizzling 74% revenue growth, as its cloud-based software observability and IT monitoring tools have been gaining favor with companies large and small. The more hawkish tone comes just as growth stocks have rallied fairly hard off of their June lows; therefore, it's no surprise that after this run, largely based on hopes of a Fed pivot, there is some giveback today.
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What happened Shares of big data software companies Palantir (NYSE: PLTR), Datadog (NASDAQ: DDOG), and C3.ai (NYSE: AI) all fell hard today, down 6.8%, 4.5%, and 8.9% as of 1 p.m. That makes each company highly susceptible to changes in long-term interest rates and inflation, and it's why each is selling off today. Even the minutes from that meeting showed most Fed officials favored decelerating the pace of rate hikes to a 50-basis-point hike at the September meeting.
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What happened Shares of big data software companies Palantir (NYSE: PLTR), Datadog (NASDAQ: DDOG), and C3.ai (NYSE: AI) all fell hard today, down 6.8%, 4.5%, and 8.9% as of 1 p.m. That makes each company highly susceptible to changes in long-term interest rates and inflation, and it's why each is selling off today. See the 10 stocks *Stock Advisor returns as of August 17, 2022 Billy Duberstein has no position in any of the stocks mentioned.
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What happened Shares of big data software companies Palantir (NYSE: PLTR), Datadog (NASDAQ: DDOG), and C3.ai (NYSE: AI) all fell hard today, down 6.8%, 4.5%, and 8.9% as of 1 p.m. That makes each company highly susceptible to changes in long-term interest rates and inflation, and it's why each is selling off today. Even the minutes from that meeting showed most Fed officials favored decelerating the pace of rate hikes to a 50-basis-point hike at the September meeting.
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edae95d8-5124-4174-b0fe-65b7c8286e54
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718552.0
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2022-08-18 00:00:00 UTC
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5 Top Cloud Stocks to Buy Now
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DDOG
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https://www.nasdaq.com/articles/5-top-cloud-stocks-to-buy-now
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nan
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nan
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Today, I provide my top 5 cloud stocks to buy for long-term growth investors. These stock picks are ranked by highest conviction. One of my favorite stocks on the list is Datadog (NASDAQ: DDOG). Datadog provides monitoring and analytics tools that give IT teams insights from anywhere and at any time. Datadog brings information together from across an entire organization into a simple dashboard. Companies that leverage Datadog enjoy benefits such as improved user experience, faster resolutions to interruptions, and overall better business decisions. If you want deeper-dive analysis on Datadog and four additional cloud stocks, please watch the video below. These growth stocks can boost your long-term investing portfolio into the clouds! Make sure to subscribe to the channel to stay on top of this sector.
*Stock prices used in the below video were during the trading day of August 18, 2022. The video was published on August 18, 2022.
10 stocks we like better than Datadog
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They just revealed what they believe are the ten best stocks for investors to buy right now... and Datadog wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of July 27, 2022
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Eric Cuka has positions in Alphabet (A shares), Amazon, Cloudflare, Inc., CrowdStrike Holdings, Inc., Datadog, Microsoft, Snowflake Inc., WisdomTree Trust-WisdomTree Cloud Computing Fund, and Zscaler. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Cloudflare, Inc., CrowdStrike Holdings, Inc., Datadog, Microsoft, Snowflake Inc., and Zscaler. The Motley Fool has a disclosure policy. Eric is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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One of my favorite stocks on the list is Datadog (NASDAQ: DDOG). Today, I provide my top 5 cloud stocks to buy for long-term growth investors. Companies that leverage Datadog enjoy benefits such as improved user experience, faster resolutions to interruptions, and overall better business decisions.
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One of my favorite stocks on the list is Datadog (NASDAQ: DDOG). Today, I provide my top 5 cloud stocks to buy for long-term growth investors. Eric Cuka has positions in Alphabet (A shares), Amazon, Cloudflare, Inc., CrowdStrike Holdings, Inc., Datadog, Microsoft, Snowflake Inc., WisdomTree Trust-WisdomTree Cloud Computing Fund, and Zscaler.
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One of my favorite stocks on the list is Datadog (NASDAQ: DDOG). 10 stocks we like better than Datadog When our award-winning analyst team has a stock tip, it can pay to listen. See the 10 stocks *Stock Advisor returns as of July 27, 2022 John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors.
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One of my favorite stocks on the list is Datadog (NASDAQ: DDOG). Today, I provide my top 5 cloud stocks to buy for long-term growth investors. The Motley Fool has a disclosure policy.
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38580b95-4324-41b5-91e3-b3ddde794d21
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718553.0
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2022-08-17 00:00:00 UTC
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Datadog (DDOG) Expands Monitoring to Microsoft SQL, Azure
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DDOG
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https://www.nasdaq.com/articles/datadog-ddog-expands-monitoring-to-microsoft-sql-azure
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nan
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nan
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Datadog DDOG recently announced that it has expanded monitoring for Microsoft MSFT Azure and SQL database platforms.
The expanded support builds on Datadog's Database Monitoring product launched in August 2021. It allows engineers and database administrators to quickly identify and address incorrect indexes, slow queries and other database performance issues and bottlenecks.
Datadog Database Monitoring for Microsoft SQL and Azure includes features to view key query metrics such as average latency, total execution time and the number of rows queried to track problematic queries and long-term trends. It also allows users to visualize differences in plans for individual queries to identify bottlenecks.
In March, Datadog was chosen as a Microsoft partner within the Azure Cloud Adoption Framework. Previously, Datadog had an existing partnership with Microsoft, owing to which Datadog was available as a first-class service in the Azure console. This allowed Azure customers to implement Datadog as a monitoring solution for their cloud workloads.
The partnership also enabled Azure customers to leverage Datadog’s observability platform to drive successful cloud modernization and migration initiatives.
Datadog, Inc. Price and Consensus
Datadog, Inc. price-consensus-chart | Datadog, Inc. Quote
Datadog Rides on Growing Partner Base, Expands User Base
Datadog is steadily benefiting from the increased adoption of cloud-based monitoring and analytics platforms across the globe, resulting from the accelerated digital transformation and cloud migration across organizations.
The stock has declined 14.4% compared with the Zacks Internet Software industry’s decline of 55.2% and surpassed the Computer and Technology sector’s decline of 16.8% in the past year.
The company has been witnessing a steady demand environment for its cloud solutions so far in 2022. In the second quarter, 2022 revenues increased 73.9% year over year to $406.1 million.
Earlier this year, Datadog entered into a strategic partnership with Amazon’s AMZN cloud division Amazon Web Services (AWS). In the second quarter, the company achieved AWS Education Competency Status. This status recognizes Datadog’s demonstration of technical proficiency and success in building solutions that support mission-critical workloads of customers in the higher education, K-12 primary/secondary, research and publishing sectors.
This strategic collaboration has opened up a marketing and co-selling program between Amazon and Datadog, bringing new opportunities for consumers worldwide.
Management also announced the extension of DDOG’s strategic partnership with Alphabet’s GOOGL Google Cloud. Datadog and Google Cloud expanded this relationship from Europe to the Middle East and Africa (EMEA) to North America.
The extended partnership made it easier for organizations to access and implement Datadog’s monitoring and security platform, allowing them to secure and optimize migrated and new workloads.
DDOG’s focus on growing partnerships increased the visibility of its cloud solutions among consumers, which in turn, contributed to its business growth and drove a robust rise in customers.
In the last reported quarter, steady customer additions boosted the top line. Datadog had more than 21,200 customers at the end of the second quarter, up from 16,400 in the year-ago quarter.
As of the end of the second quarter, 79% of customers used two or more products, up from 75% in the year-ago quarter. Additionally, 37% of customers utilized four or more products, up from 28% in the year-ago quarter.
In recent times, companies need to embrace digital conversion soon. As a monitoring and security platform for cloud applications, this Zacks Rank #3 (Hold) company has a strategic advantage and anticipates witnessing robust growth in the ongoing fiscal year. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
For the third quarter of 2022, Datadog anticipates revenues between $410 million and $414 million. The Zacks Consensus Estimate for the same is pegged at $378.05 million.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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DDOG’s focus on growing partnerships increased the visibility of its cloud solutions among consumers, which in turn, contributed to its business growth and drove a robust rise in customers. Datadog DDOG recently announced that it has expanded monitoring for Microsoft MSFT Azure and SQL database platforms. Management also announced the extension of DDOG’s strategic partnership with Alphabet’s GOOGL Google Cloud.
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Datadog DDOG recently announced that it has expanded monitoring for Microsoft MSFT Azure and SQL database platforms. Management also announced the extension of DDOG’s strategic partnership with Alphabet’s GOOGL Google Cloud. DDOG’s focus on growing partnerships increased the visibility of its cloud solutions among consumers, which in turn, contributed to its business growth and drove a robust rise in customers.
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Datadog, Inc. (DDOG): Free Stock Analysis Report Datadog DDOG recently announced that it has expanded monitoring for Microsoft MSFT Azure and SQL database platforms. Management also announced the extension of DDOG’s strategic partnership with Alphabet’s GOOGL Google Cloud.
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Datadog DDOG recently announced that it has expanded monitoring for Microsoft MSFT Azure and SQL database platforms. Management also announced the extension of DDOG’s strategic partnership with Alphabet’s GOOGL Google Cloud. DDOG’s focus on growing partnerships increased the visibility of its cloud solutions among consumers, which in turn, contributed to its business growth and drove a robust rise in customers.
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a922256e-fbb7-44f7-9e0b-9b1fe74ec634
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718554.0
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2022-08-16 00:00:00 UTC
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2 ‘Strong Buy’ Stocks Goldman Sachs Predicts Will Surge Over 40%
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DDOG
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https://www.nasdaq.com/articles/2-strong-buy-stocks-goldman-sachs-predicts-will-surge-over-40
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nan
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nan
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The stock market is finding support right now from two directions, a perception that the Fed is turning slightly dovish and will be a little less aggressive on its rate hikes going forward, and the Q2 earnings, which are coming in better than analysts had feared.
The S&P 500 might still be down 10% for the year, but the index has gained 17% since its mid-June low, and with the macro environment appearing friendlier, investors will be hoping the change of sentiment won’t be a temporary one.
Against this backdrop, Kash Rangan, a 5-star analyst from Goldman Sachs, has picked out two stocks that show room for plenty of gains in the year ahead – in his view, on the order of 40% or better. In fact, the Goldman view is no outlier. Running the tickers through TipRanks’ database, we found out that each boasts a “Strong Buy” consensus rating from the broader analyst community. Let's take a closer look.
Dynatrace (DT)
We’ll start in the world of cloud infrastructure. Dynatrace is a leader in IT observability - that is the ability to assess a system's present state according to the data it generates, such as metrics, logs, and traces. Observability is considered an essential component in managing a successful company these days and the cloud monitoring market is expected to grow significantly over the next few years. This is no surprise, as enterprises are migrating at ever growing numbers to the more efficient environment of the cloud, making infrastructure software easier to sell. The company boasts a list of big clients, which includes, Kroger, SAP, Carnival, and Experian, amongst many others.
That there’s strong demand for Dynatrace's cloud and application monitoring platform was evident in its latest quarterly report - for fiscal Q1 2023 (June quarter). Specifically, revenue increased by 27.4% year-over-year to $267.27 million, beating Wall Street’s expectation of $261.83 million. Non-GAAP EPS of $0.18 also beat the $0.17 consensus estimate.
Goldman’s Kash Rangan liked the look of the print, writing: “Results largely validate our thesis that Dynatrace is a unique software infrastructure provider in that the company’s technology stack is deployed by customers not just for application monitoring and in production environments, but also in front office business use cases (for example real-time metrics on digital go-to-market assets) and in development environments. As such, Dynatrace’s strategic position is improving and customers are deploying Dynatrace more broadly and are also purchasing new modules as Dynatrace’s product portfolio expands.”
These bullish comments underpin Rangan’s Buy rating while the analyst’s $62 price target leaves room for 12-month gains of ~47%. (To watch Rangan’s track record, click here)
Overall, the Strong Buy consensus rating shows that Wall Street generally agrees with the Goldman take here. Dynatrace has 13 reviews on record, including 12 Buys and 1 Hold. The shares are priced at $42.19 and their $51.73 average price target suggests a one-year upside potential of ~23%. (See Dynatrace stock forecast on TipRanks)
Datadog, Inc. (DDOG)
The second Goldman pick we’ll look at here is Datadog, which also operates in the cloud-services observability space. Datadog offers customers the tools needed to monitor, track, and secure their cloud-based platforms and apps in real time. Datadog’s tools include automation, monitoring and instrumentation, source control and bug tracking, and troubleshooting and optimization. The Datadog platform also allows customers to seamlessly navigate through logs, metrics, and traces, to get the best use of the collected data, for proactive management.
All of that may sound like a mouthful, and it’s really just a small taste of what Datadog does, but one thing is clear: this is a service that is essential in today’s increasingly digitized work environment. This can be seen from the company’s revenues and earnings over the past couple of years, which mostly show a consistent pattern of sequential quarterly gains.
That trend was on display when DDOG released 2Q22 earnings earlier this month. Revenue saw a 74% year-over-year growth to reach $406.14 million, above the Street’s forecast for just under $382 million. Non-GAAP EPS of $0.24 more than doubled from the same period last year while also bettering the $0.15 anticipated by the analysts. And for the full year, the company guided for revenue between $1.61 billion to $1.63 billion, and for adjusted net income between $0.74 to $0.81.
Goldman’s Rangan sees the outlook as conservative, but he is in no doubt regarding the bull thesis. He writes, "We believe with a long-term secular shift to the public cloud, as supported by our recent IT Survey report, spending on infrastructure software remains robust. Based on the strength of Datadog’s expanding product portfolio that addresses critical aspects of customers’ cloud migration, coupled with a solid profitable business model that generates rising FCF margins alongside hyper-growth, we believe it’s poised to grow into a preeminent infrastructure software business."
Overall, Rangan thinks DDOG shares have some way to go, and by some way, we mean 88% of upside. Those are the returns investors are looking at, should the stock make it all the way to Rangan's $214 price target. No need to add, the analyst’s rating is a Buy.
As for Wall Street, the consensus view is that DDOG shares deserve a Strong Buy rating. The stock has 19 recent analyst reviews on record, and they break down 16 to 3 in favor of Buys over Holds. With a trading price of $113.54 and an average price target of $143.13, the stock has a potential upside of 26% for the year ahead. (See Datadog’s stock forecast on TipRanks)
To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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(See Dynatrace stock forecast on TipRanks) Datadog, Inc. (DDOG) The second Goldman pick we’ll look at here is Datadog, which also operates in the cloud-services observability space. That trend was on display when DDOG released 2Q22 earnings earlier this month. Overall, Rangan thinks DDOG shares have some way to go, and by some way, we mean 88% of upside.
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(See Dynatrace stock forecast on TipRanks) Datadog, Inc. (DDOG) The second Goldman pick we’ll look at here is Datadog, which also operates in the cloud-services observability space. That trend was on display when DDOG released 2Q22 earnings earlier this month. Overall, Rangan thinks DDOG shares have some way to go, and by some way, we mean 88% of upside.
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(See Dynatrace stock forecast on TipRanks) Datadog, Inc. (DDOG) The second Goldman pick we’ll look at here is Datadog, which also operates in the cloud-services observability space. That trend was on display when DDOG released 2Q22 earnings earlier this month. Overall, Rangan thinks DDOG shares have some way to go, and by some way, we mean 88% of upside.
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As for Wall Street, the consensus view is that DDOG shares deserve a Strong Buy rating. (See Dynatrace stock forecast on TipRanks) Datadog, Inc. (DDOG) The second Goldman pick we’ll look at here is Datadog, which also operates in the cloud-services observability space. That trend was on display when DDOG released 2Q22 earnings earlier this month.
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7a2de0ce-40c2-4f23-99eb-81aefb11096b
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718555.0
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2022-08-15 00:00:00 UTC
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Why Tech Layoffs Aren't Panicking This Investor
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DDOG
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https://www.nasdaq.com/articles/why-tech-layoffs-arent-panicking-this-investor
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nan
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nan
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In this podcast, Motley Fool analysts Deidre Woollard and Tim Beyers discuss:
How a decrease in consumer spending is hitting software-as-a-service companies in unexpected ways.
Why The Trade Desk is thriving in a tough environment.
A "cautious" view on tech layoffs.
Why Walmart might join the streaming wars.
A brilliant, tiny company that's not getting enough attention from investors.
Plus, Motley Fool analysts Jason Moser and Matt Argersinger look at how companies are managing their share count, and one homebuilder that's outperformed Amazon for more than a decade.
To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. To get started investing, check out our quick-start guide to investing in stocks. A full transcript follows the video.
Find out why The Trade Desk is one of the 10 best stocks to buy now
Our award-winning analyst team has spent more than a decade beating the market. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed their ten top stock picks for investors to buy right now. The Trade Desk is on the list -- but there are nine others you may be overlooking.
Click here to get access to the full list!
*Stock Advisor returns as of August 11, 2022
This video was recorded on August 10, 2022.
Deidre Woollard: The Trade Desk posts blowout earnings and we'll tell you about a homebuilder that's outperformed Amazon for more than a decade. You're listening to Motley Fool Money. Welcome to Motley Fool Money. Today, we are looking at those CPI numbers and the potential for more tech layoffs. I'm Deidre Woollard sitting in for Chris Hill and I'm joined by Motley Fool Senior Analyst Tim Beyers. Hey Tim, how are you today?
Tim Beyers: I'm well Deidre, how about you?
Deidre Woollard: Doing well, little hot here in the Alexandria area but hanging in.
Tim Beyers: Yeah, it's hot all around the world here. But I got my caffeine, the wake-up juice is warm which means I'm ready to go.
Deidre Woollard: Well, speaking of things that are warm, inflation. Numbers came out and the annual rate of inflation according to the consumer price index is holding tight at 8.5 percent. Good news, unchanged from July mostly because the gasoline index fell while the costs for food and shelter rose. It's this mixed bag but the thing that I keep coming back to is the high price of food. The food index has increased 10.9 percent over last year, which is the largest price increase since May 1979. Tim, do I need to stop eating?
Tim Beyers: I think we all need to stop eating, Deidre. Yeah, this is not great and I think we're going to see more stories of people really having a tough time here because these are essentials. I think what we're seeing is that essentials are getting more expensive. I've seen this recently. I will just give you a really lame example. But over the weekend, I bought a roast chicken. You used to be able to go to the grocery store and you could get two roast chickens. If you had your grocery loyalty card, you get two roast chickens for 10 bucks. Now, it was one chicken for 8.99. It's like, that's for real. That's new.
Deidre Woollard: Yeah. The thing that I'm thinking about with this too is because it's in our faces, we all go to the grocery store at least once a week. Is this going to start really impacting consumer discretionary? Because we've still been in that revenge spending mode but I'm starting to wonder how fast is this really going to start impacting discretionary.
Tim Beyers: There's no doubt it is and it's certainly affecting guidance. I'll give you just one company that's talking about this. In the most recent quarter when Datadog reported. Now, Datadog has nothing to do with consumer business. It is a Cloud infrastructure provider, but it does have companies in the consumer discretionary sector that are just watching their spending. When Datadog issued guidance, they said, "Look, we have clients in the consumer discretionary spending." It looks like they're taking a look at all of their spend and their biggest buckets of spend, and Datadog has both a subscription product business model with usage attached to it. There are ways for those consumer discretionary companies to dial down some spend. Datadog just issued conservative guidance. It was still really strong but they did call out the consumer discretionary sector and said there's some caution there. We're going to be really conservative in our guidance. I think you're right to be thinking about this, Deidre. It's impacting companies across the sector, not just the consumer discretionary companies, but companies that are actually doing business with those companies and how they are generating revenue from those companies.
Deidre Woollard: That is a really interesting point because you're absolutely right. We tend to think about retail, restaurants, grocery stores, the things that people are interacting with but you're absolutely right. There's all of these other impacts that go all the way down the line, which brings me to our next segment. Earnings have been a mixed bag but one of them that was really good the last couple of days was The Trade Desk. People have been saying, there's going to be this bumpy road for advertising, certainly tying into that consumer discretionary thing. We've seen Roku got walloped, Meta not-so-great either. Trade Desk is forecasting 28 percent growth in Q3. What's the advantage for them here?
Tim Beyers: Well, I think a couple of things. They are focusing on an area that's really important, which is first-party data. Things have really shifted. In the case of The Trade Desk where they're buy-side for bid level advertising, there is a real interest in figuring out how to work with first-party customer data directly and build advertisements around that instead of things like cookies which are going the way of the dinosaur here. The Trade Desk, pardon me, has been pretty early on this in trying to figure this out and I think because of that, I think we're seeing the benefits of that. They're getting some more business here, they're becoming a provider of choice for a platform of choice, I think I would say here. But we're going to see a lot more of this, Deidre.
There's advertising spend will not go away but I think two things will happen. The first is that it's probably going to be sharpened so some budgets will be cut. But then the budget that remains, how do you get the most out of those dollars? You might get the most out of those dollars by looking at your existing customer base or cohorts like your existing customer base and putting advertisements in front of those cohorts because you've got more data about them. You're not really trying to guess, am I in the right demographics? Figuring out, am I in the right space? I think I might be in the right space. The cookie data tells me this. Instead, I'm getting really focused using first-party data to get out in front of the customers where I think the chance of spend is much higher. I think it's targeted and interesting and that's good for The Trade Desk.
Deidre Woollard: Is there any concern about the streaming consolidation and how that might impact Trade Desk? Because I was thinking about we've heard those rumors about Walmart making like a Walmart Plus streaming service. Yet on the other side, you've got like HBO Max, and Discovery and that consolidation. How is this all going to play out?
Tim Beyers: I don't know but I'm strongly rooting for Walmart Plus streaming. [laughs] Walmart Plus is really interesting as an idea. It's cheaper than Amazon Prime. It has most of the things that Prime has including free grocery delivery, but it doesn't have the extras like the original programming. All of that to say that there are more platforms than ever for placing things like advertisements. I think the streaming boon or maybe the normalization of streaming versus linear TV is a real tailwind for first-party advertising where you're using first-party data to create relevant ads and put them in front of people. You want to make the ad tier on some of these streaming platforms relevant and profitable. They ought to be really good for the advertisers and that requires a different level of engagement. Using first-party data is going to be really important. I think it's probably a net tailwind for The Trade Desk but it's just too early to tell, Deidre. We're in the formative stages of this, so calling it right now feels really presumptive. But it sure looks like a tailwind to me.
Deidre Woollard: Interesting. There's so much happening there that I find really fascinating. Another reason I want to talk to you today is because you and I are probably both studying tech layoffs from two different angles. I'm studying it from this office-based perspective. I'm watching my real estate investment trusts, especially in markets like New York City and San Francisco, and I'm watching what some of the big companies are doing and trying to figure it out. You're probably studying it more from this tech company perspective. I saw that Snap's doing another round of layoffs. Groupon just laid of about 15 percent of the workforce. Should we be worried? I'm worried. Are you worried?
Tim Beyers: I am cautious. I would not say worried. I'd say cautious. The reason is because this does happen. This goes in cycles, and unfortunately, Silicon Valley and the tech sector broadly has a habit of spending wildly and then cutting to the bone. Those two extremes continue to exist through cycles. It really stinks. I think there's going to be more layoffs to come. There's a tracker called layoffs.fyi, which they just put in the latest layoffs, and it's heartbreaking to look at. You can see that there's a whole bunch. I would say it's more likely that the pain is going to be at the private company maybe around Series B, Series C financing, or trying to get to that financing and having trouble making the capital work for a longer period of time, and so they end up having to lay people off, and so you get real talented people that push back into the workforce.
What's going to be interesting about this Deidre is you're going to have a lot of really talented tech workers, particularly engineers, marketers, product designers, people like that, who may throw up their hands and say, forget it, I'm moving to the middle of the country because I got a package, six months of severance, or whatever it is, and like, I'm out of here, I'm leaving. That's really interesting for the companies that have committed to hybrid and/or remote work. It's going to be fascinating. I predict there's going to be a rush of really talented people who sign up for the remote first companies that are doing really interesting tech work. Like, we don't care where you are. If you're in the middle of Iowa, fantastic. We'd love to have you. I can see that being very interesting. It's probably more favorable for the companies with a lot of capital right now. Think the bigger companies, and probably a lot worse for these smaller mid-tier companies that we're hoping to IPO in the next two years, and may find that a lot more difficult now.
Deidre Woollard: The amount of venture capital, it was wide-open for a while, and now it's just narrowed. Like why combinator is doing a smaller cohort. There's all of this stuff happening. But I think what you said there is really interesting because, and I know you've talked about this before, is the idea that in these periods, it's like after the dot-com bust. That's when the really amazing companies are born. Right now, there is some engineer who maybe got laid off or sees what's happening in his companies like, nope, I'm going to go start my own thing, and we don't know what that thing is. It could be five-years from now, it could be 10 years from now, but is probably going to be a thing that changes our lives. Sometimes when I'm feeling a little depressed about this thing, I think about those people who are out there and building the next thing that I'm going to love.
Tim Beyers: That is exactly right. These are the best times for entrepreneurship. There is absolutely no doubt about it. You can bet that venture capitalists are paying attention to this. The venture capitalists that are putting real money to work at the seed and A stages, so early stages of the company, those are the venture capitalists to be watching. The ones that are putting a lot of money or have stopped putting money into the late-stage companies, those are the ones that are giving up too early. Really those were the ones that were looking for an easy payout, and they're going to get out of the game, and that part of the market is going to dry up a little bit. It could take some time for these companies to emerge, but you're 100 percent right. It's a brilliant time for entrepreneurship.
Also, if you're a public company investor, it is a brilliant time to be watching companies that are being widely ignored but still have capital. They're not just going to go away. I'll give you one that I think is small but beautiful in this sense. Like Jamf, J-A-M-F, they're a tiny little company that nobody cares about, but they still provide a really valuable service orchestrating Apple devices in the enterprise. They are not going away, Deidre. They have capital. They've been around for a long period of time. They get zero attention. As far as their earnings go, but they are not going away. Is it going to be a blockbuster over the next 10 years? I have no idea. But what I do know is that in a time like this, when things are weird and difficult, a disciplined company like that becomes more valuable.
Deidre Woollard: Well Tim. I love that we started off a little bit depressing, but we've wrapped it up on an optimistic note. Thank you so much for chatting with me today.
Tim Beyers: Thanks Deidre.
Deidre Woollard: Up next, a reminder that just because a company is buying back stock, that doesn't mean you win as a shareholder. Jason Moser and Matt Argersinger will talk about some companies that are handling their share counts well, and some that could use a little work.
Jason Moser: Hi, Matty, it's great to catch up again. Today we're jumping into the wide world of watching your company's share count. Now, this is not a metric that you see published often, but it is a very valuable one that can offer some clues just to how management is allocating capital. It of course, plays along with the share repurchases, another headline we see often, something management will often do to try to return value to shareholders. But it's not always a case of everything being as it seems. When I say that share count is not something we often see published, I mean, in the financial media. We have ways that we can find it in. Matt, I think that's really what I want you to start us off with. First and foremost, let's start with what is the share count, and furthermore, where can I find it?
Matt Argersinger: You bet Jason, great to be with you. Share count. I know most people listening probably know what that means. But share count refers to the number of shares a company has outstanding. Just remember when a company goes public, or wants to raise money from the equity markets, it usually issue shares to do so. Some of these shares are held by insiders. But for a typical company, most shares are held by institutional investors, banks, and investors like us. As you know Jason, we like to talk about the size of companies a lot on this show, and we usually talk about the market capitalization, or market cap. Well, to figure out the market cap, you can simply take the number of shares outstanding, multiply it by the company stock price, and you have the market cap. For example, I was looking recently in a company called Iron Mountain.
Iron Mountain has just under 300 million shares outstanding. Its stock price is around 50 bucks. Multiply those two numbers together, and you get 15 billion, which is roughly the size of Iron Mountain's Market Cap. One pro tip, or maybe semi-pro tip. [laughs] Generally want to focus on diluted shares outstanding. You know that Jason. Rather than basic shares, the diluted share count includes all stock options, restricted stock that they have invested yet, but are likely to. To be more conservative, you want to focus on the diluted share account. As to where they find the info, I don't know if you have a preferred way. I tend to go to the source. You can go to a company's investor relations site, look at the press release for just the most recent quarterly earnings, for example. That should have an income statement. Usually at the bottom of an income statement, you'll find the list of basic and diluted shares outstanding. You'll see the number there.
Jason Moser: Let's take this one step further. Biggest share count, I like mechanics of that, and how you explain how that helps us determine the size of a company. We also see in the financial media, often a big headline companies love to get out there, share repurchase authorization, we are buying back our own stock. On a surface that just sounds like such a bullish sentiment. Wow, the company thinks their stock is worth buying will certainly, I should buy a too. Let's talk a little bit about share repurchases. What are they and why do companies do them?
Matt Argersinger: In stock market history, it's a relatively new phenomenon and I actually have to blame Warren Buffett a little bit. If you go back, he was the investor that was writing about share buybacks and was encouraging a lot of companies like, The Washington Post or Coca-Cola and companies where he was sitting on the boards at the time to buyback their shares because he thought they were cheap and that's of course why Berkshire Hathaway was buying them. It took off. Especially in recent decades, a lot of companies the excess cash or generating a lot of cash, don't often have a really good way of putting that cash to work. A lot of reasons, because there aren't really good places to put that to work. They keep, they're not finding good ideas to earn a good return on capital.
Why not buyback my own shares because it's undervalued and that's a good place to invest our money. Shareholders like it because the one thing share repurchases do if they're done correctly, or I should say if they've done in a vacuum, let's say that [laughs] they will, should bring down the share count. If you bring down the share count, that means your ownership stake as an investor in the company rises and the company's earnings per share, will go up. Not necessarily because the company is raising earnings, but because the share count is going down. The number or the denominator of earnings is shrinking, which means the earnings-per-share will increase and that usually increases the value of the overall company. It's a popular practice and one that's been put in place a lot, especially recently.
Jason Moser: It feels like you have two basic ways in returning value to shareholders share repurchases and dividends. One being that cash in the pocket dividend and I know a lot of people love that. The other share repurchases, it can be a little bit more theoretical as to whether it really does enhance the value of that stock in. That's ultimately what I wanted to get into here next is we want to look at some examples of companies that do the share repurchases well, that they do them effectively. Then also look at some examples of companies that, they're repurchasing their own stock, but maybe it's not having necessarily the effect that you would hope it would. Let's start with a company that does a good job with share repurchases. What's an example you have for us?
Matt Argersinger: One company that comes to mind for me is NVR, the ticker is NVR. They're one of the country's leading homebuilders. They've been legendary almost for buying back their shares. They've done it really since they've been a public company. It's one of the best-performing stocks actually over the last 20 years. Believe it or not, NVR has actually outperformed Amazon if you start from the beginning of the century January 1, 2000. But that aside, I mentioned they're big share repurchases. Over the last 10 years, they spent about $7 billion on share buybacks. It's pretty big. The company itself is only about 16 billion. By spending that money, they've been able to reduce the outstanding share count by more than a third. A lot of those billions were spent when the share price was much lower than it is today. One thing I like to see is if a company is investing in their stock, then I want to also see earnings power increase. If you look at earnings per share over the last 10 years, it's gone up almost 14x. You have a company that's share price is way up, earnings are growing, they've been buying back a lot of shares. Investors have done really well because of those efforts.
Jason Moser: Great example there. One that came to mind today, we'd spoken about recently on, an episode of Motley Fool Money is Lowe's. In Lowe's you are an interesting business because it had up to this point really been in a little bit of a turnaround. I think that CEO Marvin Ellison has done a wonderful job really getting my company back on track. We know the home improvement space is just a wonderful one, very resilient. Lowe's has spent $29.5 billion over the past five years in repurchasing stock. The good news for shareholders is that their share count has followed suit. It's down almost 23 percent all the way back since 2018. They're buying back corner stock, the bringing that share count down. All year by the way, Lowe's is dividend aristocrats, so they pay a dividend on top of that. It's just really colder to hear.
Matt Argersinger: Double whammy.
Jason Moser: Shareholders have really been winning on both fronts there with Lowe's. Another good example of a company that's done it fairly effectively. What's an example of a company that you feel like is maybe not doing it so well?
Matt Argersinger: Well, you mentioned Meta Platforms, formerly Facebook earlier. They start buying back stock pretty meaningfully about five years ago. But really stepped it up over the last couple of years. In fact, over the last five-years, they spent around 105 billion buying back stock. Just in the last 18 months, they spent about $70 billion, so it's really gotten aggressive, and so roughly a quarter of Meta's current market cap is the stock they bought back. But if you look at Meta's shares outstanding over the last five years, down less than six percent. They spent roughly 25 percent of the market cap buying back stock, but the share count is not shrunk that much. Of course, like a lot of companies in the big tech space, Meta issues a lot of shares because they're paying out a lot of stock options to employees. It's part of their compensation practices. Unfortunately, offsets most of the vast majority of the share buyback money they've invested.
Jason Moser: Well, I've got a bad example is in line with what you're talking about there with Meta. It's actually, it's a business that a lot of folks in our universe love. It's a company that's performed very well over the past several years. But NVIDIA, you go all the way back to 2018 and they've spent $8.5 billion in share repurchases. The share count has actually gone up. That's the opposite. That's the George Costanza. [laughs] They're doing the opposite of what we're looking for. Here's to add, even more confusion to the mix though and this is what I found very fascinating when I was looking at both Lowe's and NVIDIA. When you look at the performance of both company's share price is over the last five years, NVIDIA is up 313 percent.
Lowe's up close to 160 percent. Even with that, less than effective share repurchase strategy, NVIDIA shares have performed very well in you're speaking of Meta. I wonder if maybe one of the reasons why that is, is when we talk about tech companies. Tech companies have a reputation for really using those repurchases to offset that share-based compensation. If the expectation is already set going in, well, then there aren't really any surprises. I wish that NVIDIA was bringing that share count down, but it seems like the market more or less just given them a passes and we know that it's more or less just to to offset share-based compensation and we're still OK with that.
Matt Argersinger: That's true, and that's OK. Companies that are growing earnings like NVIDIA or as Meta has done in recent years, they definitely get a pass. They should get a pass. Share repurchases shouldn't be the reason any company that you're going to invest the company because they are buying back stock or because you think the share count is going to go down. Earnings-per-share going to get used. It really still, it comes down to earnings power and those companies have demonstrated tremendous earnings power in recent years. They should get the benefit of that. I still question investing so many billions of dollars though, in doing that, if you really want to return value to shareholders and you don't have any better way to do it. Consider doing a dividend because at least an investor gets to make the choice. It's not being made by the company's CFO or the board, which may not have the investors best interests, especially if it's being used to offset as we talked about share-based compensation.
Jason Moser: Well, before we wrap up here, I just wanted to get your take real quickly on a bigger picture issue. Obviously we don't get politically or on these shows, but I mean, this is, something we're politics intertwines here. It's the, inflation Reduction Act, which looks poised to pass. This is going to include a one percent excise tax attacks on share repurchases. My question is, do you think that this tax, one percent doesn't sound like a lot. Do you think this will have an impact on how companies approach share repurchases in the future.
