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718900.0
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2021-02-22 00:00:00 UTC
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Why This SaaS Company Will Thrive in Industry Consolidation
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DDOG
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https://www.nasdaq.com/articles/why-this-saas-company-will-thrive-in-industry-consolidation-2021-02-22
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nan
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nan
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For years now, it has seemed like any stock associated with a software-as-a-service company (SaaS) company could do no wrong. And why not? Once this powerful business model reaches a certain tipping point in scale, cash flows grow by leaps and bounds. Not only that, but the business is largely protected via high switching costs.
But there will be a day -- probably not too far down the road -- when a level of reality will set in. Not every SaaS company will succeed, and when looking toward the future, you want to be invested in the ones that provide tools that companies cannot live without.
In this segment from Motley Fool Live, recorded on Feb. 12, Motley Fool contributor Brian Stoffel discusses the main reason he owns Datadog (NASDAQ: DDOG) and believes it will be one of the SaaS companies that remains relevant for years to come.
10 stocks we like better than Datadog
When investing geniuses David and Tom Gardner have 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.*
David and Tom 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 November 20, 2020
Brian Stoffel: So real quick, Datadog (NASDAQ: DDOG). This was founded by two people who were both the co-CEOs of the company. They've got hard names pronounce, so I'm just going to skip that. One worked in development, one worked in operations. What they noticed was there are at these two different parts of the company and they were never talking to each other. So they said, "We need to develop tools so that people over here and people over here can talk to each other and know that they're talking about the same thing." So what Datadog does is they make it easier to see everything that's going on digitally in your company.
I've talked about this before: One of the reasons that I am a shareholder and I'm excited about it, is because I think that the day is coming where we're not going to go out and get the best software solution for every single tiny niche thing we have. Mostly because that takes a lot of time and effort and also that's a lot of relationships to manage. That would be like if I am redecorating my home and I get a different contractor for my hinges, and a different one for my doors, and a different one for my door knobs and a different one for this and this as opposed to just saying, getting someone who offers all of it. That's why I like Datadog because they are building it out; and if they have good enough solutions, I think that they can win in this space.
Brian Stoffel owns shares of Datadog. The Motley Fool owns shares of 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.
|
In this segment from Motley Fool Live, recorded on Feb. 12, Motley Fool contributor Brian Stoffel discusses the main reason he owns Datadog (NASDAQ: DDOG) and believes it will be one of the SaaS companies that remains relevant for years to come. See the 10 stocks *Stock Advisor returns as of November 20, 2020 Brian Stoffel: So real quick, Datadog (NASDAQ: DDOG). Once this powerful business model reaches a certain tipping point in scale, cash flows grow by leaps and bounds.
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In this segment from Motley Fool Live, recorded on Feb. 12, Motley Fool contributor Brian Stoffel discusses the main reason he owns Datadog (NASDAQ: DDOG) and believes it will be one of the SaaS companies that remains relevant for years to come. See the 10 stocks *Stock Advisor returns as of November 20, 2020 Brian Stoffel: So real quick, Datadog (NASDAQ: DDOG). After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.
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In this segment from Motley Fool Live, recorded on Feb. 12, Motley Fool contributor Brian Stoffel discusses the main reason he owns Datadog (NASDAQ: DDOG) and believes it will be one of the SaaS companies that remains relevant for years to come. See the 10 stocks *Stock Advisor returns as of November 20, 2020 Brian Stoffel: So real quick, Datadog (NASDAQ: DDOG). 10 stocks we like better than Datadog When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen.
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In this segment from Motley Fool Live, recorded on Feb. 12, Motley Fool contributor Brian Stoffel discusses the main reason he owns Datadog (NASDAQ: DDOG) and believes it will be one of the SaaS companies that remains relevant for years to come. See the 10 stocks *Stock Advisor returns as of November 20, 2020 Brian Stoffel: So real quick, Datadog (NASDAQ: DDOG). For years now, it has seemed like any stock associated with a software-as-a-service company (SaaS) company could do no wrong.
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46e27a5b-9fee-4e20-9c0f-3d21a20e1311
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718901.0
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2021-02-21 00:00:00 UTC
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5 Reasons Datadog's Post-Earnings Dip Is a Buying Opportunity
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DDOG
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https://www.nasdaq.com/articles/5-reasons-datadogs-post-earnings-dip-is-a-buying-opportunity-2021-02-21
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nan
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nan
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Datadog (NASDAQ: DDOG) stock recently dipped after the data visualization company posted its fourth-quarter earnings. Revenue rose 56% year over year to $178 million, beating estimates by $14 million. Adjusted net income also surged 73% to $19 million, or $0.06 per share, which beat expectations by four cents.
The company expects its revenue to rise 41% to 43% in the first quarter and 37% to 38% for the full year. On the bottom line, management expects to eke out an adjusted profit of just $0.02 to $0.03 per share in the first quarter, while full-year earnings fall between $0.10 and $0.14 per share. That revenue guidance topped analysts' expectations, but the profit forecast for both periods came up short.
Image source: Getty Images.
The lower earnings guidance was disappointing, but it wasn't surprising since Datadog recently made several acquisitions -- including the data pipeline firm Timber Technologies and the cloud-based security service provider Sqreen -- to expand its ecosystem. However, I believe investors should still consider buying Datadog's post-earnings dip, for five simple reasons.
1. A disruptive business model
Big companies often install their software and services across a wide range of computing platforms. Monitoring the performance of all those applications can be a tedious, time-consuming, and error-prone task for IT professionals.
Datadog simplifies that process by breaking down silos and pulling all of that data onto unified performance-monitoring dashboards. Over 400 software platforms, including Amazon Web Services and Microsoft Azure, provide native support for Datadog's services.
And demand for its services is rising. Datadog ended 2020 with 1,253 customers generating over $100,000 in ARR (annual recurring revenue), up 46% from 2019. The number of customers with over $1 million in ARR rose 94% to 50.
2. High net retention rates
Datadog has kept its net retention rate, which measures its year-over-year revenue growth per existing customer, over 130% for 14 consecutive quarters. It attributes that streak to its "land and expand" strategy, wherein it signs a customer up for a single service before cross-selling additional services.
At the end of the fourth quarter, 22% of Datadog's customers were using four or more of its products, up from 10% a year ago. More than 70% of its customers were using two or more products, up from about 60% a year ago.
3. Expanding margins
Many high-growth tech companies sacrifice their margins to grow their user base, revenue, and market share before focusing on profits. This isn't a major issue for Datadog: Its adjusted gross and operating margins either held steady or expanded in the fourth quarter and full year.
PERIOD
Q4 2019
Q4 2020
FY 2019
FY 2020
Gross Margin*
78%
78%
76%
79%
Operating Margin*
7%
10%
(1%)
11%
*Non-GAAP figures. Data source: Datadog.
Datadog attributed the rising gross margin to its more efficient use of cloud hosting expenses and its higher operating margin to significantly lower sales and marketing expenses.
The company's near-term profitability could be pressured by its recent acquisitions, higher cloud spending, or more aggressive sales and marketing tactics. However, its resilience throughout the pandemic indicates that it still has plenty of pricing power in its niche market.
New Relic, which competes against Datadog in the application performance management (APM) market, recently posted year-over-year contractions in its adjusted gross and operating margins in the first nine months of 2020. Its net expansion rate, which is comparable to Datadog's net retention rate, also came in lower at 108% in its third quarter.
4. Rising cash flows
Datadog's soaring revenue and expanding margins, along with a convertible debt offering last June, boosted its free cash flow from just $791,000 in 2019 to $83.2 million in 2020. That massive jump explains why Datadog is buying up companies like Timber, which will improve its data observability features, and Sqreen, which blocks application-level attacks, to expand its ecosystem.
5. Cooling valuations
Last month, I claimed Datadog's stock could tread water for a few quarters, because its valuations were too hot. But I also noted it was a more compelling buy than other high-growth software stocks like Snowflake.
At $105 per share as of this writing, Datadog is worth $32 billion -- or 39 times this year's sales and over 800 times earnings. Those valuations are still sky high, but they've cooled down slightly in the stock's post-earnings decline, and it arguably remains more reasonably valued than Snowflake and other recent high-fliers.
The bottom line
Datadog stock is still pricey, and I don't recommend investors back up the truck at these levels. However, those who patiently build a position on these pullbacks could be well-rewarded over the long term as the company grows into its valuation.
10 stocks we like better than Datadog
When investing geniuses David and Tom Gardner have 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.*
David and Tom 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 November 20, 2020
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Leo Sun owns shares of Amazon. The Motley Fool owns shares of and recommends Amazon, Datadog, Microsoft, New Relic, and Snowflake Inc and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon. 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) stock recently dipped after the data visualization company posted its fourth-quarter earnings. The lower earnings guidance was disappointing, but it wasn't surprising since Datadog recently made several acquisitions -- including the data pipeline firm Timber Technologies and the cloud-based security service provider Sqreen -- to expand its ecosystem. New Relic, which competes against Datadog in the application performance management (APM) market, recently posted year-over-year contractions in its adjusted gross and operating margins in the first nine months of 2020.
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Datadog (NASDAQ: DDOG) stock recently dipped after the data visualization company posted its fourth-quarter earnings. High net retention rates Datadog has kept its net retention rate, which measures its year-over-year revenue growth per existing customer, over 130% for 14 consecutive quarters. New Relic, which competes against Datadog in the application performance management (APM) market, recently posted year-over-year contractions in its adjusted gross and operating margins in the first nine months of 2020.
|
Datadog (NASDAQ: DDOG) stock recently dipped after the data visualization company posted its fourth-quarter earnings. This isn't a major issue for Datadog: Its adjusted gross and operating margins either held steady or expanded in the fourth quarter and full year. Datadog attributed the rising gross margin to its more efficient use of cloud hosting expenses and its higher operating margin to significantly lower sales and marketing expenses.
|
Datadog (NASDAQ: DDOG) stock recently dipped after the data visualization company posted its fourth-quarter earnings. On the bottom line, management expects to eke out an adjusted profit of just $0.02 to $0.03 per share in the first quarter, while full-year earnings fall between $0.10 and $0.14 per share. Expanding margins Many high-growth tech companies sacrifice their margins to grow their user base, revenue, and market share before focusing on profits.
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ffff2de1-a49c-4b0c-9594-59ef2c836937
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718902.0
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2021-02-18 00:00:00 UTC
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About to Buy Penny Stocks? Look at These 3 Companies First
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DDOG
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https://www.nasdaq.com/articles/about-to-buy-penny-stocks-look-at-these-3-companies-first-2021-02-18
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nan
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nan
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Penny stocks, which usually means stocks issued by small companies that trade for less than $5 per share, often attract speculative investors who have been given promises of big returns within a short time. After all, a low-priced stock only needs to rise by a dollar to generate double-digit percentage gains.
But penny stocks are cheap for some pretty obvious reasons. Some of these stocks previously plummeted due to serious fundamental problems, while others only trade on over-the-counter exchanges, which aren't subject to the tighter regulations of the NYSE or Nasdaq. Most penny stocks aren't much better than lottery tickets, or some of the "meme stocks" that recently caught on fire on Reddit.
Instead of chasing penny stocks, let's examine three growth stocks that offer better opportunities for investors who can stomach some near-term volatility: Pinterest (NYSE: PINS), Datadog (NASDAQ: DDOG), and Peloton Interactive (NASDAQ: PTON).
Image source: Pinterest.
1. Pinterest
Pinterest carved out a high-growth niche in the crowded social media sector with its virtual pinboards, which allow its users to pin and share their ideas, interests, and hobbies with each other. This format, which is particularly popular with older women, is well-suited for sharing fashion and shopping tips -- which makes it a natural fit for integrating digital ads, shoppable pins, and other e-commerce features.
A growing number of big retailers are also uploading their entire catalogs to Pinterest, which widens its moat against Facebook's Instagram and other challengers in the nascent "social shopping" market.
Pinterest's revenue rose 48% to $1.69 billion in fiscal 2020, and its monthly active users grew 46% to 361 million. Its average revenue per user also increased 16% to $4.26, with 27% growth in the U.S. and 62% growth overseas. It remains unprofitable on a GAAP basis, but its non-GAAP net income surged from $18 million to $283 million.
Analysts expect Pinterest's revenue and adjusted earnings to rise 47% and 105%, respectively, this year, as its unique platform locks in more users and advertisers. Its stock still isn't expensive at 66 times forward earnings and 21 times this year's sales -- and it's well-insulated from the political headwinds that are rocking Facebook and Twitter.
2. Datadog
Large companies operate a wide range of computing platforms, including servers, databases, cloud services, and mobile apps. Monitoring all those services is a tedious process for IT professionals, but Datadog simplifies the process by pulling all that data onto unified dashboards.
Image source: Getty Images.
Over 400 software platforms, including Microsoft's Azure and Amazon Web Services (AWS), offer native support for Datadog's dashboards and tools.
Demand for Datadog's services is surging. Its revenue rose 66% to $603.5 million in fiscal 2020, and its number of customers generating over $100,000 in annual recurring revenue increased 46%.
Its "land and expand" strategy, wherein it signs a customer to one product to cross-sell additional services, is also paying off. At the end of the fourth quarter, 22% of Datadog's customers were using four or more products -- up from 10% a year ago. Its net retention rate, which measures its revenue growth per existing customer, has also remained above 130% for 14 straight quarters.
Datadog isn't profitable on a GAAP basis, but it generated a non-GAAP net profit of $71.6 million for the year, compared to a loss of $0.5 million in 2019. It expects its revenue to rise 37%-38% for this year, but for its non-GAAP EPS to decline by 36%-55% as it ramps up its spending.
That near-term profit decline is disappointing, and Datadog's stock certainly isn't cheap at about 40 times this year's sales -- but it could still grow into its valuation as it wins over more enterprise customers with its disruptive business model.
3. Peloton Interactive
When Peloton went public in late 2019, the critics mocked its idea of selling high-end exercise bikes for nearly $2,000 to serve up streaming video workouts via monthly subscription plans. However, the pandemic subsequently created a fertile growth market for Peloton as gyms closed down, and its bike sales, number of subscribers, and revenue skyrocketed.
Peloton's revenue doubled to $1.83 billion in fiscal 2020, which ended last June. Its number of subscribers jumped 113% to 1.09 million as its net loss narrowed from $196 million to $72 million.
In the first six months of 2021, Peloton's revenue soared another 163% year over year to $1.82 billion. Its total subscribers rose 134% to 1.67 million in the second quarter, and it maintained a 12-month retention rate of 92% with a low churn rate of 0.76%. It posted a net profit of $132.8 million in the first six months, compared to a loss of $105.2 million a year ago.
Peloton expects its revenue to rise at least 123% this year, while analysts expect its earnings to nearly triple. But next year, its growth could decelerate as the pandemic ends and more people return to gyms.
Nonetheless, analysts still expect its revenue and earnings to rise 36% and 113%, respectively, next year. Peloton's stock might not seem cheap at over 230 times forward earnings, but it only trades at eight times next year's sales -- which makes it cheaper than many other high-growth stocks in this frothy market.
Find out why Pinterest is one of the 10 best stocks to buy now
Motley Fool co-founders Tom and David Gardner have 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.*
Tom and David just revealed their ten top stock picks for investors to buy right now. Pinterest 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 November 20, 2020
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft 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 its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors. Leo Sun owns shares of Amazon. The Motley Fool owns shares of and recommends Amazon, Datadog, Facebook, Microsoft, Peloton Interactive, Pinterest, and Twitter and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon. 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.
|
Instead of chasing penny stocks, let's examine three growth stocks that offer better opportunities for investors who can stomach some near-term volatility: Pinterest (NYSE: PINS), Datadog (NASDAQ: DDOG), and Peloton Interactive (NASDAQ: PTON). This format, which is particularly popular with older women, is well-suited for sharing fashion and shopping tips -- which makes it a natural fit for integrating digital ads, shoppable pins, and other e-commerce features. A growing number of big retailers are also uploading their entire catalogs to Pinterest, which widens its moat against Facebook's Instagram and other challengers in the nascent "social shopping" market.
|
Instead of chasing penny stocks, let's examine three growth stocks that offer better opportunities for investors who can stomach some near-term volatility: Pinterest (NYSE: PINS), Datadog (NASDAQ: DDOG), and Peloton Interactive (NASDAQ: PTON). Datadog isn't profitable on a GAAP basis, but it generated a non-GAAP net profit of $71.6 million for the year, compared to a loss of $0.5 million in 2019. The Motley Fool owns shares of and recommends Amazon, Datadog, Facebook, Microsoft, Peloton Interactive, Pinterest, and Twitter and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon.
|
Instead of chasing penny stocks, let's examine three growth stocks that offer better opportunities for investors who can stomach some near-term volatility: Pinterest (NYSE: PINS), Datadog (NASDAQ: DDOG), and Peloton Interactive (NASDAQ: PTON). Peloton's stock might not seem cheap at over 230 times forward earnings, but it only trades at eight times next year's sales -- which makes it cheaper than many other high-growth stocks in this frothy market. The Motley Fool owns shares of and recommends Amazon, Datadog, Facebook, Microsoft, Peloton Interactive, Pinterest, and Twitter and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon.
|
Instead of chasing penny stocks, let's examine three growth stocks that offer better opportunities for investors who can stomach some near-term volatility: Pinterest (NYSE: PINS), Datadog (NASDAQ: DDOG), and Peloton Interactive (NASDAQ: PTON). Pinterest's revenue rose 48% to $1.69 billion in fiscal 2020, and its monthly active users grew 46% to 361 million. At the end of the fourth quarter, 22% of Datadog's customers were using four or more products -- up from 10% a year ago.
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cd14438b-4b19-4ac2-a0ae-84f32c47205f
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718903.0
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2021-02-15 00:00:00 UTC
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Is Cisco Systems Stock a Buy?
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DDOG
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https://www.nasdaq.com/articles/is-cisco-systems-stock-a-buy-2021-02-15
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nan
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nan
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Over the last several years, Cisco Systems (NASDAQ: CSCO) has worked to update its legacy portfolio of services to better compete against various high-growth innovative players it competes with in its different markets. But because of the company's large scale, the transition has taken some time, and it contributed to the tech giant reporting a fifth consecutive quarter of year-over-year revenue decline last week.
The recent performance has given Cisco a valuation that corresponds to modest expectations. Does that suggest the tech giant's stock a buy at the moment? Or is it a value trap?
Cisco had declining revenue on a year-over-year basis
Cisco remains the dominant vendor of networking solutions, with its hardware switches and routers that carry traffic across networks. Over the last several years, it developed and acquired businesses to generate cross-selling opportunities with its core networking activities. For instance, it has become a large cybersecurity vendor, and it proposes unified communication solutions.
Image source: Getty Images.
Yet because of its legacy hardware business, Cisco posted declining revenue over the past five quarters. During the last quarter, revenue dropped slightly to $11.96 billion, down from $12.01 billion one year ago.
In particular, the company's largest segment, infrastructure platforms (which includes legacy hardware products), declined 3% year over year to $6.4 billion.
In contrast, Cisco's transition to subscription-based software led to some encouraging results. For instance, cybersecurity grew 10% year over year to $822 million, thanks to the cloud-based identity and remote working solutions Duo and Umbrella. And during the earnings call, CEO Chuck Robbins mentioned that the communications platform WebEx generated double-digit-percentage revenue growth with almost 600 million quarterly average users.
High-growth opportunities still exist for Cisco
Beyond those short-term results, Robbins provided for the first time extra information about the company's performance with web-scale (large cloud computing) providers. He said that the web-scale business has become meaningful at 25% of the service provider segment after having delivered its "fifth consecutive quarter of very rapid order growth, increasing to triple digits."
That development bodes well for Cisco's long-term potential. Indeed, over the last several years, the company hadn't managed to develop a competitive cloud offering against its rival Arista Networks. As a result, its market share in the high-speed data center switching market dropped from 64.7% in 2015 to 43.7% during the first half of last year.
But Cisco is finally gaining traction in the networking cloud computing area, thanks to its new Cisco Silicon One offering released in December 2019. With that new product, the company didn't stay entrenched with monolithic solutions that contributed to huge profits over the last decades; it finally disaggregated hardware and software to better address the demand of cloud vendors and service providers.
So Cisco eventually showed it could adapt and compete against agile and innovative smaller players, which bodes well for its future, as it's looking to address extra high-growth opportunities with new offerings.
For instance, in October it revealed a partnership to propose an edge computing platform as a service for service providers, which allows the company to compete against high-growth players, such as Fastly and Cloudflare, in the content delivery network and edge computing areas. Those technologies represent strong growth potential as they contribute to improving the response time of online services.
Also, Robbins said on theearnings callthat the company is working on a full-stack observability platform, for customers to monitor their complete computing infrastructures and applications to improve performance and anticipate issues. That means Cisco will be looking to compete against high-growth observability specialists such as Dynatrace and Datadog.
Cisco is trading at a reasonable price
Looking forward, management expects year-over-year revenue growth to reach 3.5% to 5.5% during the current quarter, ending on May 1, which looks solid. But compared to last year, the current quarter includes one extra week that should contribute to about 2% to 3% of year-over-year revenue growth, according to CFO Scott Herren. And during the prior-year period, revenue declined 8% year over year, which provides an easy comparison for the current quarter.
So given Cisco's unexciting results and guidance, the stock is trading at a modest forward price-to-earnings ratio of 14.3.
However, the recent encouraging developments with web-scale cloud vendors show the tech giant is able to update its legacy portfolio with competitive offerings in growth areas. Thus, since the market isn't pricing in Cisco's growth opportunities, investors should consider buying the tech stock.
10 stocks we like better than Cisco Systems
When investing geniuses David and Tom Gardner have 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.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Cisco Systems 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 November 20, 2020
Herve Blandin owns shares of Cisco Systems. The Motley Fool owns shares of and recommends Arista Networks, Cloudflare, Inc., Datadog, and Fastly. 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.
|
And during the earnings call, CEO Chuck Robbins mentioned that the communications platform WebEx generated double-digit-percentage revenue growth with almost 600 million quarterly average users. With that new product, the company didn't stay entrenched with monolithic solutions that contributed to huge profits over the last decades; it finally disaggregated hardware and software to better address the demand of cloud vendors and service providers. Also, Robbins said on theearnings callthat the company is working on a full-stack observability platform, for customers to monitor their complete computing infrastructures and applications to improve performance and anticipate issues.
|
Over the last several years, Cisco Systems (NASDAQ: CSCO) has worked to update its legacy portfolio of services to better compete against various high-growth innovative players it competes with in its different markets. In particular, the company's largest segment, infrastructure platforms (which includes legacy hardware products), declined 3% year over year to $6.4 billion. However, the recent encouraging developments with web-scale cloud vendors show the tech giant is able to update its legacy portfolio with competitive offerings in growth areas.
|
Over the last several years, Cisco Systems (NASDAQ: CSCO) has worked to update its legacy portfolio of services to better compete against various high-growth innovative players it competes with in its different markets. Cisco had declining revenue on a year-over-year basis Cisco remains the dominant vendor of networking solutions, with its hardware switches and routers that carry traffic across networks. High-growth opportunities still exist for Cisco Beyond those short-term results, Robbins provided for the first time extra information about the company's performance with web-scale (large cloud computing) providers.
|
But because of the company's large scale, the transition has taken some time, and it contributed to the tech giant reporting a fifth consecutive quarter of year-over-year revenue decline last week. In particular, the company's largest segment, infrastructure platforms (which includes legacy hardware products), declined 3% year over year to $6.4 billion. However, the recent encouraging developments with web-scale cloud vendors show the tech giant is able to update its legacy portfolio with competitive offerings in growth areas.
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873e830f-1085-4193-af17-38f556f37cb4
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718904.0
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2021-02-13 00:00:00 UTC
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Why Dynatrace Is a Top Cloud Analytics Stock for 2021
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DDOG
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https://www.nasdaq.com/articles/why-dynatrace-is-a-top-cloud-analytics-stock-for-2021-2021-02-13
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nan
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nan
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Shares of cloud observability specialist Dynatrace (NYSE: DT) have been off to the races since the company made its second public debut in 2019 (it was previously acquired and later spun off from private equity firm Thoma Bravo). The stock is up over 200% in a year and a half, including a 22% surge after the company reported on its fiscal 2021 third quarter (corresponding to the final quarter of calendar year 2020).
At this point, Dynatrace trades for a pretty high premium but for good reason. Large organizations are rapidly migrating to the cloud, and they need the right tools to manage their next-gen IT assets. Dynatrace is quickly becoming a top name in this space, and it deserves to be on your radar.
Image source: Getty Images.
Expanding with growth of the cloud
Dynatrace reported a 28% year-over-year increase in revenue during the fiscal third quarter to $182.9 million. Within the total, subscription revenue to its cloud-based software platform increased 33% to $170.3 million. And unlike many of its competitors in the cloud analytics and monitoring space, Dynatrace is highly profitable even on an unadjusted basis. Net income increased to $18.4 million during the period, compared to just $1.8 million a year ago.
Through the first nine months of fiscal 2021, Dynatrace has been putting up respectable numbers, and the company expects total revenue and subscription revenue to grow at a similar rate in the current period as they did in the third quarter.
METRIC
NINE MONTHS ENDED DEC. 31, 2020
NINE MONTHS ENDED DEC. 31, 2019
CHANGE
Revenue
$507 million
$395 million
28%
Net income
$49 million
($465 million)
N/A
Adjusted net income
$137 million
$54 million
155%
Free cash flow
$151 million
$86 million
76%
Data source: Dynatrace.
The company thinks its total addressable market will grow to some $50 billion in the next couple years as cloud observability (infrastructure software to aid in automating, securing, and fixing data center issues, and the cloud software working within those data centers) becomes more important. There are lots of competitors out there, so it may look like a crowded space. But between Dynatrace and its peers Splunk, Datadog, and Elastic, trailing 12-month revenue for the four companies totaled just under $4 billion. Suffice it to say there is plenty of room for many winners in this fast-growing market in the years ahead.
One reason behind the huge market opportunity is the fact many organizations developed their legacy IT software tools in-house. Dynatrace is focused on the top 2,000 largest global companies, and CEO John Van Siclen told me last year that one of the biggest challenges his company faces is hiring enough people to have conversations with all of these potential customers -- not stepping on the toes of competitors. As maximizing growth is the name of the game right now and Dynatrace generates plenty of free cash flow, it has ample room to remain aggressive as it initiates dialogue with these large organizations. And as these companies rapidly migrate to cloud-based operations (replacing legacy IT software in the process), they'll need help automating and simplifying complex cloud computing infrastructure.
Not so unreasonable a price tag
Dynatrace is growing, has plenty of room to expand, and plays in a fast-growing cloud computing industry that is accelerating because of the pandemic. But what about its valuation? Shares trade for over 23 times and 92 times trailing 12-month sales and free cash flow, respectively. That's premium pricing but not totally unreasonable given the company's double-digit growth and fast-expanding industry. Datadog and Elastic trade for higher price-to-sales multiples, though they are also growing faster than Dynatrace is. However, the latter is unique in the industry as it's already highly profitable and still growing its subscription revenue over 30%.
There is another drawback to Dynatrace, however. As part of its spinoff from Thoma Bravo back in 2019, it was saddled with debt that many of its closest peers don't have to worry about. However, debt was $451 million at the end of the last quarter (down from $510 million at the start of the current fiscal year). And along the way, Dynatrace has also increased its cash and equivalents on hand to $300 million (up from $213 million at the start of the fiscal year). Clearly, the company is strengthening its balance sheet while maintaining its pace of expansion.
I don't think this is the best bargain among growing cloud computing companies, but Dynatrace has earned its premium. It plays an important role for big businesses trying to make digital transformations; it's picking up new customers; and it's expanding relationships with existing ones as it increases the functionality of its software. At the very least, I think this cloud company belongs on investors' watch lists in 2021.
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Nicholas Rossolillo owns shares of Dynatrace Holdings LLC and Splunk. The Motley Fool owns shares of and recommends Datadog, Elastic, and Splunk. 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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Shares of cloud observability specialist Dynatrace (NYSE: DT) have been off to the races since the company made its second public debut in 2019 (it was previously acquired and later spun off from private equity firm Thoma Bravo). As maximizing growth is the name of the game right now and Dynatrace generates plenty of free cash flow, it has ample room to remain aggressive as it initiates dialogue with these large organizations. It plays an important role for big businesses trying to make digital transformations; it's picking up new customers; and it's expanding relationships with existing ones as it increases the functionality of its software.
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Revenue $507 million $395 million 28% Net income $49 million ($465 million) Adjusted net income $137 million $54 million 155% Free cash flow $151 million $86 million 76% Data source: Dynatrace. Not so unreasonable a price tag Dynatrace is growing, has plenty of room to expand, and plays in a fast-growing cloud computing industry that is accelerating because of the pandemic.
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Revenue $507 million $395 million 28% Net income $49 million ($465 million) Adjusted net income $137 million $54 million 155% Free cash flow $151 million $86 million 76% Data source: Dynatrace. The company thinks its total addressable market will grow to some $50 billion in the next couple years as cloud observability (infrastructure software to aid in automating, securing, and fixing data center issues, and the cloud software working within those data centers) becomes more important.
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Expanding with growth of the cloud Dynatrace reported a 28% year-over-year increase in revenue during the fiscal third quarter to $182.9 million. Within the total, subscription revenue to its cloud-based software platform increased 33% to $170.3 million. But between Dynatrace and its peers Splunk, Datadog, and Elastic, trailing 12-month revenue for the four companies totaled just under $4 billion.
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718905.0
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2021-02-12 00:00:00 UTC
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Why Datadog Stock Is Slumping Today
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DDOG
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https://www.nasdaq.com/articles/why-datadog-stock-is-slumping-today-2021-02-12
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What happened
Shares of Datadog (NASDAQ: DDOG) sank on Friday after the company reported fourth-quarter results that beat analyst expectations. The guidance may be the culprit: Datadog is expecting revenue growth to slow substantially in 2021. Shares of the cloud monitoring and security company were down about 3.6% at 11:20 a.m. EST; they had been down as much as 8.2% earlier in the day.
So what
Datadog reported fourth-quarter revenue of $177.5 million, up 56% year over year and about $14 million ahead of analyst expectations. Adjusted earnings per share of $0.06 doubled from the prior-year period and were $0.04 higher than the average analyst estimate.
Image source: Getty Images.
The fourth quarter was a bit more sluggish than the rest of 2020. The company booked 66% revenue growth for the full year, bringing the annual total to $603.5 million. Datadog now has 97 customers with annual recurring revenue of $1 million or more, nearly double the count at the end of 2019.
On top of reporting its results, Datadog announced two acquisitions. The company has agreed to acquire software security platform Sqreen and observability data pipeline provider Timber Technologies.
Now what
Datadog's guidance may be what's dragging down the stock. The company expects to report first-quarter revenue between $185 million and $187 million, along with adjusted EPS between $0.02 and $0.03. At the midpoint of those ranges, revenue would be up 42% year over year, while earnings per share would be down substantially from the $0.06 reported for the prior-year period.
For 2021, Datadog expects revenue between $825 million and $835 million and adjusted EPS between $0.10 and $0.14. That's good for revenue growth of 38%, while EPS will be down from the $0.22 reported for 2020.
Datadog is valued at around $35 billion, which works out to over 40 times the revenue guidance for 2021. With a sky-high valuation like that, a growth slowdown is the last thing investors want to see.
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*Stock Advisor returns as of November 20, 2020
Timothy Green has no position in any of the stocks mentioned. The Motley Fool owns shares of 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) sank on Friday after the company reported fourth-quarter results that beat analyst expectations. Adjusted earnings per share of $0.06 doubled from the prior-year period and were $0.04 higher than the average analyst estimate. The company has agreed to acquire software security platform Sqreen and observability data pipeline provider Timber Technologies.
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What happened Shares of Datadog (NASDAQ: DDOG) sank on Friday after the company reported fourth-quarter results that beat analyst expectations. So what Datadog reported fourth-quarter revenue of $177.5 million, up 56% year over year and about $14 million ahead of analyst expectations. The company expects to report first-quarter revenue between $185 million and $187 million, along with adjusted EPS between $0.02 and $0.03.
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What happened Shares of Datadog (NASDAQ: DDOG) sank on Friday after the company reported fourth-quarter results that beat analyst expectations. So what Datadog reported fourth-quarter revenue of $177.5 million, up 56% year over year and about $14 million ahead of analyst expectations. The company expects to report first-quarter revenue between $185 million and $187 million, along with adjusted EPS between $0.02 and $0.03.
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What happened Shares of Datadog (NASDAQ: DDOG) sank on Friday after the company reported fourth-quarter results that beat analyst expectations. The guidance may be the culprit: Datadog is expecting revenue growth to slow substantially in 2021. So what Datadog reported fourth-quarter revenue of $177.5 million, up 56% year over year and about $14 million ahead of analyst expectations.
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2021-02-11 00:00:00 UTC
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Datadog Inc (DDOG) Q4 2020 Earnings Call Transcript
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DDOG
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https://www.nasdaq.com/articles/datadog-inc-ddog-q4-2020-earnings-call-transcript-2021-02-12
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Image source: The Motley Fool.
Datadog Inc (NASDAQ: DDOG)
Q4 2020 Earnings Call
Feb 11, 2021, 5:00 p.m. ET
Contents:
Prepared Remarks
Questions and Answers
Call Participants
Prepared Remarks:
Operator
Ladies and gentlemen, thank you for standing by, and welcome to the Q4 2020 Datadogearnings conference call [Operator instructions] Thank you. I would now like to turn the call over to your speaker today, Mr. AJ Ljubich.
Please go ahead.
AJ Ljubich -- Director of Investor Relations
Thank you, Tino. Good afternoon, and thank you for joining us today to review Datadog's fourth-quarter and full-year 2020 financial results which we announced in our press release issued after the close of market today. 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 statements related to our business that are forward looking under federal securities laws that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 including statements related to our future financial performance including our outlook for the first quarter and for the full-year 2021; our strategy, the potential benefits of our products, partnerships and investments in R&D and go to market; our ability to capitalize on our market opportunity; and the impact of the COVID-19 pandemic on our customers' usage of our platform and industry trends as well as the ability to benefit from these trends.
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 not as of any subsequent date. These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations. For a discussion of the material risks and other important factors that could affect our actual results, please refer to our quarterly report on Form 10-Q for the quarterly period ended September 30, 2020, filed with the SEC on November 12, 2020.
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Additional information will be made available in our annual report on Form 10-K for the period ended December 31, 2020, and other filings and reports that we may file from time to time with the SEC. Our filings with the SEC are available on the investor relations section of our website. A replay of this call will also be made available there for a limited time. Non-GAAP financial measures will be discussed on this conference call.
Please refer to the tables in our earnings release which can be found on the investor relations portion of our website for a reconciliation of these measures to the most directly comparable GAAP financial measure. With that, I'd like to turn the call over to Olivier.
Olivier Pomel -- Co-Founder and Chief Executive Officer
Thank you, AJ and thank you all for joining us today. We are very pleased with our performance in Q4 which once again showed high growth at scale and demonstrated efficiencies. Despite the unique challenges presented by COVID, we continued in 2020 to introduce new products at a high velocity, grow top line at a rapid rate and demonstrate strong operating efficiencies. We are, in particular, very proud of the way our teams have handled the pandemic as well as the year's other unprecedented challenges.
We ended the year with 2,185 employees globally, a 56% increase year over year, with high growth above both our go-to-market and R&D teams. One of our strategic decisions at the beginning of the pandemic was to keep on hiring. And we have been able to interview, hire and onboard remotely while maintaining high employee engagement and productivity. Throughout the year, we have worked to keep our employees safe and productive and to be good citizens of our communities as they face significant challenges.
We are very proud of the exceptional grants we have awarded to our employees in Q2 and Q4, both to support them individually and to allow them to donate nearly $1 million to charities focused on COVID relief as well as social and racial justice efforts. Last but certainly not least, we have maintained our relentless focus on delivering value to our customers. And while the pandemic has been a source of challenges to businesses this year, we believe it will prove to be an accelerator of cloud migration and digital transformation over time. In other words, we learned a lot this year including our ability to execute in the face of challenges as well as confirmation of a very large and growing market opportunity.