Matt Argersinger: I'd love to get your opinion too Jason. I don't think one percent is quite enough of incentive for companies to stop buying back stock. You have to remember the cost of equity, depending on how much risk are weighing, can be pretty high, ranging from, say, 8-12 percent for your average company. If that's my cost of equity at one percent haircut feels like a pretty low bar. However, I do think we talked a little bit about dividends. I do think it will cause a few companies to consider paying a dividend rather than do buybacks. If not the companies themselves, I could see share more shareholders, institutional investors to banning it.
Hey, don't do a buyback and incur this extra one percent costs on our capital when you can just keep paying a dividend or pay a dividend to us. Let us decide what to do, especially when you consider there's so many bad examples and we just mentioned a couple, but there's so many examples of companies who just don't do share buybacks. Well at all gosh, we can bring about Bed Bath and Beyond which I think is fed [laughs] like three times its market cap on share buybacks, [laughs] but anyway, most companies just don't do really well and so maybe this will just be another little kick for companies to pay dividends instead.
Matt Argersinger: I'm with you for the most part it probably doesn't have a material impact. It really is just a rounding error for many of these large authorizations. Ultimately bumps up the cost basis budgets to smudge. But it may, force some companies to rethink their dividend policy and maybe that's not such a bad.
Deidre Woollard: As always, people on the program may have interest in the stocks they talk about and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. I'm Deidre Woollard, thanks for listening. We'll see you tomorrow.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Deidre Woollard has positions in Lowe's, Meta Platforms, Inc., Nvidia, and Walmart Inc. Jason Moser has positions in Amazon and The Trade Desk. Matthew Argersinger has positions in Amazon, Coca-Cola, Iron Mountain, NVR, Roku, and The Trade Desk and has the following options: short August 2022 $60 calls on Coca-Cola and short October 2022 $42.50 puts on Iron Mountain. Tim Beyers has positions in Amazon and Berkshire Hathaway (B shares). The Motley Fool has positions in and recommends Amazon, Berkshire Hathaway (B shares), Datadog, Iron Mountain, Jamf Holding Corp., Meta Platforms, Inc., NVR, Nvidia, Roku, The Trade Desk, and Walmart Inc. The Motley Fool recommends Lowe's and recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), long January 2024 $47.50 calls on Coca-Cola, short January 2023 $200 puts on Berkshire Hathaway (B shares), and short January 2023 $265 calls on Berkshire Hathaway (B shares). The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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In this podcast, Motley Fool analysts Deidre Woollard and Tim Beyers discuss: How a decrease in consumer spending is hitting software-as-a-service companies in unexpected ways. What's going to be interesting about this Deidre is you're going to have a lot of really talented tech workers, particularly engineers, marketers, product designers, people like that, who may throw up their hands and say, forget it, I'm moving to the middle of the country because I got a package, six months of severance, or whatever it is, and like, I'm out of here, I'm leaving. The Motley Fool has positions in and recommends Amazon, Berkshire Hathaway (B shares), Datadog, Iron Mountain, Jamf Holding Corp., Meta Platforms, Inc., NVR, Nvidia, Roku, The Trade Desk, and Walmart Inc.
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Deidre Woollard has positions in Lowe's, Meta Platforms, Inc., Nvidia, and Walmart Inc. Jason Moser has positions in Amazon and The Trade Desk. The Motley Fool has positions in and recommends Amazon, Berkshire Hathaway (B shares), Datadog, Iron Mountain, Jamf Holding Corp., Meta Platforms, Inc., NVR, Nvidia, Roku, The Trade Desk, and Walmart Inc. The Motley Fool recommends Lowe's and recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), long January 2024 $47.50 calls on Coca-Cola, short January 2023 $200 puts on Berkshire Hathaway (B shares), and short January 2023 $265 calls on Berkshire Hathaway (B shares).
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It's impacting companies across the sector, not just the consumer discretionary companies, but companies that are actually doing business with those companies and how they are generating revenue from those companies. If you go back, he was the investor that was writing about share buybacks and was encouraging a lot of companies like, The Washington Post or Coca-Cola and companies where he was sitting on the boards at the time to buyback their shares because he thought they were cheap and that's of course why Berkshire Hathaway was buying them. Share repurchases shouldn't be the reason any company that you're going to invest the company because they are buying back stock or because you think the share count is going to go down.
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It's impacting companies across the sector, not just the consumer discretionary companies, but companies that are actually doing business with those companies and how they are generating revenue from those companies. What are they and why do companies do them? Share repurchases shouldn't be the reason any company that you're going to invest the company because they are buying back stock or because you think the share count is going to go down.
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718556.0
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2022-08-15 00:00:00 UTC
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Should Direxion NASDAQ100 Equal Weighted Index Shares (QQQE) Be on Your Investing Radar?
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DDOG
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https://www.nasdaq.com/articles/should-direxion-nasdaq100-equal-weighted-index-shares-qqqe-be-on-your-investing-radar-7
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The Direxion NASDAQ100 Equal Weighted Index Shares (QQQE) was launched on 03/21/2012, and is a passively managed exchange traded fund designed to offer broad exposure to the Large Cap Growth segment of the US equity market.
The fund is sponsored by Direxion. It has amassed assets over $797.01 million, making it one of the average sized ETFs attempting to match the Large Cap Growth segment of the US equity market.
Why Large Cap Growth
Large cap companies usually have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.
Growth stocks have higher than average sales and earnings growth rates. While these are expected to grow faster than the broader market, they also have higher valuations. Also, growth stocks are a type of equity that carries more risk compared to others. Compared to value stocks, growth stocks are a safer bet in a strong bull market, but don't perform as strongly in almost all other financial environments.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.35%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.63%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector--about 40.20% of the portfolio. Consumer Discretionary and Healthcare round out the top three.
Looking at individual holdings, Datadog Inc - Class A (DDOG) accounts for about 1.19% of total assets, followed by Okta Inc (OKTA) and Moderna Inc (MRNA).
The top 10 holdings account for about 11.03% of total assets under management.
Performance and Risk
QQQE seeks to match the performance of the NASDAQ-100 Equal Weighted Index before fees and expenses. The NASDAQ-100 Equal Weighted Index consists of companies in the NASDAQ-100 Index but each of the securities is initially set at a weight of 1.00% of the Index. The NASDAQ-100 Index includes 100 of the largest non-financial securities listed on NASDAQ based on capitalization.
The ETF has lost about -13.87% so far this year and is down about -10.22% in the last one year (as of 08/15/2022). In the past 52-week period, it has traded between $60.80 and $90.09.
The ETF has a beta of 1.05 and standard deviation of 26.65% for the trailing three-year period, making it a medium risk choice in the space. With about 103 holdings, it effectively diversifies company-specific risk.
Alternatives
Direxion NASDAQ100 Equal Weighted Index Shares carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, QQQE is a sufficient option for those seeking exposure to the Style Box - Large Cap Growth area of the market. Investors might also want to consider some other ETF options in the space.
The Vanguard Growth ETF (VUG) and the Invesco QQQ (QQQ) track a similar index. While Vanguard Growth ETF has $78.90 billion in assets, Invesco QQQ has $182.64 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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
Direxion NASDAQ100 Equal Weighted Index Shares (QQQE): ETF Research Reports
Moderna, Inc. (MRNA): Free Stock Analysis Report
Invesco QQQ (QQQ): ETF Research Reports
Vanguard Growth ETF (VUG): ETF Research Reports
Okta, Inc. (OKTA): Free Stock Analysis Report
Datadog, Inc. (DDOG): Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Looking at individual holdings, Datadog Inc - Class A (DDOG) accounts for about 1.19% of total assets, followed by Okta Inc (OKTA) and Moderna Inc (MRNA). Datadog, Inc. (DDOG): Free Stock Analysis Report The Direxion NASDAQ100 Equal Weighted Index Shares (QQQE) was launched on 03/21/2012, and is a passively managed exchange traded fund designed to offer broad exposure to the Large Cap Growth segment of the US equity market.
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Looking at individual holdings, Datadog Inc - Class A (DDOG) accounts for about 1.19% of total assets, followed by Okta Inc (OKTA) and Moderna Inc (MRNA). Datadog, Inc. (DDOG): Free Stock Analysis Report Alternatives Direxion NASDAQ100 Equal Weighted Index Shares carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors.
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Looking at individual holdings, Datadog Inc - Class A (DDOG) accounts for about 1.19% of total assets, followed by Okta Inc (OKTA) and Moderna Inc (MRNA). Datadog, Inc. (DDOG): Free Stock Analysis Report Sector Exposure and Top Holdings It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk.
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Looking at individual holdings, Datadog Inc - Class A (DDOG) accounts for about 1.19% of total assets, followed by Okta Inc (OKTA) and Moderna Inc (MRNA). Datadog, Inc. (DDOG): Free Stock Analysis Report The Direxion NASDAQ100 Equal Weighted Index Shares (QQQE) was launched on 03/21/2012, and is a passively managed exchange traded fund designed to offer broad exposure to the Large Cap Growth segment of the US equity market.
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255b6d27-65b7-41e9-8a92-18b0fea3e5a5
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718557.0
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2022-08-13 00:00:00 UTC
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4 Top Bargain Stocks Ready for a Bull Run
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https://www.nasdaq.com/articles/4-top-bargain-stocks-ready-for-a-bull-run
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Even with the economy in a precarious position and the stock market off its highs, plenty of businesses are still executing at a high level. Despite this, they remain well off their all-time highs and are primed to provide investors solid returns over a long-term holding period (three to five years).
Here are some stocks I believe are primed to have a strong run.
Alphabet
Even though Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) is the third-largest stock on the U.S. exchange, I believe it is a great bargain. The stock has experienced a sell-off due to its heavy exposure to the advertisement industry, which is notoriously weak during recessions. However, this pessimism is a great opportunity to get into a stock that owns dominant brands like the Google search engine, the Android operating system, and YouTube.
Despite a challenging environment, Alphabet still managed to grow its revenue by 13% year over year (YOY), although its operating margin slipped from 31% last year to 28%. Alphabet still produced $12.6 billion in free cash flow, giving it plenty of resources to execute its ambitious buyback plan (Alphabet repurchased $15.2 billion in shares during the second quarter).
Alphabet trades at just under 22 times earnings, but keep in mind this is with reduced profitability. When the economy recovers, Alphabet's revenue will rise rapidly due to the advertisement spending influx, which will cause profits to soar. This profit rise will trigger a stock run-up, and investors will be glad they purchased the stock now when the outlook wasn't so bright.
PayPal
PayPal (NASDAQ: PYPL) has had a rough year. Since peaking in July 2021, the stock has lost 65% of its value. While part of this sell-off was deserved due to over-projecting user growth and mediocre financial results, it's been well overdone.
In Q2, PayPal's total payment volume (TPV) rose 9% YOY to $340 billion, and its free cash flow rose 22% YOY. While this isn't "knock your socks off" growth, it's still impressive for consumers attempting to control spending during a difficult inflationary environment.
Furthermore, its payment transactions per active account rose 16% YOY to 48.7, meaning customers are using its products more often. PayPal was left for dead by many investors, but its recent results show it's still a fintech force to be reckoned with. With a reasonable valuation of 21 times free cash flow, I wouldn't be surprised if PayPal's stock sees a nice boost when the economy recovers.
PubMatic
As mentioned earlier with Alphabet, advertising revenue wasn't easy to come by. However, businesses involved with ad tech excelled. This dichotomy makes sense as advertisers want to ensure that their ads reach their intended audiences. PubMatic (NASDAQ: PUBM) operates in this space and works with ad suppliers to get their inventory to ad buyers.
PubMatic delivered great Q2 results, with revenue rising 27% YOY to $63 million. Additionally, it posted a 12% net income margin, but this number was down from last year's Q2. Still, PubMatic trades at a relatively cheap 20.4 times earnings despite its small size and huge runway.
With its connected TV division growing 150% YOY in Q2 and PubMatic only owning about 3% to 4% of the industry market share, PubMatic has a substantial upside and will see its business boom when advertising spending ramps up.
Datadog
Datadog's (NASDAQ: DDOG) software helps IT teams monitor how their cloud computing operations are functioning. With companies becoming more integrated with the cloud, Datadog's software has become indispensable.
This necessity drove Q2 results, with revenue growing 74% YOY and third-quarter revenue projected to grow 34%. However, analysts wanted stronger guidance, which caused the stock to fall on the news.
What was overlooked was the tremendous customer growth (54% growth in customers spending $100,000 or more) and the free cash flow ($60.2 million) Datadog produced. These results show a strong future for Datadog, even though analysts focused more on the short term. With the market not appreciating Datadog's successful quarter, this stock seems primed for a rapid increase.
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They just revealed what they believe are the ten best stocks for investors to buy right now... and Alphabet (C shares) wasn't one of them! That's right -- they think these 10 stocks are even better buys.
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*Stock Advisor returns as of July 27, 2022
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Keithen Drury has positions in Alphabet (C shares), Datadog, PayPal Holdings, and PubMatic, Inc. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Datadog, PayPal Holdings, and PubMatic, Inc. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Datadog Datadog's (NASDAQ: DDOG) software helps IT teams monitor how their cloud computing operations are functioning. However, this pessimism is a great opportunity to get into a stock that owns dominant brands like the Google search engine, the Android operating system, and YouTube. When the economy recovers, Alphabet's revenue will rise rapidly due to the advertisement spending influx, which will cause profits to soar.
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Datadog Datadog's (NASDAQ: DDOG) software helps IT teams monitor how their cloud computing operations are functioning. When the economy recovers, Alphabet's revenue will rise rapidly due to the advertisement spending influx, which will cause profits to soar. In Q2, PayPal's total payment volume (TPV) rose 9% YOY to $340 billion, and its free cash flow rose 22% YOY.
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Datadog Datadog's (NASDAQ: DDOG) software helps IT teams monitor how their cloud computing operations are functioning. Alphabet Even though Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) is the third-largest stock on the U.S. exchange, I believe it is a great bargain. See the 10 stocks *Stock Advisor returns as of July 27, 2022 Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors.
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Datadog Datadog's (NASDAQ: DDOG) software helps IT teams monitor how their cloud computing operations are functioning. When the economy recovers, Alphabet's revenue will rise rapidly due to the advertisement spending influx, which will cause profits to soar. What was overlooked was the tremendous customer growth (54% growth in customers spending $100,000 or more) and the free cash flow ($60.2 million) Datadog produced.
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83749527-6caa-4845-8b54-28174d285db6
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718558.0
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2022-08-11 00:00:00 UTC
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My Take: 3 Strong Growth Stocks to Buy This Week
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DDOG
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https://www.nasdaq.com/articles/my-take%3A-3-strong-growth-stocks-to-buy-this-week
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nan
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nan
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The major market indexes have entered rally mode over the last month, but the S&P 500 index, Dow Jones Industrial Average, and Nasdaq Composite are all still down anywhere from 10% to 20% year to date.
While no one knows where the markets will finish the year, companies that are still reporting high revenue growth rates in this environment certainly have advantages working in their favor and could be home-run stocks in the next bull market.
Advanced Micro Devices (NASDAQ: AMD), Datadog (NASDAQ: DDOG), and Monday.com (NASDAQ: MNDY) all recently reported fantastic growth rates in the second quarter. With their share prices well off their highs, there's no better time to add these stocks to your nest egg.
1. Advanced Micro Devices
Shares of AMD are down 33% year to date but have rallied about 20% over the last month. Weakness in PC shipments has weighed on semiconductor stocks this year, most notably Intel and Nvidia. But AMD is performing relatively well, and even better, the stock trades at a relatively low valuation.
AMD reported a whopping 70% year-over-year increase in revenue for the second quarter. Adjusted earnings per share were also strong, rising 67% year over year. Growth was driven by the recent acquisition of Xilinx, a leading maker of programmable chips, in addition to strong performance from data centers.
AMD noted a decline in gaming graphics processing units (GPUs) sales, which echoes what Nvidia is reporting. Because Nvidia's main products are GPUs, it is suffering the consequences of declining demand in the gaming hardware market. Nvidia expects revenue to be down 17% year over year when it reports earnings results on Aug. 24. AMD's product lineup spanning GPUs and central processing units (CPUs) is leading to stronger performance compared to the competition in the near term.
To keep the momentum going, AMD is on schedule to launch the 5-nanometer Genoa CPU for servers later this year, which could pave the way for further market share gains against its top CPU competitor Intel.
Given AMD's growth, the stock looks like a steal at its current price-to-earnings ratio of 22 based on forward earnings estimates. That's just slightly more expensive than the average stock in the S&P 500 index.
2. Datadog
Datadog is a leading software-as-a-service (SaaS) platform that helps companies monitor their cloud infrastructure and security and troubleshoot problem areas across their data systems. Companies are seeking out cloud-based monitoring tools to oversee their operations as they migrate their data systems over to the cloud. Because of this, buying shares of Datadog is another way investors can gain exposure to the cloud computing megatrend.
Revenue growth has been terrific, up 83% and 74%, respectively, in the first and second quarters. While management is cautious about the potential for demand to soften in the second half of the year due to the uncertain economic environment, Datadog brings enormous value to companies in challenging times, given the greater efficiency gains its DevOps platform provides. It should continue to report relatively strong growth in the near term.
Full-year guidance calls for revenue to increase between 56% and 58% over 2021. The company is continuing to spend about 42% of its revenue on research and development while generating a 15% free-cash-flow margin. Over time, the market may reward Datadog with a higher valuation for its balanced top- and bottom-line growth.
Datadog's profitability at this early stage of its growth curve reflects a strong business. Gartner recently named Datadog a leader in the 2022 Magic Quadrant for application performance monitoring and observability -- the second consecutive year Datadog has been named on this prestigious list.
Investors should be aware that the cloud monitoring market is highly competitive. Datadog faces competition from well-entrenched larger companies with greater financial resources. If growth were to sharply taper off, I would sell and look for better opportunities. But as long as Datadog continues to reinvest in new features and sees those investments rewarded with more customers adopting its platform, investors could realize substantial gains on their investment over the next decade and beyond.
3. Monday.com
Monday.com is another fast-growing software stock that provides tremendous value for companies. Its flagship product is Work OS -- an open platform that helps business teams more efficiently collaborate on projects and troubleshoot problems during software development.
It's a competitive market with numerous alternatives for companies to choose from, but Monday's easy-to-use interface is winning so far. The company just reported second-quarter earnings results, where revenue soared 75% year over year, compared to 84% in the first quarter.
Those are strong numbers. The added bonus was that clients continued to spend on additional services. The net-dollar-retention rate was over 150% for customers spending more than $50,000 annually, which is outstanding for a SaaS company.
Monday continues investing in new services. It recently announced a customer relationship management (CRM) service that provides automated tasks, customization, and other tools to help companies manage sales leads. This is another highly competitive market, with Salesforce, Oracle, Microsoft, and Adobe commanding the lion's share of the CRM market.
Still, Monday's main advantage is its open platform, which can sync with external services, including integration with Salesforce. It's a good sign that Monday is continuing to expand globally. In May, the company opened a new office in London to serve as the company's European headquarters as it expands in the U.K. and worldwide. This is clearly in preparation for the growing demand management sees for its services.
Monday stock is not cheap, trading at 15 times sales, but neither was Salesforce in its early growth days. Monday's consistently high growth is a mirror reflection of Salesforce's annual growth around 2005 as it rocketed toward multibagger returns for investors. Monday is still a small company operating in a $56 billion market, which could lead to similar results.
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*Stock Advisor returns as of July 27, 2022
John Ballard has positions in Datadog, Nvidia, Salesforce, Inc., and monday.com Ltd. The Motley Fool has positions in and recommends Adobe Inc., Advanced Micro Devices, Datadog, Intel, Microsoft, Nvidia, Salesforce, Inc., and monday.com Ltd. The Motley Fool recommends Gartner and recommends the following options: long January 2023 $57.50 calls on Intel, long January 2024 $420 calls on Adobe Inc., short January 2023 $57.50 puts on Intel, and short January 2024 $430 calls on Adobe Inc. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Advanced Micro Devices (NASDAQ: AMD), Datadog (NASDAQ: DDOG), and Monday.com (NASDAQ: MNDY) all recently reported fantastic growth rates in the second quarter. AMD's product lineup spanning GPUs and central processing units (CPUs) is leading to stronger performance compared to the competition in the near term. While management is cautious about the potential for demand to soften in the second half of the year due to the uncertain economic environment, Datadog brings enormous value to companies in challenging times, given the greater efficiency gains its DevOps platform provides.
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Advanced Micro Devices (NASDAQ: AMD), Datadog (NASDAQ: DDOG), and Monday.com (NASDAQ: MNDY) all recently reported fantastic growth rates in the second quarter. The Motley Fool has positions in and recommends Adobe Inc., Advanced Micro Devices, Datadog, Intel, Microsoft, Nvidia, Salesforce, Inc., and monday.com Ltd. The Motley Fool recommends Gartner and recommends the following options: long January 2023 $57.50 calls on Intel, long January 2024 $420 calls on Adobe Inc., short January 2023 $57.50 puts on Intel, and short January 2024 $430 calls on Adobe Inc.
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Advanced Micro Devices (NASDAQ: AMD), Datadog (NASDAQ: DDOG), and Monday.com (NASDAQ: MNDY) all recently reported fantastic growth rates in the second quarter. While no one knows where the markets will finish the year, companies that are still reporting high revenue growth rates in this environment certainly have advantages working in their favor and could be home-run stocks in the next bull market. The company just reported second-quarter earnings results, where revenue soared 75% year over year, compared to 84% in the first quarter.
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Advanced Micro Devices (NASDAQ: AMD), Datadog (NASDAQ: DDOG), and Monday.com (NASDAQ: MNDY) all recently reported fantastic growth rates in the second quarter. It should continue to report relatively strong growth in the near term. Monday continues investing in new services.
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179f13d2-0c67-43ec-93d0-2fb110dc1e53
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718559.0
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2022-08-10 00:00:00 UTC
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Nasdaq 100 Movers: PDD, ZS
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DDOG
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https://www.nasdaq.com/articles/nasdaq-100-movers%3A-pdd-zs
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nan
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nan
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In early trading on Wednesday, shares of Zscaler topped the list of the day's best performing components of the Nasdaq 100 index, trading up 7.6%. Year to date, Zscaler has lost about 45.3% of its value.
And the worst performing Nasdaq 100 component thus far on the day is Pinduoduo, trading down 4.5%. Pinduoduo is lower by about 22.5% looking at the year to date performance.
Two other components making moves today are JD.com, trading down 2.7%, and Datadog, trading up 6.9% on the day.
VIDEO: Nasdaq 100 Movers: PDD, ZS
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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In early trading on Wednesday, shares of Zscaler topped the list of the day's best performing components of the Nasdaq 100 index, trading up 7.6%. And the worst performing Nasdaq 100 component thus far on the day is Pinduoduo, trading down 4.5%. VIDEO: Nasdaq 100 Movers: PDD, ZS The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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In early trading on Wednesday, shares of Zscaler topped the list of the day's best performing components of the Nasdaq 100 index, trading up 7.6%. Year to date, Zscaler has lost about 45.3% of its value. And the worst performing Nasdaq 100 component thus far on the day is Pinduoduo, trading down 4.5%.
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In early trading on Wednesday, shares of Zscaler topped the list of the day's best performing components of the Nasdaq 100 index, trading up 7.6%. And the worst performing Nasdaq 100 component thus far on the day is Pinduoduo, trading down 4.5%. Two other components making moves today are JD.com, trading down 2.7%, and Datadog, trading up 6.9% on the day.
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And the worst performing Nasdaq 100 component thus far on the day is Pinduoduo, trading down 4.5%. Pinduoduo is lower by about 22.5% looking at the year to date performance. VIDEO: Nasdaq 100 Movers: PDD, ZS The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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aebe1c46-a062-4553-94a3-d2f0814d8914
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718560.0
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2022-08-10 00:00:00 UTC
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This Tech Stock Just Grew Sales 74% -- Buy the Dip?
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DDOG
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https://www.nasdaq.com/articles/this-tech-stock-just-grew-sales-74-buy-the-dip
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nan
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nan
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Datadog (NASDAQ: DDOG) reported second-quarter earnings on Aug. 4, and the results were exceptional. Despite macroeconomic headwinds, this digital infrastructure observability platform didn't see much of a slowdown in its business and continued to post robust results.
That said, investors still didn't think it was enough. Shares fell slightly after the company reported earnings, leaving Datadog down almost 40% in 2022. If you're a long-term investor looking to buy and hold high-quality businesses, Datadog might be for you, given this year-to-date slump.
Image source: Getty Images.
Datadog kept chugging along
Datadog leads offers over 30 tools to help businesses ensure their cloud infrastructure and digital applications run smoothly. A company wants its digital applications to function for consumers, no matter the economic environment. Therefore, Datadog is a cornerstone of a business's operations, and if a company has to reduce spending, it's unlikely it'll be through Datadog.
This quarter proved that: Datadog barely saw any indication of worsening economic conditions. Second-quarter revenue soared 74% year over year to $406 million, driven by increasing spending. The company's net retention rate surpassed 130% for the 20th consecutive quarter, while churn stayed in the mid-to-low single digits.
What was even more impressive was management's guidance. The company raised its full-year expectations for revenue, now anticipating it will generate about $1.62 billion in sales this year. This represents a 57% year-over-year increase, showing that management doesn't foresee current macroeconomic headwinds significantly impacting the business this year.
Even this guidance, however, might understate the company's resiliency. Management made it clear this guidance was conservative, so come year's end, Datadog could potentially report even stronger results.
The minor stumbles
While it isn't a surprise Datadog saw continued demand this quarter, one of the concerns was that the company would see less additional spending from existing customers. That wasn't a major problem, but there were minor signs of weakness in some customer cohorts. As co-founder and CEO Olivier Pomel explains, Datadog saw spending expand at a slower rate in certain sectors:
We saw our larger spending customers continue to grow but at a rate that was lower than historical levels. This effect was more pronounced in certain industries, particularly in consumer discretionary, which includes e-commerce and food and delivery customers.
Even so, this wasn't enough to be noticeable in the company's financials. The number of customers spending over $100,000 annually continued to improve, jumping 54% year over year to 2,420 during the quarter.
Even if this becomes a more widespread problem, Datadog has the cash to continue investing and to maintain its dominant position in the industry. Over the past six months, Datadog has generated $190 million in free cash flow, representing a margin of almost 25%. This lucrative cash generation can sustain the business through a downturn, while rivals might have to cut back on their investments to stay afloat. Therefore, Datadog might come out even stronger relative to the competition.
This top dog still looks appealing
To be clear, this stock isn't cheap. Shares trade at 22 times projected 2022 sales, which isn't a bargain by any stretch of the imagination. That said, you're paying for a high-quality business. This cash-flow positive leader is critical to its customers, and as long as companies care about digital application and cloud infrastructure performance, Datadog looks poised to thrive.
With its large product portfolio, Datadog is creating high switching costs and a robust ecosystem that makes it hard for customers to leave. That sets it up to capture a significant share of the $53 billion addressable market management expects for 2025.
This quarter was an example of Datadog flexing its competitive advantages and the essential nature of its service. With shares down substantially in 2022, consider adding this top-notch business to your portfolio.
10 stocks we like better than Datadog
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They just revealed what they believe are the ten best stocks for investors to buy right now... and Datadog wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of July 27, 2022
Jamie Louko has positions in Datadog. The Motley Fool has positions in and recommends Datadog. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Datadog (NASDAQ: DDOG) reported second-quarter earnings on Aug. 4, and the results were exceptional. The minor stumbles While it isn't a surprise Datadog saw continued demand this quarter, one of the concerns was that the company would see less additional spending from existing customers. This cash-flow positive leader is critical to its customers, and as long as companies care about digital application and cloud infrastructure performance, Datadog looks poised to thrive.
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Datadog (NASDAQ: DDOG) reported second-quarter earnings on Aug. 4, and the results were exceptional. Shares fell slightly after the company reported earnings, leaving Datadog down almost 40% in 2022. Second-quarter revenue soared 74% year over year to $406 million, driven by increasing spending.
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Datadog (NASDAQ: DDOG) reported second-quarter earnings on Aug. 4, and the results were exceptional. Datadog kept chugging along Datadog leads offers over 30 tools to help businesses ensure their cloud infrastructure and digital applications run smoothly. Therefore, Datadog is a cornerstone of a business's operations, and if a company has to reduce spending, it's unlikely it'll be through Datadog.
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Datadog (NASDAQ: DDOG) reported second-quarter earnings on Aug. 4, and the results were exceptional. A company wants its digital applications to function for consumers, no matter the economic environment. Second-quarter revenue soared 74% year over year to $406 million, driven by increasing spending.
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427f128b-b8b1-4b4a-a491-850f0457952e
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718561.0
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2022-08-09 00:00:00 UTC
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Is Datadog Stock a Buy Now?
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DDOG
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https://www.nasdaq.com/articles/is-datadog-stock-a-buy-now
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nan
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nan
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Datadog's (NASDAQ: DDOG) stock dipped 2% after the cloud-based data visualization company posted its second-quarter earnings report. Its revenue rose 74% year over year to $406 million, beating analysts' estimates by $25 million. Its adjusted net income surged 160% to $84 million, or $0.24 per share, which also cleared expectations by nine cents.
Those headline numbers looked impressive, but a few issues prevented the bulls from rushing back to the stock, which has tumbled nearly 35% this year amid rising interest rates and other macroeconomic challenges. Let's examine Datadog's strengths, flaws, and valuation to see if it's still worth buying.
Image source: Getty Images.
Slowing growth in large customers
Datadog pulls diagnostic data from a company's databases, servers, and apps in real time, then aggregates all that information in unified dashboards. That silo-busting approach saves money and makes it much easier for IT professionals to identify potential problems.
The company ended the second quarter with 2,240 customers that generated annual recurring revenues (ARR) of at least $100,000. That represented 54% growth from a year ago -- but a loss of 10 customers from the previous quarter.
PERIOD
Q2 2021
Q3 2021
Q4 2021
Q1 2022
Q2 2022
Customers with ARR > $100,000
1,570
1,800
2,010
2,250
2,240
Data source: Datadog.
It attributed that sequential decline to slower spending across the consumer-discretionary sector, especially among e-commerce, food, and delivery companies, which experienced post-pandemic slowdowns. On the bright side, Datadog's dollar-based net retention rate, which gauges its revenue growth per existing customer, has remained above 130% for 20 straight quarters. However, its year-over-year revenue growth has still slightly decelerated over the past two quarters.
PERIOD
Q2 2021
Q3 2021
Q4 2021
Q1 2022
Q2 2022
Revenue growth (YOY)
67%
75%
84%
83%
74%
Data source: Datadog. YOY = Year-over-year.
Management's guidance suggests that slowdown will continue with revenue expected to rise 52% to 53% year over year in the third quarter while growing 56% to 58% for the full year.
Those estimates matched analysts' expectations, but investors were likely looking for even higher estimates to justify buying the stock at about 23 times this year's sales. By comparison, Snowflake -- a cloud-based data warehousing company which is growing slightly faster than Datadog -- trades at 28 times this year's sales.
Datadog also continues to acquire more companies to gain new customers. It purchased Timber last year to launch its new Observability Pipelines product, and it recently agreed to buy another observability platform called Seekret. It's natural for growing companies to expand via acquisitions, but it could also indicate Datadog is running out of room to grow organically.
Declining operating margins
Datadog's gross margins expanded sequentially and year over year by GAAP (generally accepted accounting principles) and non-GAAP metrics in the second quarter. However, its operating margins declined sequentially by both measures -- and its GAAP operating margin turned negative again after two positive quarters.
PERIOD
Q2 2021
Q3 2021
Q4 2021
Q1 2022
Q2 2022
Gross margin (GAAP)
76%
77%
79%
79%
80%
Gross margin (Non-GAAP)
76%
78%
80%
80%
81%
Operating margin (GAAP)
(4%)
(2%)
3%
3%
(1%)
Operating margin (Non-GAAP)
13%
16%
22%
23%
21%
Data source: Datadog.
Datadog attributed that contraction to a return to in-office attendance, business travel, and events in a post-lockdown world, as well as rising research and development, sales, and marketing investments in its new products.
It expects that pressure to continue and reduce its non-GAAP operating margin to about 13% in the third quarter. However, it also expects that figure to stay roughly flat at 16% for the full year.
Datadog is also guiding for adjusted EPS to rise 15% to 30% year over year in the third quarter, and to grow 54% to 69% for the full year. Once again, those estimates matched analysts' expectations. Based on those forecasts, the stock still trades at more than 150 times forward earnings.
Is it the right time to buy Datadog?
Datadog's business is firing on all cylinders, but its stock is priced for perfection and it's too easy to spot the imperfections. Macroeconomic headwinds could cause its sequential growth in large customers to remain sluggish over the next few quarters, and its near-term margins will likely be squeezed by a combination of rising post-pandemic costs and higher investments.
If the stock were a bit cheaper, it would be easy to recommend. But at its current valuation, the company needs to hit home runs -- not doubles or triples -- every quarter to spark meaningful rallies. Investors can nibble on this promising growth stock today, but they shouldn't be surprised if it pulls back further in this challenging market for hypergrowth companies.
10 stocks we like better than Datadog
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Datadog wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of July 27, 2022
Leo Sun has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Datadog and Snowflake Inc. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Datadog's (NASDAQ: DDOG) stock dipped 2% after the cloud-based data visualization company posted its second-quarter earnings report. Those headline numbers looked impressive, but a few issues prevented the bulls from rushing back to the stock, which has tumbled nearly 35% this year amid rising interest rates and other macroeconomic challenges. Slowing growth in large customers Datadog pulls diagnostic data from a company's databases, servers, and apps in real time, then aggregates all that information in unified dashboards.
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Datadog's (NASDAQ: DDOG) stock dipped 2% after the cloud-based data visualization company posted its second-quarter earnings report. By comparison, Snowflake -- a cloud-based data warehousing company which is growing slightly faster than Datadog -- trades at 28 times this year's sales. Declining operating margins Datadog's gross margins expanded sequentially and year over year by GAAP (generally accepted accounting principles) and non-GAAP metrics in the second quarter.
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Datadog's (NASDAQ: DDOG) stock dipped 2% after the cloud-based data visualization company posted its second-quarter earnings report. Declining operating margins Datadog's gross margins expanded sequentially and year over year by GAAP (generally accepted accounting principles) and non-GAAP metrics in the second quarter. Gross margin (GAAP) 76% 77% 79% 79% 80% Gross margin (Non-GAAP) 76% 78% 80% 80% 81% Operating margin (GAAP) (4%) (2%) 3% 3% (1%) Operating margin (Non-GAAP) 13% 16% 22% 23% 21% Data source: Datadog.
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Datadog's (NASDAQ: DDOG) stock dipped 2% after the cloud-based data visualization company posted its second-quarter earnings report. By comparison, Snowflake -- a cloud-based data warehousing company which is growing slightly faster than Datadog -- trades at 28 times this year's sales. Datadog is also guiding for adjusted EPS to rise 15% to 30% year over year in the third quarter, and to grow 54% to 69% for the full year.
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68aab69b-959c-4882-885c-2b9315d2704b
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718562.0
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2022-08-09 00:00:00 UTC
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3 Stocks You'll Be Glad You Bought at These Prices
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DDOG
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https://www.nasdaq.com/articles/3-stocks-youll-be-glad-you-bought-at-these-prices-2
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nan
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nan
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Even though July was a great month for stocks, many are still well off their all-time highs. This means it's not too late for investors to pick up some fantastic companies for bargain prices.