Now on to a review of the quarter. To summarize Q4 at a high level, revenue was $178 million, an increase of 56% year over year and above the high end of our guidance range. We also ended the year with 97 customers with an ARR of $1 million or more, almost double the 50 last year and more than 3x the 29 we had just two years ago. We ended the year with 1,253 customers with an ARR of $100,000 or more, up from 858 last year.
These customers generate over 75% of our ARR. We have about 14,200 customers, up from about 10,500 last year which means we added about 1,100 customers in the quarter, making it another strong quarter of adds after the 1,000 we added in Q3. We also continue to be capital efficient with free cash flow of $70 million. And as in past quarters, our dollar-based net retention rate was over 130% as customers increased their usage and adopted our newer products.
For the full year, we generated revenue of $603 million, a 66% increase year over year which was above the high end of our guidance. And free cash flow was $83 million or a margin of 14% for the year. Now to review Q4 in more detail. Execution was very strong with outstanding sales performance, particularly against the macro backdrop.
New logo generation was very strong including a new record of new logo ARR added that was significantly above last year's number, very strong performance across the board from commercial and enterprise sales channels as well as a record number of million-dollar-plus new logo customers. Growth of existing customers was robust as customers of all sizes continue to grow their usage of Datadog to both increase consumption and cross-selling, and Q4's growth of existing customers was broadly in line with pre-COVID trends. Lastly, churn remains very low and consistent with pre-pandemic historical rates. Next, our platform strategy continues to resonate and win in the market.
As of the end of Q4, 72% of customers are using two or more products which is up from 58% last year. Additionally, 22% of customers are using four or more products which is up from only 10% a year ago. And we have another quarter in which approximately 75% of new logos landed with two or more products. We are very happy with our platform traction including uptake of the newest products, NPM, RUM and Security, each of which has reached hundreds or thousands of customers in a short amount of time.
As a reminder, our newer products are often adopted first by first selecting customers at small scale before our land-and-expand model enables greater adoption over time. And frictionless adoption from our single integrated platform is a key value proposition for our customers. Overall, our ability to both land and expand in a very challenging time speaks to our true execution, to our leading product and to our status as a strategic partner to our customers as they prioritize their digital operations. Now on to products and R&D.
Today, we announced two acquisitions. First, we announced an agreement to acquire Sqreen, a SaaS-based security platform that enables enterprises to detect, block and respond to application level attacks. Sqreen's technology provides Runtime Application Self-Protection or RASP and in-app web application firewall also known as WAF and is already used by hundreds of companies today. Security issue in the application layer are complex to solve because application security crosses lines of responsibility between dev, ops and security teams.
As a result, we believe this will be a powerful combination for our customers using APM or Synthetics. Next, we also announced the acquisition of Timber Technologies, the developers of Vector, a vendor-agnostic and high-performance observability data pipeline. With Vector, customers can collect enrich and transform logs and other signals across multiple tools and data sources in both on-premise and cloud environments and then routes this data to the destination of their choice. We expect this technology to further empower our customers to control their observability data while providing broader points of entry to our platform.
I speak for everyone at Datadog in saying that we are extremely excited for the teams of both companies to join us in our quest to breakdown silos. Beyond the acquisition, we had a number of new developments in Q4. We launched the general availability of incident management which allows users to declare incidents, investigate root cause and collaborate without leaving Datadog. And we also delivered more than 60 other new capabilities and features across our products including new and enhanced integrations such as Snowflake oracle Cloud or vulnerability analysis marrying Snyk with our brand-new Continuous Profiler.
Now taking a step back. We exit 2020 with nine generally available product. To put this in context, just four years ago, we had only one product. And we have been able to build the most complete, integrated and cloud-native observability platform because of our founding as an integrated -- integration platform that is extensible to new use cases.
Looking forward to 2021, we continue to feel that we're just getting started. First, we are doubling down on building out our platform for observability. This core market alone is a very large opportunity and is growing quickly with the replatforming to cloud architectures. We're still early in this transition and are aggressively adding functionality to both the new SKUs as well as the more mature products.
Second, we are just getting started in security with our first product launch in 2020. We consider security a very large opportunity with a long runway of planned product development, and we envision the silos between dev, sec and ops breaking down in a similar way to what we have seen between dev and ops. Third, we are investing in the platform and ecosystem. In addition to building up the Datadog Marketplace, we now have strategic partnerships with all of the major cloud vendors.
For example, we announced the expansion of our partnership with Azure and GCP last quarter which should be in the market in 2021. We are also introducing new cloud instances in regions such as GovCloud. Our goal is to gain distribution across vendors and regions and meet customers where they are to lower friction to adoption and to lower time to value. And as we think longer term beyond 2021, we do believe there may be more use cases we can solve for our customers beyond current reach of our platform.
Let's move on to the sales and marketing. As I mentioned earlier, I'm very pleased with the continued productivity of our go-to-market teams, and Q4 was a very strong sales quarter. So let's discuss some of our wins in the quarter. First, let's talk a bit about the way COVID has accelerated digital transformation.
As expected, in the quarter, we saw seven-figure ARR increases from COVID beneficiaries such as consumer -- a consumer data -- sorry, such as a consumer device company, a large e-commerce platform and a global video games company. Perhaps more surprisingly though we also had a number of notable upsells from companies that were negatively impacted by the pandemic including a seven-figure upsell to a travel technology company and six-figure upsells to two separate airlines as well as a physical events company. These deals demonstrate that Datadog is a key strategic partner to companies that are scaling rapidly over online as well as the fact that businesses even in the most negatively impacted industries are investing heavily in their digital operations. Now, let's dive into some of our other key wins for the quarter.
First, I will highlight two notable seven-figure lands both with Fortune 100 companies, a retailer and an insurance company. Both have been struggling with teams in separate silos and are consolidating dozens of tools into Datadog, giving a single view to both dev and ops teams. Next, we had a seven-figure land from a streaming sports platform in Asia which was enabled by our new Datadog partner program. This company adopted a full Datadog platform and our Tracing without Limits approach was a key differentiator as their previous APM solution suffered from blind spots due to sampling and to a lack of integration with infrastructure data.
Next, we had yet another seven-figure land this time from a SaaS company based in EMEA. This company moves to us from a build-it-yourself approach and free its engineers, so they could build more products and deliver innovation. Lastly, we had a nearly $1 million upsell to a very large management consulting firm. This company is now using our network device monitoring product to replace legacy point solution and gain visibility into physical network devices.
I would also note that this was one of the first expansion deals to benefit from our brand-new Marketplace offerings, in this case, a partner-developed integration with Office 365. Now moving on to our outlook. It is clear to us that the market trends that have driven our success so far have only gotten stronger. Businesses must be digital first like never before.
Massive IT platform management by cloud migration is still in its early stages, and engineers and developers are truly strategic employees whose productivity and ability to collaborate are key drivers of business performance. While there is a possibility for more near-term volatility caused by the macro environment, we are increasingly confident in our ability to execute in a long-term opportunity. And we believe that we can continue to sustain strong growth both in the near term and over time. With that, I would like to turn the call over to our chief financial officer, David Obstler.
David?
David Obstler -- Chief Financial Officer
Yes. Thanks, Olivier. As mentioned, we delivered strong fourth-quarter top and bottom-line results amid a difficult macro backdrop. Revenue was $177.5 million, up 56% year over year against the challenging year-ago comp.
New logo generation was very strong. Usage trends were solid. Platform traction continued to be strong, and churn was in line to better than historical norms. To provide some more context, first, new logo results were very strong.
Both new logo ARR and the number of new logos were records for Datadog, displaying strong growth versus a year ago. New business contributions came across regions and from both our commercial and enterprise sales channels. Remember that given our usage-based revenue model, new logo wins generally do not immediately translate into revenue. Growth of existing customers was robust, and our dollar-based net retention remained above 130% for the 14th consecutive quarter.
We are pleased with the usage growth of existing customers which showed continued adoption of our platform and their cloud migration even in the face of the macro pressures. To go into a little more detail, growth of existing customers was broadly in line with long-term trends and meaningfully better than the level experienced in Q2 of last year. As a reminder, even though we have now experienced two quarters of usage growth that was approximately in line with pre-pandemic levels, Q2 was meaningfully pressured, and that pressure will impact our year-over-year metrics including revenue growth and net retention until we lap that compare. Next, in the fourth quarter, we saw continued strength of our platform strategy with over 70% of our customers using two or more products and 22% of our customers now using four or more products, up from only 10% a year ago.
Given that 75% plus of our lands now come from two or more products, we believe the overall share of customers using two-plus products is closing in on that number. Lastly, churn was in line to slightly better than historical levels. This demonstrates the importance of our solution to our customers even during challenging times. Our dollar-based gross retention rate has remained largely unchanged in the low to mid-90s.
Now turning to billings which were $219.4 million, up 68% year over year. After adjusting for the timing of $6 million of billings in last year's fourth quarter, pro forma billings growth was 61% year over year, strong and approximately in line with revenue growth. Remaining performance obligations or RPO, was $434 million, up 78% year over year. Both billings and contract duration extended in the quarter driven by strong annual billings and commitments as well as a few larger multiyear commits.
It is important to note that those multiyear commits were billed annually, and we do not incentivize our sales force for multiyear deals given our high net retention rate. Current RPO growth was strong in the mid-60s, similar to billings growth. As a reminder, billings and RPO can fluctuate versus revenue based on the timing of invoicing and the signing of customer contracts, while revenue incorporates customer usage. Now, let's review the income statement in more detail.
As a reminder, unless otherwise noted, all metrics are non-GAAP. We have provided a reconciliation of GAAP to non-GAAP financials in our earnings release. Gross profit in the quarter was $137.6 million, representing a gross margin of 78%. This compares to a gross margin of 79% last quarter and 78% in the year-ago period.
The slight decrease in gross margin sequentially is due to minor inefficiencies created from our investments in product and platform innovation. As a reminder, our gross margins may fluctuate quarter to quarter within an acceptable range as we prioritize product development and innovation as well as the build-out of our cloud data centers in newer geographies. R&D expense was $53.5 million or 30% of revenues compared to 27% in the year-ago quarter. We have continued to invest significantly in R&D including high growth of our engineering head count which was -- which we added approximately 370 net R&D heads over the course of 2020.
We have been able to attract talent and execute on hiring and onboarding during COVID. Sales and marketing expense was $52.5 million or 30% of revenues compared to 35% in the year-ago period. Similar to R&D, we continued to make substantial investments in sales and marketing, but the pace of revenue growth has outpassed that investment. This was another quarter of no in-person trade shows or marketing events.
While we have successfully redeployed much of the events budget to advertising and other lead generating activities, it was not on a 1:1 ratio. G&A expense was $13.5 million or 8% of revenues, slightly lower than the 9% in the year-ago quarter, and operating income was $18.1 million or 10% operating margin compared to an operating income of $7.9 million with a 7% margin in the year-ago period. The continued reduction in marketing, events, travel and entertainment and facilities overhead due to COVID were the primary drivers in the year-over-year leverage. Headcount growth was approximately in line with revenue growth in the quarter.
Non-GAAP net income in the quarter was $19.1 million or $0.06 per share based on a 334 million weighted average diluted shares outstanding. Turning to the balance sheet and cash flow. We ended the quarter with $1.5 billion in cash, cash equivalents, restricted cash and marketable securities. Cash flow from operations was $23.8 million in the quarter.
After taking into consider capital expenditures and capitalized software, free cash flow was $16.7 million for a margin of 9%. For the full year, free cash flow was $83.2 million or 14% margin. Now turning to the outlook for the first quarter and the full year of 2021. As Olivier mentioned, we believe we can deliver high growth for the foreseeable future as we are addressing a very large greenfield market and are executing well against that opportunity.
As we look out to 2021, COVID continues to present some uncertainty. On the one hand, we believe the pandemic will accelerate digital transformation and cloud migration once the near-term pressure subsides. However, the timing and path of normalization remains uncertainty. Taking in combination, we are initiating the following 2021 guidance which includes continued high growth.
Beginning with the first quarter, we expect revenue to be in the range of $185 million to $187 million which represents a year-over-year growth of 42% at the midpoint. Non-GAAP operating income is expected to be in the range of $8 million to $10 million, and non-GAAP net income per share is expected to be $0.02 to $0.03 per share based on approximately 345 million weighted average diluted shares. For the full year, revenue is expected to be in the range of $825 million to $835 million which represents 38% year-over-year growth at the midpoint. Non-GAAP operating income is expected to be in the range of $35 million to $45 million, and non-GAAP net income per share is expected to be in the range of $0.10 to $0.14 per share based on approximately 348 million weighted average diluted shares.
Now some notes on the guidance. Embedded in the guidance are prudent assumptions on growth of existing customers as well as new logo attainment which reflect some of the current macro uncertainties. Next, our strategic focus remains on investing to optimize for long-term growth. Therefore, we're planning to continue aggressive investments in both R&D and go to market throughout 2021.
While we have been profitable throughout 2020 and plan to be in 2021, we are not focused on optimizing near-term profitability. Rather, the efficiencies of our business are clearly evident, and we are confident in our ability to be a sizable and materially profitable company over the long term. Additionally, our model assumes a return to the office and a resumption of travel and in-person events in the second half of the year. We have limited visibility presently on these topics but believe it's prudent to incorporate that in our outlook.
Next, of the two acquisitions, Timber Technologies have closed and has no impact to our guidance. We also announced the agreement to acquire Sqreen for total transaction costs of $260 million, of which approximately 25% is deferred in a mix of cash and stock. We expect Sqreen to close in Q2, subject to customary closing conditions including regulatory approvals. Sqreen is not included in our guidance, but we expect it to have an immaterial impact to both our revenue and operating income guidance in 2021 upon deal closure.
Now, below operating income, we expect approximately $1.2 million of quarterly non-GAAP other income which is net including the interest income on our cash and marketable securities less the interest expense of our convertible. Next, we don't expect to be a federal taxpayer next year but have a tax provision related to our international entity and expect that tax provision to be approximately $600,000 in Q1 and $3 million for the full year. Lastly, we have early adopted ASC 2020-06 as of January 1 which changes the accounting for our convertible debt. Therefore, going forward, our convertible notes will be accounted for wholly as debt on our balance sheet.
GAAP and other expenses should now be more aligned to non-GAAP as there is no longer a noncash component related to the debt discount. More importantly, our share count forecast now considers an additional 8.1 million shares as the new standard requires all underlying shares of the convert to be included, and this has been taken into account in our EPS guidance. To summarize, we are pleased with our results for the quarter. Execution was very strong including strong sales results and continued product innovation.
Customers continue to consume more Datadog both in terms of usage and the cross-selling to newer products. Our continued execution throughout the challenges of 2020 give us even greater confidence heading into 2021, and the importance of our solutions will only be heightened long term by the pandemic. Therefore, we're continuing to reinvest in our business and are very excited for the year-end -- for the year ahead, sorry. Finally, we would like to thank AJ who is having his lastearnings callwith us today at Datadog.
I'm sure our investors have appreciated his contributions as much as we have. And with that, we will now open our call for questions. Operator, let's begin the Q&A.
Questions & Answers:
Operator
[Operator instructions] First question, we do have Sanjay Singh from Morgan Stanley. You are now live.
Unknown speaker
Hi. This is Mark Randy on for Sanjit. Thanks for taking my questions and congrats on the results and continued strong growth here. First, I just want to quickly get an update on the headwinds you're seeing at the top line from the lower expansion you saw last summer.
It seems like those trends have largely turned around, and we should expect another quarter or two to kind of work through those impacts. I guess my question is, as we get into the back half of next year and the growth comps become easier, should we be expecting the combination of easier growth comps and ramping kind of products and partnerships with like Azure to result in an acceleration of growth? Is that an appropriate way for us to be thinking about it?
David Obstler -- Chief Financial Officer
I think that we've -- given our guidance taking into account all of the potential upsides and risk. But you are right. The headwinds created in Q2 do create a drag on the revenue growth as we talked about through Q2 of next year. And while we are not providing that quarterly guidance through next year, we expect of that headwind in terms of the comp to abate in the second half of the year.
Unknown speaker
Got it. Helpful. And then maybe just on the two acquisitions announced. So on the security side with Sqreen, you're building out quite a portfolio now across observability and security at Datadog.
And I guess my question on Sqreen is kind of how does this integrate with the core Datadog platform. How does it work with core Datadog versus being a stand-alone functionality? And then on the Timber purchase, what's the need for an observability data pipeline in the platform? Can you help us kind of better understand what Timber's bringing to Datadog and the platform and why customers really need this functionality? Thanks so much. Really helpful.
Olivier Pomel -- Co-Founder and Chief Executive Officer
Yeah. So I'll take the questions on M&A. So the -- on the Sqreen side, what's really interesting is the focus is application security. And application security is one of the areas where the conflict I would say between applications and there basically, ops and security is the most present and the responsibilities are not really clear-cut in there.
And we think it's one area where we can show particular strength because our APM is already deployed. It's already in the heart of the application, and we can inject the security protection and detection in there directly. So we think this is a product will make a lot of sense to our customers that are using APM, and that's going to be deployed the same way basically. So that's for Sqreen.
For Timber and Vector which is the product, what's really interesting there is we hear and we see from customers over and over again that they have a number of different data sources that produce logs in particular but also other kinds of observability data. And many of those sources, our legacy systems, log management systems, for example, and one thing they want to be able to do is to aggregate all that data before it leaves their own network environment, make sure they have the right privacy controls on them, so they can filter PII, for example, and things like that and then decide to route this data to us, for example, like to a cloud service but also maybe to other places, maybe to an archive they want to keep in-house. So what we think this will allow us to do is to satisfy that need from customers, make sure they are fully in control of the observability data and make it a lot easier for customers to, in the end, send us all the data that is relevant to them.
Unknown speaker
Great. Thank you.
Operator
Next question comes from the line of Chris Merwin from Goldman Sachs. You are now live.
Chris Merwin -- Goldman Sachs -- Analyst
OK. Thanks so much for taking my question. I wanted to ask about new land. I think you called out that 75% of those lands are with two or more products.
So beyond infrastructure, can you give us a sense of where you're seeing the strongest traction more recently with the rest of your suite? Thanks.
Olivier Pomel -- Co-Founder and Chief Executive Officer
It's easy. It's pretty much in the order of introduction of the products. So the most mature behind that are APM and logs that are I would say neck and neck in terms of which are the other ones that are getting attached first. And then you go one step down to Synthetics, and then you go one step down to NPM and RUM, and then you go down to Security.
And so that's the order which by the way I think, is a question we might get later, but we're planning to invest a lot more because we see so much success with that platform approach. We see all these products have a pretty interesting growth curve. And we think there's a lot more problem space for us to cover which is why we are aggressively building a team and hiring, and we're also proceeding to do these acquisitions.
Chris Merwin -- Goldman Sachs -- Analyst
Great. Thank you. And just a follow-up. If we look at billings, I mean, on a pro forma basis, I think you said it was up 61% RPO, CRPO was up in the mid-60s, but then the revenue guide for '21 is in the high 30s.
So I realize billings aren't going to factor in usage. But can you help us think about how to reconcile the really strong billings growth we saw exiting '20 and with the revenue growth guide for '21? Thanks.
David Obstler -- Chief Financial Officer
Yeah. I think we had a strong new logo. We also had, as we mentioned, an extension of the duration of billings and contracts from our clients. So those were some of the factors that caused the strong performance.
We try to get everyone sort of back to the revenue growth and then the linearity within the quarter which one can look at ARR because of the variabilities in billing and RPO due to billings, but we did have strong new sales as well as the extension of duration in the quarter, as we mentioned which contributed to that performance.
Chris Merwin -- Goldman Sachs -- Analyst
Understood. Thank you.
Operator
Next one on the line is Sterling Auty from J.P. Morgan. You are now live.
Sterling Auty -- J.P. Morgan -- Analyst
Yeah. Thanks, guys. Wanted to revisit the security topic again. And traditionally, when we think about WAF adoption, that's usually been the security CISO organization kind of driving that adoption.
RASP is a newer area. And what I'm curious is do you need a dedicated security sales force to properly penetrate the opportunity. Or is there enough buying decision and influence coming out of the dev ops areas that your existing sales force can adequately push the security products that you have?
Olivier Pomel -- Co-Founder and Chief Executive Officer
So the short answer to that is we don't know yet, and we -- first of all, the deal is not closed yet, right? So we're standing in -- speaking in a hypothetical with the company -- the companies are not merged yet. But the -- the way we're seeing it is by starting from an APM product, we really lowered the friction that is involved in deploying an application security product which typically is the problem you have. Like when you try to deploy a RASP product, there's a high friction to deploy and the person who wants to deploy it is not the person who actually has the authority to do it or actually manages the servers or manages the application. And we solve that with Datadog.
So we think it opens up new avenues of frictionlessly deploying those products. Now how it translates on the go-to-market side and if we need to have specialist sales, we don't know yet, and we're open to it.
Sterling Auty -- J.P. Morgan -- Analyst
All right. Great. And then one follow-up would be just in the two-plus products, you mentioned kind of the land and the adoptions by the maturity curve. But what I'm curious about is are you seeing the use cases, especially for log and APM driving into newer areas than what you saw let's say maybe three or four quarters ago.
Are you getting expansion of those products, in particular, new areas of your customers?
Olivier Pomel -- Co-Founder and Chief Executive Officer
So those products are still expanding a lot, right? So the adoption curve for our customers is -- they usually start small and then they grow, and they expand the products to more and more and more of their business units and various activities. And so log and APM look different, but they keep growing with customers that way. So even when we say 70% of the customers have adopted the product, there's still a lot of growth to be had within those customers.
Sterling Auty -- J.P. Morgan -- Analyst
Got it. Thank you.
Operator
Next one on the queue is Brad Zelnick from Credit Suisse. You are now live.
Brad Zelnick -- Credit Suisse -- Analyst
Great. Thank you so much and congrats on a strong end to a crazy year. Oli, my question is on Timber. Yeah, for sure.
My question on Timber, is the idea Vector to be an agnostic data pipeline and to be able to feed data to any observability platform. And in that case, how should we think about then rolling that into your offering, potentially create coopetition, if you will, among observability platforms or am I not thinking about it right to express it that way?
Olivier Pomel -- Co-Founder and Chief Executive Officer
I mean you're right. I mean the -- it's important for -- like if you want customers to send all the data from all the sources, they have to be -- they have to have some flexibility to send it to various places, right? So that's actually part of the mix there. We think it actually makes sense for us to do it. Obviously, the integrated experience with Datadog will be fantastic and so that it makes the most sense, and it is the most interesting from a value perspective to send everything to Datadog.
But it is important for these to be open and to cater to various use cases where customers have another destination they want to consume the data or another source they want to add or some flexibility to filter on the fly what they send. In a way, you can see that as an extension of logging without limits that reaches back into the customer's infrastructure.
Brad Zelnick -- Credit Suisse -- Analyst
Got it. Thank you. And maybe a follow-up for David. David, how should we think about the level of sales hiring this year and the ability to ramp reps on the entire portfolio which has expanded quite significantly?
David Obstler -- Chief Financial Officer
Yeah. We have been successful last year as well as our plans for this year and ramping sales higher slightly ahead of revenue. So we've been -- as we talked about it in the 60s, we have plans to do it again. And as we've talked about, it involves both expanding into new geographies.
It involves building out the teams within geographies where we've been already successful. And it's what we did last year and believe we can do it again the next year.
Brad Zelnick -- Credit Suisse -- Analyst
Great. Thank you guys.
David Obstler -- Chief Financial Officer
Yeah.
Operator
Next one on the line is Mohit Gogia from Barclays. You are now live.
Mohit Gogia -- Barclays -- Analyst
Hey, guys. Thanks for taking my question and I offer my congrats on a very strong quarter as well. So my first question is around the Mendix deal that you guys announced last week. So wondering if you can give us some more color there.
It sounds like this is Mendix standardizing on Datadog as its observability platform. I think the release also mentioned that you guys replaced the existing incumbents which were like five or six tools that the customer was using. So if you can go into some sort of like dynamics of your land there or maybe you were already there and expanded from there, but any more color on that customer will be very helpful.
Olivier Pomel -- Co-Founder and Chief Executive Officer
Yeah. I actually don't have much more color I can provide because I'm not sure what I can speak to publicly. We didn't prepare anything for that. But interestingly enough, this was not one of the customers we mentioned in the rest of the call in the prepared notes.
David Obstler -- Chief Financial Officer
But I think as Oli has mentioned, it happens to be a press release, but it's typical of what has been happening with the expansion of the products across the platform, where most of the motion is landing smaller and then expanding given the value of the platform to across the product set. So it's a typical type of motion.
Mohit Gogia -- Barclays -- Analyst
Understood. My follow-up question is for David. So David, in terms of -- so I think you followed up the record new ARR in Q3, then a strong quarter in Q4, right? So if I -- I mean obviously we understand the puts and takes to billings and RPO. But if I just look at ARR, it seems to be things coming together very nicely after sort of like a slight -- or rather a dip in Q2.
So like how should we think about the guidance? I know this question was already asked. But if I sort of compare that to next fiscal year guidance versus really two strong quarters of ARR, and can you help us reconcile that?
David Obstler -- Chief Financial Officer
Yeah. As we said last time, and it's a typical approach. There's lots of positives, and we're very proud of it. But we continue to take a conservative approach toward guidance given the uncertainty in the world from COVID and what might happen to enterprises.
As we said, we see a less -- we've seen a less volatile world in terms of both the growth of client usage and new logos but continue to remain prudent and conservative when we provide guidance as we have in our quarters as a public company.
Olivier Pomel -- Co-Founder and Chief Executive Officer
Yes. One thing I will say is, when we look at our metrics internally, usage metrics, in particular, those are still noisier than they were before the pandemic, and that's because they basically track the way the various economical impacts of the pandemic ripple through the world and the various layers of the economy. And so we want to be a little bit cautious there. People's behaviors have changed to obviously this year, like it's fairly different from what it was the year before.
An example of that is, typically, at the last year or the last week of the year, there's a drop in activity because pretty much everyone takes the week off and some companies turn off their development environments and things like that. This year, it was more pronounced I think because many people haven't taken any time off during the year and everybody took their time off at that time. So we want to be a little bit careful about what we predict in the future. We've learned in Q2 that the numbers can change fast as changes to the economy happen.
Mohit Gogia -- Barclays -- Analyst
Great. Very helpful color guys. Thank you.
Operator
Next question comes from Matt Hedberg from RBC Capital Markets. You are now live.
Matt Swanson -- RBC Capital Markets -- Analyst
Yeah. Great. Thanks. This is actually Matt Swanson on for Matt.
Olivier, the strength in multiproduct adoption has trended well throughout the year. I know we talk a lot of times about your opportunity being greenfield rather than displacements. But when we start to talk about more and more customers adopting more and more solutions, is this leading you into more of a displacement cycle? And how is that kind of affecting your go-to-market strategy and the sales cycles for those upsells?
Olivier Pomel -- Co-Founder and Chief Executive Officer
Yeah. We're still I would say just as dominated by greenfield as we were before, and I think it's going to be the case for the foreseeable future which is why a lot of the -- what we're doing today is investing in building more products and growing the sales force so we can capture as much of this greenfield market as possible.
Matt Swanson -- RBC Capital Markets -- Analyst
Yeah, that's helpful. And then I know security is a newer opportunity. But could you touch on any changes you've seen following SUNBURST, maybe even outside of security? It feels like there might be some elevated concerns for enterprises around observability and just kind of a renewed focus on knowing what's happening in their environment.
Olivier Pomel -- Co-Founder and Chief Executive Officer
Yeah. Well, it's both a challenge and an opportunity, right? I think the whole world has asked themselves what was happening with their software supply chain, where they were running which is good. I think it opens some opportunity. There's some I would say minor short-term opportunity because we do see some customers that want to replace their network monitoring.
And our network device monitoring product is fairly new, but we see some interest in that for that reason. I think longer term, there's definitely a growing problem that is understanding what's running, understanding your supply chain, understanding what your application's doing, and that's why we're investing in security. I think there's going to be a long-term opportunity there. So maybe short term, some replacement there, but the real opportunities go longer term and would -- who we can help.
Enterprises basically understand what's going on in their network and in their applications.
Matt Swanson -- RBC Capital Markets -- Analyst
All right. Thank you.
Operator
Next question comes from Jack Andrews from Needham & Company. You are now live.
Unknown speaker
Hi. Good afternon. This is Khan in for Jack. Can you provide some color on how your relationship with Microsoft -- with Azure is progressing and expected ramp time in 2021? How should we be thinking about new logo size contribution from the partnership compared to your organic total motion given Microsoft's leverage -- enterprise leverage?
Olivier Pomel -- Co-Founder and Chief Executive Officer
It's -- so it's still not live yet. It's in previews. So we have some customers that have limited access to it. And we're expecting this to be live in the first half of the year, but we don't fully control it.
So there's two or three things that needs to happen for that. We -- look, it's hard to tell what the impact is going to be. Hopefully, we do expect that it's going to have a positive impact, but I don't want to sell it before it happens. What I will say though is that we already got great feedback from existing customers and prospects that were already in our pipeline that this integration and the partnership with Microsoft is helping them move with confidence in Datadog -- with Datadog and expand with us.
So we've seen a few large customers already react very positively to that. So we are -- I would say, we're already pretty satisfied with the impact.
Unknown speaker
That's helpful. And can you talk about some of the gains you're seeing from customers who adopt solutions from your marketplace in terms of sales cycles and ease of use or are you seeing any changes in like cohort behavior given that these customers can derive value from your platform more quickly?
Olivier Pomel -- Co-Founder and Chief Executive Officer
Yes. So we -- look, the marketplace is kind of new, right? So there's still quite a bit that needs to happen in terms of the offering there and the breadth of the offering, I would say. But we do have some [Audio gap]
David Obstler -- Chief Financial Officer
Oli, I think you're on mute. Not clear anymore.
Olivier Pomel -- Co-Founder and Chief Executive Officer
Am I mute? Sorry.
David Obstler -- Chief Financial Officer
Yes, you're mute and not clear. You're back.
Olivier Pomel -- Co-Founder and Chief Executive Officer
All right. Let me try again. I was saying that the platform is still fairly new at the Marketplace. But we do see some customers that are already adopting applications through the Marketplace and completing their Datadog platform with software that we haven't written in-house which is very, very interesting.
And some of these Marketplace deals are actually fairly meaningful. So this is -- I would say this is an encouraging sign. Again, there's still a lot of work to be done, a lot of building, a lot of partners to recruit on the platform, so still fairly early, but we have some very good validating signs very early on.
Unknown speaker
Thank you. Appreciate the color.
Operator
Next one on the queue is George Iwanyc from Oppenheimer. You are now live.
George Iwanyc -- Oppenheimer & Co. Inc. -- Analyst
Thank you for taking my question. So Olivier, kind of following up on the strong multi-product adoption. Are you seeing any consolidation of the number of tools at your customers? And kind of just a broad look at the overall competitive landscape.
Olivier Pomel -- Co-Founder and Chief Executive Officer
Yes. So we -- clearly, we mentioned the two examples of customers that are consolidating on us, right, because they don't want to have their teams jump between tools. They don't want to have separate tools between the teams. So we definitely see that.
In terms of the competitive landscape, it's a bit boring in that we haven't seen any noticeable change in the past year I would say so pretty much the same situation as it was before, where the bulk of the opportunity is greenfield. A lot of our competition is open source do it yourself. And then occasionally, we're going to have some large lands from customers that already had something before and switch to us, but that's not the dominant motion.
George Iwanyc -- Oppenheimer & Co. Inc. -- Analyst
All right. Thank you. And then, David, when you talked about the duration extending a bit, when you're looking at your guidance, do you expect that to either flatten out or start to contract maybe later in the year?
David Obstler -- Chief Financial Officer
We think that can be episodic with -- as we talked about with the particular quarter and the contracts that come up, there hasn't been any change in strategy. Our strategy is to get annual commits and to offer mainly upfront billing with on-demand. That's still the dominant way to go to market. So what happens in the variability is some clients want a multiyear arrangement or they want a certain billing, but we really haven't changed our assumptions sort of where we are longer term in terms of duration.
George Iwanyc -- Oppenheimer & Co. Inc. -- Analyst
Thank you.
Operator
Next one on the line is Bhavan Suri from William Blair. You are now live.
Bhavan Suri -- William Blair -- Analyst
Thanks for taking my question guys. And I'll echo my congrats. It was a solid quarter. I guess I just want to touch a couple of quick things here on Synthetics.
You started charging for Synthetics. I think it was, correct me if I'm wrong, Q3 '19. You've talked about seeing solid traction. Just love to understand what the growth has been in that business specifically.
Attach rates, maybe how it's trending relative to your expectations because you did bring up a little bit in the call, but we didn't get much color. I'd love to hear how that's doing.
David Obstler -- Chief Financial Officer
Yeah, it's going very well. And I think we talked about the size and growth of the products is really aligned to when they were initiated. And we said last quarter, we're having tremendous success that Synthetics was multiple tens of millions of dollar type customer early in its growth, had very strong adoption, and it's been, as we talked about, sort of the No. 4 product in terms of the size after infrastructure, logs and APM together.
So it's -- we've continued to see very strong reception as part of the overall platform.
Olivier Pomel -- Co-Founder and Chief Executive Officer
Yes. And look, we're very -- as we said -- as I said I think earlier, network monitoring and RUM which were introduced after Synthetics, both have adoption with very similar growth curve and a very good growth curve. So we're optimistic about all those products. Look, the curves might differ a little bit between the products because they have different levels of friction.
They have different levels of applicability and road maps that have a different depth, I would say. But overall, we -- so far, we don't have any doubts in our platform, so we feel good about that.
Bhavan Suri -- William Blair -- Analyst
Good. Good to know. Absolutely. And then one other one from me, as you disclose this metric, and maybe I've got it wrong, but I don't think you've given the one million customer count in previous quarters.
I'd love to understand how that trended through the year and if you saw a budget flush in December which might have driven a jump in seven-figure deals?
David Obstler -- Chief Financial Officer
Yeah. We said that we would be delivering that once a year and providing some color, so it's the end of the year. We -- as I think we told you, we saw steady growth of that in the year. I think it sort of mimicked the rest of the effect in the business where those -- that type of evolution either from land or expand was more difficult in Q2 and improved throughout the year commensurate with our new logo and our expansion.
Bhavan Suri -- William Blair -- Analyst
Gotcha. Gotcha. Gotcha. That's super helpful.
Thanks guys and really nice job. I appreciate you taking my question.
David Obstler -- Chief Financial Officer
You're welcome.
Operator
For the next question, we do have Pat Walravens from JMP Securities. You are now live.
Joey Marincek -- JMP Securities -- Analyst
Thank you. This is Joey Marincek on for Pat. I was going off that last question. I want to dig in on those larger customers.
Just wondering, has your conversations changed at all with these larger customers, maybe just how you're approaching them? Thank you.
Olivier Pomel -- Co-Founder and Chief Executive Officer
The conversation hasn't really changed much. I think it's all in continuity with what has happened in the past which is that those customers are adopting more and more of our products, and they are deploying us more and more broadly. And they themselves are getting deeper and deeper into the cloud. So the boundary is between customers that are one million plus or 7 million.
It is arbitrary, but we have a large number of customers right above it, large number of customers right below it. And we keep pushing customers up basically. So there's nothing new or different there. I think what this speaks to is customers continue to adopt more of our product and more of our platform, and they continue to move to the cloud.
Joey Marincek -- JMP Securities -- Analyst
Thank you so much.
Operator
Next one on the line is Brad Reback from Stifel. You are now live.
Brad Reback -- Stifel Financial Corp. -- Analyst
Thank you very much. Oli, traditionally, you've talked about the frictionless adoption of the platform as being a key focus. So as you continue to build out into new areas, how important is it to maintain that frictionless type of environment versus taking on some more difficult problems that may include deeper sales efforts upfront? Thanks.
Olivier Pomel -- Co-Founder and Chief Executive Officer
Well, we're OK with both, right? But we can also -- like there's a lot we can still do to play to our strengths, and we're very far from covering the full spectrum of problems we can solve in a completely frictionless way. So in some areas, especially security, like it's possible that we will need different kinds of sales and I would say, a bit more friction of deployment. But we're not done with the addition of frictionless products. And the ones that we have today are still very far from being fully penetrated and out of customers.