Among the stocks I'm eyeing are Datadog (NASDAQ: DDOG), MercadoLibre (NASDAQ: MELI), and dLocal (NASDAQ: DLO). I believe these three companies still have a long way to run, and investors should keep these stocks at the top of their watch lists.
1. Datadog
With businesses migrating their operations to the cloud, it's becoming increasingly necessary to monitor how these programs interact with each other. In-house solutions are clunky and can be disrupted with the addition of another program, but Datadog's offering is adaptable and helps its users monitor cloud offerings across nearly every cloud software platform. As assessed by third-party research specialist Gartner, Datadog has one of the top solutions in the application performance management and observability sector and claimed the highest position in the ability to execute.
Datadog also recently reported stellar Q2 results. Revenue grew 74% year over year to $406 million, and free cash flow was $73 million. Datadog also barely lost money, with just a $3.1 million operating loss. Additionally, customers that spend more than $100,000 annually grew 54% year over year to 1,570. These were solid results that few can find a flaw in.
What did give analysts some concern was Datadog's guidance. For Q3, management projected 52% year-over-year revenue growth to $412 million -- just under analysts' projection of $413 million. This "miss" is pretty nit-picky, and the stock has nearly recovered all of losses it saw in premarket trading.
The market for this type of monitoring software will only expand. With Datadog's business still rapidly growing while the stock is down more than 40% from its high, this looks like an attractive buying opportunity.
2. MercadoLibre
MercadoLibre also reported results recently, and just like Datadog's, they were solid. The Latin American company is bringing the necessary infrastructure for e-commerce to thrive to its customer base. With its online marketplace, shipping logistics, digital payments, and credit divisions, MercadoLibre has become the one-stop shop for all things commerce in Latin America.
While its retail business isn't growing as quickly as it used to (its commerce division's revenue rose 23% year over year versus 101% during last year's Q2), its fintech segment is picking up the slack. MercadoLibre's fintech revenue increased 107% year over year to $1.2 billion, thanks to its growing credit division and rising total payment volume. Overall, revenue was up 57% year over year to $2.6 billion, and MercadoLibre delivered a profitable 4.7% operating margin.
For a stock that traded for a rock-bottom valuation of four times sales just one month ago, MercadoLibre still has a cheap valuation of 5.6 times sales. Despite the shares' near-30% returns in five days, MercadoLibre remains well off its all-time high of $1,970 and below its typical 10 times sales multiple.
The stock still has a long way to go to retake its all-time high, and investors can make a great return by putting their money into MercadoLibre's stock as it attempts to claw back its former valuation.
3. dLocal
dLocal hasn't reported its Q2 earnings yet (it's due to release them on Aug. 23), but I don't need to see its latest results to know how solid of a company it is. dLocal provides the necessary pipelines for businesses like Amazon, Nike, and Uber Technologies to do business in emerging markets like Malaysia, Panama, or Morocco. Setting up dealers or ways to pay vendors and operators in these remote areas country by country would be expensive and wasteful. dLocal's tools allow companies to operate as usual in their preferred currency, and dLocal takes care of the rest, converting the money into local currency.
This solution has been wildly popular, as evidenced by revenue growing 117% year over year to $87 million in Q1. Additionally, its net revenue retention rate was 190%, meaning customers spent $190 for every $100 they spent last year. To top things off, dLocal is profitable, with a profit margin of 30% during the first quarter.
However, due to dLocal's rapid growth rate and profitability, the stock is richly valued at 34 times sales and 109 times earnings. Because of this lofty valuation, the company must continue to deliver stellar results, or the stock will get slammed.
I believe dLocal is just getting started, as many merchants do not operate in every country in which it operates. Furthermore, dLocal onboarded more than 10 "significant merchants" in Q1, which shows the business is still attracting clients. While the market opportunity for each country may not be massive, it represents a sizable market that will attract companies from all industries when they are all lumped in.
dLocal has massive upside, and with the stock price down over 50% from its all-time high, investors would be wise to put this one on their watch list.
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Keithen Drury has positions in DLocal Limited, Datadog, and MercadoLibre. The Motley Fool has positions in and recommends Amazon, Datadog, MercadoLibre, and Nike. The Motley Fool recommends Gartner and Uber Technologies. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Among the stocks I'm eyeing are Datadog (NASDAQ: DDOG), MercadoLibre (NASDAQ: MELI), and dLocal (NASDAQ: DLO). As assessed by third-party research specialist Gartner, Datadog has one of the top solutions in the application performance management and observability sector and claimed the highest position in the ability to execute. With its online marketplace, shipping logistics, digital payments, and credit divisions, MercadoLibre has become the one-stop shop for all things commerce in Latin America.
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Among the stocks I'm eyeing are Datadog (NASDAQ: DDOG), MercadoLibre (NASDAQ: MELI), and dLocal (NASDAQ: DLO). MercadoLibre's fintech revenue increased 107% year over year to $1.2 billion, thanks to its growing credit division and rising total payment volume. Overall, revenue was up 57% year over year to $2.6 billion, and MercadoLibre delivered a profitable 4.7% operating margin.
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Among the stocks I'm eyeing are Datadog (NASDAQ: DDOG), MercadoLibre (NASDAQ: MELI), and dLocal (NASDAQ: DLO). The stock still has a long way to go to retake its all-time high, and investors can make a great return by putting their money into MercadoLibre's stock as it attempts to claw back its former valuation. See the 10 stocks *Stock Advisor returns as of July 27, 2022 John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors.
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Among the stocks I'm eyeing are Datadog (NASDAQ: DDOG), MercadoLibre (NASDAQ: MELI), and dLocal (NASDAQ: DLO). With Datadog's business still rapidly growing while the stock is down more than 40% from its high, this looks like an attractive buying opportunity. Overall, revenue was up 57% year over year to $2.6 billion, and MercadoLibre delivered a profitable 4.7% operating margin.
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2022-08-06 00:00:00 UTC
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Nasdaq Bear Market: 5 Fantastic Growth Stocks You'll Regret Not Buying On the Dip
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DDOG
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https://www.nasdaq.com/articles/nasdaq-bear-market%3A-5-fantastic-growth-stocks-youll-regret-not-buying-on-the-dip
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Regardless of whether you've been invested in the stock market for decades or have only recently begun putting your money to work on Wall Street, it's been a challenging year. The S&P 500's first-half return was its worst in more than a half-century.
Meanwhile, things have been even more difficult for the growth-dependent Nasdaq Composite (NASDAQINDEX: ^IXIC). Since hitting its record-closing high in mid-November, the Nasdaq has plunged by as much as 34%. Even with a modest rebound from its lows, the index is firmly entrenched in a bear market.
Image source: Getty Images.
But there's an interesting fact about bear markets that all patient investors should know. Namely, every bear market decline and stock market correction throughout history has eventually been wiped away by a bull market rally. This means all sizable declines in the major U.S. indexes, including the growth-driven Nasdaq Composite, are opportunities for long-term investors to pounce.
At the moment, growth stocks offer some of the most attractive valuations on Wall Street. What follows are five fantastic growth stocks you'll regret not buying during the current Nasdaq bear market dip.
Nio
The first phenomenal growth stock you'll be kicking yourself over if you don't scoop it up on the Nasdaq bear market decline is China-based electric vehicle (EV) manufacturer Nio (NYSE: NIO). Although auto stocks are contending with a flurry of semiconductor chip and parts shortages tied to the COVID-19 pandemic, these are short-term concerns that don't alter Nio's long-term growth trajectory.
We've already been given a brief glimpse of the company's ability to ramp its production. In June and July, Nio delivered 12,961 EVs and 10,052 EVs, respectively. Prior to the pandemic throwing a monkey wrench into domestic supply chains, Nio's management team believed it would hit an annual run-rate of 600,000 EVs (50,000 EVs/month) by the end of the year. Once part availability improves, little will stand in the way of Nio's expansion.
Investors should also appreciate the company's innovation, which can be seen on multiple fronts. Nio has regularly introduced new vehicles to its lineup to broaden its appeal to domestic EV buyers. The ET7 sedan, which began deliveries in late March, and the ET5 sedan, which is expected to be delivered to customers in September, can travel 621 miles on a single charge with the top battery upgrade.
There's also Nio's battery-as-a-service (BaaS) subscription, which it introduced in August 2020. With BaaS, buyers receive a discount off the purchase price of their EV, and can charge, swap, and upgrade their batteries at a later date. For Nio, the benefit is high-margin monthly subscription revenue and the loyalty of early buyers.
Exelixis
If somewhat off-the-radar growth companies are your thing, biotech stock Exelixis (NASDAQ: EXEL) represents the perfect buy following the Nasdaq bear market dip.
If there's one great thing about healthcare stocks, it's that they're defensive. No matter how poorly the U.S. economy or stock market perform, or how high inflation flies, patients will continue to need prescription drugs, medical devices, and healthcare services. This puts a pretty safe floor beneath drug stocks like Exelixis.
What makes this cancer-drug developer so special is its blockbuster drug Cabometyx. Cabometyx is approved to treat first- and second-line renal cell carcinoma, as well as advanced hepatocellular carcinoma that's previously been treated. These indications alone offer more than $1 billion in annual sales potential. But with somewhere in the neighborhood of six dozen clinical studies ongoing to assess Cabometyx as a monotherapy or combination therapy in an assortment of cancer types, label expansion is a very real possibility.
What's more, Exelixis is swimming with cash. It ended March with approximately $2 billion in cash, cash equivalents, and restricted cash equivalents and investments. Having so much capital on hand has allowed the company to reignite its internal research engine, and fund numerous drug-development partnerships.
Image source: Getty Images.
Visa
A third fantastic growth stock that's begging to be bought, and which you'll regret not buying while it's down, is payment processor Visa (NYSE: V). Although financial stocks usually take it on the chin during periods of economic weakness, Visa has sustainable competitive advantages that minimize its struggles.
On a macro basis, Visa and its peers benefit from the disproportionate amount of time the U.S. economy spends expanding. Even though recessions are inevitable, they don't last very long. If Visa shareholders are patient, they can take advantage of the natural expansion of the U.S. and global economy over time.
On a company-specific basis, Visa is the most dominant player in the U.S. (the top market for consumption in the world). As of 2020, it held 54% of credit card network purchase volume in the U.S. -- 31 percentage points higher than the next-closest competitor -- and was the only payment processor to see significant share expansion after the Great Recession (2007-2009).
Visa's growth runway is also exceptionally long. Since most global transactions are still being conducted in cash, Visa has the opportunity to acquire its way into potentially underbanked regions, as it did with the Visa Europe acquisition in 2016. Or it could choose to organically infiltrate the Middle East, Africa, and Southeastern Asia region with its payment infrastructure over time. Sustained double-digit growth should be the expectation for Visa shareholders.
Columbia Care
The fourth growth stock that's an amazing value during this bear market dip in the Nasdaq is U.S. marijuana stock Columbia Care (OTC: CCHWF). As you're about to see, Columbia Care is an especially smart way to play the U.S. pot industry if you're also bullish on multi-state operator (MSO) Cresco Labs (OTC: CRLBF).
To begin with, the U.S. cannabis industry should be booming throughout much of this decade. Cannabis research firm BDSA projects that the U.S. legal weed market will grow from the $29 billion in sales recorded in 2021 to an estimated $61 billion by 2026. That's a compound annual growth rate of 16% for those of you keeping score at home.
As an added bonus, cannabis has acted as a nondiscretionary item throughout the COVID-19 pandemic. This means consumers are buying regardless of inflation or a deteriorating economic outlook.
What makes Columbia Care so appealing is its growth strategy and pending acquisition by Cresco Labs. With regards to the former, Columbia Care has used acquisitions to quickly broaden its retail presence. It's become a major player in Colorado (the nation's No. 2 weed market by annual sales), and has a footprint in most high-dollar markets.
As for the pending buyout, combining Cresco and Columbia Care will create an MSO with more than 130 operating dispensaries and a footprint in 18 states. It'll be the leading wholesale pot company in the U.S., with a rapidly expanding (and higher-margin) retail presence. The icing on the cake is that Columbia Care is trading at an 8% discount to the all-share buyout price offered by Cresco, which represents an arbitrage opportunity for investors.
Datadog
The fifth and final fantastic growth stock you'll regret not buying on the Nasdaq bear market dip is cloud-based application monitoring and security company Datadog (NASDAQ: DDOG). Although Datadog boasts a sizable premium relative to sales and earnings per share, it's also the fastest-growing company on this list by a considerable amount (a 74% compound annual growth rate between 2017 and 2022, based on the company's 2022 guidance).
The reason Datadog is growing so rapidly isn't a secret. Businesses were steadily shifting their data into the cloud prior to the pandemic. Since the COVID-19 pandemic hit, this shift has accelerated. With Datadog offering solutions that allow businesses to monitor and secure their applications, it's perfectly positioned for what could become a sustained hybrid-work environment.
What's arguably been most impressive with Datadog isn't necessarily its strong customer growth. Rather, it's been the ability of the company to generate significant organic growth from its existing clients. As of the end of March 2022, Datadog had a 19-quarter streak (three months shy of five years) of a dollar-based net retention rate of at least 130%. This means existing customers are spending an average of at least 30% more in the comparable quarter of the following year.
To add, Datadog noted at the end of 2020 that 22% of its customers were utilizing four or more products, with 3% purchasing six or more. As of the end of March 2022, 35% were using four or more products and 12% had "graduated" to six or more. It's really a testament to Datadog growing its business from within.
With a consistently growing total addressable market and the company having decisively pushed into recurring profitability, now is the perfect time for opportunistic investors to strike.
10 stocks we like better than Nio Inc.
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*Stock Advisor returns as of July 27, 2022
Sean Williams has positions in Columbia Care and Exelixis. The Motley Fool has positions in and recommends Cresco Labs Inc., Datadog, Nio Inc., and Visa. The Motley Fool recommends Exelixis. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Datadog The fifth and final fantastic growth stock you'll regret not buying on the Nasdaq bear market dip is cloud-based application monitoring and security company Datadog (NASDAQ: DDOG). Although auto stocks are contending with a flurry of semiconductor chip and parts shortages tied to the COVID-19 pandemic, these are short-term concerns that don't alter Nio's long-term growth trajectory. Prior to the pandemic throwing a monkey wrench into domestic supply chains, Nio's management team believed it would hit an annual run-rate of 600,000 EVs (50,000 EVs/month) by the end of the year.
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Datadog The fifth and final fantastic growth stock you'll regret not buying on the Nasdaq bear market dip is cloud-based application monitoring and security company Datadog (NASDAQ: DDOG). Nio The first phenomenal growth stock you'll be kicking yourself over if you don't scoop it up on the Nasdaq bear market decline is China-based electric vehicle (EV) manufacturer Nio (NYSE: NIO). Exelixis If somewhat off-the-radar growth companies are your thing, biotech stock Exelixis (NASDAQ: EXEL) represents the perfect buy following the Nasdaq bear market dip.
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Datadog The fifth and final fantastic growth stock you'll regret not buying on the Nasdaq bear market dip is cloud-based application monitoring and security company Datadog (NASDAQ: DDOG). Nio The first phenomenal growth stock you'll be kicking yourself over if you don't scoop it up on the Nasdaq bear market decline is China-based electric vehicle (EV) manufacturer Nio (NYSE: NIO). Columbia Care The fourth growth stock that's an amazing value during this bear market dip in the Nasdaq is U.S. marijuana stock Columbia Care (OTC: CCHWF).
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Datadog The fifth and final fantastic growth stock you'll regret not buying on the Nasdaq bear market dip is cloud-based application monitoring and security company Datadog (NASDAQ: DDOG). Exelixis If somewhat off-the-radar growth companies are your thing, biotech stock Exelixis (NASDAQ: EXEL) represents the perfect buy following the Nasdaq bear market dip. 10 stocks we like better than Nio Inc.
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2022-08-05 00:00:00 UTC
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Datadog (DDOG) Q2 Earnings Beat Estimates, Revenues Rise Y/Y
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DDOG
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https://www.nasdaq.com/articles/datadog-ddog-q2-earnings-beat-estimates-revenues-rise-y-y
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Datadog DDOG reported second-quarter 2022 non-GAAP earnings of 24 cents per share, which beat the Zacks Consensus Estimate by 100%. The bottom line also increased 166.7% from the year-ago quarter.
The company’s net revenues of $406.1 million surpassed the consensus mark by 7.43%. The figure increased 73.9% year over year.
Datadog, Inc. Price, Consensus and EPS Surprise
Datadog, Inc. price-consensus-eps-surprise-chart | Datadog, Inc. Quote
Quarter Details
Steady customer additions drove the top line in the second quarter. Datadog had more than 21,200 customers at the end of the second quarter, up from 16,400 in the year-ago quarter.
Of these customers, 2,420 have an annual run rate (ARR) of $100K or more, up from 1,570 in the year-ago quarter. These customers generate about 85% of the total ARR.
As of the end of the second quarter, 79% of customers used two or more products, up from 75% in the year-ago quarter. Additionally, 37% of customers utilized four or more products, up from 28% in the year-ago quarter.
Datadog’s dollar-based retention rate was above 130% in the second quarter, driven by increased usage and adoption of existing and new products.
Operating Details
In the second quarter, Datadog’s adjusted gross margin increased 450 basis points (bps) on a year-over-year basis to 80.8%.
Research & development expenses increased 71.1% on a year-over-year basis to $121.6 million, driven by increased investments in Datadog’s platform. Research & development, as a percentage of revenues, contracted 50 bps to 29.9%.
Sales and marketing expenses increased 59.1% year over year to $96.9 million. Sales and marketing expenses, as a percentage of revenues, declined 220 bps to 23.9%.
General & administrative expenses were up year over year by 61.3%, reaching $25 million in the reported quarter. General & administrative expenses, as a percentage of revenues, contracted 50 bps to 6.2%.
Datadog reported non-GAAP operating income of $83.8 million compared with $32.2 million in the year-ago quarter.
Balance Sheet & Cash Flow
As of Jun 30, 2022, Datadog had cash, cash equivalents and marketable securities of $1.7 billion compared with $1.6 billion as of Mar 31, 2022.
Operating cash flow was $73 million in the reported quarter, down from $147 million reported in the previous quarter.
Free cash flow during the quarter was $60.2 million compared with $130 million in the prior quarter.
Guidance
For the third quarter of 2022, Datadog anticipates revenues between $410 million and $414 million. The Zacks Consensus Estimate for the same is pegged at $378.05 million.
Non-GAAP earnings are expected to be 15-17 cents per share. The consensus mark for earnings is pegged at 14 cents per share.
Non-GAAP operating income is expected in the range of $51 million to $55 million.
For 2022, Datadog anticipates revenues between $1.61 billion and $1.63 billion. The Zacks Consensus Estimate for the same is pegged at $1.61 billion
Non-GAAP earnings are expected to be between 74 cents and 81 cents. The Zacks Consensus Estimate for earnings stands at 72 cents per share.
Non-GAAP operating income is expected in the range of $255 million to $275 million.
2Q22 Highlights
Datadog announced the launch of Observability Pipelines. This new product enables organizations to take greater control of their data so they can reliably scale their observability practices.
The company achieved AWS Education Competency Status. This status recognizes that Datadog has demonstrated technical proficiency and success in building solutions that support mission-critical workloads of customers in the higher education, K-12 primary/secondary, research and publishing sectors.
Datadog announced OpenTelemetry Protocol Support. This new capability brings the full monitoring capabilities of the Datadog platform to OpenTelemetry-instrumented applications, without the need to install a separate OpenTelemetry collector.
Datadog launched Container Monitoring, Application Performance Monitoring and Security to help Kubernetes users effectively monitor and secure Kubernetes environments.
Zacks Rank & Stocks to Consider
Currently, Datadog carries a Zacks Rank #4 (Sell).
Datadog’s shares have declined 37.9% compared with the Zacks Computer and Technology sector’s fall of 46.5% in the year-to-date period.
Investors interested in the broader Zacks Computer & Technology sector can consider some better-ranked stocks like Keysight Technologies KEYS, ASE Technology ASX and Asure Software ASUR, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Keysight Technologies has lost 19.9% in the year-to-date period. KEYS’ long-term earnings growth rate is currently projected at 9.1%.
ASE technology has lost 24.6% in the year-to-date period. The long-term earnings growth rate for ASX is currently projected at 23.1%.
Asure Software has lost 32.3% in the year-to-date period. The long-term earnings growth rate for ASUR is currently projected at 14%.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
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Datadog, Inc. (DDOG): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Datadog DDOG reported second-quarter 2022 non-GAAP earnings of 24 cents per share, which beat the Zacks Consensus Estimate by 100%. Datadog, Inc. (DDOG): Free Stock Analysis Report This status recognizes that Datadog has demonstrated technical proficiency and success in building solutions that support mission-critical workloads of customers in the higher education, K-12 primary/secondary, research and publishing sectors.
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Datadog DDOG reported second-quarter 2022 non-GAAP earnings of 24 cents per share, which beat the Zacks Consensus Estimate by 100%. Datadog, Inc. (DDOG): Free Stock Analysis Report Research & development expenses increased 71.1% on a year-over-year basis to $121.6 million, driven by increased investments in Datadog’s platform.
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Datadog DDOG reported second-quarter 2022 non-GAAP earnings of 24 cents per share, which beat the Zacks Consensus Estimate by 100%. Datadog, Inc. (DDOG): Free Stock Analysis Report Datadog, Inc. Price, Consensus and EPS Surprise Datadog, Inc. price-consensus-eps-surprise-chart | Datadog, Inc. Quote Quarter Details Steady customer additions drove the top line in the second quarter.
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Datadog DDOG reported second-quarter 2022 non-GAAP earnings of 24 cents per share, which beat the Zacks Consensus Estimate by 100%. Datadog, Inc. (DDOG): Free Stock Analysis Report Research & development expenses increased 71.1% on a year-over-year basis to $121.6 million, driven by increased investments in Datadog’s platform.
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2022-08-04 00:00:00 UTC
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Why Datadog Was a Dog of a Stock on Thursday
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https://www.nasdaq.com/articles/why-datadog-was-a-dog-of-a-stock-on-thursday
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What happened
Datadog (NASDAQ: DDOG) wasn't a favorite stock market pet among investors on Thursday. The company's shares fell by nearly 2% on the day, versus only a slight decline of the broad S&P 500 index. While Datadog notched a pair of beats in its freshly released quarterly results, investors were nevertheless unimpressed. The lack of detail about a new acquisition also may have played a role in the decline.
So what
For its second quarter, Datadog's revenue tallied just over $406 million, representing considerable year-over-year improvement of 74%. Even better, non-GAAP (adjusted) net income more than doubled, advancing from the second-quarter 2021 result of $32 million to the current period's nearly $84 million ($0.27 per share).
Those numbers were more than good enough to trump analyst estimates. On average, prognosticators following the stock were modeling less than $382 million for revenue and adjusted net income of $0.15 per share.
Much of Datadog's growth stems from a notable (54%) increase in clients spending at least $100,000 annually on subscriptions for the company's services. The total count was roughly 2,420 at the end of June.
Separately, Datadog announced that it has acquired privately held Seekret, which it describes as "a highly innovative API observability company." Datadog didn't disclose how much it's paying for this new asset.
Now what
Datadog also proffered third-quarter and full-year 2022 guidance. For the latter period, it's expecting revenue of $1.61 billion to $1.63 billion and adjusted net income of $0.74 to $0.81.
Those figures are broadly in line with analyst expectations, which might have been a key reason for the stock's Thursday fall. They indicate slowing top-line growth, first of all, and investors in growth companies like to see their businesses notably exceed forecasts instead of simply matching them.
10 stocks we like better than Datadog
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They just revealed what they believe are the ten best stocks for investors to buy right now... and Datadog wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of July 27, 2022
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Datadog. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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What happened Datadog (NASDAQ: DDOG) wasn't a favorite stock market pet among investors on Thursday. Much of Datadog's growth stems from a notable (54%) increase in clients spending at least $100,000 annually on subscriptions for the company's services. Separately, Datadog announced that it has acquired privately held Seekret, which it describes as "a highly innovative API observability company."
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What happened Datadog (NASDAQ: DDOG) wasn't a favorite stock market pet among investors on Thursday. On average, prognosticators following the stock were modeling less than $382 million for revenue and adjusted net income of $0.15 per share. For the latter period, it's expecting revenue of $1.61 billion to $1.63 billion and adjusted net income of $0.74 to $0.81.
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What happened Datadog (NASDAQ: DDOG) wasn't a favorite stock market pet among investors on Thursday. 10 stocks we like better than Datadog When our award-winning analyst team has a stock tip, it can pay to listen. See the 10 stocks *Stock Advisor returns as of July 27, 2022 Eric Volkman has no position in any of the stocks mentioned.
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What happened Datadog (NASDAQ: DDOG) wasn't a favorite stock market pet among investors on Thursday. So what For its second quarter, Datadog's revenue tallied just over $406 million, representing considerable year-over-year improvement of 74%. 10 stocks we like better than Datadog When our award-winning analyst team has a stock tip, it can pay to listen.
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2022-08-04 00:00:00 UTC
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Why Is Datadog Stock Down After Earnings?
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DDOG
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https://www.nasdaq.com/articles/why-is-datadog-stock-down-after-earnings
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Datadog (NASDAQ: DDOG) reported solid earnings this morning with 74% year-over-year revenue growth to $406 million. However, the stock sold off as much as 10%. In the five-minute video below, I provide an update on Datadog earnings and share thoughts on why the stock sold off and where DDOG stock is headed next. Please don't forget to subscribe to the channel for more stock market due diligence and earnings updates.
*Stock prices used were from the trading day of August 4, 2022. The video was published on August 4, 2022.
10 stocks we like better than Datadog
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Datadog wasn't one of them! That's right -- they think these 10 stocks are even better buys.
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*Stock Advisor returns as of July 27, 2022
Eric Cuka has positions in Datadog and Snowflake Inc. The Motley Fool has positions in and recommends Datadog and Snowflake Inc. The Motley Fool has a disclosure policy. Eric is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Datadog (NASDAQ: DDOG) reported solid earnings this morning with 74% year-over-year revenue growth to $406 million. In the five-minute video below, I provide an update on Datadog earnings and share thoughts on why the stock sold off and where DDOG stock is headed next. Please don't forget to subscribe to the channel for more stock market due diligence and earnings updates.
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Datadog (NASDAQ: DDOG) reported solid earnings this morning with 74% year-over-year revenue growth to $406 million. In the five-minute video below, I provide an update on Datadog earnings and share thoughts on why the stock sold off and where DDOG stock is headed next. Please don't forget to subscribe to the channel for more stock market due diligence and earnings updates.
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In the five-minute video below, I provide an update on Datadog earnings and share thoughts on why the stock sold off and where DDOG stock is headed next. Datadog (NASDAQ: DDOG) reported solid earnings this morning with 74% year-over-year revenue growth to $406 million. 10 stocks we like better than Datadog When our award-winning analyst team has a stock tip, it can pay to listen.
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In the five-minute video below, I provide an update on Datadog earnings and share thoughts on why the stock sold off and where DDOG stock is headed next. Datadog (NASDAQ: DDOG) reported solid earnings this morning with 74% year-over-year revenue growth to $406 million. Please don't forget to subscribe to the channel for more stock market due diligence and earnings updates.
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3aa7a155-a34e-4adb-ae3e-d682679a70c3
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718567.0
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2022-08-04 00:00:00 UTC
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Datadog (DDOG) Tops Q2 Earnings and Revenue Estimates
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DDOG
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https://www.nasdaq.com/articles/datadog-ddog-tops-q2-earnings-and-revenue-estimates
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Datadog (DDOG) came out with quarterly earnings of $0.24 per share, beating the Zacks Consensus Estimate of $0.14 per share. This compares to earnings of $0.09 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of 71.43%. A quarter ago, it was expected that this data analytics and cloud monitoring company would post earnings of $0.11 per share when it actually produced earnings of $0.24, delivering a surprise of 118.18%.
Over the last four quarters, the company has surpassed consensus EPS estimates four times.
Datadog, which belongs to the Zacks Internet - Software industry, posted revenues of $406.14 million for the quarter ended June 2022, surpassing the Zacks Consensus Estimate by 7.43%. This compares to year-ago revenues of $233.55 million. The company has topped consensus revenue estimates four times over the last four quarters.
The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.
Datadog shares have lost about 36.9% since the beginning of the year versus the S&P 500's decline of -12.8%.
What's Next for Datadog?
While Datadog has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?
There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.
Ahead of this earnings release, the estimate revisions trend for Datadog: mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is $0.15 on $407.8 million in revenues for the coming quarter and $0.72 on $1.61 billion in revenues for the current fiscal year.
Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Internet - Software is currently in the bottom 37% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
Riskified (RSKD), another stock in the same industry, has yet to report results for the quarter ended June 2022. The results are expected to be released on August 10.
This provider of fraud-prevention services is expected to post quarterly loss of $0.12 per share in its upcoming report, which represents a year-over-year change of +91.5%. The consensus EPS estimate for the quarter has been revised 3% lower over the last 30 days to the current level.
Riskified's revenues are expected to be $57.96 million, up 4.1% from the year-ago quarter.
5 Stocks Set to Double
Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2021. Previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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Datadog, Inc. (DDOG): Free Stock Analysis Report
Riskified Ltd. (RSKD): Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Datadog (DDOG) came out with quarterly earnings of $0.24 per share, beating the Zacks Consensus Estimate of $0.14 per share. Datadog, Inc. (DDOG): Free Stock Analysis Report Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions.
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Datadog, Inc. (DDOG): Free Stock Analysis Report Datadog (DDOG) came out with quarterly earnings of $0.24 per share, beating the Zacks Consensus Estimate of $0.14 per share. Datadog, which belongs to the Zacks Internet - Software industry, posted revenues of $406.14 million for the quarter ended June 2022, surpassing the Zacks Consensus Estimate by 7.43%.
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Datadog (DDOG) came out with quarterly earnings of $0.24 per share, beating the Zacks Consensus Estimate of $0.14 per share. Datadog, Inc. (DDOG): Free Stock Analysis Report Datadog, which belongs to the Zacks Internet - Software industry, posted revenues of $406.14 million for the quarter ended June 2022, surpassing the Zacks Consensus Estimate by 7.43%.
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Datadog (DDOG) came out with quarterly earnings of $0.24 per share, beating the Zacks Consensus Estimate of $0.14 per share. Datadog, Inc. (DDOG): Free Stock Analysis Report Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.
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7270f75a-68bc-4ec8-8229-612fa18aeaab
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718568.0
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2022-08-04 00:00:00 UTC
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Best Cheap Stocks To Buy Now? 4 Software Stocks For Your List
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DDOG
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https://www.nasdaq.com/articles/best-cheap-stocks-to-buy-now-4-software-stocks-for-your-list
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It’s no surprise that software stocks have taken a breather in the stock market so for this year. In turn, this could make software stocks an attractive option in the stock market now as valuations have fallen across the sector. In general, software continues to play a key role in the tech industry as a home for businesses with generally higher business margins.
Suitably, this is in large part due to the emerging Software-as-a-Service (SaaS) business model. In detail, companies can offer digital products & services across multiple industries. There is also an increasing demand for SaaS offerings connected with cloud computing, digital transformation, big data analytics, and artificial intelligence. Because of all this, I could understand investors are turning their attention to software stocks now. If you are keen on investing in the sector, here are four top software stocks to watch in the stock market today.
Top Software Stocks To Buy [Or Avoid] Now
Salesforce Inc. (NYSE: CRM)
Datadog Inc. (NASDAQ: DDOG)
Sofi Technologies Inc. (NYSE: SOFI)
Adobe Inc. (NASDAQ: ADBE)
Salesforce (CRM Stock)
First, let’s look at enterprise software company Salesforce (CRM). In brief, this is a customer relationship management software company that provides enterprise applications focused on customer services. Also, its software is used for application development, analytics, and marketing automation, and others. The company reports having more than 150,000 companies use its software to grow their businesses. Over the last month of trading, CRM stock has rallied by over 10%.
Recently, the company announced it has been recognized by Gartner as a Leader in its 2022 Magic Quadrant for Multichannel Marketing Hubs. “In today’s digital-first world, customers expect personalized experiences from companies at every touch point,” stated Lidiane Jones, EVP & GM, Salesforce Digital Experiences. “Salesforce Marketing Cloud allows marketers to know their customers, humanize every moment, and optimize outcomes — building trusted relationships at scale.”
With that, Salesforce is set to report its second quarter fiscal year 2023 results on Wednesday, Aug. 24, 2022, after the close of the market. With such excitement surrounding the company, will you make space for CRM on your watchlist?
Source: TD Ameritrade TOS
[Read More] Top Stocks To Buy Now? 4 Defense Stocks To Watch
Datadog Inc. (DDOG Stock)
Next, let’s check out Datadog Inc. (DDOG) As a whole, the company focuses on providing cybersecurity software services. Through its cutting-edge monitoring and security platform, Datadog mainly focuses on protecting cloud applications. In detail, the company’s services assist organizations by facilitating safe and efficient cloud migration, collaborative development efforts, and digital transformation.
Shares of DDOG have increased by over 20% over the last five trading days. Back in May, the company reported its first quarter financial results. In it, Datadog posted reported earnings of $0.21 per share on revenue of $363.0 million for the quarter. Previously, the company said it anticipates second quarter non-GAAP earnings of $0.13 to $0.15 per share on revenue of $376.0 million to $380.0 million. Wall street’s current consensus earnings estimate is $0.12 per share on revenue of $361.60 million for the quarter.
What’s more, Datadog is reporting its second quarter fiscal year 2022 financial results before the U.S. financial markets open on Thursday, August 4, 2022. Do you think Datadog is a buy in the stock market now?
Source: TD Ameritrade TOS
Sofi Technologies Inc. (SOFI Stock)
Following that, let us look at the digital personal finance company, SoFi Technologies (SOFI). In brief, the company operates through three business segments, Lending, Financial Services, and Technology Platform. SoFi believes that it can help people achieve their financial independence through its products and services. As a matter of fact, the company just announced its second quarter 2022 results.
Diving in, SOFI posted a loss of $0.12 per share on revenue of $389.3 million. For context, Wall Street’s consensus estimate was a loss of $0.12 per share on revenue of $349.4 million. As a result, revenue increased by 50.1%year-over-year for SoFi. Additionally, the company reported it projects the full year 2022 revenue of $1.508 billion to $1.513 billion. The company’s previous guidance was 2022 revenue of $1.505 billion to $1.510 billion, versus the current consensus revenue estimate of $1.50 billion for the year.
“We delivered another quarter of great results with robust growth in members, products, and cross-buy. We generated record adjusted net revenue, which was up 50% year-over-year, and our eighth consecutive quarter of positive adjusted EBITDA, which doubled sequentially. While the political, fiscal, and economic landscapes continue to shift around us, we have maintained strong and consistent momentum in our business. We built our products and services to provide durable growth and profitability, and that is what we are delivering,” stated Anthony Noto, CEO of SoFi Technologies, Inc. Following this news, shares of SOFI stock jumped over 28% on Thursday.
Source: TD Ameritrade TOS
[Read More] 5 Top Dividend Stocks To Watch In A Bear Market
Adobe Inc. (ADBE Stock)
Last up, we have a leading developer of desktop publishing software, Adobe. In general, a significant percentage of its sales come from three of the company’s software products, Photoshop, Illustrator, and PageMaker. Additionally, the company has also developed and distributed Acrobat Reader, a software to view and print portable document formats (PDF) for its users. After this, the company’s latest offering is the Adobe Document Cloud. In summary, the software products help make a digital workspace for collaboration and communication.
In June, Adobe reported a beat for its second quarter fiscal 2022. Diving in, the company posted earnings per share of $3.36 on revenue of $4.4 billion. This beat analyst expectations of $3.31 per share on revenue of $4.3 billion. However, Adobe did provide lower guidance for the quarter. Specifically, the company said it estimates third-quarter non-GAAP earnings of approximately $3.33 per share on revenue of approximately $4.43 billion. This is compared to the current consensus earnings estimate of $3.40 earnings per share on revenue of $4.51 billion for the quarter.
“Adobe achieved record Q2 revenue with strong demand across Creative Cloud, Document Cloud and Experience Cloud,” quoted Shantanu Narayen CEO of Adobe. “We are winning in our established businesses and seeing significant momentum in new categories from content authoring for a broad base of creators to PDF functionality on the web to the leading real-time customer data platform for global enterprises.” Is this enough for you to add ADBE stock to your radar today?
Source: TD Ameritrade TOS
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Top Software Stocks To Buy [Or Avoid] Now Salesforce Inc. (NYSE: CRM) Datadog Inc. (NASDAQ: DDOG) Sofi Technologies Inc. (NYSE: SOFI) Adobe Inc. (NASDAQ: ADBE) Salesforce (CRM Stock) First, let’s look at enterprise software company Salesforce (CRM). 4 Defense Stocks To Watch Datadog Inc. (DDOG Stock) Next, let’s check out Datadog Inc. (DDOG) As a whole, the company focuses on providing cybersecurity software services. Shares of DDOG have increased by over 20% over the last five trading days.
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Top Software Stocks To Buy [Or Avoid] Now Salesforce Inc. (NYSE: CRM) Datadog Inc. (NASDAQ: DDOG) Sofi Technologies Inc. (NYSE: SOFI) Adobe Inc. (NASDAQ: ADBE) Salesforce (CRM Stock) First, let’s look at enterprise software company Salesforce (CRM). 4 Defense Stocks To Watch Datadog Inc. (DDOG Stock) Next, let’s check out Datadog Inc. (DDOG) As a whole, the company focuses on providing cybersecurity software services. Shares of DDOG have increased by over 20% over the last five trading days.
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Top Software Stocks To Buy [Or Avoid] Now Salesforce Inc. (NYSE: CRM) Datadog Inc. (NASDAQ: DDOG) Sofi Technologies Inc. (NYSE: SOFI) Adobe Inc. (NASDAQ: ADBE) Salesforce (CRM Stock) First, let’s look at enterprise software company Salesforce (CRM). 4 Defense Stocks To Watch Datadog Inc. (DDOG Stock) Next, let’s check out Datadog Inc. (DDOG) As a whole, the company focuses on providing cybersecurity software services. Shares of DDOG have increased by over 20% over the last five trading days.
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Top Software Stocks To Buy [Or Avoid] Now Salesforce Inc. (NYSE: CRM) Datadog Inc. (NASDAQ: DDOG) Sofi Technologies Inc. (NYSE: SOFI) Adobe Inc. (NASDAQ: ADBE) Salesforce (CRM Stock) First, let’s look at enterprise software company Salesforce (CRM). 4 Defense Stocks To Watch Datadog Inc. (DDOG Stock) Next, let’s check out Datadog Inc. (DDOG) As a whole, the company focuses on providing cybersecurity software services. Shares of DDOG have increased by over 20% over the last five trading days.
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ab6af717-0ba6-433e-8a70-654f123bdefb
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718569.0
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2022-08-04 00:00:00 UTC
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Noteworthy Thursday Option Activity: RKT, ABNB, DDOG
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DDOG
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https://www.nasdaq.com/articles/noteworthy-thursday-option-activity%3A-rkt-abnb-ddog
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Among the underlying components of the Russell 3000 index, we saw noteworthy options trading volume today in Rocket Companies Inc Class A (Symbol: RKT), where a total of 34,878 contracts have traded so far, representing approximately 3.5 million underlying shares. That amounts to about 133% of RKT's average daily trading volume over the past month of 2.6 million shares. Particularly high volume was seen for the $9.50 strike put option expiring August 19, 2022, with 11,280 contracts trading so far today, representing approximately 1.1 million underlying shares of RKT. Below is a chart showing RKT's trailing twelve month trading history, with the $9.50 strike highlighted in orange:
Airbnb Inc (Symbol: ABNB) saw options trading volume of 83,597 contracts, representing approximately 8.4 million underlying shares or approximately 118.9% of ABNB's average daily trading volume over the past month, of 7.0 million shares. Particularly high volume was seen for the $120 strike call option expiring August 05, 2022, with 5,123 contracts trading so far today, representing approximately 512,300 underlying shares of ABNB. Below is a chart showing ABNB's trailing twelve month trading history, with the $120 strike highlighted in orange:
And Datadog Inc (Symbol: DDOG) options are showing a volume of 56,087 contracts thus far today. That number of contracts represents approximately 5.6 million underlying shares, working out to a sizeable 118.4% of DDOG's average daily trading volume over the past month, of 4.7 million shares. Particularly high volume was seen for the $115 strike call option expiring August 05, 2022, with 4,940 contracts trading so far today, representing approximately 494,000 underlying shares of DDOG. Below is a chart showing DDOG's trailing twelve month trading history, with the $115 strike highlighted in orange:
For the various different available expirations for RKT options, ABNB options, or DDOG options, visit StockOptionsChannel.com.
Today's Most Active Call & Put Options of the S&P 500 »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Particularly high volume was seen for the $115 strike call option expiring August 05, 2022, with 4,940 contracts trading so far today, representing approximately 494,000 underlying shares of DDOG. Below is a chart showing ABNB's trailing twelve month trading history, with the $120 strike highlighted in orange: And Datadog Inc (Symbol: DDOG) options are showing a volume of 56,087 contracts thus far today. That number of contracts represents approximately 5.6 million underlying shares, working out to a sizeable 118.4% of DDOG's average daily trading volume over the past month, of 4.7 million shares.
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Below is a chart showing ABNB's trailing twelve month trading history, with the $120 strike highlighted in orange: And Datadog Inc (Symbol: DDOG) options are showing a volume of 56,087 contracts thus far today. That number of contracts represents approximately 5.6 million underlying shares, working out to a sizeable 118.4% of DDOG's average daily trading volume over the past month, of 4.7 million shares. Particularly high volume was seen for the $115 strike call option expiring August 05, 2022, with 4,940 contracts trading so far today, representing approximately 494,000 underlying shares of DDOG.
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Below is a chart showing ABNB's trailing twelve month trading history, with the $120 strike highlighted in orange: And Datadog Inc (Symbol: DDOG) options are showing a volume of 56,087 contracts thus far today. That number of contracts represents approximately 5.6 million underlying shares, working out to a sizeable 118.4% of DDOG's average daily trading volume over the past month, of 4.7 million shares. Particularly high volume was seen for the $115 strike call option expiring August 05, 2022, with 4,940 contracts trading so far today, representing approximately 494,000 underlying shares of DDOG.
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Below is a chart showing ABNB's trailing twelve month trading history, with the $120 strike highlighted in orange: And Datadog Inc (Symbol: DDOG) options are showing a volume of 56,087 contracts thus far today. That number of contracts represents approximately 5.6 million underlying shares, working out to a sizeable 118.4% of DDOG's average daily trading volume over the past month, of 4.7 million shares. Particularly high volume was seen for the $115 strike call option expiring August 05, 2022, with 4,940 contracts trading so far today, representing approximately 494,000 underlying shares of DDOG.
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2022-08-04 00:00:00 UTC
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Datadog (DDOG) Q2 2022 Earnings Call Transcript
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DDOG
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https://www.nasdaq.com/articles/datadog-ddog-q2-2022-earnings-call-transcript
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Image source: The Motley Fool.
Datadog (NASDAQ: DDOG)
Q2 2022 Earnings Call
Aug 04, 2022, 8:00 a.m. ET
Contents:
Prepared Remarks
Questions and Answers
Call Participants
Prepared Remarks:
Operator
Good morning, and welcome to the Q2 2022 Datadogearnings call My name is Cheryl, and I will be your operator for today's call. [Operator instructions] I will now turn the call over to Yuka Broderick. You may begin.
Yuka Broderick -- Head of Investor Relations
Thank you, Cheryl. Good morning, and thank you for joining us to review Datadog's second quarter 2022 financial results, which we announced in our press release issued this morning. Joining me on the call today are Olivier Pomel, Datadog's co-founder and CEO; and David Obstler, Datadog's CFO. During this call, we will make forward-looking statements, including statements related to our future financial performance, our outlook for the third quarter and fiscal year 2022, our gross margins and operating margins, our strategy, our product capabilities and our ability to capitalize on market opportunities.
The words anticipate, believe, continue, estimate, expect, intend, will and similar expressions are intended to identify forward-looking statements or similar indications of future expectations. These statements reflect our views only as of today and are subject to a variety of risks and uncertainties that could cause actual results to differ materially. For a discussion of the material risks and other important factors that could affect our actual results, please refer to our Form 10-Q for the quarter ended March 31, 2022. Additional information will be made available in our upcoming Form 10-Q for the quarter ended June 30, 2022, and other filings with the SEC.
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This information is also available on the Investor Relations section of our website, along with a replay of this call. We will also discuss non-GAAP financial measures, which are reconciled to their most directly comparable GAAP financial measures in the tables in our earnings release, which is available at investor.datadoghq.com. With that, I'd like to turn the call over to Olivier.
Olivier Pomel -- Co-Founder and Chief Executive Officer
Thanks, Yuka, and thank you all for joining us this morning. We are pleased to report strong results in Q2 as we executed well, and we extended our category leadership. Let me start off with a review of our Q2 financial performance. In Q2, revenue was $406 million, an increase of 74% year over year and above the high end of our guidance range.
We had about 21,200 customers, up from about 16,400 in the year-ago quarter. We ended the quarter with about 2,420 customers with ARR of $100,000 or more, up from 1,570 in the year-ago quarter. These customers generated about 85% of our ARR. We generated free cash flow of $60 million and a free cash flow margin of 15%.
And our dollar-based net retention rate continues to be over 130% as customers increased their usage and adopted more products. Now moving on to this quarter's business drivers. In Q2, while we overall saw strong customer growth dynamics, we have seen some variability in growth among our customers. We saw our larger spending customers continue to grow but at a rate that was lower than historical levels.
This effect was more pronounced in certain industries, particularly in consumer discretionary, which includes e-commerce and food and delivery customers and affected more specifically on products with a strong volume-based component such as log management and APM suite. Note that we did not see this with our SMB and lower spending customers who continued growing with us as they have in the past. While these node growth data points and the current micro climate are leading us to be prudent with our short-term outlook, we remain very bullish about our opportunity and confident in our execution as we continue to see positive trends underpinning our business. First, the number of hosts and containers being monitored by our customers is growing steadily, which points to continued momentum of cloud migration and digital transformation projects.
Second, we had strong execution on the new logo side as new logo ARR was robust as we added a record 1,400 new customers in the quarter, including the impact of turning off about 200 customers in Russia and Belarus in Q2. And we closed a number of sizable six to seven new logo deals during the quarter with diverse customers, including a media conglomerate, a metal ore mining company, a U.S. government agency, a SaaS business, and a hyperscaler. Third, our pipeline of large new logos and new product cross sales going into the second half of the year is strong.
And fourth, churn remains low with gross revenue retention steady in the mid- to high 90s. Moving on to our products. We are pleased with the continued adoption and expansion of our products to our customers. The three pillars of observability, which are infrastructure, APM and log management all grew strongly in Q2.
Our APM suite and log management now exceeds $0.25 billion of ARR. As a reminder, we define APM suite as including core APM, Synthetics, RUM and continuous provider. In addition to that, infrastructure monitoring continued to grow strongly on par with recent quarters. We're also pleased with the adoption of our newer products.
Our newer products, excluding infrastructure monitoring, APM suite and log management, continue to grow ARR more than 100% year over year. And we've seen a strong start with our CI visibility products, which we announced at Dash last year and started charging for just a few months ago. CI visibility already has more than 1,000 paying customers, including some product-specific new levels. Our platform strategy also continues to resonate in the market.
As of the end of Q2, 79% of customers were using two or more products, up from 75% a year ago. 37% customers were using four or more products, up from 28% a year ago and 14% of our customers were using six or more products, up from 6% a year ago. Now let's move on to product and R&D, where our teams delivered another strong quarter of innovation. In June, Gartner published a 2022 Magic Quadrant for Application Performance Monitoring and observability.
Datadog has once again been the leader, and we have improved from last year on our scores and ranking in all dimensions. We attribute this to -- first to our unified platform experience, covering DevOps, securities, and order personas in one place. But we also see it as a recognition of the continued evolution of Watchdog, our AI engine, which takes over the complexity of monitoring planetary architectures and provides proactive alerts, gettable shooting and fully automated good analysis. We're very pleased that our APM product went from GA to best-of-breed in just five years, and I want again to congratulate our teams for this achievement.
In June, we announced the availability of Observability Pipelines, the 15th product in Datadog platform. As a reminder, this is based on our 2021 acquisition of Timber, the company behind a very popular open-source project in Vector. As organizations scale their applications, the volume of telemetry data grows exponentially. Engineers must manage large volumes of metrics crisis and logs and log them from many sources to many destination.
And this complexity leads to vendor lock-in, order quality, risks of sensitive data leaks, and an increase in overall management costs. By using Datadog authority pipeline, customers can control the cost and volume of data, decouple data sources from their destination, standardize and improving data quality, and redact sensitive data to help maintain compliance. Next, we announced the general availability of Audit Trail in June, helping businesses safely adopted our platform, on maintaining compliance, enforcing governance and building greater transparency. And this week, we announced the general availability of service catalog.
With cloud architectures, customers are often creating hundreds of thousands of interpretive services, which are owned and developed by globally distributed teams. This large network of services, often mixed with customers, is difficult, and it can be challenging to understand what to do to terminate issues or who to call for help. Our service catalog inventory services define ownerships and displaced configurations and dependencies very similarly to what CMDBs might do or where CMDBs are typically manually populated. Our service catalog can identify this information automatically as it was specifically designed for the cloud edge.
Finally, this morning, we announced that we acquired Seekret, which is spelled S-E-E-K-R-E-T. Seekret API observability platform gives engineering teams control their need to better manage their private, public and third-party sets of APIs. With Seekret, we will accelerate on our path to bring customers visibility into the API and over time, unlock new exciting capabilities for our APM suite and our security platform. That's it for our product update this quarter.
And needless to say, we're all very grateful to our engineering and product teams for their continued hard work. Now moving on to sales and marketing. Let's discuss some of our wins in Q2. First, we signed a seven-figure upsell with a global services and audit company.
This customer is going through a large-scale digital transformation including migrating from on-prem data centers to multiple clouds and in particular, Azure. They are consolidating nine disparate legacy principal tool to Datadog as their strategic platform and purchase all of our products, as well as our premier support and technical account management services. Next, we had a seven-figure upsell with a managed service provider in Asia that is a top ideal partner in the region. This customer transitioned from their legacy monitoring tool to Datadog and adopted the entire Datadog platform.
They are experiencing rapid growth as they sell their MSP services to Edvard U.S. and CDN customers, and we are expanding the opportunity as well as our APAC. Next, we had a seven-figure land with a multinational media company. This customer has aggressive expansion plans for a streaming service, including the international markets.
But they found that their current mix of open source and legacy solutions wasn't meeting their needs. They calculated that it would pay for itself simply by accelerating the resolution of just one of the major incidents and avoiding loss of revenue. This customer started with infrastructure, APM, and log management, with the opportunity to expand and to more usage in products as the company scales. Next, we had a six-year land with a Fortune 500 logistics company.
Three years ago, this customer chose legacy monitoring providers and home solutions over Datadog. Now our platform has come a long way since then. Meanwhile, incumbents were unable to meet these customers' needs, particularly around their communities adoption, leading to dozens of high-profile incidents a year with a high time to resolution. Additionally, these customers expects to save nearly $3 million in developer resources by consolidating multiple products with Datadog.
Finally, we had a six-year land with a gaming division into hyperscaler. Previously, this company was primarily using open source and its own hyperscale native tooling. But despite deep technical expertise, ongoing solutions were lacking granularity and consume critical engineering resources. By using Datadog, this customer unlocked a prescriptive way to visualize alert and maintain the cloud gaming services.
In addition to these wins, we also had a number of sizable six- and seven-figure new logo and expansion wins with companies that have recently experienced business contraction and announced staff reductions. These customers are looking to streamline their operations. sale on engineering costs or consolidate multiple vendors on the strategic platform. We believe that software is a deflationary force and we are confident in our ability to help our customers do more with less, should economic conditions worsen.
As this quarter's customer highlights, I'd like to thank our go-to-market teams for their efforts and continued execution. Now let me speak to our longer-term outlook. We recognize the macro environment is uncertain as we look into the back half of 2022. But we also see no change to the long-term trends toward cloud-based services and modern DevOps environments, and observability remains critical to that journey.
We continue to drive market leadership and offer our customers value, efficiency and cost savings to solve their complex monitoring problems. As a result, we continue to feel very confident in our opportunities. We believe cloud migration and digital transformation are drivers of our long-term growth and our multiyear trends that are still early in their life cycle. And we believe it is increasingly critical for companies to embark on these journeys in order to move faster, serve their customers better and in times like these become more efficient with their infrastructure and engineering investments.
So we plan to continue to invest in our solid priorities to execute on these long-term opportunities. At the same time, we will continue to closely monitor the demand environment and we'll calibrate further, if necessary, to balance our long-term investments with financial strength. Before I hand it over to David, I wanted to make a couple of announcements. First, we are holding Dash 2022 User conference on October 18 and 19 at the Javits Center in New York City.
This is an occasion for us to showcase our latest product innovations and we're excited to show the one that we're up to. We also will organize an investor meeting at Dash and we will share shortly. And last but not least, we are pleased to welcome Titi Cole to our board of directors. Titi is CEO of Legacy Franchises at Citigroup and brings over 25 years of experience in senior global leadership roles in the financial services industry.
The perspective and experience will be incredibly valuable as we continue to do on scale. With that, I will turn the call over to our CFO for a review of our financial performance and guidance. David?
David Obstler -- Chief Financial Officer
Thanks, Olivier. We delivered strong financial performance in Q2. Revenue was $406 million, up 74% year over year and up 12% quarter over quarter. As Olivier described, we executed strongly with robust new logo ARR growth, continued low churn and continued strong platform traction.
But we did see some customers beginning to manage costs in response to macroeconomic concerns, which impacted our usage growth with some of our existing customers. Looking at our growth with existing customers, our dollar-based net retention was above 130% for the 20th consecutive quarter, remaining strong as we continue to see customers use more existing products and adopt new products on the Datadog platform. We saw usage growth with some existing customers decelerate in Q2 and that deceleration was concentrated in our larger spending customers as opposed to our lesser spending customers, where growth remained steady year over year. Amongst our industries, we saw relative deceleration in consumer discretionary customers, which represents low teens percent of our ARR.
As a reminder, we are highly diversified in industries and segments. And we saw lower expansion rate weighted toward areas of our platform that have volume-based components like certain aspects of log management and APM. Infrastructure monitoring AR growth was relatively steady year over year. On the other hand, our gross retention remained unchanged and steady in the mid- to high 90s.
We believe that our gross retention has reached and is sustaining these levels because of the stickiness of our product and the criticality of our platform to our clients. And as Oli mentioned, our new logos, we saw strong continued new logo acquisition and ARR growth, broadly by geography and across industries and company sizes. Finally, our platform strategy continues to resonate with customers with 79% of our customers now using two or more products, 37% using four or more products, and 14% using six or more products in the Datadog platform as of the end of Q2. Moving on to our financial results.
Billings were $397 million, up 47% year over year. As in previous quarters, we had some differences in the timing of billings of a few large customers, which were built in Q2 last year but were billed in Q1 this year. And pro forma for those adjustments, billings growth year over year was in the mid-50s. Remaining performance obligations, or RPO, was $881 million, up 51% year over year.
Current RPO growth was in the mid-50s year over year, and contract duration was slightly lower than the year-ago quarter. In addition, we observed that some customers aren't changing their level of usage growth but are being more conservative in their commitments, which impacts billings and RPO growth but not revenue growth. As we said in previous quarters, billings and RPO growth can fluctuate significantly and vary from revenue growth, whether higher or lower due to the timing of invoicing and duration of customer contracts. To illustrate this, we note that billings growth for the first half of the year of 2022 was 72% year over year.
Now let's review some key income statement results. Unless otherwise noted, all metrics are non-GAAP, and we have provided a reconciliation of GAAP to non-GAAP financials in our earnings release. Gross profit in the quarter was $328 million, representing a gross margin of 81%. this compares to a gross margin of 80% last quarter and 76% in the year-ago quarter.
We continue to experience efficiencies in cloud costs reflected in our cost of sales this quarter. In the medium to long term, we continue to expect gross margins to be in the high 70s range. Given our success in increasing our investments in R&D and go-to-market, our non-GAAP Q2 opex grew 65% year over year versus 56% year over year in Q1. This included our return to in-person office travel and events, which contributed $11 million to the sequential growth of opex.
Operating income in Q2 was $85 million or 21% operating margin, compared to operating income of $31 million or 13% operating margin in the year-ago quarter. Now turning to the balance sheet and cash flow statements. We ended the quarter with $1.7 billion in cash, cash equivalents, restricted cash and marketable securities. Cash flow from operations was $73 million in the quarter.
After taking into consideration capital expenditures and capitalized software, free cash flow was $60 million with a free cash flow margin of 15%. Our free cash flow margin in the first half of 2022 was 25%. Now for our outlook for the third quarter and the fiscal year 2022. First, informing our guidance, we are using conservative assumptions as to the organic growth of customers.
Taking into account the macroeconomic uncertainty and recent variability of the growth among certain customers. As Olivier mentioned, we see healthy trends in the host and containers monitor and strong execution in our business, but we recognize customers may have less visibility into their own businesses due to the macroeconomic environment. So for the third quarter, we expect revenues to be in the range of $410 million to $414 million, which represents 52% year-over-year growth at the midpoint. Non-GAAP operating income is expected to be in the range of $51 million to $55 million and non-GAAP net income per share is expected to be in the $0.15 to $0.17 per share range based on approximately 347 million weighted average diluted shares outstanding.
For the full-year fiscal year 2022, we expect revenue to be in the range of $1.61 billion to $1.63 billion, which represents 57% year-over-year growth at the midpoint. Non-GAAP operating income is expected to be in the range of $255 million to $275 million. Non-GAAP net income per share is expected to be in the range of $0.74 to $0.81 per share based on approximately 347 million weighted average diluted shares outstanding. Now as regards to our margin guidance, I wanted to point out.
First, gross margins have recently been at the top of our historical range. In operating expense, we have returned to in-office attendance, travel and events. We estimate that this was a 300 basis point sequential margin impact in Q2, and we expect an additional 100 basis point sequential margin impact in Q3. As Oli mentioned, in Q4, we will hold our Dash user conference and we will participate in the AWS Reinvent, our largest trade show at end of the year.
The cost of these events will be approximately 400 basis points of margin impact. We're back to fully in-person events this year, and we're excited to get in front of customers and showcase our many product innovations. Next, we have been successful in making R&D and sales and marketing investments, and we believe these will pay off in the future. While we plan to continue to invest, we will remain judicious and disciplined in our cost structure given macro uncertainties.
As indicated by the guidance, we expect non-GAAP operating margins in the second half of 2022 to be in the low double digits. We are healthily profitable on a non-GAAP basis. and our free cash flow generative. And we have built a highly efficient, frictionless business model while driving high ROI on our investments over time.
Our efficiency and financial strength affords us options in times of macro uncertainty that other market participants will not have, and we intend to make the best of this opportunity to drive our long-term growth. But of course, we are mindful of the environment and are closely monitoring our costs carefully, and we will calibrate further, if necessary, to maintain our financial strength. In conclusion, while we recognize there is greater uncertainty in the macro environment right now, we see no change in the importance of cloud migration and digital transformation, which are critical to our customers' competitive advantage. We believe we are well positioned to help our customers embark on these journeys, and we are investing aggressively into our long-term opportunities while maintaining our financial strength.
I want to thank Datadog worldwide for their efforts. And with that, we will open the call for questions. Operator, let's begin the Q&A.
Questions & Answers:
Operator
[Operator instructions] Our first question comes from Sanjit Singh from Morgan Stanley.
Sanjit Singh -- Morgan Stanley -- Analyst
Really impressive Q2 results with 74% growth. I wanted to talk a little bit about some of the trends you're seeing in the business and particularly with respect to the guide. I guess the first question is, as the quarter progressed, when did you start to see some of these slower usage trends in some of these verticals? If you could give a comment on that? And then, David, in terms of the guidance in terms of how you were framing it, can you give us a sense of what you're sort of assuming in the back half with respect to Q3 into Q4? Is it some of the trends that you're seeing in July? Did that improve or stabilize or worsen? Just give us some sort of context on how you are framing the guidance for the back half, that would be super helpful.
Olivier Pomel -- Co-Founder and Chief Executive Officer
OK. So I'll start maybe with the linearity. We did see the viability in usage growth that we mentioned. We saw that start really in late April, May and June.
So as we got deeper into the quarter. I should say that this is -- if you're thinking of what happened at the COVID, this is not a sharp pullback as we have seen at that time. But we saw it's just for some customers still growth, but slower goals for certain types of customers and others than what we would have seen historically. I should say that while we did see that for some of our products, especially the ones that have more of a volume component, net logs and some APM, we did see continued healthy growth in host or I should say, cloud expenses and containers, which really are indicative of the fact that the cloud migration is proceeding as it was before.
To fully answer the question also, I think you're getting ahead of what David is going to talk about a little bit. In July, we did see an improvement on those trends, but we still remain conservative in our outlook for the short term because of the noisiness of the data we're seeing there, it's -- there's a few more valuations, a bit more noise. And all of that is underpinned by some macro uncertainty. So we want to derisk that a little bit and give it more careful.
David, do you want to comment on that?
David Obstler -- Chief Financial Officer
Yes. On guidance, as you know, we have always been conservative in our guidance by using lower organic growth and other metrics than seen historically and continue to maintain that philosophy. I would note that if you look at the raise here and the percentage of the beat that was passed through into the raise from Q2, it is lower, more conservative than we have done in previous quarters. And the reason for that is the macro uncertainty where we can't be as confident about what happens given the macro uncertainty.
So I would say there, if you want to take that, there were some incremental conservatism put into this. But I'd remind everybody that we've always been quite conservative in using assumptions that are lower than the past when we give guidance.
Sanjit Singh -- Morgan Stanley -- Analyst
That's super helpful. I appreciate all the context. And one more if I could just sneak in one quick question. Olivier, on the comment on which sort of products may be seeing slightly lower usage.
I fully understand like the volume-based products like logs that makes complete sense. With APM, though, I'm a little confused on why you might see some deceleration there. Because correct me if I'm wrong, I think that's primarily based on host-based pricing. So any comments on like the APM side versus log side in terms of how cost -- some of the trends you're seeing in terms of usage across those two parts of the portfolio?
Olivier Pomel -- Co-Founder and Chief Executive Officer
That's a great question. So for APM, there's actually part of APM that looks like logs, which is APM is -- part of it is house-based and part of it is traffic-based. If you want to run analytics and have longer retention on certain parts of your APM data, it basically behaves that logs. And that's the part on which we've seen some slower growth.
It's still growing, but both are actually still growing healthily, but I would say, slower than they were in recent quarters for these types of customers. And you can do the same thing with that. A little bit more, you can reduce retention, and these other levers customers have to control the spend there.
Sanjit Singh -- Morgan Stanley -- Analyst
Makes total sense. I got it.
Operator
Our next question comes from Raimo Lenschow from Barclays.
Raimo Lenschow -- Barclays -- Analyst
New version of my name. Can I stay on that subject, Olivier? So if you think -- is there a different pattern of how people work with you and use you, if you say infrastructure volumes are -- or infrastructure is not as much impacted or is not impacted as the log and APM part. Like are you more important on that side because like if I'm thinking like I need to monitor my applications as much as I need to monitor my infrastructure. So I'm just -- like maybe help us understand a little bit the differences there? And then I have 1 follow-up.
Olivier Pomel -- Co-Founder and Chief Executive Officer
No. It's just that these are -- you have more like short-term levers to actually optimize a little bit in logs and APM and anything that's volume-based. What we've seen customers do is -- I mean, really, if we were to cater customers that would break them into three buckets. One bucket is the customers that spend a lot with us, have us all to work in their business and not seeing their business slow down.
That's what we mentioned in consumer discretionary and food delivery, for example. In those cases, naturally, if customers are then sales are growing 10% to 50%, and they're using several already like we're going to through it with them. That's measurable, but that's only a small part of our customers. We're very diversified, and we also have a very small part of our customers that uses that.
It's a useful tool at this point. The second bucket I would say is customers that have a series you can spend with us. And I'm now just seeing a little bit more uncertainty in the future. So their businesses might not be challenged today, but pretty much every CFO has a mandate to look more closely at their expenses.
And what we see those do is they're looking for optimization. They're looking for maybe to find some leaky faucet they can close. And you can typically find some of those in logs, for example. And this is not something new.
I mean we've just said before, every customer goes through cycles where they optimize a little bit and then they go again and then they optimize again. What happens in times like that is that you see customers bunch in the same quarter doing it all at the same time because they're all going through the same macro event. So we're seeing some of that there. And again, this is not comparable in breadth or in magnitude to what we've seen at the mean of COVID.
But still, we see that in the data, so we wanted to call it out on the call. Just to finish it. I promised you three buckets, I'll deliver you the three. The third bucket is customers that are lesser spend, which in this case, we mean less than $500,000 a year on us.
They are basically growing as they were before. They're actually growing more slowly than the larger ones. The larger ones have slowed down a little bit while the model ones haven't.
David Obstler -- Chief Financial Officer
I just want to clarify, when -- if you look after the call on our website, you'll see that in APM it's host-based pricing, but there's other parts that are like logs, as Oli mentioned, that are data related that are related to ingestion and indexing. And so what we're saying is that the infrastructure part, both with the infrastructure and the APM didn't experience as much variability, but the ability to tweak the use of the data through both ingestion and indexing which is more of a part of logs, but also a part of ATM was where we saw that variability.
Raimo Lenschow -- Barclays -- Analyst
OK. Perfect. And then the follow-up is if you think about it, and I'm sure you have thought about as you thought about the implications for the second half. Consumer discretionary sounds like the first thing that in the kind of downturn gets impacted.
You also mentioned food delivery a little bit, which kind of seems more like the newer tech companies. Is that something that you kind of anticipate to go through the supply chain? So CPG comes next. Class of retail comes next. how do you think about it or how do you think about that when you were buffering for the second half?
Olivier Pomel -- Co-Founder and Chief Executive Officer
Yes. So we're very diversified. So no particular part of the industry actually covers a large part of our revenue. And also, I would say, we -- in terms of those of our customers, they are very following in the cloud migration or that cloud needed to start with, we actually probably have more of them in consumer discretionary than in other verticals that we have.
So that all -- that came into consideration when we looked at our guidance.
Operator
Our next question comes from Kash Rangan from Goldman Sachs.
Kath Rangan -- Goldman Sachs -- Analyst
Yes. I can pronounce Raimo's name perfectly well. So thank you. Thanks for giving me a chance to ask a question here.
So I'm curious when you look at AWS and Azure, I mean, a much larger business. They had good bookings, I think backlog growth, whatever you want to call it. But if you can help us reconcile your CRPO growth. I'm sure there are company specific things that pertain to how you see your growth on a year-over-year basis, sequential growth basis.
How do we look at that in the context of what's happening with the hyperscalers. And they did put up even during an uncertain time, tremendous backlog growth, whatnot. So is there something specific to Datadog? Maybe it's the 18% or so, high teens percentage exposure to consumer discretionary. Maybe if you parse that out, there is a different way to look at the rest of the business.
And if you could quantify how the rest of the business did relative to how the hyperscalers were able to put up that kind of backlog. So I'm trying to just bridge the performance of Datadog versus the public cloud at an aggregate level, if you don't mind.
Olivier Pomel -- Co-Founder and Chief Executive Officer
Yes. So I'll start on the rapid trends with the hyperscalers and then David can give you more color on the bookings part. But the -- so in Q2, we did a lot better than the hyperscalers. So we're going a lot faster than all of them combined.
And they've decelerated actually more than we've done in a interactive basis. So we actually feel good about the ratio there. Like we are commanding a larger portion of the cloud revenue than we were last quarter. In terms of the go forward, I don't think the hyperscalers have to guide specifically for that.
But we -- in terms of business trends, we see that all of the leading indicators of success are looking good for us. So I've mentioned it on the call that we're seeing great action with new logos. We're seeing great success with new product attaches. The pipeline's going into the second half of the year are very good.
We've also done very well with the capacity we've added and the hiring and everything that's a pretty for our success. So all of that is looking good. What we don't have necessarily in terms of the gap for the future is we have a little bit of more noise in the data in terms of growth, which leads us to be a little more conservative. David, do you want to give more color on the booking part of it?
David Obstler -- Chief Financial Officer
Definitely. So I remind everybody that with our land and expand where we start getting used by clients, they scale up the growth and when they get to a certain point through. This has been going on for the whole business model. They go to an increased commit.
Because of that, there's variability in the billings and RPO that net-net, over time, on average, go toward the ARR growth. Again, remember, we mentioned that the ARR growth is the best metric. And the way to look at that is that you look at the revenues. You take -- you use the linearity, which is 34%, 35% of that and multiply that times 12, and that is pure because it doesn't get altered by when a bill goes out either in timing or whether the bill is a previous commitment plus an on-demand or a new commitment.
So it's always going to be noisy with us. We understand that investors and analysts look at it. So we try to give some color on that, but remind everybody that is very variable and only over time gets -- it comes back to the revenue growth. So just to remind everybody.
And I think we said we basically put in there that in the first half of the year, the growth of this was in the 70s, pretty close to revenues. Why? Because there was some timing of billing in the first quarter relative to the second quarter that moved the first quarter up in the second quarter down, but it really doesn't have much effect on the drivers of our business.
Olivier Pomel -- Co-Founder and Chief Executive Officer
And just to be very clear about this, like theoretically, we don't actually manage the business to billings. And that's because it aligns us with our customers. So we manage it to usage, which it turns into revenue pretty directly for us. What this means is we're very heavily in the extreme business.
When we land, we typically land small. So that has typically a small impact on billings. And when we expand whether we actually do the expansion this quarter on export, doesn't really matter because it doesn't really change to usage of customers. Their innovation doesn't really change the revenue that we're going to see from them.
And so we see some noise there, and we don't manage the business to it.
Operator
Our next question comes from Fatima Boolani from Citi.
Fatima Boolani -- Citi -- Analyst
Oli, one for you and one for David as well. Oli, you talked about some wins vis-a-vis DIY and open source displacements in your prepared remarks. But I suppose in a more challenged or uncertain macroeconomic backdrop, the free or -- if it ain't broke, don't fix it type model is potentially more attractive. So I'm curious if you can give us some color commentary on how you expect to sort of effectively compete with "free open source" alternatives, especially for some of your volume-based solutions? And then I'll follow up for it separately.