So there's a -- there's still a very long runway for all of that.
Brad Reback -- Stifel Financial Corp. -- Analyst
Great. Thanks very much.
Operator
Next one on the line will be Michael Turits from Keybanc. You are now live.
Michael Turit -- KeyBanc Capital Markets -- Analyst
Hi, David and Oli. One of your competitors has made some very extensive changing -- changes to their pricing structure. Are you seeing any impact from that or any pressure to make any kinds of changes structurally in the way you price?
Olivier Pomel -- Co-Founder and Chief Executive Officer
We haven't seen any developments there. No, I think it's -- and look, it's still possible that customers want to change the way they consume so we didn't fix. But we haven't seen anything so far, so we're -- as I said, the competitive landscape is boring in a good way so far.
Michael Turit -- KeyBanc Capital Markets -- Analyst
And David, just a quick housekeeping. You talked about billings getting some boost from duration extension. Can you quantify that for this quarter?
David Obstler -- Chief Financial Officer
We're both in contracting billings that were both a couple of months, so both of them had been sort of in the seven to 10, 12. And so they both extended a couple of months. But again, we want to caution everybody that that may be related to the bills that went out at the end of the year, etc. And we don't expect any real changes in the way we're sort of going to market and interacting with our customers.
Michael Turit -- KeyBanc Capital Markets -- Analyst
And what's that invoicing duration on average now? What's been roughly?
David Obstler -- Chief Financial Officer
That range has been sort of in the six to eight range and the contact duration has been a couple of months longer than that. And they both expanded, but again, we don't -- we're not drawing conclusion out based on one quarter. I'd cautioned everybody.
Michael Turit -- KeyBanc Capital Markets -- Analyst
So it has been six to eight, and it was up a couple of months this quarter on invoicing duration.
David Obstler -- Chief Financial Officer
Yup.
Operator
Next one on the queue is Gregg Moskowitz from Mizuho. You are now live.
Gregg Moskowitz -- Mizuho Securities -- Analyst
OK. Thank you. Hi, guys. So it's great that the usage trends were good again this quarter and that you're now approximately back to pre-COVID levels.
And what I was curious about is now that we're another quarter removed from the Q2, just to get your thoughts on the likelihood of a similar spike in cloud optimization reoccurring at some point. In other words, do you think that we would probably need to see another exogenous shock or long tail type event for usage to move around materially in any given quarter?
Olivier Pomel -- Co-Founder and Chief Executive Officer
So I don't have an idea on what's going to happen to the vaccines in the -- and the rest of the pandemic, so I'll defer on that. In terms of the cycles of optimization, they happen from time to time from our customers. Now whether they all got on the same schedule now because they are optimized at the same time, I don't know. I don't think all companies work the same way.
But again, we don't know. We want to be a little bit prudent with our numbers because, as I said, they're a little bit noisier than pre-pandemic, and we want to set the right expectation there.
Gregg Moskowitz -- Mizuho Securities -- Analyst
OK. And then just, David, any changes to average deal sizes this quarter across either new or existing customers?
David Obstler -- Chief Financial Officer
We did have more -- an increase of the new logos. Broadly speaking, we have some range of that. So we talked about that was part of our new logo performance in Q4. And over time, we have a steady increase of the average spend with our customers as they grow with us as part of the land and expand.
Gregg Moskowitz -- Mizuho Securities -- Analyst
All right. Thank you.
Operator
Last question comes from the line of Yun Kim from Loop Capital Markets. You are now live.
Yun Kim -- Loop Capital Markets -- Analyst
So Oli, there was an earlier question on the impact of SolarWinds and SUNBURST. Are you seeing that event's driving closer collaboration between dev ops and security ops? And is that what's driving somewhat of a wait and....
Olivier Pomel -- Co-Founder and Chief Executive Officer
I'm sorry. I think you got cut off.
David Obstler -- Chief Financial Officer
Should we take the next?
AJ Ljubich -- Director of Investor Relations
Yeah. Maybe, operator, we end the call here.
David Obstler -- Chief Financial Officer
Oli, that's you. Oli.
Olivier Pomel -- Co-Founder and Chief Executive Officer
Sorry, we're ending the call. So yes. So thank you, everyone. Again, I'd like to restate the fact that we're very pleased with the performance in the fourth quarter and as well as the performance for the full year.
And as a closing word, I am very proud of our execution, and I want to thank our employees for their hard work and the high output is what -- in what has been a difficult year for most people. One thing that's important to remember is that we are more critical to our customers than ever before and as the move to cloud is proving to be truly essential. So I and everyone at Datadog are excited to continue to make their lives easier and to deliver value to them in 2021 and in the years to come. So thank you all.
Operator
[Operator signoff]
Duration: 64 minutes
Call participants:
AJ Ljubich -- Director of Investor Relations
Olivier Pomel -- Co-Founder and Chief Executive Officer
David Obstler -- Chief Financial Officer
Unknown speaker
Chris Merwin -- Goldman Sachs -- Analyst
Sterling Auty -- J.P. Morgan -- Analyst
Brad Zelnick -- Credit Suisse -- Analyst
Mohit Gogia -- Barclays -- Analyst
Matt Swanson -- RBC Capital Markets -- Analyst
George Iwanyc -- Oppenheimer & Co. Inc. -- Analyst
Bhavan Suri -- William Blair -- Analyst
Joey Marincek -- JMP Securities -- Analyst
Brad Reback -- Stifel Financial Corp. -- Analyst
Michael Turit -- KeyBanc Capital Markets -- Analyst
Gregg Moskowitz -- Mizuho Securities -- Analyst
Yun Kim -- Loop Capital Markets -- Analyst
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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 Inc (NASDAQ: DDOG) Q4 2020 Earnings Call Feb 11, 2021, 5:00 p.m. Operator [Operator signoff] Duration: 64 minutes Call participants: AJ Ljubich -- Director of Investor Relations Olivier Pomel -- Co-Founder and Chief Executive Officer David Obstler -- Chief Financial Officer Unknown speaker Chris Merwin -- Goldman Sachs -- Analyst Sterling Auty -- J.P. Morgan -- Analyst Brad Zelnick -- Credit Suisse -- Analyst Mohit Gogia -- Barclays -- Analyst Matt Swanson -- RBC Capital Markets -- Analyst George Iwanyc -- Oppenheimer & Co. Inc. -- Analyst Bhavan Suri -- William Blair -- Analyst Joey Marincek -- JMP Securities -- Analyst Brad Reback -- Stifel Financial Corp. -- Analyst Michael Turit -- KeyBanc Capital Markets -- Analyst Gregg Moskowitz -- Mizuho Securities -- Analyst Yun Kim -- Loop Capital Markets -- Analyst More DDOG analysis All earnings call transcripts This article is a transcript of this conference call produced for The Motley Fool. During this call, we will make statements related to our business that are forward looking under federal securities laws that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 including statements related to our future financial performance including our outlook for the first quarter and for the full-year 2021; our strategy, the potential benefits of our products, partnerships and investments in R&D and go to market; our ability to capitalize on our market opportunity; and the impact of the COVID-19 pandemic on our customers' usage of our platform and industry trends as well as the ability to benefit from these trends.
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Operator [Operator signoff] Duration: 64 minutes Call participants: AJ Ljubich -- Director of Investor Relations Olivier Pomel -- Co-Founder and Chief Executive Officer David Obstler -- Chief Financial Officer Unknown speaker Chris Merwin -- Goldman Sachs -- Analyst Sterling Auty -- J.P. Morgan -- Analyst Brad Zelnick -- Credit Suisse -- Analyst Mohit Gogia -- Barclays -- Analyst Matt Swanson -- RBC Capital Markets -- Analyst George Iwanyc -- Oppenheimer & Co. Inc. -- Analyst Bhavan Suri -- William Blair -- Analyst Joey Marincek -- JMP Securities -- Analyst Brad Reback -- Stifel Financial Corp. -- Analyst Michael Turit -- KeyBanc Capital Markets -- Analyst Gregg Moskowitz -- Mizuho Securities -- Analyst Yun Kim -- Loop Capital Markets -- Analyst More DDOG analysis All earnings call transcripts This article is a transcript of this conference call produced for The Motley Fool. Datadog Inc (NASDAQ: DDOG) Q4 2020 Earnings Call Feb 11, 2021, 5:00 p.m. As a reminder, even though we have now experienced two quarters of usage growth that was approximately in line with pre-pandemic levels, Q2 was meaningfully pressured, and that pressure will impact our year-over-year metrics including revenue growth and net retention until we lap that compare.
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Operator [Operator signoff] Duration: 64 minutes Call participants: AJ Ljubich -- Director of Investor Relations Olivier Pomel -- Co-Founder and Chief Executive Officer David Obstler -- Chief Financial Officer Unknown speaker Chris Merwin -- Goldman Sachs -- Analyst Sterling Auty -- J.P. Morgan -- Analyst Brad Zelnick -- Credit Suisse -- Analyst Mohit Gogia -- Barclays -- Analyst Matt Swanson -- RBC Capital Markets -- Analyst George Iwanyc -- Oppenheimer & Co. Inc. -- Analyst Bhavan Suri -- William Blair -- Analyst Joey Marincek -- JMP Securities -- Analyst Brad Reback -- Stifel Financial Corp. -- Analyst Michael Turit -- KeyBanc Capital Markets -- Analyst Gregg Moskowitz -- Mizuho Securities -- Analyst Yun Kim -- Loop Capital Markets -- Analyst More DDOG analysis All earnings call transcripts This article is a transcript of this conference call produced for The Motley Fool. Datadog Inc (NASDAQ: DDOG) Q4 2020 Earnings Call Feb 11, 2021, 5:00 p.m. During this call, we will make statements related to our business that are forward looking under federal securities laws that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 including statements related to our future financial performance including our outlook for the first quarter and for the full-year 2021; our strategy, the potential benefits of our products, partnerships and investments in R&D and go to market; our ability to capitalize on our market opportunity; and the impact of the COVID-19 pandemic on our customers' usage of our platform and industry trends as well as the ability to benefit from these trends.
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Operator [Operator signoff] Duration: 64 minutes Call participants: AJ Ljubich -- Director of Investor Relations Olivier Pomel -- Co-Founder and Chief Executive Officer David Obstler -- Chief Financial Officer Unknown speaker Chris Merwin -- Goldman Sachs -- Analyst Sterling Auty -- J.P. Morgan -- Analyst Brad Zelnick -- Credit Suisse -- Analyst Mohit Gogia -- Barclays -- Analyst Matt Swanson -- RBC Capital Markets -- Analyst George Iwanyc -- Oppenheimer & Co. Inc. -- Analyst Bhavan Suri -- William Blair -- Analyst Joey Marincek -- JMP Securities -- Analyst Brad Reback -- Stifel Financial Corp. -- Analyst Michael Turit -- KeyBanc Capital Markets -- Analyst Gregg Moskowitz -- Mizuho Securities -- Analyst Yun Kim -- Loop Capital Markets -- Analyst More DDOG analysis All earnings call transcripts This article is a transcript of this conference call produced for The Motley Fool. Datadog Inc (NASDAQ: DDOG) Q4 2020 Earnings Call Feb 11, 2021, 5:00 p.m. So even when we say 70% of the customers have adopted the product, there's still a lot of growth to be had within those customers.
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812e6eb5-4b59-4cc3-a550-d06a268e621f
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718907.0
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2021-02-11 00:00:00 UTC
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After-Hours Earnings Report for February 11, 2021 : DIS, ILMN, DLR, DXCM, SGEN, DDOG, VRSN, NET, EXPE, HUBS, AEM, BIO
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DDOG
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https://www.nasdaq.com/articles/after-hours-earnings-report-for-february-11-2021-%3A-dis-ilmn-dlr-dxcm-sgen-ddog-vrsn-net
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The following companies are expected to report earnings after hours on 02/11/2021. Visit our Earnings Calendar for a full list of expected earnings releases.
Walt Disney Company (DIS) is reporting for the quarter ending December 31, 2020. The media company's consensus earnings per share forecast from the 14 analysts that follow the stock is $-0.45. This value represents a 129.41% decrease compared to the same quarter last year. DIS missed the consensus earnings per share in the 1st calendar quarter of 2020 by -27.71%. Zacks Investment Research reports that the 2021 Price to Earnings ratio for DIS is 135.45 vs. an industry ratio of 34.50, implying that they will have a higher earnings growth than their competitors in the same industry.
Illumina, Inc. (ILMN) is reporting for the quarter ending December 31, 2020. The biomedical (gene) company's consensus earnings per share forecast from the 4 analysts that follow the stock is $1.21. This value represents a 28.82% decrease compared to the same quarter last year. ILMN missed the consensus earnings per share in the 2nd calendar quarter of 2020 by -13.89%. Zacks Investment Research reports that the 2020 Price to Earnings ratio for ILMN is 100.22 vs. an industry ratio of 16.60, implying that they will have a higher earnings growth than their competitors in the same industry.
Digital Realty Trust, Inc. (DLR) is reporting for the quarter ending December 31, 2020. The reit company's consensus earnings per share forecast from the 9 analysts that follow the stock is $1.52. This value represents a 6.17% decrease compared to the same quarter last year. DLR missed the consensus earnings per share in the 1st calendar quarter of 2020 by -0.65%. Zacks Investment Research reports that the 2020 Price to Earnings ratio for DLR is 24.07 vs. an industry ratio of 19.10, implying that they will have a higher earnings growth than their competitors in the same industry.
DexCom, Inc. (DXCM) is reporting for the quarter ending December 31, 2020. The medical instruments company's consensus earnings per share forecast from the 11 analysts that follow the stock is $0.91. This value represents a 20.87% decrease compared to the same quarter last year. In the past year DXCM has beat the expectations every quarter. The highest one was in the 3rd calendar quarter where they beat the consensus by 46.88%. Zacks Investment Research reports that the 2020 Price to Earnings ratio for DXCM is 130.54 vs. an industry ratio of 33.20, implying that they will have a higher earnings growth than their competitors in the same industry.
Seagen Inc. (SGEN) is reporting for the quarter ending December 31, 2020. The biomedical (gene) company's consensus earnings per share forecast from the 8 analysts that follow the stock is $0.81. This value represents a 468.18% increase compared to the same quarter last year. In the past year SGEN has beat the expectations every quarter. The highest one was in the 3rd calendar quarter where they beat the consensus by 4475%. Zacks Investment Research reports that the 2020 Price to Earnings ratio for SGEN is 53.09 vs. an industry ratio of 16.60, implying that they will have a higher earnings growth than their competitors in the same industry.
Datadog, Inc. (DDOG) is reporting for the quarter ending December 31, 2020. The internet software company's consensus earnings per share forecast from the 8 analysts that follow the stock is $-0.02. This value represents a 0.00% decrease compared to the same quarter last year. DDOG missed the consensus earnings per share in the 3rd calendar quarter of 2020 by -100%. Zacks Investment Research reports that the 2020 Price to Earnings ratio for DDOG is -5777.50 vs. an industry ratio of -463.10.
VeriSign, Inc. (VRSN) is reporting for the quarter ending December 31, 2020. The internet software company's consensus earnings per share forecast from the 2 analysts that follow the stock is $1.29. This value represents a 2.38% increase compared to the same quarter last year. In the past year VRSN has beat the expectations every quarter. The highest one was in the 3rd calendar quarter where they beat the consensus by 18.25%. Zacks Investment Research reports that the 2020 Price to Earnings ratio for VRSN is 36.67 vs. an industry ratio of -33.20, implying that they will have a higher earnings growth than their competitors in the same industry.
Cloudflare, Inc. (NET) is reporting for the quarter ending December 31, 2020. The internet software company's consensus earnings per share forecast from the 9 analysts that follow the stock is $-0.08. This value represents a 20.00% increase compared to the same quarter last year. In the past year NET has met analyst expectations twice and beat the expectations the other two quarters. Zacks Investment Research reports that the 2020 Price to Earnings ratio for NET is -293.26 vs. an industry ratio of -463.10, implying that they will have a higher earnings growth than their competitors in the same industry.
Expedia Group, Inc. (EXPE) is reporting for the quarter ending December 31, 2020. The internet company's consensus earnings per share forecast from the 7 analysts that follow the stock is $-2.02. This value represents a 326.97% decrease compared to the same quarter last year. Zacks Investment Research reports that the 2020 Price to Earnings ratio for EXPE is -16.64 vs. an industry ratio of -1.00.
HubSpot, Inc. (HUBS) is reporting for the quarter ending December 31, 2020. The internet software company's consensus earnings per share forecast from the 8 analysts that follow the stock is $-0.42. This value represents a 4300.00% decrease compared to the same quarter last year. In the past year HUBS has beat the expectations every quarter. The highest one was in the 3rd calendar quarter where they beat the consensus by 30.61%. Zacks Investment Research reports that the 2020 Price to Earnings ratio for HUBS is -311.36 vs. an industry ratio of -463.10, implying that they will have a higher earnings growth than their competitors in the same industry.
Agnico Eagle Mines Limited (AEM) is reporting for the quarter ending December 31, 2020. The gold mining company's consensus earnings per share forecast from the 5 analysts that follow the stock is $0.64. This value represents a 72.97% increase compared to the same quarter last year. In the past year AEM has beat the expectations every quarter. The highest one was in the 3rd calendar quarter where they beat the consensus by 14.71%. Zacks Investment Research reports that the 2020 Price to Earnings ratio for AEM is 39.90 vs. an industry ratio of -3.40, implying that they will have a higher earnings growth than their competitors in the same industry.
Bio-Rad Laboratories, Inc. (BIO) is reporting for the quarter ending December 31, 2020. The medical products company's consensus earnings per share forecast from the 1 analyst that follows the stock is $3.10. This value represents a 33.62% increase compared to the same quarter last year. BIO missed the consensus earnings per share in the 4th calendar quarter of 2019 by -5.69%. Zacks Investment Research reports that the 2020 Price to Earnings ratio for BIO is 65.76 vs. an industry ratio of 55.10, implying that they will have a higher earnings growth than their competitors in the same industry.
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, Inc. (DDOG) is reporting for the quarter ending December 31, 2020. DDOG missed the consensus earnings per share in the 3rd calendar quarter of 2020 by -100%. Zacks Investment Research reports that the 2020 Price to Earnings ratio for DDOG is -5777.50 vs. an industry ratio of -463.10.
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Datadog, Inc. (DDOG) is reporting for the quarter ending December 31, 2020. DDOG missed the consensus earnings per share in the 3rd calendar quarter of 2020 by -100%. Zacks Investment Research reports that the 2020 Price to Earnings ratio for DDOG is -5777.50 vs. an industry ratio of -463.10.
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Datadog, Inc. (DDOG) is reporting for the quarter ending December 31, 2020. DDOG missed the consensus earnings per share in the 3rd calendar quarter of 2020 by -100%. Zacks Investment Research reports that the 2020 Price to Earnings ratio for DDOG is -5777.50 vs. an industry ratio of -463.10.
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Datadog, Inc. (DDOG) is reporting for the quarter ending December 31, 2020. DDOG missed the consensus earnings per share in the 3rd calendar quarter of 2020 by -100%. Zacks Investment Research reports that the 2020 Price to Earnings ratio for DDOG is -5777.50 vs. an industry ratio of -463.10.
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718908.0
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2021-02-11 00:00:00 UTC
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Looking For The Best Software Stocks To Buy In February? 3 Reporting Earnings Today
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DDOG
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https://www.nasdaq.com/articles/looking-for-the-best-software-stocks-to-buy-in-february-3-reporting-earnings-today-2021-02
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nan
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Are These The Top Software Stocks To Buy Today?
Software stocks have seen a meteoric rise in valuation recently. As more companies go digital and move their infrastructures to the cloud, top software stocks will no doubt enjoy substantial growth. We see how software companies like Zoom (NASDAQ: ZM) and Adobe (NASDAQ: ADBE) have grown over the last year thanks to a spike in demand for their software and services. In fact, the industry enjoyed such growth that many software companies decided to go public amid the pandemic.
Software companies with a focus on work-from-home products have been beneficiaries of the global pandemic. The reality is that our demand for software and its related services will still be on a high for the months and possibly years to come. As companies begin to adapt to this pandemic era, the likelihood of going back to how things were pre-pandemic is getting slimmer. Therefore, investors who are looking for the best software stocks to buy [or sell] now so they can capitalize on this market momentum. With that in mind, here are the top software stocks to consider buying this month.
Top Software Stocks To Buy [Or Sell] Now
Cloudflare Inc. (NYSE: NET)
Twitter Inc. (NYSE: TWTR)
Datadog Inc. (NASDAQ: DDOG)
Dexcom Inc. (NASDAQ: DXCM)
Cloudflare Inc.
Cloudflare is a web infrastructure and website security company that is based in California. The company specializes in providing content delivery network services, DDoS mitigation, and internet security to name a few. Also, the company claims that approximately 16% of Fortune 1,000 are paying Cloudflare customers. Cloudflare will announce its fourth-quarter fiscal today. With NET stock up over 20% this year, investors clearly have much to look forward to.
In the company’s third-quarter financials, it posted total revenue of $114.2 million, which is a 54% increase year-over-year. Cloudflare also reported a strong large customer growth, adding a record of roughly 100 net larger enterprise customers in the quarter, in addition to its first $10 million annual recurring revenue (ARR) customer. The company also ended the quarter with $1.05 billion in cash.
Source: TD Ameritrade TOS
“Our third quarter represented many significant milestones including surpassing $100M in revenue, crossing 100,000 paying customers, and releasing more than a dozen new products and features,” said Matthew Prince, co-founder & CEO of Cloudflare. With such impressive financials, will you consider buying NET stock ahead of its financials?
Read More
Best Stocks To Buy For 2021? 4 Fintech Stocks To Watch
Are These The Best Tech Stocks To Buy In February? 4 Names To Watch
Twitter Inc.
Twitter is a microblogging and social networking service in which users can post and interact with messages known as “tweets”. The company is an open service that is home to a world of diverse people, perspectives, ideas, and information. TWTR stock rose by 13% on Wednesday. This came after the company announced its fourth-quarter fiscal on Tuesday.
In it, the company reported that its monetizable daily active usage increased by 27% year-over-year at 192 million users. Twitter also reported a strong finish to the year with a revenue of $1.29 billion, up by 28% in the same period. It reflects better-than-expected performance across all its major products and geographies. In the quarter, the company also made significant progress in its brand and direct response products.
Source: TD Ameritrade TOS
Its strong ad revenue came from mobile app promotion as it brings a new ad format, stronger attribution, and improved targeting. This resulted in a 31% year-over-year increase in total ad revenue. Twitter also said that growth from product improvements reached an all-time high, with additional benefit from an increased global conversation around the coronavirus, the run-up to the U.S. elections, and other current events. With so many good things happening to the company, is TWTR stock a top software stock to buy?
[Read More] 4 Top Semiconductor Stocks To Watch Now Amid A Global Chip Shortage
Datadog Inc.
Datadog offers a monitoring and security platform for cloud applications. The company provides end-to-end traces, metrics, and logs to help make applications, infrastructure, and third-party services entirely observable. These capabilities would then help businesses secure their systems, avoid downtime, and ensure customers are getting the best user experience. DDOG stock has been up by over 25% year-to-date. The company will report its fourth-quarter fiscal today.
How has the company been doing financially? In its latest quarter financials posted in November, the company reported that its revenue grew by 61% year-over-year to $155 million. The company also saw its larger customers ($100,000+) grow by over 52% to 1,107 compared to a year earlier. The company certainly demonstrates continued high growth at scale.
Source: TD Ameritrade TOS
As the pandemic has driven organizations globally and across industries to prioritize their digital operations like never before, Datadog will continue to be a trusted partner in enabling this digital transformation and cloud migration. All things said, will you add DDOG stock to your portfolio?
[Read More] Looking For The Best Health Care Stocks To Buy This Month? 4 To Consider
Dexcom Inc.
Dexcom is a company that develops and manufactures monitoring systems for diabetes management. In detail, the company is based in California and integrates its software and products for patients to have a real-time look at their glucose readings. Through its continuous glucose monitoring systems, allows for easier diabetes management decisions and will provide crucial information for patients. Dexcom will post its fourth-quarter financials after today’s closing bell as well.
Source: TD Ameritrade TOS
Last month, the company reported its preliminary and unaudited revenue for its fourth quarter. The company says that it will meet or exceed $567 million, which is an increase of 23% year-over-year. For its fiscal 2020, the company’s total preliminary revenue is expected to meet or exceed $1.925 billion, a 30% increase from a year ago.
CEO Kevin Sayer had this to say, “Dexcom demonstrated its resilience in the face of the unique challenges of 2020, delivering revenue growth of nearly $450 million over 2019 and making several significant steps to extend our growth opportunity well into the future. I am incredibly proud of the work of our teams and want to express my gratitude to our employees for prioritizing the care of our customers and service to our communities throughout the year.” Will you consider buying DXCM stock for these reasons?
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 Sell] Now Cloudflare Inc. (NYSE: NET) Twitter Inc. (NYSE: TWTR) Datadog Inc. (NASDAQ: DDOG) Dexcom Inc. (NASDAQ: DXCM) Cloudflare Inc. Cloudflare is a web infrastructure and website security company that is based in California. DDOG stock has been up by over 25% year-to-date. All things said, will you add DDOG stock to your portfolio?
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Top Software Stocks To Buy [Or Sell] Now Cloudflare Inc. (NYSE: NET) Twitter Inc. (NYSE: TWTR) Datadog Inc. (NASDAQ: DDOG) Dexcom Inc. (NASDAQ: DXCM) Cloudflare Inc. Cloudflare is a web infrastructure and website security company that is based in California. DDOG stock has been up by over 25% year-to-date. All things said, will you add DDOG stock to your portfolio?
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Top Software Stocks To Buy [Or Sell] Now Cloudflare Inc. (NYSE: NET) Twitter Inc. (NYSE: TWTR) Datadog Inc. (NASDAQ: DDOG) Dexcom Inc. (NASDAQ: DXCM) Cloudflare Inc. Cloudflare is a web infrastructure and website security company that is based in California. DDOG stock has been up by over 25% year-to-date. All things said, will you add DDOG stock to your portfolio?
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Top Software Stocks To Buy [Or Sell] Now Cloudflare Inc. (NYSE: NET) Twitter Inc. (NYSE: TWTR) Datadog Inc. (NASDAQ: DDOG) Dexcom Inc. (NASDAQ: DXCM) Cloudflare Inc. Cloudflare is a web infrastructure and website security company that is based in California. DDOG stock has been up by over 25% year-to-date. All things said, will you add DDOG stock to your portfolio?
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7fc0273b-6a11-438e-9e9f-95620a8ec523
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718909.0
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2021-02-10 00:00:00 UTC
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Beware of New Relic's Short-Term Headwinds
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DDOG
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https://www.nasdaq.com/articles/beware-of-new-relics-short-term-headwinds-2021-02-10
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nan
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Following better-than-expected fiscal third-quarter earnings results, New Relic's (NYSE: NEWR) management recently warned investors of temporary headwinds over the next few quarters because of the company's transition to a new pricing model. As a result, the tech company's stock price plunged by 16.25% late last week.
Despite the mix of news, investors shouldn't consider buying the dip, as the performance tracking software company's challenges may expand beyond the short term.
From a subscription to a consumption pricing model
With the release of its new cloud platform New Relic One last year, New Relic has become an observability specialist. That means it provides developers and engineers with an integrated and complete look at an enterprise's operational data which helps it anticipate issues and improve the performance of computing infrastructures and applications.
At the end of 2020, the company announced a transition from a subscription to a consumption pricing model. This new model allows enterprises to commit to some minimum volume for a better deal. And extra consumption won't be overcharged compared to base pricing.
Image source: Getty Images.
That change offers customers more flexibility. According to management, it will also shift New Relic's focus. Instead of paying extra attention to customers only when signing or renewing subscriptions, the company will be looking to constantly improve its offerings and relationships with customers to encourage more consumption.
However, with that new pricing model, a negative development started to materialize during the last quarter. Some customers preferred to lower their upfront commitments relative to their expected consumption to take advantage of the customer-friendly pricing when exceeding committed volumes. That means New Relic will recognize less revenue over the short term, with potential upside as customers' consumption increases.
As a result, management expects revenue to grow by only 4% year over year to a range of $166 million to $167 million during the current fiscal quarter ending on March 31.
Competitive challenges
During the earnings call, CEO Lew Cirne expressed confidence in seeing customers increasing their consumption above their lower-than-expected committed volumes over time. However, customers' lower commitments may be an early sign of long-term competitive challenges that go beyond pricing decisions.
New Relic has been generating lower -- and declining -- revenue growth over the last several quarters compared to many competitors, such as Dynatrace (NYSE: DT), Datadog (NASDAQ: DDOG), and Sumo Logic (NASDAQ: SUMO). Indeed, these observability players have been enjoying strong results as they have been enhancing their cloud platforms with new features and cybersecurity capabilities.
NEWR Revenue (Quarterly YoY Growth) data by YCharts
Besides, with its subscription-based business that represented 93% of revenue during the last quarter, Dynatrace posted better-than-expected quarterly earnings results and strong guidance. That shows cloud-based observability platforms can thrive with subscription-based pricing, which was not the case with New Relic.
Also, New Relic's recent customer-friendly decisions suggest the company lacks pricing power. In addition to the absence of extra fees for overconsumption in its new pricing structure, the company released in July a generous free tier to attract new small customers.
Finally, New Relic's efforts to develop and market its observability platform contribute to diminishing operating margin. During the last quarter, operating losses under generally accepted accounting principles (GAAP) reached $54 million, compared to a loss of $27 million in the prior-year quarter.
Granted, the company is facing temporary extra costs with the move of its computing infrastructure to Amazon Web Services (AWS), which diminishes its gross margin. But more troubling, operating leverage isn't materializing despite increasing scale, as New Relic must keep investing a large -- and growing -- part of its revenue in research and development and sales and marketing expenses to update its offering and improve its performance.
NEWR Gross Profit Margin (Quarterly) data by YCharts
Looking forward
Given management's optimism beyond the short term with forecast increased consumption from customers, the 16.25% drop in the company's stock price following the release of the quarterly results looks like an opportunity to buy the dip.
But the stock is still trading at a high price-to-sales ratio of 6.4, based on the midpoint of full-year revenue guidance. That suggests the market is anticipating revenue growth to accelerate through 2021, which may not happen given the company's recent underwhelming performance in an increasingly competitive environment.
Thus, investors should wait for growing consumption from customers to materialize beyond the next couple of quarters before considering buying the tech stock at that valuation.
This article represents the opinion of the writer, who may disagree with the "official" recommendation position of a Motley Fool premium advisory service. We're motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.
10 stocks we like better than New Relic
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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. Herve Blandin has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon, Datadog, and New Relic and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon. 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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New Relic has been generating lower -- and declining -- revenue growth over the last several quarters compared to many competitors, such as Dynatrace (NYSE: DT), Datadog (NASDAQ: DDOG), and Sumo Logic (NASDAQ: SUMO). Following better-than-expected fiscal third-quarter earnings results, New Relic's (NYSE: NEWR) management recently warned investors of temporary headwinds over the next few quarters because of the company's transition to a new pricing model. Competitive challenges During the earnings call, CEO Lew Cirne expressed confidence in seeing customers increasing their consumption above their lower-than-expected committed volumes over time.
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New Relic has been generating lower -- and declining -- revenue growth over the last several quarters compared to many competitors, such as Dynatrace (NYSE: DT), Datadog (NASDAQ: DDOG), and Sumo Logic (NASDAQ: SUMO). Following better-than-expected fiscal third-quarter earnings results, New Relic's (NYSE: NEWR) management recently warned investors of temporary headwinds over the next few quarters because of the company's transition to a new pricing model. NEWR Revenue (Quarterly YoY Growth) data by YCharts Besides, with its subscription-based business that represented 93% of revenue during the last quarter, Dynatrace posted better-than-expected quarterly earnings results and strong guidance.
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New Relic has been generating lower -- and declining -- revenue growth over the last several quarters compared to many competitors, such as Dynatrace (NYSE: DT), Datadog (NASDAQ: DDOG), and Sumo Logic (NASDAQ: SUMO). Following better-than-expected fiscal third-quarter earnings results, New Relic's (NYSE: NEWR) management recently warned investors of temporary headwinds over the next few quarters because of the company's transition to a new pricing model. From a subscription to a consumption pricing model With the release of its new cloud platform New Relic One last year, New Relic has become an observability specialist.
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New Relic has been generating lower -- and declining -- revenue growth over the last several quarters compared to many competitors, such as Dynatrace (NYSE: DT), Datadog (NASDAQ: DDOG), and Sumo Logic (NASDAQ: SUMO). Instead of paying extra attention to customers only when signing or renewing subscriptions, the company will be looking to constantly improve its offerings and relationships with customers to encourage more consumption. NEWR Revenue (Quarterly YoY Growth) data by YCharts Besides, with its subscription-based business that represented 93% of revenue during the last quarter, Dynatrace posted better-than-expected quarterly earnings results and strong guidance.
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16af9545-3bb4-4bb9-873b-207ea138eb4a
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718910.0
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2021-02-10 00:00:00 UTC
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At Its All-Time High, Is This Cloud Stock a Buy?
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DDOG
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https://www.nasdaq.com/articles/at-its-all-time-high-is-this-cloud-stock-a-buy-2021-02-10
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nan
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The cloud monitoring specialist Dynatrace (NYSE: DT) posted better-than-expected fiscal third-quarter earnings results. Yet investors should remain prudent. The company's elevated valuation, with a stock price at its all-time highs, suggests the market expects flawless execution over the long term amid intensifying competition -- a risky proposition.
Solid performance
Over the last several years, Dynatrace has expanded its core application monitoring capabilities to build an integrated and automated platform that leverages artificial intelligence to deliver infrastructure monitoring, business intelligence, application security, and more.
With solid execution and tailwinds from the secular growth of cloud computing, the company sustained strong revenue growth and increasing profitability. During its fiscal third quarter, which ended on Dec. 31, revenue grew 28% year over year (25% at constant currency) to $182.9 million, compared to 25% in the prior-year quarter.
Image source: Getty Images.
In particular, the net expansion rate exceeded 120% (for the 11th quarter in a row), which indicates that existing customers spent at least 20% more than last year, as the company upsold solutions beyond its core application monitoring capabilities. As an illustration, CEO John Van Siclen highlighted during the earnings call that more than 33% of customers used at least three modules, up from 24% one year ago.
In addition, in contrast with many high-growth cloud players, Dynatrace is already profitable on a generally accepted accounting principles (GAAP) basis. During the last quarter, GAAP net income increased to $23.2 million, up from $1.8 million in the prior-year quarter.
And with scale and operating leverage, profits should keep growing. Management anticipates full-year non-GAAP (adjusted) operating income to land in the range of $202 million to $204 million, up from $130 million one year ago.
The company's strategy explains such an enviable bottom line for a growing cloud vendor. Indeed, by focusing on large enterprises, Dynatrace minimizes its sales and marketing expenses, which represented 35.4% of revenue during the last quarter, compared to more than 50% for several competitors such as Splunk, New Relic, and Sumo Logic.
DT Sales and Marketing Expense (% of Quarterly Revenues) data by YCharts
High expectations amid increasing competition
Following such strong performance, Dynatrace's stock price more than doubled since its March lows to all-time highs, at 21 times the midpoint of management's forecast full-year revenue. That suggests the market expects nothing less than phenomenal execution to continue over the next several years.
Granted, the company addresses large markets that will expand from $50 billion to $68 billion over time, according to management, which leaves plenty of room for growth. But those expanding markets have attracted many competitors.
Indeed, several monitoring specialists adopted the same strategy as Dynatrace: They have been expanding their core products to develop integrated platforms that cover many aspects of the monitoring, analytics, and security areas.
For instance, the legacy application monitoring specialist New Relic released its New Relic One platform last year to propose an integrated observability solution that includes network monitoring, logging (records of device-generated events), and more. The high-growth cloud-native vendor Datadog has been enhancing its monitoring offerings at a rapid pace to become an observability platform, too, with extra cybersecurity capabilities.