Olivier Pomel -- Co-Founder and Chief Executive Officer
Yes. So three is actually the most expensive typically because you have to build it yourself. And it turns out people tend to be the most expensive thing for our customers. We mentioned in the script earlier that we actually had a number of sizable wins with customers that had announced layoffs shortly before they actually bought from us for the first time or have big expansions with us.
And that's because we help them be more efficient. We have been concentrate their efforts where it actually adds to their business as opposed to reinventing the wheel in a more expensive and less efficient way themselves.
Fatima Boolani -- Citi -- Analyst
I appreciate that. And David, just for you, I think historically, you've characterized that roughly three-quarters of the business is tied to committed and rate card committed type contracts. And I think you were very categorical in mentioning that RPO levels are moderating of some of your customers moderate their commitment level. So I was curious to get your perspective on sort of the next 6- to 12-month impact on increased conservatism around the commit levels as well as how that translates into the quarter of your business that is very much usage and average-oriented.
If you could just frame that for us and more of a 6- to kind of 12-month frame from here? And that's it for me.
David Obstler -- Chief Financial Officer
Yes. We haven't seen -- thanks for the question. We haven't seen any change in those numbers. We still have the land, commit, use, grow, get into on-demand, recommit, we did say that in the level of conservatism that was introduced to some clients that they may have stayed more into their previous commit plus on demand.
Because of that, that doesn't for that situation affect the revenues because they're still consuming the same, but they may want to retain more optionality. this is really sort of in looking at financial management with level of uncertainty. You generally would pay a higher price if you stay that way, but you'd be trading off the higher unit price, the marginally higher unit price for the more optionality. And we did see some of that.
We don't know what's going to happen next, but we would think that if we continue to have macro uncertainty, there will be some customers that will opt for that type of pattern relative to the commitments.
Olivier Pomel -- Co-Founder and Chief Executive Officer
And we're fine with that, by the way. We designed the business that way. We don't offer large discounts for very large time commitments. And that, again, that's by design, like we actually want to align or success with the user of our customers, and we're happy to keep it that way.
In times like that, it is always pay down.
Operator
Our next question comes from Matt Hedberg from RBC Capital Markets.
Matt Hedberg -- RBC Capital Markets -- Analyst
Maybe, David, a follow-up, I think really to Raimo's question earlier, in your guidance philosophy, did you assume other verticals beyond consumer discretionary slow their usage? And maybe what are the assumptions from smaller customers? It sounded like they actually were fairly strong this quarter.
David Obstler -- Chief Financial Officer
Yes. To take the second part, I think we saw that in our smaller customers, we had very consistent net and gross retention. We always do that. So our guidance always takes the drivers, which would be the organic or usage growth and the new logos, it always takes it down.
So we do that in every quarter. I think you know that from following us. And in this quarter, I mentioned that by passing through less of the beat we inject an incremental level of conservatism. But overall, the philosophy of basically taking all of those things down and it remains at the core of our philosophy of providing guidance.
Matt Hedberg -- RBC Capital Markets -- Analyst
Got it. OK. And then was there a geographic element to any of the kind of the slowdown in consumption? Was there a European element? Or was it sort of just broad-based geographic?
David Obstler -- Chief Financial Officer
There was not. We did not see that. It was not geographic. As we mentioned, it tended to be more either large spend or industry based, but we did not see that geographically.
Operator
Our next question comes from Kamil from William Blair.
Kamil Mielczarek -- William Blair and Company -- Analyst
One for Oli, maybe first of all, congrats on the acquisition of Seekret. Dave has historically done a great job of rapidly integrating these products and launching them as new solutions. I think at Dash, you mentioned that the typical turnaround is one year for these products to become a stand-alone Datadog solutions. However, given the upward trend in cash generation and your cash and equivalents are now approaching $2 billion, have your thoughts changed around potentially making a more transformative acquisition, especially given the decline in market valuations today?
Olivier Pomel -- Co-Founder and Chief Executive Officer
It's possible. Everything is open. We've looked at some of those in the past. We're raising the higher for larger businesses like that.
But we're really looking at valuations coming down and some more opportunities presenting themselves to us there. So everything is possible. But in general, we're very active on the M&A side. I think we'll only be more active as markets temper as they are right now.
But there's not much margin side.
Kamil Mielczarek -- William Blair and Company -- Analyst
Great. And just as a follow-up. Earlier this year, we still got Datadog building out its recruiting engine, and I see you accelerated investments into sales and marketing again this quarter. I think even after adjusting for T&E.
Can you update us on where the incremental investments are focused? And given the macro environment, how do you think about the balance between preserving margin versus continuing to hire maybe more aggressively and coming out stronger on the other end.
Olivier Pomel -- Co-Founder and Chief Executive Officer
Right now, we're aggressively recruiting. We're building capacity. We're successful at it. And I really see it as a predictor of future success.
We're in an interesting situation because -- as a company, we are very efficient. We've been very disciplined from the funding of the company. For those of you who have followed us for a long time, we burned less than $30 million on our way to IPO, and we've generated a lot more cash than that since then. So no discipline be into the DNA of the company.
We also built the business around model that is frictionless and extremely efficient. And we've shown this efficiency, I would say, over the past two quarters by growing very fast while being fairly profitable. So we did no doubt in our minds about the long-term profitability profile of the company. So what this does is that it affords us opportunities to invest in times like this.
that the rest of the market will not have. Last year, everybody would invest everybody could spend money, it didn't matter. This year, I think it's a little bit different. So we really see that as an opportunity to break from the back even further and innovate, build self capacity and all those things.
Now obviously, as I said earlier, discipline is in the DNA of the company. So we're always looking at with our margins are or the macro environment is. And we have all the levers we need to adjust so we can maintain profitability in the future. David, do you want to comment some more?
David Obstler -- Chief Financial Officer
Yes. I just want to add that what we said all along was we try to maintain a steady investment profile, which is focused on R&D and sales and marketing investments. And it's banded by what we can execute, what we feel we can hire, integrate, etc. And in periods where there are is an acceleration, we said this many times on the top line, we can't invest as fast as that when the top line went up to 80%.
So you're going to have margin expansion. That was exaggerated because there were some costs that didn't happen in COVID that are part of our normal business operations. So we try to maintain a steady profile of investment and the variability is with this acceleration of the top line, you might see that because it flows through at a high marginal rate. And then if you see a deceleration, you might see less of that margin expansion.
So that's our philosophy, but it's always to invest and take advantage of the long-term opportunity.
Olivier Pomel -- Co-Founder and Chief Executive Officer
Yes. The last thing I'd say we feel great about the opportunity in general. We feel great about the -- as I mentioned earlier, the leading indicators of success whether it's new logos, product attaches our product pipeline and our ability to ship it as well as the pipeline we see of customers that are in sales processes with us for new products or just brand new deployments. So we feel great about all that.
And this makes us very confident into our investments. What's possible though is that the demand environment is a bit more challenged. There will be a bit of a longer time for us to show in the investment, and we are fine with that.
Operator
Our next question comes from Brent Thill from Jefferies.
Brent Thill -- Jefferies -- Analyst
David, I think everyone is still a little confused. You're seeing an inversion with what's happening with SMB and large enterprise. Many companies are coming out weakness in SMB not at large. Can you explain why you think you're seeing this inversion? And are you embedding a more conservative view in the back half?
David Obstler -- Chief Financial Officer
Yes. Not an inversion. I think what we said was -- we did not see what you're saying, which is SMB and smaller customers did not act differently than they had. What we said was whether it's an enterprise mid-market or SMB, what happened was in certain segments, consumer, etc., we had a more conservative or a more of a cost mentality.
And two, irregardless of where it was -- remember SMB for us is 1,000 employees or less mid-market, 1,000 to 5,000 enterprise 5,000 and up. That in the larger areas where there had been substantial expansion, we saw a look at that cost. So those were the determination numbers for us. It wasn't Europe.
It wasn't that SMB fell out. It was those things. And in terms of the second half of the year, we don't know. But in what we guide always, we assume lower organic growth in all the sectors than we have historically and that we might expect.
So I think inversion is the wrong thing because what this -- what happened was the driver of the cost look was not whether it was an SMB mid-market or enterprise, but what the level of spend and the industry.
Olivier Pomel -- Co-Founder and Chief Executive Officer
One way to see to see it is we're critical to our customers. Critically important, we deliver value. We have them be more efficient. So in general, the -- whatever the size of the customer is, we're not on the chopping block.
But the more customers spend on us, they're going to look for savings where they're spending money, and they're going to see that at a larger level of spend with us. And as we mentioned earlier, there's always a little bit you can optimize, especially with some of the volume- based products.
David Obstler -- Chief Financial Officer
And by the way, gross retention stayed the same at all the different levels, SMB, mid-market and enterprise. So when you're talking about, do you have a solution, are you continuing to do solution we saw no change in the gross retention across all of our customer sizes.
Operator
Our next question comes from Gregg Moskowitz from Mizuho.
Gregg Moskowitz -- Mizuho Securities -- Analyst
Oli, you're frequently speaking to a lot of Datadog customers, and totally speaking, are they raising more questions about your pricing levels in this environment? Any commentary on that would be helpful.
Olivier Pomel -- Co-Founder and Chief Executive Officer
So we're actually very optimistic from our conversion with customers because there's more and more of them. They want to buy more product. They want to use more of our products. They want to a bigger problem for them.
Everybody wants a better deal, but I think that's always been true, and that's always going to be true. And it's even truer in situations like this where the CFOs have a mandate to be more conservative. But anecdotally, from what we see with customers, we're very bullish.
Gregg Moskowitz -- Mizuho Securities -- Analyst
OK. Got it. And then you touched on some interesting examples in your script, but if you were to look back over the past 6 months or so, I'm wondering whether or not there has been any change to the trajectory of customer consolidation or standardization on Datadog?
Olivier Pomel -- Co-Founder and Chief Executive Officer
So we keep seeing more and more of it. It's still not the majority of what we do. But we think, again, if the daily prolonged macro issues in the market, like we might see more consolidation and customers now want to really try to save on their legacy software by consolidating on us. So we definitely see that as a possibility.
Again, that's not the majority of what we do today. That's not what we base any of our projections on, but that's something that we think might happen.
Operator
Our next question comes from Mike Cikos from Needham & Company.
Mike Cikos -- Needham and Company -- Analyst
I did just want to come back to that other point previously regarding the SMB versus enterprise. And really, is it fair to characterize some of the, I guess, movements you're seeing with these larger deals? Is it maybe less of an impact to you at the SMB level, either because you're their wallet share when they're looking to pay out their vendors? Or is it possible that those SMB organizations just have less exposure to your more usage-based products.
Olivier Pomel -- Co-Founder and Chief Executive Officer
They have the same exposure to simply the difference is what your time to say, $5,000, probably not. If you're a much larger customer, it's worth your time to sell $500,000. And that's what we see with optimizations.
Mike Cikos -- Needham and Company -- Analyst
Understood. And then the follow-up I had for you is if I look at the trends for multiproduct adoption from your customers, I think this is the first time we've seen your two-plus product module adoption actually declined sequentially from 81% to 79%. Is the implication there that your customers are starting smaller now or deciding to up pay. We'll take another product from you at a later date? And again, if you could help me parse out that metric, that would be helpful.
Olivier Pomel -- Co-Founder and Chief Executive Officer
Just mechanicals because we -- I think we said 75% of our new logos are [Inaudible] with two or more products, and we have more new logos. And so this pushes the number down a little bit.
David Obstler -- Chief Financial Officer
There's nothing -- 81, 79 these are all just there's nothing -- no change in trend.
Operator
Our next question comes from Peter Weed from Bernstein.
Peter Weed -- AllianceBernstein -- Analyst
I'm interested in the customers that are doing some cost rationalization and trying to unpack is that something that's targeted directly at Datadog? Or is it actually as part of a broader cloud rationalization that you see going on. It just happens to be that Datadog gets pulled into that and may even just see splash on effect as customers are managing their overall cloud topology and with the pricing that pulls down Datadog. Help me unpack those two things, whether or not it's Datadog focused or more of a broader cloud focus.
Olivier Pomel -- Co-Founder and Chief Executive Officer
It's just focused on their cost structure. So they line up their expenses by decreasing in the freezing order and they heat up everyone [Inaudible] and they see what it is that they can do to optimize. And again, a number -- you've seen a number of customers that had layoffs. So they're going after their cost structure.
They have cost structures on their workforce, and we're part of that. I think that it's a good thing because those customers spend a lot of us were very critical one of the top vendors. That means, for those of them who use us both will, like we are, to a certain extent, tied to their own trajectory.
Peter Weed -- AllianceBernstein -- Analyst
OK. So you're saying that this is very focused on Datadog as a line item and not just a splash on effect necessarily --
Olivier Pomel -- Co-Founder and Chief Executive Officer
No. I'm saying is focusing with they're spending money on. And for some of those, that's paying a lot of money. They're spending more money on cloud in there.
I guarantee you, they're also trying to save money on that. And we know that the cloud providers are also working with these customers to have them with their spend. I think everybody is aligned in trying to make their customers successful there. And we actually have been involved in efforts where we work with the block providers and these customers to help them make the most of what they have.
And again, in times like this, we want to be on the side of our customers. We want to help them. We want to have them get the most of what they spend on us. so we can have a long-term successful relationship with them.
David Obstler -- Chief Financial Officer
Given the stickiness and what we did just monitoring of real-time applications for their clients, we feel that when our experience has been that it is less focused on other things than Datadog, but when you're looking at your cost structure, there are opportunities, as you said, to rationalize across. But generally, if you look at the gross retention and you look at how important Datadog is to the businesses, and you read the newspapers, you see that it's focused on other things more.
Peter Weed -- AllianceBernstein -- Analyst
Yes. Yes. No. That makes sense.
And one other last question, if you may. I think you alluded to some timings of some contracts over quarters and this type of thing in that there may have even been some improvements in July and some of the momentum of closing contracts. Can you comment on some of those improvements and how you see them kind of juxtaposed with some of the other cost that you're talking about and have to.
Olivier Pomel -- Co-Founder and Chief Executive Officer
I think the improvement in July were not about closing contracts. The one I mentioned we're about the usage trends, which is fairly force from the closings and the contracts and everything else. We also -- again, I got a great pipeline, and we're very happy with what we've seen the sale side in July, but this is where -- which we commented about the usage.
David Obstler -- Chief Financial Officer
Yes. Like always -- I think we've been on calls over time. Every call, if there is some timing differences to the positive, billing was in this quarter. We try to point it out because when the bill goes out or when the commitment is not is not as correlated to the revenues as ARR is.
So we -- I think we said that on every -- almost everyearnings call and we just remind everybody all the time that because of the land-expand model that you're going to have variability plus and minus. And when it's plus, we want to remind everybody not to read anything into it. And when it's less, we want to remind everybody that that's not the major metric that drives top line growth of the company.
Peter Weed -- AllianceBernstein -- Analyst
Sure. But I mean, if you've got utilization, it should turn into additional revenue in future periods, and I think you're mentioning kind of a positive trajectory. When you say resources, we just think --
Olivier Pomel -- Co-Founder and Chief Executive Officer
Usage actually is revenue in the same period. Like the two others are one and the same. There's no delay between those two that [Inaudible] another was billings.
Peter Weed -- AllianceBernstein -- Analyst
Yes. And I guess what I'm getting at is if you see that positive trajectory in July, it will turn into revenue in the period. How are you seeing that going forward?
David Obstler -- Chief Financial Officer
Telling you that we're telling -- we're saying that unlike COVID there was -- we had strong usage growth. We had usage growth in a lot of places and on average, in the second quarter. What we're saying is that in July, we saw pockets where there was a little better usage growth, but we're not calling the market here. We're basically reporting what we see and what we hope is the most helpful in a formative way.
Operator
Thank you. This has concluded the question-and-answer session. I will now turn the call back over to CEO Olivier Pomel, for closing comments.
Olivier Pomel -- Co-Founder and Chief Executive Officer
All right. Thank you. I want to thank everyone for spending time with us on the call. And again, I want to thank all of Datadog employees for a great quarter and for continuing to be a fantastic company and so far into our customers.
So thank you all, and we'll see you next quarter.
Operator
[Operator signoff]
Duration: 0 minutes
Call participants:
Yuka Broderick -- Head of Investor Relations
Olivier Pomel -- Co-Founder and Chief Executive Officer
David Obstler -- Chief Financial Officer
Sanjit Singh -- Morgan Stanley -- Analyst
Raimo Lenschow -- Barclays -- Analyst
Kath Rangan -- Goldman Sachs -- Analyst
Fatima Boolani -- Citi -- Analyst
Matt Hedberg -- RBC Capital Markets -- Analyst
Kamil Mielczarek -- William Blair and Company -- Analyst
Brent Thill -- Jefferies -- Analyst
Gregg Moskowitz -- Mizuho Securities -- Analyst
Mike Cikos -- Needham and Company -- Analyst
Peter Weed -- AllianceBernstein -- Analyst
More DDOG analysis
All earnings call transcripts
This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability.
The Motley Fool has positions in and recommends Datadog. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Datadog (NASDAQ: DDOG) Q2 2022 Earnings Call Aug 04, 2022, 8:00 a.m. Operator [Operator signoff] Duration: 0 minutes Call participants: Yuka Broderick -- Head of Investor Relations Olivier Pomel -- Co-Founder and Chief Executive Officer David Obstler -- Chief Financial Officer Sanjit Singh -- Morgan Stanley -- Analyst Raimo Lenschow -- Barclays -- Analyst Kath Rangan -- Goldman Sachs -- Analyst Fatima Boolani -- Citi -- Analyst Matt Hedberg -- RBC Capital Markets -- Analyst Kamil Mielczarek -- William Blair and Company -- Analyst Brent Thill -- Jefferies -- Analyst Gregg Moskowitz -- Mizuho Securities -- Analyst Mike Cikos -- Needham and Company -- Analyst Peter Weed -- AllianceBernstein -- Analyst More DDOG analysis All earnings call transcripts This article is a transcript of this conference call produced for The Motley Fool. This effect was more pronounced in certain industries, particularly in consumer discretionary, which includes e-commerce and food and delivery customers and affected more specifically on products with a strong volume-based component such as log management and APM suite.
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Operator [Operator signoff] Duration: 0 minutes Call participants: Yuka Broderick -- Head of Investor Relations Olivier Pomel -- Co-Founder and Chief Executive Officer David Obstler -- Chief Financial Officer Sanjit Singh -- Morgan Stanley -- Analyst Raimo Lenschow -- Barclays -- Analyst Kath Rangan -- Goldman Sachs -- Analyst Fatima Boolani -- Citi -- Analyst Matt Hedberg -- RBC Capital Markets -- Analyst Kamil Mielczarek -- William Blair and Company -- Analyst Brent Thill -- Jefferies -- Analyst Gregg Moskowitz -- Mizuho Securities -- Analyst Mike Cikos -- Needham and Company -- Analyst Peter Weed -- AllianceBernstein -- Analyst More DDOG analysis All earnings call transcripts This article is a transcript of this conference call produced for The Motley Fool. Datadog (NASDAQ: DDOG) Q2 2022 Earnings Call Aug 04, 2022, 8:00 a.m. During this call, we will make forward-looking statements, including statements related to our future financial performance, our outlook for the third quarter and fiscal year 2022, our gross margins and operating margins, our strategy, our product capabilities and our ability to capitalize on market opportunities.
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Operator [Operator signoff] Duration: 0 minutes Call participants: Yuka Broderick -- Head of Investor Relations Olivier Pomel -- Co-Founder and Chief Executive Officer David Obstler -- Chief Financial Officer Sanjit Singh -- Morgan Stanley -- Analyst Raimo Lenschow -- Barclays -- Analyst Kath Rangan -- Goldman Sachs -- Analyst Fatima Boolani -- Citi -- Analyst Matt Hedberg -- RBC Capital Markets -- Analyst Kamil Mielczarek -- William Blair and Company -- Analyst Brent Thill -- Jefferies -- Analyst Gregg Moskowitz -- Mizuho Securities -- Analyst Mike Cikos -- Needham and Company -- Analyst Peter Weed -- AllianceBernstein -- Analyst More DDOG analysis All earnings call transcripts This article is a transcript of this conference call produced for The Motley Fool. Datadog (NASDAQ: DDOG) Q2 2022 Earnings Call Aug 04, 2022, 8:00 a.m. Looking at our growth with existing customers, our dollar-based net retention was above 130% for the 20th consecutive quarter, remaining strong as we continue to see customers use more existing products and adopt new products on the Datadog platform.
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Operator [Operator signoff] Duration: 0 minutes Call participants: Yuka Broderick -- Head of Investor Relations Olivier Pomel -- Co-Founder and Chief Executive Officer David Obstler -- Chief Financial Officer Sanjit Singh -- Morgan Stanley -- Analyst Raimo Lenschow -- Barclays -- Analyst Kath Rangan -- Goldman Sachs -- Analyst Fatima Boolani -- Citi -- Analyst Matt Hedberg -- RBC Capital Markets -- Analyst Kamil Mielczarek -- William Blair and Company -- Analyst Brent Thill -- Jefferies -- Analyst Gregg Moskowitz -- Mizuho Securities -- Analyst Mike Cikos -- Needham and Company -- Analyst Peter Weed -- AllianceBernstein -- Analyst More DDOG analysis All earnings call transcripts This article is a transcript of this conference call produced for The Motley Fool. Datadog (NASDAQ: DDOG) Q2 2022 Earnings Call Aug 04, 2022, 8:00 a.m. In addition, we observed that some customers aren't changing their level of usage growth but are being more conservative in their commitments, which impacts billings and RPO growth but not revenue growth.
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8711717c-a0cc-4ae7-84b7-781053af568e
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718571.0
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2022-08-02 00:00:00 UTC
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3 Humbled Nasdaq Stocks Ready to Bounce Back
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DDOG
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https://www.nasdaq.com/articles/3-humbled-nasdaq-stocks-ready-to-bounce-back-3
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nan
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nan
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Some tech stocks are getting too cheap to ignore, but not all of them are good buys right now. Growth stocks took a beating over the past year or so, as rising interest rates and recession fears eliminated investor risk tolerance. These three stocks took a beating in recent months, but they still have great long-term prospects.
1. Nvidia
Nvidia (NASDAQ: NVDA) was one of the darlings of the pandemic bull market. The semiconductor stock rode a wave of strong results and investor momentum to become one of the largest companies in the world. Its price-to-sales ratio peaked close to 35, and its forward price-to-earnings (P/E) ratio swelled to 75. Those sorts of valuations weren't sustainable when investors moved away from growth stocks about nine months ago.
Nvidia is much more reasonably priced now. Its forward P/E ratio is around 34, and its price-to-sales is down to 15. Last quarter, the company reported record sales after growing 45%. Nvidia semiconductors are state-of-the-art market leaders in several major growth categories, including data centers, gaming, automation, and robotics. Nvidia has set itself up to be one of the greatest beneficiaries of the emerging tech trends that should define the near future. It's also shrewdly investing in next-generation quantum computing so that it can stay afloat when its current product portfolio becomes obsolete.
Image source: Getty Images.
Ongoing rate hikes and a potential recession could hurt Nvidia's growth rate, which probably result in the stock dropping further. That shouldn't dissuade investors who love the company. Its valuation is reasonable enough for long-term investors to enjoy gains as the company's cash flows expand.
2. Datadog
Datadog (NASDAQ: DDOG) provides application monitoring and security for cloud software. Its product helps customers to maximize the performance of their digital operations. and capability of their cloud while protecting against threats. That's relevant for almost every company in the modern economy, and it's a major point of emphasis as software influences every aspect of operations. Those are fantastic growth catalysts.
Gartner gives high marks to Datadog, naming it a leader in the application performance monitoring industry. Datadog's customers seem to agree -- its net retention rate is over 130%, indicating that customers are sticking around and expanding their relationship. That's strong evidence of quality and satisfaction.
DDOG PS Ratio data by YCharts
Datadog rode these catalysts to 83% revenue growth last quarter. The company reported net profits and $130 million in free cash flow. That's exciting for investors who are looking for a rare combination of huge growth along with profitability. Datadog stock isn't cheap at price-to-sales ratio above 25 and forward P/E above 140, but it's much cheaper on the basis of fundamentals than it was in December.
3. ZScaler
Zscaler (NASDAQ: ZS) is a cybersecurity stock that specializes in edge protection. Cyberattacks are commonplace in the headlines these days, and criminals often access sensitive corporate data through employees and customers. That's exactly what Zscaler aims to stop, and it's considered an industry leader by Gartner.
Zscaler is growing faster than 60%, which is an incredible feat for a company that's on pace to surpass $1 billion in annual revenue. It's not profitable yet, but it produces positive free cash flow, so it's not burning through cash to achieve such impressive growth. In this regard, Zscaler is a lot like Datadog -- it even has very similar valuation ratios. It's hard to call this stock cheap, but Zscaler's value has plenty of room to grow if it stays on this trajectory.
10 stocks we like better than Nvidia
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They just revealed what they believe are the ten best stocks for investors to buy right now... and Nvidia wasn't one of them! That's right -- they think these 10 stocks are even better buys.
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*Stock Advisor returns as of July 27, 2022
Ryan Downie has positions in Nvidia. The Motley Fool has positions in and recommends Datadog, Nvidia, and Zscaler. The Motley Fool recommends Gartner and Nasdaq. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Datadog Datadog (NASDAQ: DDOG) provides application monitoring and security for cloud software. DDOG PS Ratio data by YCharts Datadog rode these catalysts to 83% revenue growth last quarter. Growth stocks took a beating over the past year or so, as rising interest rates and recession fears eliminated investor risk tolerance.
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Datadog Datadog (NASDAQ: DDOG) provides application monitoring and security for cloud software. DDOG PS Ratio data by YCharts Datadog rode these catalysts to 83% revenue growth last quarter. The company reported net profits and $130 million in free cash flow.
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Datadog Datadog (NASDAQ: DDOG) provides application monitoring and security for cloud software. DDOG PS Ratio data by YCharts Datadog rode these catalysts to 83% revenue growth last quarter. Datadog stock isn't cheap at price-to-sales ratio above 25 and forward P/E above 140, but it's much cheaper on the basis of fundamentals than it was in December.
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DDOG PS Ratio data by YCharts Datadog rode these catalysts to 83% revenue growth last quarter. Datadog Datadog (NASDAQ: DDOG) provides application monitoring and security for cloud software. * They just revealed what they believe are the ten best stocks for investors to buy right now... and Nvidia wasn't one of them!
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ea69ac1f-5e5e-46f3-bc1e-3517f6202e9b
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718572.0
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2022-08-02 00:00:00 UTC
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You'll Want to Watch This High-Growth Tech Stock This Week
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DDOG
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https://www.nasdaq.com/articles/youll-want-to-watch-this-high-growth-tech-stock-this-week
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nan
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nan
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All eyes are on tech stocks this earnings season as many investors contemplate how inflation and a potential recession will impact business spending. Datadog (NASDAQ: DDOG), a notable and high-flying tech stock, is in the spotlight this week.
The cloud infrastructure observability platform reports on Thursday, Aug. 4, before the market opens, and expectations are high. Wall Street is anticipating revenue to reach $379.4 million this quarter, a 62% jump over the year-ago period.
That's an optimistic forecast from Wall Street, but here's why Datadog could meet -- and maybe even exceed -- those expectations.
Image source: Getty Images.
Tightening business budgets could weigh on Datadog
Investors have been concerned about tech performance in the second quarter for a while. Inflation and recession fears are pressuring businesses, causing many to pull back spending. One of the ways these companies are cutting costs is by reducing their usage of dispensable software platforms.
Investors are especially concerned about highly valued companies. The higher the valuation, the greater the expectations are for the business. If richly valued companies don't live up to optimism, look out below. At 27 times sales, Datadog is nearly priced for perfection.
Datadog is a software platform that enables businesses to monitor application performance. The company offers a subscription-based service, so, in theory, businesses can easily pull back how much they spend on Datadog every month. In reality, however, the probability of rising customer churn at Datadog is quite low given how critical its services are.
Why Datadog could prevail
Observability and application performance monitoring are necessary for modern businesses today, and Datadog is the top dog in the space. The company has more than 25 products to help businesses monitor their cloud infrastructure and keep their applications secure and operating properly.
In short, the company provides need-to-have products to businesses, and the company's financials have proven that. Datadog's churn in the first quarter was in the mid- to low-single-digit percentage range, and for the past 19 quarters, the company has had a net retention rate above 130%. Lastly, 2,250 customers spent $100,000 or more annually on Datadog's platform as of Q1, signaling how important its services are for many businesses.
While it is certainly possible that companies could stop using Datadog in an attempt to save some money, it looks unlikely. Even if demand slows in the short term, the long-term thesis remains intact. Management believes the observability market will be worth $53 billion by 2025; even if the U.S. enters a recession, that forecast likely won't change.
Also, Datadog could potentially come out stronger on the other side of a recession because of its impressive cash generation. Over the trailing 12 months, the company has generated over $336 million in free cash flow. Comparatively, Dynatrace -- one of Datadog's primary rivals -- only generated $233 million over the same period. If both companies saw activity decline during a recession, Datadog would likely have more cash to continue investing in innovation to further its leadership, whereas Dynatrace might have to pull back investment to preserve its business.
Key metrics to watch on Thursday
While high customer churn is improbable, Datadog could see customers pull back their additional spending. Instead of spending 30% more than they did in the year-ago period, customers could only spend 20% more or keep their usage flat year over year. Therefore, it will be important to monitor its net retention rate this quarter. The same goes for customers spending over $100,000, another indicator of increasing customer spend.
Wall Street estimates of 62% year-over-year revenue expansion set a high bar, but Datadog is a high-quality business. Over the past four quarters, the company has handily beat Wall Street's earnings estimates, and internal guidance for this quarter puts Q2 revenue at $378 million -- just $1.4 million less than what analysts are predicting.
Datadog's products are seen as essential to businesses by many, but this quarter will put that to the test. If the company can keep revenue growth high while seeing continued consumer spending increases, it's safe to say that Datadog's products are extremely valuable. That said, even if the short term is bumpy, the long-term future looks bright for Datadog. You might want to consider owning shares of the company, no matter how it performs financially in Q2.
10 stocks we like better than Datadog
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Datadog wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of July 27, 2022
Jamie Louko has positions in Datadog. The Motley Fool has positions in and recommends Datadog. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Datadog (NASDAQ: DDOG), a notable and high-flying tech stock, is in the spotlight this week. All eyes are on tech stocks this earnings season as many investors contemplate how inflation and a potential recession will impact business spending. The company offers a subscription-based service, so, in theory, businesses can easily pull back how much they spend on Datadog every month.
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Datadog (NASDAQ: DDOG), a notable and high-flying tech stock, is in the spotlight this week. All eyes are on tech stocks this earnings season as many investors contemplate how inflation and a potential recession will impact business spending. The cloud infrastructure observability platform reports on Thursday, Aug. 4, before the market opens, and expectations are high.
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Datadog (NASDAQ: DDOG), a notable and high-flying tech stock, is in the spotlight this week. The company offers a subscription-based service, so, in theory, businesses can easily pull back how much they spend on Datadog every month. Why Datadog could prevail Observability and application performance monitoring are necessary for modern businesses today, and Datadog is the top dog in the space.
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Datadog (NASDAQ: DDOG), a notable and high-flying tech stock, is in the spotlight this week. Tightening business budgets could weigh on Datadog Investors have been concerned about tech performance in the second quarter for a while. Datadog is a software platform that enables businesses to monitor application performance.
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76496805-4ddd-41e0-91c5-c6bf11afa058
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718573.0
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2022-08-01 00:00:00 UTC
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Avalara (AVLR) Expected to Beat Earnings Estimates: Should You Buy?
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DDOG
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https://www.nasdaq.com/articles/avalara-avlr-expected-to-beat-earnings-estimates%3A-should-you-buy
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nan
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nan
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Avalara (AVLR) is expected to deliver a year-over-year decline in earnings on higher revenues when it reports results for the quarter ended June 2022. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price.
The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on August 8. On the other hand, if they miss, the stock may move lower.
While the sustainability of the immediate price change and future earnings expectations will mostly depend on management's discussion of business conditions on theearnings call it's worth handicapping the probability of a positive EPS surprise.
Zacks Consensus Estimate
This provider of cloud-based software services is expected to post quarterly loss of $0.08 per share in its upcoming report, which represents a year-over-year change of -500%.
Revenues are expected to be $209.36 million, up 23.8% from the year-ago quarter.
Estimate Revisions Trend
The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.
Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change.
Earnings Whisper
Estimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. This insight is at the core of our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction).
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.
Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only.
A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP.
Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell).
How Have the Numbers Shaped Up for Avalara?
For Avalara, the Most Accurate Estimate is higher than the Zacks Consensus Estimate, suggesting that analysts have recently become bullish on the company's earnings prospects. This has resulted in an Earnings ESP of +33.67%.
On the other hand, the stock currently carries a Zacks Rank of #3.
So, this combination indicates that Avalara will most likely beat the consensus EPS estimate.
Does Earnings Surprise History Hold Any Clue?
Analysts often consider to what extent a company has been able to match consensus estimates in the past while calculating their estimates for its future earnings. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number.
For the last reported quarter, it was expected that Avalara would post a loss of $0.13 per share when it actually produced earnings of $0.08, delivering a surprise of +161.54%.
Over the last four quarters, the company has beaten consensus EPS estimates four times.
Bottom Line
An earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss.
That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
Avalara appears a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release.
An Industry Player's Expected Results
Another stock from the Zacks Internet - Software industry, Datadog (DDOG), is soon expected to post earnings of $0.14 per share for the quarter ended June 2022. This estimate indicates a year-over-year change of +55.6%. Revenues for the quarter are expected to be $378.05 million, up 61.9% from the year-ago quarter.
Over the last 30 days, the consensus EPS estimate for Datadog has been revised 1.8% up to the current level. Nevertheless, the company now has an Earnings ESP of -1.75%, reflecting a lower Most Accurate Estimate.
When combined with a Zacks Rank of #3 (Hold), this Earnings ESP makes it difficult to conclusively predict that Datadog will beat the consensus EPS estimate. The company beat consensus EPS estimates in each of the trailing four quarters.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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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
Avalara, Inc. (AVLR): Free Stock Analysis Report
Datadog, Inc. (DDOG): Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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An Industry Player's Expected Results Another stock from the Zacks Internet - Software industry, Datadog (DDOG), is soon expected to post earnings of $0.14 per share for the quarter ended June 2022. Datadog, Inc. (DDOG): Free Stock Analysis Report This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price.
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An Industry Player's Expected Results Another stock from the Zacks Internet - Software industry, Datadog (DDOG), is soon expected to post earnings of $0.14 per share for the quarter ended June 2022. Datadog, Inc. (DDOG): Free Stock Analysis Report The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate.
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An Industry Player's Expected Results Another stock from the Zacks Internet - Software industry, Datadog (DDOG), is soon expected to post earnings of $0.14 per share for the quarter ended June 2022. Datadog, Inc. (DDOG): Free Stock Analysis Report The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate.
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An Industry Player's Expected Results Another stock from the Zacks Internet - Software industry, Datadog (DDOG), is soon expected to post earnings of $0.14 per share for the quarter ended June 2022. Datadog, Inc. (DDOG): Free Stock Analysis Report The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on August 8.