In addition, some legacy tech giants have been ramping up their efforts in that area. For instance, last week Cisco Systems announced new cybersecurity features for its application monitoring solution AppDynamics. And in October, Oracle revealed its new cloud observability and management platform.
That intensifying competition doesn't mean Dynatrace won't thrive. But the company will have to sustain high research and development and sales and marketing expenses to keep innovating and remain competitive.
Thus, Dynatrace's elevated stock price doesn't leave much margin of safety should the company deliver less-than-impressive performance in an increasingly challenging environment. So investors looking for exposure to the tech sector should stay on the sidelines and consider other attractive opportunities instead.
10 stocks we like better than Dynatrace Holdings LLC
When investing geniuses David and Tom Gardner have 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.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Dynatrace Holdings LLC 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 November 20, 2020
Herve Blandin owns shares of Cisco Systems. The Motley Fool owns shares of and recommends Datadog, New Relic, and Splunk. 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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The company's elevated valuation, with a stock price at its all-time highs, suggests the market expects flawless execution over the long term amid intensifying competition -- a risky proposition. In particular, the net expansion rate exceeded 120% (for the 11th quarter in a row), which indicates that existing customers spent at least 20% more than last year, as the company upsold solutions beyond its core application monitoring capabilities. Indeed, by focusing on large enterprises, Dynatrace minimizes its sales and marketing expenses, which represented 35.4% of revenue during the last quarter, compared to more than 50% for several competitors such as Splunk, New Relic, and Sumo Logic.
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Solid performance Over the last several years, Dynatrace has expanded its core application monitoring capabilities to build an integrated and automated platform that leverages artificial intelligence to deliver infrastructure monitoring, business intelligence, application security, and more. DT Sales and Marketing Expense (% of Quarterly Revenues) data by YCharts High expectations amid increasing competition Following such strong performance, Dynatrace's stock price more than doubled since its March lows to all-time highs, at 21 times the midpoint of management's forecast full-year revenue. For instance, the legacy application monitoring specialist New Relic released its New Relic One platform last year to propose an integrated observability solution that includes network monitoring, logging (records of device-generated events), and more.
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Solid performance Over the last several years, Dynatrace has expanded its core application monitoring capabilities to build an integrated and automated platform that leverages artificial intelligence to deliver infrastructure monitoring, business intelligence, application security, and more. DT Sales and Marketing Expense (% of Quarterly Revenues) data by YCharts High expectations amid increasing competition Following such strong performance, Dynatrace's stock price more than doubled since its March lows to all-time highs, at 21 times the midpoint of management's forecast full-year revenue. For instance, the legacy application monitoring specialist New Relic released its New Relic One platform last year to propose an integrated observability solution that includes network monitoring, logging (records of device-generated events), and more.
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DT Sales and Marketing Expense (% of Quarterly Revenues) data by YCharts High expectations amid increasing competition Following such strong performance, Dynatrace's stock price more than doubled since its March lows to all-time highs, at 21 times the midpoint of management's forecast full-year revenue. For instance, the legacy application monitoring specialist New Relic released its New Relic One platform last year to propose an integrated observability solution that includes network monitoring, logging (records of device-generated events), and more. * David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Dynatrace Holdings LLC wasn't one of them!
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718911.0
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2021-02-07 00:00:00 UTC
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3 Tech Stocks to Buy in the New Year
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DDOG
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https://www.nasdaq.com/articles/3-tech-stocks-to-buy-in-the-new-year-2021-02-07
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The coronavirus has prompted many companies to accelerate their digital transformation plans. As these businesses look to new digital tools, they are increasingly adopting cloud-based software. With a mix of legacy applications and a growing set of new cloud products, companies are turning to Twilio (NYSE: TWLO), Cloudflare (NYSE: NET), and Datadog (NASDAQ: DDOG) to make the most of their digital infrastructure. Let's find out why investors should consider upgrading their status to shareholder for this trio in the new year.
Twilio: Bringing customer engagement into the cloud era
We have all gotten used to status messages on our mobile devices for the services we use. It could be an update that your driver will be a few minutes late, notification that your pizza is on the way, or a reminder of your upcoming medical appointment. Twilio is the software that makes these messages possible, and its developer-friendly platform is only just getting started.
Since its founding in 2008, it has grown to be a $1.5 billion annual revenue business that's still posting torrid growth. Last quarter, customers grew 21% year over year to 208,000, and revenue grew by 52% to $447 million. Its customers are spending more every year, as its enviable dollar-based net expansion rate of 137% shows. Even though it's losing money, the $3.3 billion in cash and marketable securities on its balance sheet will allow it to continue to invest in growth for years.
As the company goes after its $79 billion addressable market, this platform-as-a-service player's best days are still ahead. Maybe you should consider adding this gem to your portfolio.
Image source: Getty Images.
Cloudflare: An internet "fast pass"
Cloudflare's mission is to "build a better internet." What that means for its customers is that they can achieve better application performance, improved security, and high reliability for the ever-increasing demands of users. High-tech companies like Hubspot, Shopify, and Zendesk all use Cloudflare to power their cloud applications to ensure customers have services that are always on, with lightning-fast response times.
Its business model and innovative technology have rocketed this infrastructure-as-a-service company to an expected $423 million in revenue for 2020. This represents an amazing 47% year-over-year gain. But what's even more exciting is that its 100,000-plus customers end up spending more every year. In fact, its dollar-based net expansion rate has been at or above 115% over the last 10 quarters. Like Twilio, the company is losing money, but the $26 million loss last quarter is a small fraction of the $1.05 billion in cash and marketable securities on its balance sheet.
It has a massive opportunity of $32 billion with its estimated addressable market, growing to $47 billion by 2022. With Cloudflare's superior platform, its sticky ecosystem, and a quality founder-led management team, this business is well-positioned to continue to win in the years ahead. It might be just the stock for you in the new year.
Datadog: Making your cloud network easier to manage
Datadog came public at $27 in September 2019, and its stock has rocketed up four-fold since then. Investors may be worried that they've missed the boat, but this (Data)dog still has plenty of room to run. This application performance monitoring (APM) specialist helps information technology teams watch and manage the performance of their ever-growing environment of cloud apps, internet security measures, and infrastructure all from one screen. The days of companies using APM tools is just beginning. Gartner estimates that as of 2018, only 5% of all applications were being monitored, and this will only grow as cloud applications become more prevalent.
Datadog's innovative streak and sticky ecosystem have captured more than 1,100 customers paying over $100,000 in subscription fees annually, up 52% from a year ago. Total revenue for its most recent quarter grew 61% to $155 million and posted strong cash flow from operations at $36 million. Its dollar-based net retention rates are enviable at over 130%. Like its cloud brothers mentioned above, it's losing money too. But with $1.5 billion in cash and marketable securities on the balance sheet, it's not going broke anytime soon.
Interested investors should watch to see if the company will hit its targeted fourth-quarter revenue of $162 million to $164 million when it announces earnings on Feb. 11. With a history of earnings beats, I would not be surprised if the company trumps its targeted 43% revenue year-over-year growth on its way to taking more of its huge $35 billion addressable market.
You should consider bringing this dog's stock home to roost in your portfolio.
The bottom line for investors
This trio of high-growth software stocks is not cheap by any measure. Since the companies lack earnings, the price-to-sales ratios give readers an idea of the premium the market is putting on their valuations. Twilio looks like a value play with its price-to-sales ratio at "only" 36, compared to the other duo in the low 60s. Investors interested in these stocks should buy in over time and plan to hold for the long term. As companies move to the cloud over the next several decades, these three stocks should make patient shareholders very happy.
10 stocks we like better than Twilio
When investing geniuses David and Tom Gardner have 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.*
David and Tom 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 November 20, 2020
Brian Withers owns shares of Cloudflare, Inc., Datadog, Shopify, and Twilio. The Motley Fool owns shares of and recommends Cloudflare, Inc., Datadog, HubSpot, Shopify, Twilio, and Zendesk. 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 a mix of legacy applications and a growing set of new cloud products, companies are turning to Twilio (NYSE: TWLO), Cloudflare (NYSE: NET), and Datadog (NASDAQ: DDOG) to make the most of their digital infrastructure. High-tech companies like Hubspot, Shopify, and Zendesk all use Cloudflare to power their cloud applications to ensure customers have services that are always on, with lightning-fast response times. Like Twilio, the company is losing money, but the $26 million loss last quarter is a small fraction of the $1.05 billion in cash and marketable securities on its balance sheet.
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With a mix of legacy applications and a growing set of new cloud products, companies are turning to Twilio (NYSE: TWLO), Cloudflare (NYSE: NET), and Datadog (NASDAQ: DDOG) to make the most of their digital infrastructure. This application performance monitoring (APM) specialist helps information technology teams watch and manage the performance of their ever-growing environment of cloud apps, internet security measures, and infrastructure all from one screen. The Motley Fool owns shares of and recommends Cloudflare, Inc., Datadog, HubSpot, Shopify, Twilio, and Zendesk.
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With a mix of legacy applications and a growing set of new cloud products, companies are turning to Twilio (NYSE: TWLO), Cloudflare (NYSE: NET), and Datadog (NASDAQ: DDOG) to make the most of their digital infrastructure. Like Twilio, the company is losing money, but the $26 million loss last quarter is a small fraction of the $1.05 billion in cash and marketable securities on its balance sheet. See the 10 stocks *Stock Advisor returns as of November 20, 2020 Brian Withers owns shares of Cloudflare, Inc., Datadog, Shopify, and Twilio.
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With a mix of legacy applications and a growing set of new cloud products, companies are turning to Twilio (NYSE: TWLO), Cloudflare (NYSE: NET), and Datadog (NASDAQ: DDOG) to make the most of their digital infrastructure. Last quarter, customers grew 21% year over year to 208,000, and revenue grew by 52% to $447 million. Even though it's losing money, the $3.3 billion in cash and marketable securities on its balance sheet will allow it to continue to invest in growth for years.
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718912.0
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2021-02-04 00:00:00 UTC
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Noteworthy Thursday Option Activity: DDOG, MKL, LUV
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DDOG
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https://www.nasdaq.com/articles/noteworthy-thursday-option-activity%3A-ddog-mkl-luv-2021-02-04
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Among the underlying components of the Russell 3000 index, we saw noteworthy options trading volume today in Datadog Inc (Symbol: DDOG), where a total of 16,913 contracts have traded so far, representing approximately 1.7 million underlying shares. That amounts to about 52.5% of DDOG's average daily trading volume over the past month of 3.2 million shares. Especially high volume was seen for the $110 strike call option expiring February 05, 2021, with 2,262 contracts trading so far today, representing approximately 226,200 underlying shares of DDOG. Below is a chart showing DDOG's trailing twelve month trading history, with the $110 strike highlighted in orange:
Markel Corp (Symbol: MKL) saw options trading volume of 359 contracts, representing approximately 35,900 underlying shares or approximately 52.3% of MKL's average daily trading volume over the past month, of 68,610 shares. Especially high volume was seen for the $1100 strike call option expiring February 19, 2021, with 66 contracts trading so far today, representing approximately 6,600 underlying shares of MKL. Below is a chart showing MKL's trailing twelve month trading history, with the $1100 strike highlighted in orange:
And Southwest Airlines Co (Symbol: LUV) options are showing a volume of 37,980 contracts thus far today. That number of contracts represents approximately 3.8 million underlying shares, working out to a sizeable 52.2% of LUV's average daily trading volume over the past month, of 7.3 million shares. Particularly high volume was seen for the $50 strike call option expiring March 19, 2021, with 6,778 contracts trading so far today, representing approximately 677,800 underlying shares of LUV. Below is a chart showing LUV's trailing twelve month trading history, with the $50 strike highlighted in orange:
For the various different available expirations for DDOG options, MKL options, or LUV 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 $110 strike call option expiring February 05, 2021, with 2,262 contracts trading so far today, representing approximately 226,200 underlying shares of DDOG. Among the underlying components of the Russell 3000 index, we saw noteworthy options trading volume today in Datadog Inc (Symbol: DDOG), where a total of 16,913 contracts have traded so far, representing approximately 1.7 million underlying shares. That amounts to about 52.5% of DDOG's average daily trading volume over the past month of 3.2 million shares.
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Especially high volume was seen for the $110 strike call option expiring February 05, 2021, with 2,262 contracts trading so far today, representing approximately 226,200 underlying shares of DDOG. Below is a chart showing DDOG's trailing twelve month trading history, with the $110 strike highlighted in orange: Markel Corp (Symbol: MKL) saw options trading volume of 359 contracts, representing approximately 35,900 underlying shares or approximately 52.3% of MKL's average daily trading volume over the past month, of 68,610 shares. Among the underlying components of the Russell 3000 index, we saw noteworthy options trading volume today in Datadog Inc (Symbol: DDOG), where a total of 16,913 contracts have traded so far, representing approximately 1.7 million underlying shares.
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Among the underlying components of the Russell 3000 index, we saw noteworthy options trading volume today in Datadog Inc (Symbol: DDOG), where a total of 16,913 contracts have traded so far, representing approximately 1.7 million underlying shares. Especially high volume was seen for the $110 strike call option expiring February 05, 2021, with 2,262 contracts trading so far today, representing approximately 226,200 underlying shares of DDOG. Below is a chart showing DDOG's trailing twelve month trading history, with the $110 strike highlighted in orange: Markel Corp (Symbol: MKL) saw options trading volume of 359 contracts, representing approximately 35,900 underlying shares or approximately 52.3% of MKL's average daily trading volume over the past month, of 68,610 shares.
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Especially high volume was seen for the $110 strike call option expiring February 05, 2021, with 2,262 contracts trading so far today, representing approximately 226,200 underlying shares of DDOG. Below is a chart showing DDOG's trailing twelve month trading history, with the $110 strike highlighted in orange: Markel Corp (Symbol: MKL) saw options trading volume of 359 contracts, representing approximately 35,900 underlying shares or approximately 52.3% of MKL's average daily trading volume over the past month, of 68,610 shares. Below is a chart showing LUV's trailing twelve month trading history, with the $50 strike highlighted in orange: For the various different available expirations for DDOG options, MKL options, or LUV options, visit StockOptionsChannel.com.
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352db5c0-c240-4cf1-9269-9a675769857a
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718913.0
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2021-02-04 00:00:00 UTC
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These Long-Term Tailwinds Make Palantir Stock a Great Investment
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DDOG
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https://www.nasdaq.com/articles/these-long-term-tailwinds-make-palantir-stock-a-great-investment-2021-02-04
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
As one of the most exciting IPOs last year, Palantir (NYSE:PLTR) remains a leader in a very exciting industry. PLTR stock benefits from the company having a frontline advantage to impact the way governments operate (as far as the technology is concerned).
PLTR) headquarters" width="300" height="169">
Source: Sundry Photography / Shutterstock.com
This growing influence in the public sphere is reflected in its numbers. PLTR stock is up 260% since going public with signs of more upside ahead.
Although many consider the shares to be overvalued at their current price, the long-term prospects of the company make it a great investment.
Here’s why Palantir is worth betting on this year.
Government Contracts and PLTR Stock
The tech industry’s influence is far and wide but few have the ability to impact agencies in the public domain. This is where Palantir’s key advantage comes into play.
7 Blue Chip Stocks to Help Prepare For Your Retirement
The company creates technology that deals with policing, big data, surveillance and AI. These solutions are made available to government agencies at a more in-depth and higher level.
However, given that this also requires a high level of confidentiality, Palantir’s full capabilities are not made available to the public.
Nevertheless, Palantir’s market reputation and its ability to cater to the needs of the government is a major reason for its success in the public markets.
In the coming years, the company’s technology could be used across various government agencies. This will enable it to have a direct influence on how governments operate. Adding to this, the partnerships with several government agencies also results in massive revenue potential for the company.
In terms of the numbers, Palantir has generated some impressive gains since going public. Management estimates revenue for 2020 will amount to $1.072 billion and its stock is already up 2.5x since its IPO.
At this revenue value, shares are currently trading at approximately 40 times. While this number seems high, it is still on par with industry peers. Datadog (NASDAQ:DDOG) trades at 50 times projected revenue while Snowflake (NYSE:SNOW) has a P/S ratio of 150.
Moreover, Palantir’s biggest customer is the government which could potentially lead to lucrative long-term contracts in the coming years. The company is also planning to scale its businesses in the surveillance and national security sectors which will add to its revenue numbers.
PLTR stock seems a bit pricey right now but investors who are in it for the long-haul will find it a great investment.
Palantir Spikes on Investors’ Optimistic Outlook
Palantir shares have been on a strong run this past month, thanks to increased investor optimism in the stock. On Jan. 28, the company announced its multi-year agreement with Rio Tinto (NYSE:RIO) to license its Foundry platform to the company. According to Rio Tinto the “significant industry partnership” is an important step in the digital transformation of its business.
In more recent news, the sub-Reddit account, r/WallStreetBets, which has proven its ability to influence major price movements in the stock market (see here) often discusses Palantir in its community.
On Monday shares of the company surged 10.2%. This rally is a result of shared optimism on the earning potential of PLTR stock by Redditors on Wall Street Bets. By the end of the day, nearly 180 million shares had traded hands.
Adding to its success, Palantir delivered a successful Demo Day last week. The event shared the highlights and growth outlook of its individual platforms.
Shares of the company spiked by 18% following Demo Day. Investor optimism on Palantir stock continues to remain at an all-time high with this Seeking Alpha writer even giving it a price target of $75 by 2023.
The Bottom Line
After issuing its IPO at $10 last year, shares of Palantir are trending at $35.18 as of this writing. Yes, this is pricey given its revenue levels but it’s also worth looking at from a different lens.
Palantir’s price point is a reflection of investors’ bullish sentiments towards the stock. As a major player in an industry that is known for its long-term contracts, the company has major revenue potential.
For this reason, I am bullish on PLTR stock. This growth stock is worth betting on to gain from its long-term tailwinds.
On the date of publication, Divya Premkumar did not have (either directly or indirectly) any positions in any of the securities mentioned in this article.
Divya Premkumar has a finance degree from the University of Houston, Texas. She is a financial writer and analyst who has written stories on various financial topics from investing to personal finance. Divya has been writing for InvestorPlace since 2020.