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a8ae8876-4cdf-490b-bc55-6f4dc5c734c4
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718574.0
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2022-07-29 00:00:00 UTC
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Nasdaq 100 Movers: INTC, AMZN
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DDOG
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https://www.nasdaq.com/articles/nasdaq-100-movers%3A-intc-amzn
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nan
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nan
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In early trading on Friday, shares of Amazon.com topped the list of the day's best performing components of the Nasdaq 100 index, trading up 11.9%. Year to date, Amazon.com has lost about 18.0% of its value.
And the worst performing Nasdaq 100 component thus far on the day is Intel, trading down 9.4%. Intel is lower by about 30.1% looking at the year to date performance.
Two other components making moves today are DexCom, trading down 8.2%, and Datadog, trading up 3.2% on the day.
VIDEO: Nasdaq 100 Movers: INTC, AMZN
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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And the worst performing Nasdaq 100 component thus far on the day is Intel, trading down 9.4%. Intel is lower by about 30.1% looking at the year to date performance. VIDEO: Nasdaq 100 Movers: INTC, AMZN The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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In early trading on Friday, shares of Amazon.com topped the list of the day's best performing components of the Nasdaq 100 index, trading up 11.9%. And the worst performing Nasdaq 100 component thus far on the day is Intel, trading down 9.4%. Intel is lower by about 30.1% looking at the year to date performance.
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In early trading on Friday, shares of Amazon.com topped the list of the day's best performing components of the Nasdaq 100 index, trading up 11.9%. And the worst performing Nasdaq 100 component thus far on the day is Intel, trading down 9.4%. Two other components making moves today are DexCom, trading down 8.2%, and Datadog, trading up 3.2% on the day.
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And the worst performing Nasdaq 100 component thus far on the day is Intel, trading down 9.4%. Intel is lower by about 30.1% looking at the year to date performance. VIDEO: Nasdaq 100 Movers: INTC, AMZN The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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c9b53699-aa0a-46d1-b472-391179a4119b
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718575.0
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2022-07-29 00:00:00 UTC
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2 Growth Stocks Billionaire Investors Are Buying in a Bear Market
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DDOG
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https://www.nasdaq.com/articles/2-growth-stocks-billionaire-investors-are-buying-in-a-bear-market
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nan
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nan
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The Nasdaq Composite has been in a downward tailspin for the better part of the past year, and macroeconomic concerns pushed the index into bear market territory during the first quarter. But some of the wealthiest investors have treated the downturn as a buying opportunity.
For instance, billionaire Israel Englander of Millennium Management added to his position in The Trade Desk (NASDAQ: TTD) in the first quarter, while billionaires John Overdeck and Ron Baron increased their stakes in Datadog (NASDAQ: DDOG).
Since then, both stocks have continued to fall. That's got some investors wondering why these billionaires are buying these growth stocks.
1. The Trade Desk
The Trade Desk specializes in digital advertising. Its artificial intelligence-powered platform helps advertisers plan, measure, and optimize targeted campaigns across digital channels, including desktop, mobile, and connected television (CTV).
Last year, research company Gartner once again recognized The Trade Desk as an industry leader, alongside Alphabet's Google and Amazon. But as an independent company -- meaning it does not own media properties -- The Trade Desk benefits from a less-biased business model. For instance, Alphabet has reason to steer ad buyers toward its own inventory on Google Search and YouTube, and Amazon has reason to steer ad buyers toward its inventory on the Amazon marketplace and Fire TV. The Trade Desk isn't subject to those conflicts of interest.
That advantage has helped drive rapid growth. In the past year, The Trade Desk saw revenue climb by 44% to $1.3 billion, and free cash flow (FCF) jumped 12% to $394 million. Better yet, investors have good reason to believe that growth will continue. Digital advertising is quickly approaching an addressable market of $1 trillion, and The Trade Desk is gaining momentum in shopper marketing and CTV advertising.
The world's largest retailer, Walmart, recently selected The Trade Desk to power its ad tech platform. The partnership will blend purchase data from Walmart with technology from The Trade Desk, allowing marketers to target campaigns and measure the results against online and in-store sales. That move could propel The Trade Desk to the forefront of the $200 billion shopper marketing industry.
More recently, Disney struck a similar deal with The Trade Desk. The media giant will make its data available through The Trade Desk's ad tech platform, allowing marketers to launch personalized campaigns across Disney's linear and digital video channels. That development is especially noteworthy because Disney plans to launch an ad-supported tier of Disney+ by the end of the year, and The Trade Desk is now well positioned to benefit.
In light of that momentum, this growth stock does indeed look like a smart investment.
2. Datadog
Datadog specializes in monitoring and observability. Its cloud platform ingests, indexes, and analyzes trillions of data points each day, and its artificial intelligence engine Watchdog uses those signals to identify security threats and performance issues in real time across applications, networks, and infrastructures. That allows businesses to identify and resolve technical problems quickly, ensuring a good user experience for employees and customers.
In June, Gartner recognized Datadog as a leader in the application performance monitoring and observability market, citing a better ability to execute than any other vendor. Gartner specifically mentioned that Watchdog's ability to predict events and automate root cause analysis was a key differentiator.
Datadog offers over 500 built-in integrations that make adoption easy, and its broad portfolio of performance monitoring and security software has become the foundation of a successful land-and-expand strategy. In fact, net revenue retention has exceeded 130% for the past 19 quarters, meaning the average customer is upping their spend by more than 30% each year.
At the same time, Datadog saw its customer base rise 30% to 19,800 over the past year, and that compounding dynamic -- more customers and growing spend per customer -- has fueled strong financial results. Revenue soared 78% to $1.2 billion over the past year, and FCF shot up 210% to $336 million.
Looking ahead, shareholders have good reason to be bullish on this company. Digital transformation projects will generate even more data in the future, and businesses will need to monitor that data for performance and security issues. Datadog believes that it will create a $53 billion addressable market by 2025, and the company's strong market presence should help it capitalize on that opportunity.
Currently, the stock trades at 23 times sales -- far cheaper than the three-year average of 39 times sales -- which makes this a good time to buy a few shares.
Find out why The Trade Desk is one of the 10 best stocks to buy now
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Trevor Jennewine has positions in Amazon, The Trade Desk, and Walt Disney. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Datadog, The Trade Desk, Walmart Inc., and Walt Disney. The Motley Fool recommends Gartner and recommends the following options: long January 2024 $145 calls on Walt Disney and short January 2024 $155 calls on Walt Disney. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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For instance, billionaire Israel Englander of Millennium Management added to his position in The Trade Desk (NASDAQ: TTD) in the first quarter, while billionaires John Overdeck and Ron Baron increased their stakes in Datadog (NASDAQ: DDOG). Its artificial intelligence-powered platform helps advertisers plan, measure, and optimize targeted campaigns across digital channels, including desktop, mobile, and connected television (CTV). The media giant will make its data available through The Trade Desk's ad tech platform, allowing marketers to launch personalized campaigns across Disney's linear and digital video channels.
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For instance, billionaire Israel Englander of Millennium Management added to his position in The Trade Desk (NASDAQ: TTD) in the first quarter, while billionaires John Overdeck and Ron Baron increased their stakes in Datadog (NASDAQ: DDOG). Digital advertising is quickly approaching an addressable market of $1 trillion, and The Trade Desk is gaining momentum in shopper marketing and CTV advertising. The media giant will make its data available through The Trade Desk's ad tech platform, allowing marketers to launch personalized campaigns across Disney's linear and digital video channels.
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For instance, billionaire Israel Englander of Millennium Management added to his position in The Trade Desk (NASDAQ: TTD) in the first quarter, while billionaires John Overdeck and Ron Baron increased their stakes in Datadog (NASDAQ: DDOG). The Trade Desk The Trade Desk specializes in digital advertising. The media giant will make its data available through The Trade Desk's ad tech platform, allowing marketers to launch personalized campaigns across Disney's linear and digital video channels.
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For instance, billionaire Israel Englander of Millennium Management added to his position in The Trade Desk (NASDAQ: TTD) in the first quarter, while billionaires John Overdeck and Ron Baron increased their stakes in Datadog (NASDAQ: DDOG). That's got some investors wondering why these billionaires are buying these growth stocks. The Trade Desk The Trade Desk specializes in digital advertising.
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4487c818-8506-4a82-a9fa-4e2386f8d049
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718576.0
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2022-07-28 00:00:00 UTC
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Datadog (DDOG) Reports Next Week: Wall Street Expects Earnings Growth
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DDOG
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https://www.nasdaq.com/articles/datadog-ddog-reports-next-week%3A-wall-street-expects-earnings-growth
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nan
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nan
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Wall Street expects a year-over-year increase in earnings on higher revenues when Datadog (DDOG) reports results for the quarter ended June 2022. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates.
The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on August 4. On the other hand, if they miss, the stock may move lower.
While the sustainability of the immediate price change and future earnings expectations will mostly depend on management's discussion of business conditions on theearnings call it's worth handicapping the probability of a positive EPS surprise.
Zacks Consensus Estimate
This data analytics and cloud monitoring company is expected to post quarterly earnings of $0.14 per share in its upcoming report, which represents a year-over-year change of +55.6%.
Revenues are expected to be $378.05 million, up 61.9% from the year-ago quarter.
Estimate Revisions Trend
The consensus EPS estimate for the quarter has been revised 1.82% higher over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.
Investors should keep in mind that an aggregate change may not always reflect the direction of estimate revisions by each of the covering analysts.
Earnings Whisper
Estimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. This insight is at the core of our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction).
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.
Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only.
A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP.
Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell).
How Have the Numbers Shaped Up for Datadog?
For Datadog, the Most Accurate Estimate is lower than the Zacks Consensus Estimate, suggesting that analysts have recently become bearish on the company's earnings prospects. This has resulted in an Earnings ESP of -1.75%.
On the other hand, the stock currently carries a Zacks Rank of #3.
So, this combination makes it difficult to conclusively predict that Datadog will beat the consensus EPS estimate.
Does Earnings Surprise History Hold Any Clue?
Analysts often consider to what extent a company has been able to match consensus estimates in the past while calculating their estimates for its future earnings. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number.
For the last reported quarter, it was expected that Datadog would post earnings of $0.11 per share when it actually produced earnings of $0.24, delivering a surprise of +118.18%.
Over the last four quarters, the company has beaten consensus EPS estimates four times.
Bottom Line
An earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss.
That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
Datadog doesn't appear a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Wall Street expects a year-over-year increase in earnings on higher revenues when Datadog (DDOG) reports results for the quarter ended June 2022. Datadog, Inc. (DDOG): Free Stock Analysis Report While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates.
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Wall Street expects a year-over-year increase in earnings on higher revenues when Datadog (DDOG) reports results for the quarter ended June 2022. Datadog, Inc. (DDOG): Free Stock Analysis Report This insight is at the core of our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction).
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Wall Street expects a year-over-year increase in earnings on higher revenues when Datadog (DDOG) reports results for the quarter ended June 2022. Datadog, Inc. (DDOG): Free Stock Analysis Report The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate.
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Wall Street expects a year-over-year increase in earnings on higher revenues when Datadog (DDOG) reports results for the quarter ended June 2022. Datadog, Inc. (DDOG): Free Stock Analysis Report The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on August 4.
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6aa63dc6-da50-4a08-aafb-1a153298a2cb
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718577.0
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2022-07-28 00:00:00 UTC
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Sum Up The Pieces: IWB Could Be Worth $269
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DDOG
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https://www.nasdaq.com/articles/sum-up-the-pieces%3A-iwb-could-be-worth-%24269
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nan
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nan
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Looking at the underlying holdings of the ETFs in our coverage universe at ETF Channel, we have compared the trading price of each holding against the average analyst 12-month forward target price, and computed the weighted average implied analyst target price for the ETF itself. For the iShares Russell 1000 ETF (Symbol: IWB), we found that the implied analyst target price for the ETF based upon its underlying holdings is $268.93 per unit.
With IWB trading at a recent price near $221.07 per unit, that means that analysts see 21.65% upside for this ETF looking through to the average analyst targets of the underlying holdings. Three of IWB's underlying holdings with notable upside to their analyst target prices are GXO Logistics Inc (Symbol: GXO), The Trade Desk Inc (Symbol: TTD), and Datadog Inc (Symbol: DDOG). Although GXO has traded at a recent price of $44.59/share, the average analyst target is 84.64% higher at $82.33/share. Similarly, TTD has 71.85% upside from the recent share price of $46.63 if the average analyst target price of $80.13/share is reached, and analysts on average are expecting DDOG to reach a target price of $160.06/share, which is 70.17% above the recent price of $94.06. Below is a twelve month price history chart comparing the stock performance of GXO, TTD, and DDOG:
Below is a summary table of the current analyst target prices discussed above:
NAME SYMBOL RECENT PRICE AVG. ANALYST 12-MO. TARGET % UPSIDE TO TARGET
iShares Russell 1000 ETF IWB $221.07 $268.93 21.65%
GXO Logistics Inc GXO $44.59 $82.33 84.64%
The Trade Desk Inc TTD $46.63 $80.13 71.85%
Datadog Inc DDOG $94.06 $160.06 70.17%
Are analysts justified in these targets, or overly optimistic about where these stocks will be trading 12 months from now? Do the analysts have a valid justification for their targets, or are they behind the curve on recent company and industry developments? A high price target relative to a stock's trading price can reflect optimism about the future, but can also be a precursor to target price downgrades if the targets were a relic of the past. These are questions that require further investor research.
10 ETFs With Most Upside To Analyst Targets »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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iShares Russell 1000 ETF IWB $221.07 $268.93 21.65% GXO Logistics Inc GXO $44.59 $82.33 84.64% The Trade Desk Inc TTD $46.63 $80.13 71.85% Datadog Inc DDOG $94.06 $160.06 70.17% Are analysts justified in these targets, or overly optimistic about where these stocks will be trading 12 months from now? Three of IWB's underlying holdings with notable upside to their analyst target prices are GXO Logistics Inc (Symbol: GXO), The Trade Desk Inc (Symbol: TTD), and Datadog Inc (Symbol: DDOG). Similarly, TTD has 71.85% upside from the recent share price of $46.63 if the average analyst target price of $80.13/share is reached, and analysts on average are expecting DDOG to reach a target price of $160.06/share, which is 70.17% above the recent price of $94.06.
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Three of IWB's underlying holdings with notable upside to their analyst target prices are GXO Logistics Inc (Symbol: GXO), The Trade Desk Inc (Symbol: TTD), and Datadog Inc (Symbol: DDOG). Similarly, TTD has 71.85% upside from the recent share price of $46.63 if the average analyst target price of $80.13/share is reached, and analysts on average are expecting DDOG to reach a target price of $160.06/share, which is 70.17% above the recent price of $94.06. iShares Russell 1000 ETF IWB $221.07 $268.93 21.65% GXO Logistics Inc GXO $44.59 $82.33 84.64% The Trade Desk Inc TTD $46.63 $80.13 71.85% Datadog Inc DDOG $94.06 $160.06 70.17% Are analysts justified in these targets, or overly optimistic about where these stocks will be trading 12 months from now?
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Similarly, TTD has 71.85% upside from the recent share price of $46.63 if the average analyst target price of $80.13/share is reached, and analysts on average are expecting DDOG to reach a target price of $160.06/share, which is 70.17% above the recent price of $94.06. Three of IWB's underlying holdings with notable upside to their analyst target prices are GXO Logistics Inc (Symbol: GXO), The Trade Desk Inc (Symbol: TTD), and Datadog Inc (Symbol: DDOG). Below is a twelve month price history chart comparing the stock performance of GXO, TTD, and DDOG: Below is a summary table of the current analyst target prices discussed above:
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iShares Russell 1000 ETF IWB $221.07 $268.93 21.65% GXO Logistics Inc GXO $44.59 $82.33 84.64% The Trade Desk Inc TTD $46.63 $80.13 71.85% Datadog Inc DDOG $94.06 $160.06 70.17% Are analysts justified in these targets, or overly optimistic about where these stocks will be trading 12 months from now? Three of IWB's underlying holdings with notable upside to their analyst target prices are GXO Logistics Inc (Symbol: GXO), The Trade Desk Inc (Symbol: TTD), and Datadog Inc (Symbol: DDOG). Similarly, TTD has 71.85% upside from the recent share price of $46.63 if the average analyst target price of $80.13/share is reached, and analysts on average are expecting DDOG to reach a target price of $160.06/share, which is 70.17% above the recent price of $94.06.
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bde81023-b236-4ccd-a3c9-894acef06d3f
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718578.0
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2022-07-27 00:00:00 UTC
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Noteworthy Wednesday Option Activity: GWW, DDOG, SLAB
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DDOG
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https://www.nasdaq.com/articles/noteworthy-wednesday-option-activity%3A-gww-ddog-slab
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nan
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nan
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Looking at options trading activity among components of the Russell 3000 index, there is noteworthy activity today in W.W. Grainger Inc. (Symbol: GWW), where a total volume of 1,303 contracts has been traded thus far today, a contract volume which is representative of approximately 130,300 underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 43.1% of GWW's average daily trading volume over the past month, of 302,645 shares. Especially high volume was seen for the $450 strike call option expiring August 19, 2022, with 222 contracts trading so far today, representing approximately 22,200 underlying shares of GWW. Below is a chart showing GWW's trailing twelve month trading history, with the $450 strike highlighted in orange:
Datadog Inc (Symbol: DDOG) options are showing a volume of 19,245 contracts thus far today. That number of contracts represents approximately 1.9 million underlying shares, working out to a sizeable 43% of DDOG's average daily trading volume over the past month, of 4.5 million shares. Particularly high volume was seen for the $100 strike call option expiring July 29, 2022, with 4,418 contracts trading so far today, representing approximately 441,800 underlying shares of DDOG. Below is a chart showing DDOG's trailing twelve month trading history, with the $100 strike highlighted in orange:
And Silicon Laboratories Inc (Symbol: SLAB) options are showing a volume of 1,463 contracts thus far today. That number of contracts represents approximately 146,300 underlying shares, working out to a sizeable 41.6% of SLAB's average daily trading volume over the past month, of 351,640 shares. Especially high volume was seen for the $65 strike put option expiring August 19, 2022, with 618 contracts trading so far today, representing approximately 61,800 underlying shares of SLAB. Below is a chart showing SLAB's trailing twelve month trading history, with the $65 strike highlighted in orange:
For the various different available expirations for GWW options, DDOG options, or SLAB options, visit StockOptionsChannel.com.
Today's Most Active Call & Put Options of the S&P 500 »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Particularly high volume was seen for the $100 strike call option expiring July 29, 2022, with 4,418 contracts trading so far today, representing approximately 441,800 underlying shares of DDOG. Below is a chart showing GWW's trailing twelve month trading history, with the $450 strike highlighted in orange: Datadog Inc (Symbol: DDOG) options are showing a volume of 19,245 contracts thus far today. That number of contracts represents approximately 1.9 million underlying shares, working out to a sizeable 43% of DDOG's average daily trading volume over the past month, of 4.5 million shares.
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Below is a chart showing GWW's trailing twelve month trading history, with the $450 strike highlighted in orange: Datadog Inc (Symbol: DDOG) options are showing a volume of 19,245 contracts thus far today. That number of contracts represents approximately 1.9 million underlying shares, working out to a sizeable 43% of DDOG's average daily trading volume over the past month, of 4.5 million shares. Particularly high volume was seen for the $100 strike call option expiring July 29, 2022, with 4,418 contracts trading so far today, representing approximately 441,800 underlying shares of DDOG.
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Below is a chart showing GWW's trailing twelve month trading history, with the $450 strike highlighted in orange: Datadog Inc (Symbol: DDOG) options are showing a volume of 19,245 contracts thus far today. That number of contracts represents approximately 1.9 million underlying shares, working out to a sizeable 43% of DDOG's average daily trading volume over the past month, of 4.5 million shares. Particularly high volume was seen for the $100 strike call option expiring July 29, 2022, with 4,418 contracts trading so far today, representing approximately 441,800 underlying shares of DDOG.
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Below is a chart showing SLAB's trailing twelve month trading history, with the $65 strike highlighted in orange: For the various different available expirations for GWW options, DDOG options, or SLAB options, visit StockOptionsChannel.com. Below is a chart showing GWW's trailing twelve month trading history, with the $450 strike highlighted in orange: Datadog Inc (Symbol: DDOG) options are showing a volume of 19,245 contracts thus far today. That number of contracts represents approximately 1.9 million underlying shares, working out to a sizeable 43% of DDOG's average daily trading volume over the past month, of 4.5 million shares.
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91db89b3-86dd-4025-b7c0-fb647d1e0f6e
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718579.0
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2022-07-26 00:00:00 UTC
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Why CrowdStrike, Snowflake, and Datadog Plunged Today
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DDOG
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https://www.nasdaq.com/articles/why-crowdstrike-snowflake-and-datadog-plunged-today
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nan
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nan
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What happened
Shares of Snowflake (NYSE: SNOW), CrowdStrike Holdings (NASDAQ: CRWD), and Datadog (NASDAQ: DDOG) all fell hard Tuesday, down 5.7%, 6.6%, and 5%, respectively, as of 12:30 p.m. ET.
These best-in-class digital transformation names in cloud data lakes, cybersecurity, and application observability are all at the cutting edge of enterprise innovation today. However, they are all very high-priced growth stocks. Since the economy seems to be slowing at a rapid pace and each stock has had a nice run over the past few weeks, it appears investors are taking chips off the table ahead of earnings.
CrowdStrike did unveil a new innovation today, but it appears macroeconomic issues enhanced by a bad growth outlook from the International Monetary Fund (IMF) is overwhelming any company-specific news today.
So what
On Tuesday, the IMF revised down its estimates for global growth in 2022, to just 3.2%, down from 6.1% last year and down from its initial estimates heading into this year. In an accompanying blog post, the IMF said, "The risks to the outlook are overwhelmingly tilted to the downside," citing higher-than-expected inflation, a strong U.S. dollar, the war in Ukraine, and Chinese lockdowns as factors.
Lower growth wouldn't be good for anyone, especially growth stocks. However, it is interesting that these three marquee names in the space are selling off so much. Amid recession concerns, the 10-year Treasury bond yield is actually down today, to around 2.78%, down from a high of 3.48% in mid-June and even 3% as recently as last week. Typically, when long-term bond rates go lower, growth stocks like these three will respond favorably.
However, these stocks still fell today. This could be because of upcoming earnings season, which is making investors nervous. U.S. companies with significant international businesses could be under pressure under a very strong U.S. dollar, which has the potential to hurt headline revenue and earnings growth.
Finally, there is a big Federal Reserve meeting tomorrow, followed by a press conference with Chair Jay Powell. Investors may also be getting nervous about the tone from the Fed, which will give color on the inflation outlook and the path of interest rates.
In short, there are a whole host of worries, and profitless growth stocks like these don't have a valuation cushion to fall back on, at least in terms of profits. Given that these types of stocks were driven by revenue growth and momentum over the past few years, the current growth scare is now affecting them in the opposite fashion. These three stocks are still hanging above their prior lows set back in June, but it remains to be seen if we will test those levels again.
In individual company news, CrowdStrike unveiled its cloud native application protection platform (CNAPP), which expands the company's cloud-native security capabilities to applications built on containers running in the cloud.
Interestingly, the new innovation could actually set CrowdStrike on a competitive collision course with companies like Datadog that play in the same field of protecting and monitoring cloud software applications. That is certainly a trend to monitor, as cybersecurity and observability continue to overlap more and more.
CRWD Year to Date Price Returns (Daily) data by YCharts
Now what
In highly uncertain times like these, investors should look to stocks backed up by high quality and competitive advantages, as well as valuation. While these three certainly have the former, as shown by their high growth rates, their valuations are still high, with price-to-sales ratios over 20, even though these stocks are down a lot to start the year. While each of these names belongs on your watch list, I'd still be cautious about adding, due to these valuation concerns.
Although stocks that can grow tend to outperform others when growth is scarce (as in a recession), a lot of growth is priced into these names. How much? It's hard to say.
I'd encourage interested investors in these names to build a discounted cash flow model based on assumptions about future profitability. That could shed more light on the right price to pay, rather than trying to guess based on attractive stories and multiples of revenue.
10 stocks we like better than CrowdStrike Holdings, Inc.
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*Stock Advisor returns as of June 2, 2022
Billy Duberstein has the following options: short January 2023 $60 puts on CrowdStrike Holdings, Inc. His clients may own shares of the companies mentioned. The Motley Fool has positions in and recommends CrowdStrike Holdings, Inc., Datadog, and Snowflake Inc. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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What happened Shares of Snowflake (NYSE: SNOW), CrowdStrike Holdings (NASDAQ: CRWD), and Datadog (NASDAQ: DDOG) all fell hard Tuesday, down 5.7%, 6.6%, and 5%, respectively, as of 12:30 p.m. Since the economy seems to be slowing at a rapid pace and each stock has had a nice run over the past few weeks, it appears investors are taking chips off the table ahead of earnings. In an accompanying blog post, the IMF said, "The risks to the outlook are overwhelmingly tilted to the downside," citing higher-than-expected inflation, a strong U.S. dollar, the war in Ukraine, and Chinese lockdowns as factors.
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What happened Shares of Snowflake (NYSE: SNOW), CrowdStrike Holdings (NASDAQ: CRWD), and Datadog (NASDAQ: DDOG) all fell hard Tuesday, down 5.7%, 6.6%, and 5%, respectively, as of 12:30 p.m. Typically, when long-term bond rates go lower, growth stocks like these three will respond favorably. In individual company news, CrowdStrike unveiled its cloud native application protection platform (CNAPP), which expands the company's cloud-native security capabilities to applications built on containers running in the cloud.
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What happened Shares of Snowflake (NYSE: SNOW), CrowdStrike Holdings (NASDAQ: CRWD), and Datadog (NASDAQ: DDOG) all fell hard Tuesday, down 5.7%, 6.6%, and 5%, respectively, as of 12:30 p.m. Lower growth wouldn't be good for anyone, especially growth stocks. Although stocks that can grow tend to outperform others when growth is scarce (as in a recession), a lot of growth is priced into these names.
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What happened Shares of Snowflake (NYSE: SNOW), CrowdStrike Holdings (NASDAQ: CRWD), and Datadog (NASDAQ: DDOG) all fell hard Tuesday, down 5.7%, 6.6%, and 5%, respectively, as of 12:30 p.m. Lower growth wouldn't be good for anyone, especially growth stocks. * They just revealed what they believe are the ten best stocks for investors to buy right now... and CrowdStrike Holdings, Inc. wasn't one of them!
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2e34b431-2ede-49c0-82e3-75f902ea44c3
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718580.0
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2022-07-26 00:00:00 UTC
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2 Incredible Growth Stocks Millionaire Investors Are Buying Hand Over Fist
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DDOG
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https://www.nasdaq.com/articles/2-incredible-growth-stocks-millionaire-investors-are-buying-hand-over-fist
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nan
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nan
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Currently, the Nasdaq Composite is 26% off its all-time high, putting the index in a bear market. That downward slide started in the fourth quarter when investors began to worry inflation was more persistent than the Federal Reserve acknowledged, and the losses accelerated in the first quarter when the Fed outlined a series of rate hikes.
Despite that turbulence, some of the world's wealthiest investors have continued to put money into the market. Here are two growth stocks that millionaires have been buying hand over fist.
1. Datadog
John Overdeck of Two Sigma Investments has a sizable stake in Datadog (NASDAQ: DDOG). He first bought shares in Q1 2020, and last added to his position in Q1 2022. The stock currently ranks as the seventh-largest holding in his hedge fund.
Datadog is an industry-leading vendor of monitoring and observability software. Its platform ingests data from applications, networks, and infrastructure, processing over 10 trillion signals each day. Using those signals, Datadog leans on artificial intelligence to predict and identify problems, alert the appropriate team members, and help businesses prevent or quickly resolve performance and security issues.
Datadog simplifies customer adoption with more than 500 built-in integrations, and its broad portfolio of observability and security software has enabled a successful land-and-expand growth strategy, which has made its customer relationships stickier over time.
In the past year, Datadog saw its customer base increase by 30%, and average spending per customer climbed by more than 30%. That led to strong first-quarter financial results. Revenue soared 83% to $363 million and free cash flow (FCF) skyrocketed 192% to $130 million. That works out to a monster FCF margin of 36%.
In the years ahead, businesses will pump out ever-growing streams of data as cloud adoption and other digital transformation projects continue. Monitoring that data for performance and security problems will become increasingly complicated but also increasingly critical. Datadog believes that will create a $53 billion addressable market by 2025, leaving the company with plenty of room to grow.
Currently, shares trade at 25 times sales, which certainly isn't cheap. But it is less expensive than the three-year average of 39 times sales. More importantly, it seems like a tolerable valuation for a company of this caliber. Investors should consider buying this growth stock right now.
2. Salesforce
Robert Shafir of Sculptor Capital has amassed a sizable stake in Salesforce (NYSE: CRM). He first bought shares in Q4 2019, and he last added to the position in Q1 2022. The stock currently ranks as the fifth-largest holding in his hedge fund.
Salesforce is the fastest-growing enterprise software company in history. Its suite of customer relationship management (CRM) applications drives productivity across sales, customer service, marketing, and commerce. Its platform also includes solutions for low-code application development, data analytics, and workflow automation. Collectively, those tools help businesses provide a high-quality experience during all stages of the customer lifecycle.
CRM software has become mission critical as digital transformation has made the world more connected, and Salesforce has led the CRM industry for nine consecutive years. Better yet, the company continued to pull away from the pack in 2021, capturing 24% market share, up from 20% in 2020. That strong market position has led to impressive financial results.
In the last quarter, revenue jumped 24% to $7.4 billion and FCF climbed 14% to $3.5 billion. That works out to an astounding FCF margin of 47%. Better yet, Salesforce is well-positioned to maintain that momentum in the coming years.
Management puts its total addressable market at $248 billion by 2025, and the company's capacity for innovation should keep it at the forefront of the CRM industry. Salesforce has introduced 12 industry-specific CRM clouds in recent years, and it just added new tools for consumer goods companies and financial-service providers. Those tailored solutions contributed to seven of the top 10 deals in the last quarter.
Currently, Salesforce trades at 6.3 times sales, a good deal cheaper than the three-year average of 9.1. That means now is a good time for investors to follow Shafir's lead and buy this growth stock.
10 stocks we like better than Datadog
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now… and Datadog wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of June 2, 2022
Trevor Jennewine has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Datadog and Salesforce, Inc. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Datadog John Overdeck of Two Sigma Investments has a sizable stake in Datadog (NASDAQ: DDOG). Using those signals, Datadog leans on artificial intelligence to predict and identify problems, alert the appropriate team members, and help businesses prevent or quickly resolve performance and security issues. In the years ahead, businesses will pump out ever-growing streams of data as cloud adoption and other digital transformation projects continue.
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Datadog John Overdeck of Two Sigma Investments has a sizable stake in Datadog (NASDAQ: DDOG). Its suite of customer relationship management (CRM) applications drives productivity across sales, customer service, marketing, and commerce. CRM software has become mission critical as digital transformation has made the world more connected, and Salesforce has led the CRM industry for nine consecutive years.
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Datadog John Overdeck of Two Sigma Investments has a sizable stake in Datadog (NASDAQ: DDOG). Datadog simplifies customer adoption with more than 500 built-in integrations, and its broad portfolio of observability and security software has enabled a successful land-and-expand growth strategy, which has made its customer relationships stickier over time. CRM software has become mission critical as digital transformation has made the world more connected, and Salesforce has led the CRM industry for nine consecutive years.
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Datadog John Overdeck of Two Sigma Investments has a sizable stake in Datadog (NASDAQ: DDOG). In the last quarter, revenue jumped 24% to $7.4 billion and FCF climbed 14% to $3.5 billion. Salesforce has introduced 12 industry-specific CRM clouds in recent years, and it just added new tools for consumer goods companies and financial-service providers.
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5c506724-3cb3-4471-b668-98ae93afa008
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718581.0
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2022-07-26 00:00:00 UTC
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Is Invesco Dynamic Software ETF (PSJ) a Strong ETF Right Now?
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DDOG
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https://www.nasdaq.com/articles/is-invesco-dynamic-software-etf-psj-a-strong-etf-right-now-3
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nan
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nan
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Designed to provide broad exposure to the Technology ETFs category of the market, the Invesco Dynamic Software ETF (PSJ) is a smart beta exchange traded fund launched on 06/23/2005.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is managed by Invesco, and has been able to amass over $213 million, which makes it one of the average sized ETFs in the Technology ETFs. Before fees and expenses, PSJ seeks to match the performance of the Dynamic Software Intellidex Index.
The Dynamic Software Intellidex Index is comprised of stocks of software companies. The Index is designed to provide capital appreciation by thoroughly evaluating companies based on a variety of investment merit criteria, including fundamental growth, stock valuation, investment timeliness and risk factors.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for PSJ are 0.56%, which makes it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 0.74%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Information Technology sector - about 68.10% of the portfolio. Telecom and Healthcare round out the top three.
Looking at individual holdings, Roblox Corp (RBLX) accounts for about 6.33% of total assets, followed by Datadog Inc (DDOG) and Cadence Design Systems Inc (CDNS).
The top 10 holdings account for about 48.46% of total assets under management.
Performance and Risk
The ETF has lost about -23.68% so far this year and is down about -35.51% in the last one year (as of 07/26/2022). In the past 52-week period, it has traded between $86.93 and $160.03.
PSJ has a beta of 1.02 and standard deviation of 31.04% for the trailing three-year period, which makes the fund a high risk choice in the space. With about 31 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco Dynamic Software ETF is an excellent option for investors seeking to outperform the Technology ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
SPDR S&P Software & Services ETF (XSW) tracks S&P Software & Services Select Industry Index and the iShares Expanded TechSoftware Sector ETF (IGV) tracks S&P North American Technology-Software Index. SPDR S&P Software & Services ETF has $221.52 million in assets, iShares Expanded TechSoftware Sector ETF has $4.60 billion. XSW has an expense ratio of 0.35% and IGV charges 0.43%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Technology ETFs.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.
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Invesco Dynamic Software ETF (PSJ): ETF Research Reports
Cadence Design Systems, Inc. (CDNS): Free Stock Analysis Report
SPDR S&P Software & Services ETF (XSW): ETF Research Reports
iShares Expanded TechSoftware Sector ETF (IGV): ETF Research Reports
Datadog, Inc. (DDOG): Free Stock Analysis Report
Roblox Corporation (RBLX): Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Looking at individual holdings, Roblox Corp (RBLX) accounts for about 6.33% of total assets, followed by Datadog Inc (DDOG) and Cadence Design Systems Inc (CDNS). Datadog, Inc. (DDOG): Free Stock Analysis Report However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
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Looking at individual holdings, Roblox Corp (RBLX) accounts for about 6.33% of total assets, followed by Datadog Inc (DDOG) and Cadence Design Systems Inc (CDNS). Datadog, Inc. (DDOG): Free Stock Analysis Report Designed to provide broad exposure to the Technology ETFs category of the market, the Invesco Dynamic Software ETF (PSJ) is a smart beta exchange traded fund launched on 06/23/2005.
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Looking at individual holdings, Roblox Corp (RBLX) accounts for about 6.33% of total assets, followed by Datadog Inc (DDOG) and Cadence Design Systems Inc (CDNS). Datadog, Inc. (DDOG): Free Stock Analysis Report Designed to provide broad exposure to the Technology ETFs category of the market, the Invesco Dynamic Software ETF (PSJ) is a smart beta exchange traded fund launched on 06/23/2005.
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Looking at individual holdings, Roblox Corp (RBLX) accounts for about 6.33% of total assets, followed by Datadog Inc (DDOG) and Cadence Design Systems Inc (CDNS). Datadog, Inc. (DDOG): Free Stock Analysis Report Designed to provide broad exposure to the Technology ETFs category of the market, the Invesco Dynamic Software ETF (PSJ) is a smart beta exchange traded fund launched on 06/23/2005.
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0f035016-ad8e-48ed-bf9b-b6c071ceb2f7
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718582.0
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2022-07-25 00:00:00 UTC
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Why Datadog, HubSpot, and MongoDB Stocks Slumped Today
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DDOG
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https://www.nasdaq.com/articles/why-datadog-hubspot-and-mongodb-stocks-slumped-today
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nan
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nan
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What happened
Shares of a number of high-growth stocks tumbled on Monday as investors focused on economic issues that had the major U.S. stock indexes looking for direction.
Datadog (NASDAQ: DDOG) was off by as much as 4.6%, HubSpot (NYSE: HUBS) stock was down as much as 4.8%, and MongoDB (NASDAQ: MDB) slumped as much as 5.9%. At the end of the session, the trio was still trading lower, down 3.5%, 3.2%, and 4%, respectively. The broader market indexes ended the day mixed, with the S&P 500 gaining 0.13% on the day, while the Nasdaq Composite declined 0.43%.
There was very little company-specific news behind the sell-off, but fears regarding the overall condition of the economy had a hand in driving these stocks lower.
So what
Fears regarding the potential for a recession seemed to be the overriding factor that drove high-growth stocks lower. The problem is that even economists can't seem to come to a consensus about whether the economy will experience a recession or if we are already in one.
On Thursday, July 28, the U.S. Department of Commerce is scheduled to release its quarterly gross domestic product (GDP) report, which will finally provide some insight into the current state of U.S. economic activity. The data is widely expected to show that the economy contracted for a second consecutive quarter, which would show that the U.S. is already in a recession.
Speaking to reporters on Monday, President Joe Biden sought to ease those fears, saying, "We're not going to be in a recession, in my view." Furthermore, Biden administration officials pointed to the robust labor market as evidence that the U.S. is not in a recession. In fact, the country has never experienced a recession that didn't include the loss of jobs, according to National Economic Council Director Brian Deese.
Treasury Secretary Janet Yellen echoed that opinion, suggesting the U.S. economy is merely slowing, as evidenced by increasing consumer spending and a healthy jobs market. "We've got a very strong labor market," Yellen said. "This is not an economy that's in recession."
Unfortunately, with inflation at 40-year highs and fuel prices down only slightly from recent records, investors are looking for any sign that we are nearer the end of this economic upheaval than the beginning.
Just one of our trio of stocks had any company-specific news today that could have contributed to the share price decline. RBC Capital analyst Matthew Hedberg lowered his price target on Datadog to $115, down from $167, according to The Fly. Yet, even this lower price target suggests potential gains for investors of 23% compared to Friday's closing price. Perhaps more importantly, Hedberg sees potential for continued strong growth and margin expansion, which should be more important to long-term shareholders.
Now what
Eagle-eyed investors will have noticed one important similarity between these three stocks -- even after today's declines, they're still not cheap using traditional valuation metrics. Datadog, MongoDB, and HubSpot are currently selling at 24, 20, and 10 times sales, respectively, when a good price-to-sale ratio is generally considered to be between 1 and 2. During periods of market uncertainty, stocks with frothy valuations like these tend to be more volatile, as investors tend to sell first and ask questions later.
A look under the hood, however, shows why investors are willing to pay top dollar for these companies. In the most recent quarter, HubSpot, MongoDB, and Datadog grew revenue by 41%, 57%, and 83% year over year, respectively. It's also worth mentioning that only one of the three -- Datadog -- is profitable on a generally accepted accounting principles (GAAP) basis, though all three are generating positive free cash flow. This suggests that the losses are caused by non-cash items such as depreciation, and profits are just a matter of time.
Growth of this magnitude suggests these companies are deserving of a higher multiple. Given the strong underlying fundamentals and exceptional performances that preceded these lofty valuations, there's certainly an argument that these high-growth stocks might actually be cheaper than they seem. That presents astute investors with the opportunity to get these stocks at a discount.
10 stocks we like better than Datadog
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Datadog wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of June 2, 2022
Danny Vena has positions in Datadog, HubSpot, and MongoDB. The Motley Fool has positions in and recommends Datadog, HubSpot, and MongoDB. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Datadog (NASDAQ: DDOG) was off by as much as 4.6%, HubSpot (NYSE: HUBS) stock was down as much as 4.8%, and MongoDB (NASDAQ: MDB) slumped as much as 5.9%. On Thursday, July 28, the U.S. Department of Commerce is scheduled to release its quarterly gross domestic product (GDP) report, which will finally provide some insight into the current state of U.S. economic activity. Treasury Secretary Janet Yellen echoed that opinion, suggesting the U.S. economy is merely slowing, as evidenced by increasing consumer spending and a healthy jobs market.
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Datadog (NASDAQ: DDOG) was off by as much as 4.6%, HubSpot (NYSE: HUBS) stock was down as much as 4.8%, and MongoDB (NASDAQ: MDB) slumped as much as 5.9%. "We've got a very strong labor market," Yellen said. Yet, even this lower price target suggests potential gains for investors of 23% compared to Friday's closing price.
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Datadog (NASDAQ: DDOG) was off by as much as 4.6%, HubSpot (NYSE: HUBS) stock was down as much as 4.8%, and MongoDB (NASDAQ: MDB) slumped as much as 5.9%. What happened Shares of a number of high-growth stocks tumbled on Monday as investors focused on economic issues that had the major U.S. stock indexes looking for direction. 10 stocks we like better than Datadog When our award-winning analyst team has a stock tip, it can pay to listen.
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Datadog (NASDAQ: DDOG) was off by as much as 4.6%, HubSpot (NYSE: HUBS) stock was down as much as 4.8%, and MongoDB (NASDAQ: MDB) slumped as much as 5.9%. "This is not an economy that's in recession." Just one of our trio of stocks had any company-specific news today that could have contributed to the share price decline.
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300e0406-ef10-4564-9a0e-f8d2864a5983
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718583.0
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2022-07-23 00:00:00 UTC
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Datadog (NASDAQ:DDOG) Is Doing The Right Things To Multiply Its Share Price
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DDOG
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https://www.nasdaq.com/articles/datadog-nasdaq%3Addog-is-doing-the-right-things-to-multiply-its-share-price
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nan
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nan
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If we want to find a potential multi-bagger, often there are underlying trends that can provide clues. Firstly, we'll want to see a proven return on capital employed (ROCE) that is increasing, and secondly, an expanding base of capital employed. Put simply, these types of businesses are compounding machines, meaning they are continually reinvesting their earnings at ever-higher rates of return. So when we looked at Datadog (NASDAQ:DDOG) and its trend of ROCE, we really liked what we saw.
Understanding Return On Capital Employed (ROCE)
For those who don't know, ROCE is a measure of a company's yearly pre-tax profit (its return), relative to the capital employed in the business. Analysts use this formula to calculate it for Datadog:
Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)
0.0021 = US$4.1m ÷ (US$2.5b - US$602m) (Based on the trailing twelve months to March 2022).
Therefore, Datadog has an ROCE of 0.2%. Ultimately, that's a low return and it under-performs the Software industry average of 9.7%.
NasdaqGS:DDOG Return on Capital Employed July 23rd 2022
In the above chart we have measured Datadog's prior ROCE against its prior performance, but the future is arguably more important. If you'd like, you can check out the forecasts from the analysts covering Datadog here for free.
What Does the ROCE Trend For Datadog Tell Us?
The fact that Datadog is now generating some pre-tax profits from its prior investments is very encouraging. About four years ago the company was generating losses but things have turned around because it's now earning 0.2% on its capital. In addition to that, Datadog is employing 2,683% more capital than previously which is expected of a company that's trying to break into profitability. This can indicate that there's plenty of opportunities to invest capital internally and at ever higher rates, both common traits of a multi-bagger.
One more thing to note, Datadog has decreased current liabilities to 24% of total assets over this period, which effectively reduces the amount of funding from suppliers or short-term creditors. This tells us that Datadog has grown its returns without a reliance on increasing their current liabilities, which we're very happy with.
The Bottom Line
To the delight of most shareholders, Datadog has now broken into profitability. And since the stock has fallen 16% over the last year, there might be an opportunity here. With that in mind, we believe the promising trends warrant this stock for further investigation.
One more thing to note, we've identified 3 warning signs with Datadog and understanding them should be part of your investment process.
While Datadog isn't earning the highest return, check out this free list of companies that are earning high returns on equity with solid balance sheets.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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So when we looked at Datadog (NASDAQ:DDOG) and its trend of ROCE, we really liked what we saw. NasdaqGS:DDOG Return on Capital Employed July 23rd 2022 In the above chart we have measured Datadog's prior ROCE against its prior performance, but the future is arguably more important. Put simply, these types of businesses are compounding machines, meaning they are continually reinvesting their earnings at ever-higher rates of return.
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So when we looked at Datadog (NASDAQ:DDOG) and its trend of ROCE, we really liked what we saw. NasdaqGS:DDOG Return on Capital Employed July 23rd 2022 In the above chart we have measured Datadog's prior ROCE against its prior performance, but the future is arguably more important. Understanding Return On Capital Employed (ROCE) For those who don't know, ROCE is a measure of a company's yearly pre-tax profit (its return), relative to the capital employed in the business.
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NasdaqGS:DDOG Return on Capital Employed July 23rd 2022 In the above chart we have measured Datadog's prior ROCE against its prior performance, but the future is arguably more important. So when we looked at Datadog (NASDAQ:DDOG) and its trend of ROCE, we really liked what we saw. Understanding Return On Capital Employed (ROCE) For those who don't know, ROCE is a measure of a company's yearly pre-tax profit (its return), relative to the capital employed in the business.
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So when we looked at Datadog (NASDAQ:DDOG) and its trend of ROCE, we really liked what we saw. NasdaqGS:DDOG Return on Capital Employed July 23rd 2022 In the above chart we have measured Datadog's prior ROCE against its prior performance, but the future is arguably more important. Understanding Return On Capital Employed (ROCE) For those who don't know, ROCE is a measure of a company's yearly pre-tax profit (its return), relative to the capital employed in the business.
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4aaf7f6d-ed00-482c-830a-e0d80b22e867
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718584.0
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2022-07-22 00:00:00 UTC
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Is First Trust NASDAQ100 Equal Weighted ETF (QQEW) a Strong ETF Right Now?
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DDOG
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https://www.nasdaq.com/articles/is-first-trust-nasdaq100-equal-weighted-etf-qqew-a-strong-etf-right-now-2
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nan
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nan
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The First Trust NASDAQ100 Equal Weighted ETF (QQEW) was launched on 04/19/2006, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Large Cap Growth category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is sponsored by First Trust Advisors. It has amassed assets over $1.07 billion, making it one of the average sized ETFs in the Style Box - Large Cap Growth. Before fees and expenses, this particular fund seeks to match the performance of the NASDAQ-100 Equal Weighted Index.
The NASDAQ-100 Equal Weighted Index is the equal-weighted version of the NASDAQ-100 Index which includes 100 of the largest non-financial securities listed on NASDAQ based on market capitalization.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.57%.
The fund has a 12-month trailing dividend yield of 0.45%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Information Technology sector - about 40.20% of the portfolio. Consumer Discretionary and Healthcare round out the top three.
When you look at individual holdings, Datadog, Inc. (class A) (DDOG) accounts for about 1.15% of the fund's total assets, followed by Okta, Inc. (OKTA) and Zscaler, Inc. (ZS).
QQEW's top 10 holdings account for about 10.79% of its total assets under management.
Performance and Risk
The ETF has lost about -19.28% so far this year and is down about -14.93% in the last one year (as of 07/22/2022). In the past 52-week period, it has traded between $84.27 and $120.91.
The ETF has a beta of 1.05 and standard deviation of 26.58% for the trailing three-year period, making it a medium risk choice in the space. With about 103 holdings, it effectively diversifies company-specific risk.
Alternatives
First Trust NASDAQ100 Equal Weighted ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Growth segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Growth ETF (VUG) tracks CRSP U.S. Large Cap Growth Index and the Invesco QQQ (QQQ) tracks NASDAQ-100 Index. Vanguard Growth ETF has $72.80 billion in assets, Invesco QQQ has $169.20 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Growth.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.
Get it free >>
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First Trust NASDAQ100 Equal Weighted ETF (QQEW): ETF Research Reports
Invesco QQQ (QQQ): ETF Research Reports
Vanguard Growth ETF (VUG): ETF Research Reports
Okta, Inc. (OKTA): Free Stock Analysis Report
Zscaler, Inc. (ZS): Free Stock Analysis Report
Datadog, Inc. (DDOG): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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When you look at individual holdings, Datadog, Inc. (class A) (DDOG) accounts for about 1.15% of the fund's total assets, followed by Okta, Inc. (OKTA) and Zscaler, Inc. (ZS). Datadog, Inc. (DDOG): Free Stock Analysis Report The First Trust NASDAQ100 Equal Weighted ETF (QQEW) was launched on 04/19/2006, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Large Cap Growth category of the market.
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When you look at individual holdings, Datadog, Inc. (class A) (DDOG) accounts for about 1.15% of the fund's total assets, followed by Okta, Inc. (OKTA) and Zscaler, Inc. (ZS). Datadog, Inc. (DDOG): Free Stock Analysis Report The First Trust NASDAQ100 Equal Weighted ETF (QQEW) was launched on 04/19/2006, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Large Cap Growth category of the market.
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When you look at individual holdings, Datadog, Inc. (class A) (DDOG) accounts for about 1.15% of the fund's total assets, followed by Okta, Inc. (OKTA) and Zscaler, Inc. (ZS). Datadog, Inc. (DDOG): Free Stock Analysis Report The First Trust NASDAQ100 Equal Weighted ETF (QQEW) was launched on 04/19/2006, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Large Cap Growth category of the market.
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When you look at individual holdings, Datadog, Inc. (class A) (DDOG) accounts for about 1.15% of the fund's total assets, followed by Okta, Inc. (OKTA) and Zscaler, Inc. (ZS). Datadog, Inc. (DDOG): Free Stock Analysis Report The First Trust NASDAQ100 Equal Weighted ETF (QQEW) was launched on 04/19/2006, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Large Cap Growth category of the market.
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f08e63a0-4bab-46dc-9e06-4765b67bfec9
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718585.0
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2022-07-21 00:00:00 UTC
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Datadog (DDOG) Gains But Lags Market: What You Should Know
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DDOG
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https://www.nasdaq.com/articles/datadog-ddog-gains-but-lags-market%3A-what-you-should-know-1
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nan
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nan
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In the latest trading session, Datadog (DDOG) closed at $101.23, marking a +0.35% move from the previous day. This move lagged the S&P 500's daily gain of 0.99%. At the same time, the Dow added 0.51%, and the tech-heavy Nasdaq lost 0.31%.
Prior to today's trading, shares of the data analytics and cloud monitoring company had gained 10.75% over the past month. This has outpaced the Computer and Technology sector's loss of 11.18% and the S&P 500's gain of 7.91% in that time.
Investors will be hoping for strength from Datadog as it approaches its next earnings release, which is expected to be August 4, 2022. In that report, analysts expect Datadog to post earnings of $0.14 per share. This would mark year-over-year growth of 55.56%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $378.05 million, up 61.87% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $0.72 per share and revenue of $1.61 billion, which would represent changes of +50% and +56.57%, respectively, from the prior year.
Any recent changes to analyst estimates for Datadog should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Datadog is currently sporting a Zacks Rank of #3 (Hold).
In terms of valuation, Datadog is currently trading at a Forward P/E ratio of 139.87. Its industry sports an average Forward P/E of 45.82, so we one might conclude that Datadog is trading at a premium comparatively.
The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 134, putting it in the bottom 47% 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.
To follow DDOG in the coming trading sessions, be sure to utilize Zacks.com.
5 Stocks Set to Double
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Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>
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
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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In the latest trading session, Datadog (DDOG) closed at $101.23, marking a +0.35% move from the previous day. To follow DDOG in the coming trading sessions, be sure to utilize Zacks.com. Datadog, Inc. (DDOG): Free Stock Analysis Report
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In the latest trading session, Datadog (DDOG) closed at $101.23, marking a +0.35% move from the previous day. To follow DDOG in the coming trading sessions, be sure to utilize Zacks.com. Datadog, Inc. (DDOG): Free Stock Analysis Report
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In the latest trading session, Datadog (DDOG) closed at $101.23, marking a +0.35% move from the previous day. To follow DDOG in the coming trading sessions, be sure to utilize Zacks.com. Datadog, Inc. (DDOG): Free Stock Analysis Report
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In the latest trading session, Datadog (DDOG) closed at $101.23, marking a +0.35% move from the previous day. Datadog, Inc. (DDOG): Free Stock Analysis Report To follow DDOG in the coming trading sessions, be sure to utilize Zacks.com.
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4ec30692-b840-4394-ad36-9574b985328f
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718586.0
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2022-07-20 00:00:00 UTC
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EXCLUSIVE-New Relic to explore sale options amid takeover interest -sources
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DDOG
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https://www.nasdaq.com/articles/exclusive-new-relic-to-explore-sale-options-amid-takeover-interest-sources-0
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nan
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nan
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By Krystal Hu and Anirban Sen
July 20 (Reuters) - New Relic Inc NEWR.N, the U.S. business software company targeted by activist hedge fund Jana Partners, is preparing to explore a potential sale following interest from private equity firms, sources familiar with the matter told Reuters.
New Relic is in talks to hire financial advisers to explore options that would include a sale, the sources said, cautioning that no deal is certain. The sources requested anonymity because the matter is confidential.
A spokesperson for New Relic declined to comment.
New Relic shares jumped on the news and ended trading on Wednesday up 17% at $61.28, giving the company a market value of $4.1 billion.
The San Francisco-based company develops cloud-based software to help websites and application owners track the performance of their services. Founded in 2008, the company listed in the stock market in 2014.
In recent years, New Relic's growth has slowed as it tries to compete against other Application Performance Monitoring (APM) vendors such as Dynatrace DT.N and Datadog DDOG.O. It reported 14,800 active customer accounts in the most recent quarter, down from 15,400 in June 2020.
New Relic generated revenue of $786 million in fiscal year 2022, up 18% year-over-year, while its loss widened to $229 million from $171 million. It shares have lost half of its value since November 2021.
Last month, New Relic appointed Kevin Galligan, a partner at Jana Partners, to its board as part of a cooperation agreement, and Jana has increased their stake in the company to 5.3%, according to a filing.
Jana Partners is known for pushing for a sale of the companies it takes a stake in. Zendesk Inc ZEN.N, another Jana target, agreed to be sold last month for $10.2 billion to a consortium of private equity firms led by Hellman & Friedman and Permira.
(Reporting by Krystal Hu and Anirban Sen in New York; Editing by Lisa Shumaker)
((Krystal.Hu@thomsonreuters.com;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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In recent years, New Relic's growth has slowed as it tries to compete against other Application Performance Monitoring (APM) vendors such as Dynatrace DT.N and Datadog DDOG.O. The San Francisco-based company develops cloud-based software to help websites and application owners track the performance of their services. Zendesk Inc ZEN.N, another Jana target, agreed to be sold last month for $10.2 billion to a consortium of private equity firms led by Hellman & Friedman and Permira.
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In recent years, New Relic's growth has slowed as it tries to compete against other Application Performance Monitoring (APM) vendors such as Dynatrace DT.N and Datadog DDOG.O. By Krystal Hu and Anirban Sen July 20 (Reuters) - New Relic Inc NEWR.N, the U.S. business software company targeted by activist hedge fund Jana Partners, is preparing to explore a potential sale following interest from private equity firms, sources familiar with the matter told Reuters. Zendesk Inc ZEN.N, another Jana target, agreed to be sold last month for $10.2 billion to a consortium of private equity firms led by Hellman & Friedman and Permira.
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In recent years, New Relic's growth has slowed as it tries to compete against other Application Performance Monitoring (APM) vendors such as Dynatrace DT.N and Datadog DDOG.O. By Krystal Hu and Anirban Sen July 20 (Reuters) - New Relic Inc NEWR.N, the U.S. business software company targeted by activist hedge fund Jana Partners, is preparing to explore a potential sale following interest from private equity firms, sources familiar with the matter told Reuters. New Relic shares jumped on the news and ended trading on Wednesday up 17% at $61.28, giving the company a market value of $4.1 billion.
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In recent years, New Relic's growth has slowed as it tries to compete against other Application Performance Monitoring (APM) vendors such as Dynatrace DT.N and Datadog DDOG.O. By Krystal Hu and Anirban Sen July 20 (Reuters) - New Relic Inc NEWR.N, the U.S. business software company targeted by activist hedge fund Jana Partners, is preparing to explore a potential sale following interest from private equity firms, sources familiar with the matter told Reuters. New Relic shares jumped on the news and ended trading on Wednesday up 17% at $61.28, giving the company a market value of $4.1 billion.
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69a47279-f2bd-4bcf-ab52-ca95d1c72b18
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718587.0
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2022-07-20 00:00:00 UTC
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EXCLUSIVE-New Relic to explore sale options amid takeover interest -sources
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DDOG
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https://www.nasdaq.com/articles/exclusive-new-relic-to-explore-sale-options-amid-takeover-interest-sources
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nan
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nan
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By Krystal Hu and Anirban Sen
July 20 (Reuters) - New Relic Inc NEWR.N, the U.S. business software company targeted by activist hedge fund Jana Partners, is preparing to explore a potential sale following interest from private equity firms, sources familiar with the matter told Reuters.
New Relic is in talks to hire financial advisers to explore options that would include a sale, the sources said, cautioning that no deal is certain. The sources requested anonymity because the matter is confidential.
A spokesperson for New Relic declined to comment.
New Relic has a market capitalization of $3.7 billion. The San Francisco-based company develops cloud-based software to help websites and application owners track the performance of their services. Founded in 2008, the company listed in the stock market in 2014.
In recent years, New Relic's growth has slowed as it tries to compete against other Application Performance Monitoring (APM) vendors such as Dynatrace DT.N and Datadog DDOG.O. It reported 14,800 active customer accounts in the most recent quarter, down from 15,400 in June 2020.
New Relic generated revenue of $786 million in fiscal year 2022, up 18% year-over-year, while its loss widened to $229 million from $171 million. It shares have lost half of its value since November 2021.
Last month, New Relic appointed Kevin Galligan, a partner at Jana Partners, to its board as part of a cooperation agreement, and Jana has increased their stake in the company to 5.3%, according to a filing.
Jana Partners is known for pushing for a sale of the companies it takes a stake in. Zendesk Inc ZEN.N, another Jana target, agreed to be sold last month for $10.2 billion to a consortium of private equity firms led by Hellman & Friedman and Permira.
(Reporting by Krystal Hu and Anirban Sen in New York; Editing by Lisa Shumaker)
((Krystal.Hu@thomsonreuters.com;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
In recent years, New Relic's growth has slowed as it tries to compete against other Application Performance Monitoring (APM) vendors such as Dynatrace DT.N and Datadog DDOG.O. The San Francisco-based company develops cloud-based software to help websites and application owners track the performance of their services. Zendesk Inc ZEN.N, another Jana target, agreed to be sold last month for $10.2 billion to a consortium of private equity firms led by Hellman & Friedman and Permira.
|
In recent years, New Relic's growth has slowed as it tries to compete against other Application Performance Monitoring (APM) vendors such as Dynatrace DT.N and Datadog DDOG.O. By Krystal Hu and Anirban Sen July 20 (Reuters) - New Relic Inc NEWR.N, the U.S. business software company targeted by activist hedge fund Jana Partners, is preparing to explore a potential sale following interest from private equity firms, sources familiar with the matter told Reuters. Zendesk Inc ZEN.N, another Jana target, agreed to be sold last month for $10.2 billion to a consortium of private equity firms led by Hellman & Friedman and Permira.
|
In recent years, New Relic's growth has slowed as it tries to compete against other Application Performance Monitoring (APM) vendors such as Dynatrace DT.N and Datadog DDOG.O. By Krystal Hu and Anirban Sen July 20 (Reuters) - New Relic Inc NEWR.N, the U.S. business software company targeted by activist hedge fund Jana Partners, is preparing to explore a potential sale following interest from private equity firms, sources familiar with the matter told Reuters. New Relic generated revenue of $786 million in fiscal year 2022, up 18% year-over-year, while its loss widened to $229 million from $171 million.
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In recent years, New Relic's growth has slowed as it tries to compete against other Application Performance Monitoring (APM) vendors such as Dynatrace DT.N and Datadog DDOG.O. By Krystal Hu and Anirban Sen July 20 (Reuters) - New Relic Inc NEWR.N, the U.S. business software company targeted by activist hedge fund Jana Partners, is preparing to explore a potential sale following interest from private equity firms, sources familiar with the matter told Reuters. New Relic has a market capitalization of $3.7 billion.
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1bc8bdee-40fe-43c6-bcf5-db5591ae629d
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718588.0
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2022-07-20 00:00:00 UTC
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Nasdaq 100 Movers: PDD, DDOG
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DDOG
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https://www.nasdaq.com/articles/nasdaq-100-movers%3A-pdd-ddog
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nan
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nan
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In early trading on Wednesday, shares of Datadog topped the list of the day's best performing components of the Nasdaq 100 index, trading up 5.8%. Year to date, Datadog has lost about 44.8% of its value.
And the worst performing Nasdaq 100 component thus far on the day is Pinduoduo, trading down 3.3%. Pinduoduo is lower by about 8.9% looking at the year to date performance.
Two other components making moves today are Biogen, trading down 2.6%, and Atlassian, trading up 5.1% on the day.
VIDEO: Nasdaq 100 Movers: PDD, DDOG
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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VIDEO: Nasdaq 100 Movers: PDD, DDOG The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. In early trading on Wednesday, shares of Datadog topped the list of the day's best performing components of the Nasdaq 100 index, trading up 5.8%. And the worst performing Nasdaq 100 component thus far on the day is Pinduoduo, trading down 3.3%.
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VIDEO: Nasdaq 100 Movers: PDD, DDOG The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. In early trading on Wednesday, shares of Datadog topped the list of the day's best performing components of the Nasdaq 100 index, trading up 5.8%. Year to date, Datadog has lost about 44.8% of its value.
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VIDEO: Nasdaq 100 Movers: PDD, DDOG The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. In early trading on Wednesday, shares of Datadog topped the list of the day's best performing components of the Nasdaq 100 index, trading up 5.8%. And the worst performing Nasdaq 100 component thus far on the day is Pinduoduo, trading down 3.3%.
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VIDEO: Nasdaq 100 Movers: PDD, DDOG The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. And the worst performing Nasdaq 100 component thus far on the day is Pinduoduo, trading down 3.3%. Pinduoduo is lower by about 8.9% looking at the year to date performance.
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8c013a98-d31e-4b83-aaca-06e58f5d384b
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718589.0
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2022-07-20 00:00:00 UTC
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Why Datadog Stock Is Soaring Today
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DDOG
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https://www.nasdaq.com/articles/why-datadog-stock-is-soaring-today
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nan
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nan
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What happened
Shares of Datadog (NASDAQ: DDOG), a cloud-based monitoring and analytics company, were jumping this morning after an analyst initiated coverage of the company and put an outperform rating on its shares.
The tech stock was up 9.4% as of 11:03 a.m. ET on Wednesday.
So what
Bernstein analyst Peter Weed started coverage of Datadog today and put a $172 price target on the stock. It was trading at about $101 at the time of this writing.
Image source: Getty Images.
Weed believes that the company is doing a good job of expanding its addressable market and that Datadog has "large secular tailwinds," according to TheFly.com.
Weed also thinks that management is being cautious in its revenue forecasts. Datadog's leadership says revenue will increase by 55% in 2022, but Weed believes sales could actually jump by 70% for the year, and could rise by more than 50% through 2024.
Now what
Datadog will report its second-quarter results on Aug. 4, and management expects sales between $376 million and $380 million, which would be an increase of 61% from the year-ago quarter at the midpoint of guidance.
The company is also expecting adjusted earnings per share of $0.14 at the middle of guidance, which would be a year-over-year increase of 55%.
While Datadog's stock is rising today, the company's share price is still down 42% year to date. Some investors are still wary of the tech sector as inflation continues to increase and fears of an economic slowdown rise.
All of which means that Datadog investors should keep an even closer eye on the upcoming quarterly report to gauge the company's current health.
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Chris Neiger has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Datadog. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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What happened Shares of Datadog (NASDAQ: DDOG), a cloud-based monitoring and analytics company, were jumping this morning after an analyst initiated coverage of the company and put an outperform rating on its shares. So what Bernstein analyst Peter Weed started coverage of Datadog today and put a $172 price target on the stock. Weed believes that the company is doing a good job of expanding its addressable market and that Datadog has "large secular tailwinds," according to TheFly.com.
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What happened Shares of Datadog (NASDAQ: DDOG), a cloud-based monitoring and analytics company, were jumping this morning after an analyst initiated coverage of the company and put an outperform rating on its shares. So what Bernstein analyst Peter Weed started coverage of Datadog today and put a $172 price target on the stock. Datadog's leadership says revenue will increase by 55% in 2022, but Weed believes sales could actually jump by 70% for the year, and could rise by more than 50% through 2024.
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What happened Shares of Datadog (NASDAQ: DDOG), a cloud-based monitoring and analytics company, were jumping this morning after an analyst initiated coverage of the company and put an outperform rating on its shares. While Datadog's stock is rising today, the company's share price is still down 42% year to date. 10 stocks we like better than Datadog When our award-winning analyst team has a stock tip, it can pay to listen.
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What happened Shares of Datadog (NASDAQ: DDOG), a cloud-based monitoring and analytics company, were jumping this morning after an analyst initiated coverage of the company and put an outperform rating on its shares. Datadog's leadership says revenue will increase by 55% in 2022, but Weed believes sales could actually jump by 70% for the year, and could rise by more than 50% through 2024. That's right -- they think these 10 stocks are even better buys.
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91e9e7a8-3623-40b5-adc8-7bfadb3118d7
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718590.0
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2022-07-15 00:00:00 UTC
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Datadog (DDOG) Stock Sinks As Market Gains: What You Should Know
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DDOG
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https://www.nasdaq.com/articles/datadog-ddog-stock-sinks-as-market-gains%3A-what-you-should-know-3
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nan
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nan
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Datadog (DDOG) closed at $93.60 in the latest trading session, marking a -0.19% move from the prior day. This change lagged the S&P 500's daily gain of 1.92%. Meanwhile, the Dow gained 2.15%, and the Nasdaq, a tech-heavy index, added 0.16%.
Prior to today's trading, shares of the data analytics and cloud monitoring company had gained 14.38% over the past month. This has outpaced the Computer and Technology sector's gain of 2.35% and the S&P 500's gain of 1.54% in that time.
Investors will be hoping for strength from Datadog as it approaches its next earnings release, which is expected to be August 4, 2022. On that day, Datadog is projected to report earnings of $0.14 per share, which would represent year-over-year growth of 55.56%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $378.05 million, up 61.87% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $0.72 per share and revenue of $1.61 billion, which would represent changes of +50% and +56.57%, respectively, from the prior year.
Investors should also note any recent changes to 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.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
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. The Zacks Consensus EPS estimate remained stagnant within the past month. Datadog is currently sporting a Zacks Rank of #3 (Hold).
Digging into valuation, Datadog currently has a Forward P/E ratio of 130.02. This represents a premium compared to its industry's average Forward P/E of 41.96.
The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 146, which puts it in the bottom 43% of all 250+ industries.
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.
You can find more information on all of these metrics, and much more, on Zacks.com.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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Datadog, Inc. (DDOG): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Datadog (DDOG) closed at $93.60 in the latest trading session, marking a -0.19% move from the prior day. Datadog, Inc. (DDOG): Free Stock Analysis Report Prior to today's trading, shares of the data analytics and cloud monitoring company had gained 14.38% over the past month.
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Datadog, Inc. (DDOG): Free Stock Analysis Report Datadog (DDOG) closed at $93.60 in the latest trading session, marking a -0.19% move from the prior day. For the full year, our Zacks Consensus Estimates are projecting earnings of $0.72 per share and revenue of $1.61 billion, which would represent changes of +50% and +56.57%, respectively, from the prior year.
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Datadog (DDOG) closed at $93.60 in the latest trading session, marking a -0.19% move from the prior day. Datadog, Inc. (DDOG): Free Stock Analysis Report For the full year, our Zacks Consensus Estimates are projecting earnings of $0.72 per share and revenue of $1.61 billion, which would represent changes of +50% and +56.57%, respectively, from the prior year.
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Datadog (DDOG) closed at $93.60 in the latest trading session, marking a -0.19% move from the prior day. Datadog, Inc. (DDOG): Free Stock Analysis Report On that day, Datadog is projected to report earnings of $0.14 per share, which would represent year-over-year growth of 55.56%.
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6e313d51-0118-4a4c-abd6-ec13d441f45c
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718591.0
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2022-07-14 00:00:00 UTC
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Nasdaq 100 Movers: TEAM, COST
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DDOG
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https://www.nasdaq.com/articles/nasdaq-100-movers%3A-team-cost
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nan
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nan
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In early trading on Thursday, shares of Costco Wholesale topped the list of the day's best performing components of the Nasdaq 100 index, trading up 0.8%. Year to date, Costco Wholesale has lost about 12.6% of its value.
And the worst performing Nasdaq 100 component thus far on the day is Atlassian, trading down 4.4%. Atlassian is lower by about 51.2% looking at the year to date performance.
Two other components making moves today are Datadog, trading down 4.4%, and Cintas, trading up 0.6% on the day.
VIDEO: Nasdaq 100 Movers: TEAM, COST
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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In early trading on Thursday, shares of Costco Wholesale topped the list of the day's best performing components of the Nasdaq 100 index, trading up 0.8%. And the worst performing Nasdaq 100 component thus far on the day is Atlassian, trading down 4.4%. VIDEO: Nasdaq 100 Movers: TEAM, COST The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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In early trading on Thursday, shares of Costco Wholesale topped the list of the day's best performing components of the Nasdaq 100 index, trading up 0.8%. Year to date, Costco Wholesale has lost about 12.6% of its value. And the worst performing Nasdaq 100 component thus far on the day is Atlassian, trading down 4.4%.
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In early trading on Thursday, shares of Costco Wholesale topped the list of the day's best performing components of the Nasdaq 100 index, trading up 0.8%. And the worst performing Nasdaq 100 component thus far on the day is Atlassian, trading down 4.4%. Two other components making moves today are Datadog, trading down 4.4%, and Cintas, trading up 0.6% on the day.
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In early trading on Thursday, shares of Costco Wholesale topped the list of the day's best performing components of the Nasdaq 100 index, trading up 0.8%. And the worst performing Nasdaq 100 component thus far on the day is Atlassian, trading down 4.4%. VIDEO: Nasdaq 100 Movers: TEAM, COST The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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530dc0c2-0e65-4aca-9894-2b4a8308e529
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718592.0
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2022-07-14 00:00:00 UTC
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Everbridge (EVBG) Launches Digital Operations Platform Module
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DDOG
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https://www.nasdaq.com/articles/everbridge-evbg-launches-digital-operations-platform-module
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nan
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nan
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Everbridge EVBG recently announced the launch of a new digital operations platform module — Service Intelligence.
Service Intelligence is a correlation and analytics module, which provides IT organizations with advanced analytics for instant insights into digital disruptions, service component dependency inspection and analysis, and dynamic runbook automation to recover data fast and reduce the impact on businesses.
The recently released module has been designed to address the strong demand for critical event management and public safety technology. The COVID-19-induced pandemic has amplified the adoption of cloud services, distributed teams globally and provided precedence to remote work and accelerated the pace of digitization for several organizations.
The Russia-Ukraine war has also highlighted the issue of increased cyber-attacks globally. These events have underscored the importance of risk intelligence services like critical event management (CEM) to protect customers’ business operations.
In order to provide various IT teams with unified resolver tools and console to streamline the response and minimize the business impacts, Everbridge is integrating its Service Intelligence services with industry-leading AI for IT operations service (AIOT) companies like Datadog DDOG and Dynatrace DT.
Service Intelligence has collaborated with companies like Datadog and Dynatrace to enable full system synchronization and help users in tracking responses, comments and actions.
Datadog’s AIOT services help Service Intelligence to receive anomaly alerts and incidents with all necessary information needed by IT teams to help solve the issue before it impacts end users and harms business operations in the process.
Dynatrace helps Service Intelligence in providing automated diagnosis and rich intelligent mobilization notifications to help teams save time as it eliminates the need for searching for the root cause of the problems.
Everbridge, Inc. Price and Consensus
Everbridge, Inc. price-consensus-chart | Everbridge, Inc. Quote
Everbridge is collaborating with Microsoft’s MSFT communication channel Microsoft Teams, as it is one of the most effective communicating channels used by corporates to communicate.
Microsoft Teams will help Everbridge to communicate timely during incidence response by automatically notifying team members of an incidence.
The launch of Everbridge’s recent digital operations platform module is in sync with its realigned operations module to focus on four CEM models.
Launch of Service Intelligence to Impact Growth
The prevailing negative sentiments due to the current macro-economic turmoils — rising inflation and probable recession and the Russia-Ukraine war — have hurt the share price movement of the company.
Everbridge’s shares have fallen 61.1% compared with the Zacks Internet Software industry’s decline of 51.8% in the year-to-date period.
In order to address this issue, Everbridge has been simplifying its product offerings from several dozen individual point products to focus on four strategic CEM bundles.
Service Intelligence addresses two of these four CEM bundles — CEM for digital operations and CEM for business operations.
Amid the prevailing geopolitical tensions, there has been a huge demand for CEM solutions, and Everbridge is expected to experience strong demand for its simplified product offerings like Service Intelligence. This, in turn, will drive both top and bottom lines in the long run.
Everbridge expects that the change in business operations will drive annualized savings between $13 million and $18 million and help in expanding margins.
Everbridge currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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
Microsoft Corporation (MSFT): Free Stock Analysis Report
Dynatrace, Inc. (DT): Free Stock Analysis Report
Everbridge, Inc. (EVBG): Free Stock Analysis Report
Datadog, Inc. (DDOG): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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In order to provide various IT teams with unified resolver tools and console to streamline the response and minimize the business impacts, Everbridge is integrating its Service Intelligence services with industry-leading AI for IT operations service (AIOT) companies like Datadog DDOG and Dynatrace DT. Datadog, Inc. (DDOG): Free Stock Analysis Report The COVID-19-induced pandemic has amplified the adoption of cloud services, distributed teams globally and provided precedence to remote work and accelerated the pace of digitization for several organizations.
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In order to provide various IT teams with unified resolver tools and console to streamline the response and minimize the business impacts, Everbridge is integrating its Service Intelligence services with industry-leading AI for IT operations service (AIOT) companies like Datadog DDOG and Dynatrace DT. Datadog, Inc. (DDOG): Free Stock Analysis Report Everbridge EVBG recently announced the launch of a new digital operations platform module — Service Intelligence.
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In order to provide various IT teams with unified resolver tools and console to streamline the response and minimize the business impacts, Everbridge is integrating its Service Intelligence services with industry-leading AI for IT operations service (AIOT) companies like Datadog DDOG and Dynatrace DT. Datadog, Inc. (DDOG): Free Stock Analysis Report Everbridge, Inc. Price and Consensus Everbridge, Inc. price-consensus-chart | Everbridge, Inc. Quote Everbridge is collaborating with Microsoft’s MSFT communication channel Microsoft Teams, as it is one of the most effective communicating channels used by corporates to communicate.
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In order to provide various IT teams with unified resolver tools and console to streamline the response and minimize the business impacts, Everbridge is integrating its Service Intelligence services with industry-leading AI for IT operations service (AIOT) companies like Datadog DDOG and Dynatrace DT. Datadog, Inc. (DDOG): Free Stock Analysis Report Everbridge EVBG recently announced the launch of a new digital operations platform module — Service Intelligence.
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9f624896-9a92-48a6-83f2-b760c8618e40
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718593.0
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2022-07-14 00:00:00 UTC
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2 Hypergrowth Stocks to Buy in 2022 and Beyond
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DDOG
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https://www.nasdaq.com/articles/2-hypergrowth-stocks-to-buy-in-2022-and-beyond-4
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nan
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nan
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It hasn't been a fun year for investors, but as the great value investor Benjamin Graham once said, "In the short run, the market is a voting machine, but in the long run, it is a weighing machine."
That's another way of saying beaten-down growth stocks are ripe for the pickings. Two promising industries that are still reporting strong growth in 2022 are cloud services and cybersecurity. Given the explosive growth happening in these markets, here's why I would put my money on Datadog (NASDAQ: DDOG) and Crowdstrike Holdings (NASDAQ: CRWD) for the long term. Let's find out a bit more about these two hypergrowth stocks.
1. Datadog
Datadog has been consistently growing revenue above 50% since its initial public offering in late 2019. The company is a leader in the application performance monitoring and observability market -- a market estimated to be worth $38 billion in 2021 and expected to grow much larger over time.
Datadog's platform is used by companies of all sizes to gauge cloud infrastructure performance and identify problems that need troubleshooting. It also offers security monitoring tools, where it is seeing rapid growth.
These are essential tools for every company needs that is migrating data systems over to the cloud, and that's why Datadog continues to see robust demand for its platform. In the first quarter, Datadog signed a seven-figure deal with a European car manufacturer, a six-figure deal with a major U.S. hotel company, and another six-figure upsell with a global shipping company.
Datadog helps these companies save time, run their business more efficiently, and move forward with their migration to the cloud. Revenue has accelerated from a year-over-year growth rate of 51% in the first quarter of 2021 to 83% in the first quarter of 2022.
There are not many companies reporting such strong numbers in this economic environment, which speaks volumes about the value embedded in software-as-a-service companies. Companies migrating over to the cloud are making a long-term investment, so it doesn't matter how the economy performs now; these companies must invest in mission-critical areas like cloud migration and security to stay competitive.
Like many software-as-a-service stocks, Datadog stock is not cheap, trading at a price-to-free cash flow ratio of 99. But at the rate the business is growing, and with a massive addressable market ahead, this growth stock has already earned a spot among my personal holdings.
2. Crowdstrike
Cybersecurity is another mission-critical area that continues to see strong demand. Crowdstrike was founded in 2011 and has been growing incredibly fast. Revenue grew four-fold over the last five years, with annual recurring revenue reaching $1.9 billion over the last four quarters. Crowdstrike can still grow enormously with an expanding addressable market estimated to be worth $71 billion by 2024.
Crowdstrike has built its Falcon security platform around an expansive amount of data, which management sees as the company's competitive advantage. It uses artificial intelligence to gather and analyze trillions of incidents in real time to detect vulnerabilities and prevent threats for clients.
The proof is in the pudding. Crowdstrike added 1,620 net new subscription customers in the most recent quarter, bringing the total to 17,945 at the end of April. That's a year-over-year growth rate of 57%.
What's most telling about Crowdstrike's competitive position against other cybersecurity options available is that 71% of subscription customers have adopted at least four additional services, or modules. These add-on modules cover security for IT operations, log management, identity protection, and many other areas of corporate security. Falcon Complete, which provides a team of digital forensic experts to assist companies against potential threats, just completed its best quarter yet with annual recurring revenue reaching an all-time high.
Cybersecurity is essential. There's a never-ending threat that requires ongoing investment. Although there are several competitors in the market, more companies are placing their trust in Crowdstrike. CEO George Kurtz mentioned on a recentearnings callthat the demand environment is more robust today than this time last year. If cybersecurity is a top priority for corporations, buying shares of Crowdstrike should also be a top priority for investors.
10 stocks we like better than Datadog
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They just revealed what they believe are the ten best stocks for investors to buy right now... and Datadog wasn't one of them! That's right -- they think these 10 stocks are even better buys.
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*Stock Advisor returns as of June 2, 2022
John Ballard has positions in Datadog. The Motley Fool has positions in and recommends CrowdStrike Holdings, Inc. and Datadog. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Given the explosive growth happening in these markets, here's why I would put my money on Datadog (NASDAQ: DDOG) and Crowdstrike Holdings (NASDAQ: CRWD) for the long term. But at the rate the business is growing, and with a massive addressable market ahead, this growth stock has already earned a spot among my personal holdings. Crowdstrike has built its Falcon security platform around an expansive amount of data, which management sees as the company's competitive advantage.
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Given the explosive growth happening in these markets, here's why I would put my money on Datadog (NASDAQ: DDOG) and Crowdstrike Holdings (NASDAQ: CRWD) for the long term. Companies migrating over to the cloud are making a long-term investment, so it doesn't matter how the economy performs now; these companies must invest in mission-critical areas like cloud migration and security to stay competitive. Revenue grew four-fold over the last five years, with annual recurring revenue reaching $1.9 billion over the last four quarters.
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Given the explosive growth happening in these markets, here's why I would put my money on Datadog (NASDAQ: DDOG) and Crowdstrike Holdings (NASDAQ: CRWD) for the long term. In the first quarter, Datadog signed a seven-figure deal with a European car manufacturer, a six-figure deal with a major U.S. hotel company, and another six-figure upsell with a global shipping company. Companies migrating over to the cloud are making a long-term investment, so it doesn't matter how the economy performs now; these companies must invest in mission-critical areas like cloud migration and security to stay competitive.
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Given the explosive growth happening in these markets, here's why I would put my money on Datadog (NASDAQ: DDOG) and Crowdstrike Holdings (NASDAQ: CRWD) for the long term. These are essential tools for every company needs that is migrating data systems over to the cloud, and that's why Datadog continues to see robust demand for its platform. Companies migrating over to the cloud are making a long-term investment, so it doesn't matter how the economy performs now; these companies must invest in mission-critical areas like cloud migration and security to stay competitive.
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23853878-598e-4505-a5b3-2c5480ef12e7
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718594.0
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2022-07-13 00:00:00 UTC
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Datadog (DDOG) Gains As Market Dips: What You Should Know
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DDOG
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https://www.nasdaq.com/articles/datadog-ddog-gains-as-market-dips%3A-what-you-should-know-4
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nan
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nan
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Datadog (DDOG) closed the most recent trading day at $97.34, moving +0.02% from the previous trading session. The stock outpaced the S&P 500's daily loss of 0.45%. At the same time, the Dow lost 0.67%, and the tech-heavy Nasdaq lost 0.06%.
Heading into today, shares of the data analytics and cloud monitoring company had gained 11.72% over the past month, outpacing the Computer and Technology sector's loss of 2.03% and the S&P 500's loss of 1.89% in that time.
Datadog will be looking to display strength as it nears its next earnings release. On that day, Datadog is projected to report earnings of $0.15 per share, which would represent year-over-year growth of 66.67%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $378.37 million, up 62.01% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $0.72 per share and revenue of $1.61 billion. These totals would mark changes of +50% and +56.8%, respectively, from last year.
Investors might also notice recent changes to analyst estimates for Datadog. These revisions help to show the ever-changing nature of 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 shows that these estimate changes are directly correlated with near-term stock prices. 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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Datadog is currently sporting a Zacks Rank of #2 (Buy).
Investors should also note Datadog's current valuation metrics, including its Forward P/E ratio of 134.7. Its industry sports an average Forward P/E of 43.84, so we one might conclude that Datadog is trading at a premium comparatively.
The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 133, which puts it in the bottom 48% 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.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
Zacks' Top Picks to Cash in on Electric Vehicles
Big money has already been made in the Electric Vehicle (EV) industry. But, the EV revolution has not hit full throttle yet. There is a lot of money to be made as the next push for future technologies ramps up. Zacks’ Special Report reveals 5 picks investors
See 5 EV Stocks With Extreme Upside Potential >>
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
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Datadog (DDOG) closed the most recent trading day at $97.34, moving +0.02% from the previous trading session. Datadog, Inc. (DDOG): Free Stock Analysis Report Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $0.72 per share and revenue of $1.61 billion.
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Datadog (DDOG) closed the most recent trading day at $97.34, moving +0.02% from the previous trading session. Datadog, Inc. (DDOG): Free Stock Analysis Report Heading into today, shares of the data analytics and cloud monitoring company had gained 11.72% over the past month, outpacing the Computer and Technology sector's loss of 2.03% and the S&P 500's loss of 1.89% in that time.
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Datadog (DDOG) closed the most recent trading day at $97.34, moving +0.02% from the previous trading session. Datadog, Inc. (DDOG): Free Stock Analysis Report Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $0.72 per share and revenue of $1.61 billion.
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Datadog (DDOG) closed the most recent trading day at $97.34, moving +0.02% from the previous trading session. Datadog, Inc. (DDOG): Free Stock Analysis Report On that day, Datadog is projected to report earnings of $0.15 per share, which would represent year-over-year growth of 66.67%.
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2c2f7e03-8c08-4953-bf1d-1ddd424cae52
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718595.0
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2022-07-12 00:00:00 UTC
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Why Snowflake, Datadog, and MongoDB Plunged Today
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DDOG
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https://www.nasdaq.com/articles/why-snowflake-datadog-and-mongodb-plunged-today
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nan
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nan
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What happened
Shares of enterprise software disruptors Snowflake (NYSE: SNOW), Datadog (NASDAQ: DDOG), and MongoDB (NASDAQ: MDB) plunged by 6.4%, 6.4%, and 6.3%, respectively, on Tuesday.
There wasn't any material news out of these companies specifically, as most companies are in a quiet period ahead of the earnings reports. However, comments from Bill McDermott, CEO of their enterprise SaaS peer, ServiceNow (NYSE: NOW), on CNBC's Mad Money Monday night could be making investors somewhat nervous about the software sector's upcoming reports. Additionally, since these stocks had all enjoyed a three-week rally heading into this week, some traders may be locking in profits ahead of June's Consumer Price Index report, due out Wednesday.
So what
On Monday night's episode of Mad Money, ServiceNow's McDermott actually gave quite a bullish outlook for technology stocks in general, especially those that cater to enterprise customers. That's because technology helps companies become more efficient, please customers, and limit costs in areas such as labor, where their expenses have been growing.
While ServiceNow's automation suite certainly helps companies on those fronts, so do the offerings of these three powerful franchises. Snowflake helps companies collect, analyze, and act on their vast troves of data quickly, helping them gain insights they were unable to before. MongoDB's document-style databases are gaining favor on this front as well, allowing businesses to organize both structured and unstructured data in a more intuitive way. Finally, Datadog's cloud platform helps organizations monitor and track the performance of all of their important business and consumer-facing software applications while also detecting threats.
On the other hand, McDermott also said some business projects that don't offer immediate returns on investment may get delayed this year, and the strong dollar could hurt the revenue figures for tech companies with significant international operations this quarter.
Last quarter, MongoDB got about 40% of its revenues from outside the U.S., Snowflake got about 20% of its revenues from outside the U.S., and Datadog received about 28.4% of its revenue from outside North America, so a strong dollar could tamp down their top-line results this earnings season.
Additionally, investors will be getting new inflation data Wednesday when the Bureau of Labor Statistics releases the June Consumer Price Index. The May CPI report showed higher-than-expected inflation, which prompted the Federal Reserve to hike the federal funds rate by 75 basis points in mid-June. That actually proved to be a positive for these three stocks, as investors began to pivot from inflation fears to recession fears.
Long-term bond yields fell, which helped these three growth stocks move higher. That's because none of them are earning material profits today, but their growth paths suggest they will in the future. When future earnings are discounted by a lower long-term bond yield back to the present, their intrinsic value goes up.
Since the last report and the subsequent Fed interest rate hikes led to such a big bounce for growth stocks, it's possible that the opposite result could be triggered by Wednesday's report. With that prospect in mind, traders may be taking profits on the recent software stock bounces.
SNOW PS Ratio data by YCharts
Now what
It's probably a good idea for investors to think skeptically about these three stocks at the moment. That's not because they aren't great companies -- they are. Rather, the concern is their sky-high valuations. Snowflake, Datadog, and MongoDB still trade at 31, 26, and 20 times sales, respectively. Despite each company's market cap having been cut down between 41% and 55% this year already, those valuations don't leave much room for error.
Each of these companies has a bright future, and their shares may be appropriate buys for young, growth-oriented investors who can sit tight through further near-term declines, but it's no surprise to see more conservative traders taking some bets off the table. However, all three belong on any tech investor's watch list, given their high growth rates and leading franchises in their respective niches.
10 stocks we like better than Snowflake Inc.
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Snowflake Inc. wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of June 2, 2022
Billy Duberstein has no position in any of the stocks mentioned. His clients may own shares of the companies mentioned. The Motley Fool has positions in and recommends Datadog, MongoDB, ServiceNow, Inc., and Snowflake Inc. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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What happened Shares of enterprise software disruptors Snowflake (NYSE: SNOW), Datadog (NASDAQ: DDOG), and MongoDB (NASDAQ: MDB) plunged by 6.4%, 6.4%, and 6.3%, respectively, on Tuesday. However, comments from Bill McDermott, CEO of their enterprise SaaS peer, ServiceNow (NYSE: NOW), on CNBC's Mad Money Monday night could be making investors somewhat nervous about the software sector's upcoming reports. On the other hand, McDermott also said some business projects that don't offer immediate returns on investment may get delayed this year, and the strong dollar could hurt the revenue figures for tech companies with significant international operations this quarter.
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What happened Shares of enterprise software disruptors Snowflake (NYSE: SNOW), Datadog (NASDAQ: DDOG), and MongoDB (NASDAQ: MDB) plunged by 6.4%, 6.4%, and 6.3%, respectively, on Tuesday. Additionally, since these stocks had all enjoyed a three-week rally heading into this week, some traders may be locking in profits ahead of June's Consumer Price Index report, due out Wednesday. So what On Monday night's episode of Mad Money, ServiceNow's McDermott actually gave quite a bullish outlook for technology stocks in general, especially those that cater to enterprise customers.
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What happened Shares of enterprise software disruptors Snowflake (NYSE: SNOW), Datadog (NASDAQ: DDOG), and MongoDB (NASDAQ: MDB) plunged by 6.4%, 6.4%, and 6.3%, respectively, on Tuesday. There wasn't any material news out of these companies specifically, as most companies are in a quiet period ahead of the earnings reports. * They just revealed what they believe are the ten best stocks for investors to buy right now... and Snowflake Inc. wasn't one of them!
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What happened Shares of enterprise software disruptors Snowflake (NYSE: SNOW), Datadog (NASDAQ: DDOG), and MongoDB (NASDAQ: MDB) plunged by 6.4%, 6.4%, and 6.3%, respectively, on Tuesday. Additionally, since these stocks had all enjoyed a three-week rally heading into this week, some traders may be locking in profits ahead of June's Consumer Price Index report, due out Wednesday. 10 stocks we like better than Snowflake Inc.
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9d13e5d5-d9ce-46fe-8cf0-7322866f3c63
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718596.0
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2022-07-12 00:00:00 UTC
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Nasdaq 100 Movers: TEAM, CHTR
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DDOG
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https://www.nasdaq.com/articles/nasdaq-100-movers%3A-team-chtr
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nan
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nan
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In early trading on Tuesday, shares of Charter Communications topped the list of the day's best performing components of the Nasdaq 100 index, trading up 3.6%. Year to date, Charter Communications Inc has lost about 28.0% of its value.
And the worst performing Nasdaq 100 component thus far on the day is Atlassian, trading down 8.4%. Atlassian is lower by about 49.3% looking at the year to date performance.
Two other components making moves today are Datadog, trading down 4.8%, and Walgreens Boots Alliance, trading up 2.5% on the day.
VIDEO: Nasdaq 100 Movers: TEAM, CHTR
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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In early trading on Tuesday, shares of Charter Communications topped the list of the day's best performing components of the Nasdaq 100 index, trading up 3.6%. And the worst performing Nasdaq 100 component thus far on the day is Atlassian, trading down 8.4%. VIDEO: Nasdaq 100 Movers: TEAM, CHTR The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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In early trading on Tuesday, shares of Charter Communications topped the list of the day's best performing components of the Nasdaq 100 index, trading up 3.6%. Year to date, Charter Communications Inc has lost about 28.0% of its value. And the worst performing Nasdaq 100 component thus far on the day is Atlassian, trading down 8.4%.
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In early trading on Tuesday, shares of Charter Communications topped the list of the day's best performing components of the Nasdaq 100 index, trading up 3.6%. And the worst performing Nasdaq 100 component thus far on the day is Atlassian, trading down 8.4%. Two other components making moves today are Datadog, trading down 4.8%, and Walgreens Boots Alliance, trading up 2.5% on the day.
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In early trading on Tuesday, shares of Charter Communications topped the list of the day's best performing components of the Nasdaq 100 index, trading up 3.6%. And the worst performing Nasdaq 100 component thus far on the day is Atlassian, trading down 8.4%. VIDEO: Nasdaq 100 Movers: TEAM, CHTR The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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17dac40a-46a5-47e9-bcdb-f1ce9b87c2f2
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718597.0
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2022-07-12 00:00:00 UTC
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3 Supercharged Tech Stocks to Buy Without Hesitation
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DDOG
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https://www.nasdaq.com/articles/3-supercharged-tech-stocks-to-buy-without-hesitation
|
nan
|
nan
|
The tech sector has been under a lot of pressure this year as rising interest rates drove investors toward more-conservative sectors. But that sell-off has also created some rare buying opportunities for patient investors who can stomach the near-term volatility.
So today, I'll examine a trio of promising tech stocks that could still generate market-beating returns over the next few decades -- The Trade Desk (NASDAQ: TTD), Datadog (NASDAQ: DDOG), and Microsoft (NASDAQ: MSFT) -- and explain why they're worth buying today.
Image source: Getty Images.
1. The Trade Desk
As the world's largest independent demand-side platform for digital ads, The Trade Desk enables ad agencies, advertisers, and trade desks to bid on programmatic ad inventories. In its latest quarter, it served more than 1,000 customers and maintained a retention rate of over 95%.
The Trade Desk serves ads for mobile, desktop, and connected TV (CTV) platforms, but it generates most of its growth from the CTV market -- which benefits from the secular expansion of streaming media services and the death of linear-TV platforms. Netflix's recent decision to launch a cheaper ad-supported tier also indicates paid streaming services will follow that trend.
Between fiscal 2016 and fiscal 2021, its revenue grew from $203 million to $1.2 billion, representing a compound annual growth rate (CAGR) of 43%. Its adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) increased at a CAGR of 50% and hit $503 million in 2021.
In fiscal 2022, analysts expect its revenue and adjusted EBITDA to increase 33% and 22%, respectively, even as macro headwinds curb the market's demand for digital ads. The Trade Desk isn't cheap at 36 times this year's adjusted EBITDA, but its robust growth rates and high exposure to the growing CTV advertising market should justify that higher valuation.
2. Datadog
Datadog's software platform enables companies to monitor all of their databases, servers, and apps in real time. It pulls that data onto unified dashboards, which makes it easier for IT professionals to diagnose problems.
Datadog has grown like a weed since its public debut in 2019. Between 2019 and 2021, its revenue grew from $363 million to $1.03 billion, representing a CAGR of 68%. It also turned profitable on a non-GAAP (generally accepted accounting principles) basis in 2020, and more than doubled its non-GAAP earnings per share (EPS) the following year.
Its number of customers that generated annual recurring revenue (ARR) of at least $100,000 jumped from 858 at the end of 2019 to 2,250 in the first quarter of 2022, as its dollar-based net retention rate (which gauges its growth per existing customer) surpassed 130% for 19 consecutive quarters.
Analysts expect that momentum to continue this year as its revenue and adjusted EPS rise 57% and 56%, respectively. Datadog's stock isn't cheap at 185 times forward earnings and 21 times this year's sales, but it's one of the few hyper-growth stocks I'd still recommend buying in this bear market.
3. Microsoft
Lastly, investors who think The Trade Desk and Datadog are too risky can simply buy Microsoft as an evergreen growth play. Under Satya Nadella, who took the helm as the tech giant's third CEO in 2014, Microsoft evolved into a cloud software giant and impressed growth-oriented investors again.
Between fiscal 2014 and fiscal 2021, which ended last June, Microsoft's commercial cloud revenue increased from 5% to 41% of its annual revenue. Its revenue also increased from $86.8 billion to $168.1 billion, representing a CAGR of 10%, as its EPS rose at a CAGR of 17%.
Today, Microsoft's Azure is the world's second-largest cloud infrastructure platform after Amazon Web Services (AWS), and it remains a compelling alternative for companies -- particularly retailers -- that don't want to tether themselves to Amazon's most profitable business division.
Microsoft's transformation of its Office desktop software into cloud-based services also prevented it from being disrupted by Alphabet's Google, and it continued to expand its hardware business with new devices and its Xbox gaming division with big acquisitions and new subscription-based services.
Analysts expect Microsoft's revenue and earnings to grow 18% and 16%, respectively, this year, as its cloud business continues to expand. Its stock still looks reasonably valued at 25 times forward earnings, and it could still have plenty of room to run over the next few decades.
10 stocks we like better than The Trade Desk
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and The Trade Desk wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of June 2, 2022
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Leo Sun has positions in Alphabet (A shares) and Amazon. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Datadog, Microsoft, Netflix, and The Trade Desk. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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So today, I'll examine a trio of promising tech stocks that could still generate market-beating returns over the next few decades -- The Trade Desk (NASDAQ: TTD), Datadog (NASDAQ: DDOG), and Microsoft (NASDAQ: MSFT) -- and explain why they're worth buying today. Netflix's recent decision to launch a cheaper ad-supported tier also indicates paid streaming services will follow that trend. In fiscal 2022, analysts expect its revenue and adjusted EBITDA to increase 33% and 22%, respectively, even as macro headwinds curb the market's demand for digital ads.
|
So today, I'll examine a trio of promising tech stocks that could still generate market-beating returns over the next few decades -- The Trade Desk (NASDAQ: TTD), Datadog (NASDAQ: DDOG), and Microsoft (NASDAQ: MSFT) -- and explain why they're worth buying today. The Trade Desk As the world's largest independent demand-side platform for digital ads, The Trade Desk enables ad agencies, advertisers, and trade desks to bid on programmatic ad inventories. Between fiscal 2016 and fiscal 2021, its revenue grew from $203 million to $1.2 billion, representing a compound annual growth rate (CAGR) of 43%.
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So today, I'll examine a trio of promising tech stocks that could still generate market-beating returns over the next few decades -- The Trade Desk (NASDAQ: TTD), Datadog (NASDAQ: DDOG), and Microsoft (NASDAQ: MSFT) -- and explain why they're worth buying today. The Trade Desk As the world's largest independent demand-side platform for digital ads, The Trade Desk enables ad agencies, advertisers, and trade desks to bid on programmatic ad inventories. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Datadog, Microsoft, Netflix, and The Trade Desk.
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So today, I'll examine a trio of promising tech stocks that could still generate market-beating returns over the next few decades -- The Trade Desk (NASDAQ: TTD), Datadog (NASDAQ: DDOG), and Microsoft (NASDAQ: MSFT) -- and explain why they're worth buying today. Analysts expect that momentum to continue this year as its revenue and adjusted EPS rise 57% and 56%, respectively. That's right -- they think these 10 stocks are even better buys.
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01b5d106-c0aa-4e35-b39d-fbf9b2206b9d
|
718598.0
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2022-07-08 00:00:00 UTC
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Noteworthy Friday Option Activity: DDOG, MCD, KLAC
|
DDOG
|
https://www.nasdaq.com/articles/noteworthy-friday-option-activity%3A-ddog-mcd-klac
|
nan
|
nan
|
Looking at options trading activity among components of the Russell 3000 index, there is noteworthy activity today in Datadog Inc (Symbol: DDOG), where a total volume of 23,431 contracts has been traded thus far today, a contract volume which is representative of approximately 2.3 million underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 45.4% of DDOG's average daily trading volume over the past month, of 5.2 million shares. Particularly high volume was seen for the $130 strike call option expiring January 20, 2023, with 3,015 contracts trading so far today, representing approximately 301,500 underlying shares of DDOG. Below is a chart showing DDOG's trailing twelve month trading history, with the $130 strike highlighted in orange:
McDonald's Corp (Symbol: MCD) options are showing a volume of 13,251 contracts thus far today. That number of contracts represents approximately 1.3 million underlying shares, working out to a sizeable 44.5% of MCD's average daily trading volume over the past month, of 3.0 million shares. Particularly high volume was seen for the $255 strike call option expiring July 08, 2022, with 1,832 contracts trading so far today, representing approximately 183,200 underlying shares of MCD. Below is a chart showing MCD's trailing twelve month trading history, with the $255 strike highlighted in orange:
And KLA Corp (Symbol: KLAC) options are showing a volume of 7,093 contracts thus far today. That number of contracts represents approximately 709,300 underlying shares, working out to a sizeable 44.2% of KLAC's average daily trading volume over the past month, of 1.6 million shares. Especially high volume was seen for the $370 strike call option expiring August 19, 2022, with 1,749 contracts trading so far today, representing approximately 174,900 underlying shares of KLAC. Below is a chart showing KLAC's trailing twelve month trading history, with the $370 strike highlighted in orange:
For the various different available expirations for DDOG options, MCD options, or KLAC options, visit StockOptionsChannel.com.
Today's Most Active Call & Put Options of the S&P 500 »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
Particularly high volume was seen for the $130 strike call option expiring January 20, 2023, with 3,015 contracts trading so far today, representing approximately 301,500 underlying shares of DDOG. Looking at options trading activity among components of the Russell 3000 index, there is noteworthy activity today in Datadog Inc (Symbol: DDOG), where a total volume of 23,431 contracts has been traded thus far today, a contract volume which is representative of approximately 2.3 million underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 45.4% of DDOG's average daily trading volume over the past month, of 5.2 million shares.
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Below is a chart showing DDOG's trailing twelve month trading history, with the $130 strike highlighted in orange: McDonald's Corp (Symbol: MCD) options are showing a volume of 13,251 contracts thus far today. Looking at options trading activity among components of the Russell 3000 index, there is noteworthy activity today in Datadog Inc (Symbol: DDOG), where a total volume of 23,431 contracts has been traded thus far today, a contract volume which is representative of approximately 2.3 million underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 45.4% of DDOG's average daily trading volume over the past month, of 5.2 million shares.
|
Looking at options trading activity among components of the Russell 3000 index, there is noteworthy activity today in Datadog Inc (Symbol: DDOG), where a total volume of 23,431 contracts has been traded thus far today, a contract volume which is representative of approximately 2.3 million underlying shares (given that every 1 contract represents 100 underlying shares). Particularly high volume was seen for the $130 strike call option expiring January 20, 2023, with 3,015 contracts trading so far today, representing approximately 301,500 underlying shares of DDOG. That number works out to 45.4% of DDOG's average daily trading volume over the past month, of 5.2 million shares.
|
Looking at options trading activity among components of the Russell 3000 index, there is noteworthy activity today in Datadog Inc (Symbol: DDOG), where a total volume of 23,431 contracts has been traded thus far today, a contract volume which is representative of approximately 2.3 million underlying shares (given that every 1 contract represents 100 underlying shares). Below is a chart showing KLAC's trailing twelve month trading history, with the $370 strike highlighted in orange: For the various different available expirations for DDOG options, MCD options, or KLAC options, visit StockOptionsChannel.com. That number works out to 45.4% of DDOG's average daily trading volume over the past month, of 5.2 million shares.
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135e5ca0-7f08-458f-a41f-2439fe918f12
|
718599.0
|
2022-07-07 00:00:00 UTC
|
Datadog (DDOG) Stock Sinks As Market Gains: What You Should Know
|
DDOG
|
https://www.nasdaq.com/articles/datadog-ddog-stock-sinks-as-market-gains%3A-what-you-should-know-2
|
nan
|
nan
|
Datadog (DDOG) closed the most recent trading day at $107.70, moving -0.31% from the previous trading session. This change lagged the S&P 500's 1.5% gain on the day. Elsewhere, the Dow gained 1.12%, while the tech-heavy Nasdaq added 0.32%.
Heading into today, shares of the data analytics and cloud monitoring company had gained 0.63% over the past month, outpacing the Computer and Technology sector's loss of 7.02% and the S&P 500's loss of 6.54% in that time.
Wall Street will be looking for positivity from Datadog as it approaches its next earnings report date. The company is expected to report EPS of $0.15, up 66.67% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $378.37 million, up 62.01% from the year-ago period.
DDOG's full-year Zacks Consensus Estimates are calling for earnings of $0.72 per share and revenue of $1.61 billion. These results would represent year-over-year changes of +50% and +56.8%, respectively.
Investors might also notice recent changes to analyst estimates for Datadog. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable 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. The Zacks Consensus EPS estimate remained stagnant within the past month. Datadog is currently sporting a Zacks Rank of #3 (Hold).
In terms of valuation, Datadog is currently trading at a Forward P/E ratio of 149.52. Its industry sports an average Forward P/E of 44.53, so we one might conclude that Datadog is trading at a premium comparatively.
The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 146, putting it in the bottom 43% 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.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
5 Stocks Set to Double
Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2021. Previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>
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
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Datadog (DDOG) closed the most recent trading day at $107.70, moving -0.31% from the previous trading session. DDOG's full-year Zacks Consensus Estimates are calling for earnings of $0.72 per share and revenue of $1.61 billion. Datadog, Inc. (DDOG): Free Stock Analysis Report
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DDOG's full-year Zacks Consensus Estimates are calling for earnings of $0.72 per share and revenue of $1.61 billion. Datadog (DDOG) closed the most recent trading day at $107.70, moving -0.31% from the previous trading session. Datadog, Inc. (DDOG): Free Stock Analysis Report
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Datadog (DDOG) closed the most recent trading day at $107.70, moving -0.31% from the previous trading session. DDOG's full-year Zacks Consensus Estimates are calling for earnings of $0.72 per share and revenue of $1.61 billion. Datadog, Inc. (DDOG): Free Stock Analysis Report
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Datadog (DDOG) closed the most recent trading day at $107.70, moving -0.31% from the previous trading session. Datadog, Inc. (DDOG): Free Stock Analysis Report DDOG's full-year Zacks Consensus Estimates are calling for earnings of $0.72 per share and revenue of $1.61 billion.
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32b0bd7d-02db-4295-ba16-3482e428cf72
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