The post These Long-Term Tailwinds Make Palantir Stock a Great Investment 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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Datadog (NASDAQ:DDOG) trades at 50 times projected revenue while Snowflake (NYSE:SNOW) has a P/S ratio of 150. 7 Blue Chip Stocks to Help Prepare For Your Retirement The company creates technology that deals with policing, big data, surveillance and AI. In more recent news, the sub-Reddit account, r/WallStreetBets, which has proven its ability to influence major price movements in the stock market (see here) often discusses Palantir in its community.
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Datadog (NASDAQ:DDOG) trades at 50 times projected revenue while Snowflake (NYSE:SNOW) has a P/S ratio of 150. InvestorPlace - Stock Market News, Stock Advice & Trading Tips As one of the most exciting IPOs last year, Palantir (NYSE:PLTR) remains a leader in a very exciting industry. Palantir Spikes on Investors’ Optimistic Outlook Palantir shares have been on a strong run this past month, thanks to increased investor optimism in the stock.
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Datadog (NASDAQ:DDOG) trades at 50 times projected revenue while Snowflake (NYSE:SNOW) has a P/S ratio of 150. InvestorPlace - Stock Market News, Stock Advice & Trading Tips As one of the most exciting IPOs last year, Palantir (NYSE:PLTR) remains a leader in a very exciting industry. Government Contracts and PLTR Stock The tech industry’s influence is far and wide but few have the ability to impact agencies in the public domain.
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Datadog (NASDAQ:DDOG) trades at 50 times projected revenue while Snowflake (NYSE:SNOW) has a P/S ratio of 150. InvestorPlace - Stock Market News, Stock Advice & Trading Tips As one of the most exciting IPOs last year, Palantir (NYSE:PLTR) remains a leader in a very exciting industry. PLTR stock benefits from the company having a frontline advantage to impact the way governments operate (as far as the technology is concerned).
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2021-01-29 00:00:00 UTC
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Got $4,000? 4 Growth Stocks Begging to Be Bought
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DDOG
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https://www.nasdaq.com/articles/got-%244000-4-growth-stocks-begging-to-be-bought-2021-01-29
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Growth stocks versus value stocks: It's possibly the oldest debate on Wall Street.
Historically, value stocks have led to higher average annual returns, according to a Bank of America/Merrill Lynch report that examined the 90-year period between 1926 and 2015. But since the end of the Great Recession, growth stocks have pummeled value stocks. Record-low interest rates are fueling borrowing and allowing growth stocks to hire, innovate, and acquire with ease.
With lending rates expected to remain low for years as the U.S. economy recovers from the crippling coronavirus pandemic, growth stocks should remain in focus. If you have, say, $4,000 in cash that you won't need to pay bills or cover emergencies, then you have more than enough capital to dive into the following four growth stocks.
Image source: Getty Images.
Datadog
Most software-as-a-service (SaaS) stocks have been unstoppable over the past year, and application performance monitoring company Datadog (NASDAQ: DDOG) is no exception. The future remains bright, and Datadog might just be one of the fastest-growing SaaS stocks over the next five years.
Datadog has clearly benefited from the coronavirus pandemic. Businesses forced to abandon the traditional work environment have become more reliant on cloud applications. These include the solutions offered by Datadog, which help businesses better understand user behavior and improve their knowledge of key business metrics. All of this will still be important in a post-pandemic environment.
Arguably the most impressive aspect of Datadog is its ability to attract sizable businesses to its platform. The company ended September with 1,107 customers that had an annual recurring revenue above $100,000. That's up 52% from the prior-year quarter. If Datadog can continue to get these larger existing clients to boost their spending -- total Q3 sales were up 61% -- it should have no trouble growing its adjusted profits.
Investors should expect Datadog to more than double its sales over the next three years.
Image source: Getty Images.
AstraZeneca
Until recently, implying that Big Pharma company AstraZeneca (NASDAQ: AZN) is a growth stock would have been laughable, but it's no longer a joke. A number of tailwinds have made AstraZeneca a bona fide growth stock that's just begging to be bought by patient investors.
Most folks are probably familiar with AstraZeneca's partnership with Oxford University, which led to the development and approval of a coronavirus disease 2019 (COVID-19) vaccine in the United Kingdom. However, it's not COVID-19 vaccines that should have investors excited about this company.
First, AstraZeneca is seeing incredible organic growth from its three blockbuster oncology drugs: Tagrisso, Imfinzi, and Lynparza. Constant currency sales were up a respective 39%, 43%, and 53% through nine months in 2020, with these three drugs accounting for nearly a third of AstraZeneca's full-year revenue. Demand and pricing power for the company's oncology and cardiovascular medicines portfolio are strong and can yield sustained double-digit sales growth.
Additionally, AstraZeneca's pending acquisition of Alexion Pharmaceuticals (NASDAQ: ALXN) could be a game-changer. Alexion specifically targets ultrarare indications, meaning it faces minimal competition and little or no pushback on high list prices from health insurers. Further, Alexion's next-generation therapy Ultomiris will, over time, replace its blockbuster drug Soliris and secure the company's cash flow for at least another decade.
Image source: Getty Images.
EverQuote
Shopping for insurance isn't exciting, but owning a stock that takes advantage of growing online insurance ad spending? That's money.
Online insurance marketplace EverQuote (NASDAQ: EVER) is designed to take advantage of a shift in how insurance companies attempt to reach new customers. Considering that insurance shoppers are highly cost-conscious, EverQuote provides a platform that easily allows prospective buyers to compare prices. As for insurers, it's bringing them highly motivated customers ready to buy or jump ship from their existing provider.
EverQuote isn't just focusing on a single insurance indication. While auto insurance has always been its bread and butter, it's begun expanding vertically in the insurance space to also cover home, renters, health, and life insurance. These other applications are growing considerably faster than auto insurance, meaning EverQuote's topline growth can remain sustainably high for the foreseeable future.
Investors also shouldn't overlook just how big the opportunity is for digital insurance ad spending. An estimated $146 billion was spent on insurance advertisements in 2020, of which $5.6 billion was digital spending. This digital spend is expected to grow by 16% annually over the next four years. That means it'll nearly double by 2024. EverQuote is simply in the right place at the right time with the right product.
Image source: Getty Images.
Exelixis
Finally, consider putting some of that $4,000 to work in fast-growing biotech stock Exelixis (NASDAQ: EXEL).
The fuel that keeps the engine going for Exelixis is cancer drug Cabometyx. This is a treatment approved for first- and second-line renal cell carcinoma (RCC), as well as advanced hepatocellular carcinoma (HCC). These indications should have no trouble delivering sustained growth for years, and might even help push Cabometyx above $1 billion in annual sales in 2021. Cabometyx was responsible for $741 million in full-year sales in 2020, according to a preliminary update from the company.
Exelixis isn't just sitting on the laurels of its main indications. It's advancing Cabometyx in close to six dozen ongoing clinical trials as both a monotherapy and combination treatment. One of these studies has already yielded a label expansion. When combined with chief rival Opdivo (an immunotherapy treatment made by Bristol Myers Squibb), Cabometyx produced superior efficacy in the CheckMate 9ER trial for first-line RCC. This combo could well become the standard of care.
The company also happens to be a cash cow. It's expected to have ended 2020 with $1.5 billion in cash and investments. Even with big-time spending on dozens of clinical trials, and the company reigniting its internal growth engine, its cash position could grow by up to $200 million in 2021. If Exelixis doesn't get bought out, it could soon go on a buying spree of its own with its growing cash hoard.
10 stocks we like better than Exelixis
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*Stock Advisor returns as of November 20, 2020
Sean Williams owns shares of Bank of America and Exelixis. The Motley Fool owns shares of and recommends Bristol Myers Squibb and Datadog. 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 Most software-as-a-service (SaaS) stocks have been unstoppable over the past year, and application performance monitoring company Datadog (NASDAQ: DDOG) is no exception. Alexion specifically targets ultrarare indications, meaning it faces minimal competition and little or no pushback on high list prices from health insurers. These other applications are growing considerably faster than auto insurance, meaning EverQuote's topline growth can remain sustainably high for the foreseeable future.
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Datadog Most software-as-a-service (SaaS) stocks have been unstoppable over the past year, and application performance monitoring company Datadog (NASDAQ: DDOG) is no exception. EverQuote Shopping for insurance isn't exciting, but owning a stock that takes advantage of growing online insurance ad spending? These other applications are growing considerably faster than auto insurance, meaning EverQuote's topline growth can remain sustainably high for the foreseeable future.
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Datadog Most software-as-a-service (SaaS) stocks have been unstoppable over the past year, and application performance monitoring company Datadog (NASDAQ: DDOG) is no exception. AstraZeneca Until recently, implying that Big Pharma company AstraZeneca (NASDAQ: AZN) is a growth stock would have been laughable, but it's no longer a joke. EverQuote Shopping for insurance isn't exciting, but owning a stock that takes advantage of growing online insurance ad spending?
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Datadog Most software-as-a-service (SaaS) stocks have been unstoppable over the past year, and application performance monitoring company Datadog (NASDAQ: DDOG) is no exception. Investors should expect Datadog to more than double its sales over the next three years. EverQuote isn't just focusing on a single insurance indication.
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27e177de-2ecb-4991-b272-c5a7e0538d92
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718915.0
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2021-01-27 00:00:00 UTC
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Starbucks, SaaS Stocks Weigh Down Nasdaq
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DDOG
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https://www.nasdaq.com/articles/starbucks-saas-stocks-weigh-down-nasdaq-2021-01-27
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nan
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nan
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The stock market has moved aggressively higher for months, but investors hit an air pocket on Wednesday. Some Wall Street pros have been taken aback by the massive short squeeze in well-known stocks, and that has raised new uncertainty in the current environment. Just after 2:30 p.m. EST, the Nasdaq Composite (NASDAQINDEX: ^IXIC) was down more than 2%.
Earnings season continued apace, and investors in Starbucks (NASDAQ: SBUX) weren't entirely happy with what they saw. Meanwhile, many stocks in the software-as-a-service realm saw deep declines early Wednesday but regained much of their lost ground in the afternoon.
Starbucks gets cold
Shares of Starbucks were down more than 6% Wednesday afternoon. The coffee giant reported fiscal first-quarter results that showed signs of recovery but weren't able to match the high expectations of its shareholders.
Image source: Getty Images.
Some of the news wasn't good. Starbucks reported a 5% drop in comparable store sales globally, with a similar drop in the U.S. due primarily to plunging numbers of transactions. It took a 5% rise in comps in China to help cushion the blow, and even there, traffic flow was down from year-ago levels. The weak comps sent revenue down 5% year over year. Adjusted earnings per share fell 23%.
However, there were some promising signs. Active members in the Starbucks Rewards loyalty program jumped by 15% in the U.S. to 21.8 million, and Starbucks opened 278 net new stores. That brings the network's size to nearly 33,000, evenly split between company-owned and licensed locations.
CEO Kevin Johnson believes that Starbucks made a good start to the new fiscal year as it positions itself to recover from the pandemic. Innovation both in beverages and with respect to customer interaction is paying dividends, and even if shareholders couldn't fully appreciate that, it bodes well for Starbucks' longer-term future.
Can these high-flyers bounce back?
Elsewhere, the whole software-as-a-service (SaaS) realm took some sizable hits early in the session but bounced back. Among investor favorites were:
CrowdStrike Holdings (NASDAQ: CRWD), down 2% after having fallen as much as 6% earlier.
DocuSign (NASDAQ: DOCU), falling 3% and recovering from a nearly 5% drop.
Datadog (NASDAQ: DDOG), which recovered from a 5% decline to be down just 3%.
Okta (NASDAQ: OKTA), which was off 2% after bouncing from a 4.5% loss.
Workday (NASDAQ: WDAY) wasn't able to bounce back from its 5% drop.
A few Nasdaq stocks in the SaaS realm managed to recover all of their losses and then some. Zoom Video Communications (NASDAQ: ZM), for instance, traded up 1% after having fallen as much as 4% earlier in the session.
Many investors are increasingly worried about how much further SaaS stocks can run. After having been the darlings of 2020, many of them have reached extremely expensive valuations. Even with brisk growth prospects, it's hard for many investors to reconcile their share prices with the business results they're likely to produce in the years ahead.
Today's price action in SaaS stocks doesn't necessarily mean that they're bound to crash in the near future. What's likely, however, is that after a prolonged period of outperformance, the sector could take a pause and yield stock market leadership to some other group of stocks. Eventually, though, if the growth hopes investors have for these companies gets realized, the share prices could climb further from here.
10 stocks we like better than Starbucks
When investing geniuses David and Tom Gardner have 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.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Starbucks 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 November 20, 2020
Dan Caplinger owns shares of Starbucks. The Motley Fool owns shares of and recommends CrowdStrike Holdings, Inc., Datadog, DocuSign, Okta, Starbucks, Workday, and Zoom Video Communications. 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), which recovered from a 5% decline to be down just 3%. Innovation both in beverages and with respect to customer interaction is paying dividends, and even if shareholders couldn't fully appreciate that, it bodes well for Starbucks' longer-term future. Even with brisk growth prospects, it's hard for many investors to reconcile their share prices with the business results they're likely to produce in the years ahead.
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Datadog (NASDAQ: DDOG), which recovered from a 5% decline to be down just 3%. Elsewhere, the whole software-as-a-service (SaaS) realm took some sizable hits early in the session but bounced back. Zoom Video Communications (NASDAQ: ZM), for instance, traded up 1% after having fallen as much as 4% earlier in the session.
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Datadog (NASDAQ: DDOG), which recovered from a 5% decline to be down just 3%. 10 stocks we like better than Starbucks When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. * David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Starbucks wasn't one of them!
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Datadog (NASDAQ: DDOG), which recovered from a 5% decline to be down just 3%. Starbucks gets cold Shares of Starbucks were down more than 6% Wednesday afternoon. Workday (NASDAQ: WDAY) wasn't able to bounce back from its 5% drop.
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7541bd10-187f-40fd-8b81-a5234a9437b7
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718916.0
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2021-01-24 00:00:00 UTC
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Is Palantir Technologies Stock Overvalued?
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DDOG
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https://www.nasdaq.com/articles/is-palantir-technologies-stock-overvalued-2021-01-24
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nan
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nan
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Palantir Technologies' (NYSE: PLTR) shares have performed remarkably well during its short time as a public company. The stock is up 176% since its late-September market debut.
Palantir came to market with a reputation for technological prowess and some well-regarded backers, and investors are understandably excited about the company's prospects. But at this point, it would be natural to question whether the share price has gotten ahead of the business projections.
What's an investor to think about Palantir shares today? Here's a look at the company and whether the stock is overvalued right now.
PLTR data by YCharts
A history of success
Palantir is a data analytics company that has served U.S. government customers -- and, in particular, its clandestine spy agencies -- for nearly two decades. The company was co-founded by Peter Thiel, the sometimes controversial venture capitalist best known as a co-founder of PayPal and an early investor in both Facebook and LinkedIn. Thiel is now chairman of Palantir's board, but has no day-to-day role at the company.
Until it prepared to go public last year, Palantir was mostly shrouded in secrecy. But its exploits are the stuff of Silicon Valley legend, including its well-reported (but never officially confirmed) role in finding Osama bin Laden.
Today it works with a large number of military and civilian federal agencies, as well as a growing roster of commercial customers. In 2020, an unnamed aerospace customer signed the largest commercial deal in Palantir's history -- a five-year, $300 million contract. It also has made inroads into the pharmaceutical and logistics industries, among others.
Image source: Getty Images.
A tale of two valuations
Palantir has not yet released full-year results, but the company said in November that it expects to generate $1.07 billion to $1.072 billion in revenue in 2020. Assuming that forecast bears out, the market is currently valuing the company at about 45 times sales.
Is that too high? It depends on what measuring stick you use. If you compare its valuation to other IT-focused government contractors such as Booz Allen Hamilton, ManTech International, and Leidos Holdings, Palantir looks way overvalued.
None of those companies have exactly comparable tech to Palantir, but arguably, Palantir doesn't have anything near their breadth of technology or diversity of revenue sources.
COMPANY
PRICE/SALES RATIO
Palantir Technologies (NYSE: PLTR)
45*
Datadog (NASDAQ: DDOG)
60
MongoDB (NASDAQ: MDB)
39
Booz Allen Hamilton (NYSE: BAH)
1.7
Mantech (NASDAQ: MANT)
1.6
Leidos (NYSE: LDOS)
1.3
Data source: YCharts, as of Jan. 20, 2020. * author's estimate
Palantir bulls would argue that the company's growing commercial business justifies a higher multiple. Indeed, software companies that sell to the commercial sector rather than to governments tend to attract higher valuations because they can attract a wider range of customers and don't face the same budget scrutiny.
Palantir's valuation looks more reasonable when compared to two commercial database specialists, MongoDB and Datadog. But it is worth noting that for much of Palantir's history, it has relied heavily on government sales, and in its third-quarter release said that the U.S. government sector "remains a primary area of focus for our business."
Indeed, prior to going public, Palantir was perhaps best known for its controversial contracts with various intelligence agencies and Immigration and Customs Enforcement, work that it has defended despite a great deal of scrutiny.
So is Palantir overvalued?
It may be too simplistic to categorize Palantir as just a defense contractor, but it would also be wrong to dismiss the connection. Government customers provided 56% of its total revenue in the third quarter, and the government business grew nearly twice as much in the quarter on a year-over-year basis as its commercial business.
Among defense IT companies, Palantir has technology and expertise that few can match, but its tech is arguably more specialized and tougher to sell to a broader set of customers. The company has been around since 2003, and although its growth has accelerated in recent years, it took it until 2020 to hit $1 billion in annual sales.
Palantir has amazing and unique tech, and has the potential to grow into a much larger business. But given the pace of government contracting and the slow rollout of its commercial offerings, it will take years for Palantir's business to justify its current lofty multiple.
The stock is overvalued right now. For those interested in Palantir, best to leave it on your watch list in anticipation of better opportunities to buy in over the months to come.
10 stocks we like better than Palantir Technologies Inc.
When investing geniuses David and Tom Gardner have 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.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Palantir Technologies 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 November 20, 2020
Teresa Kersten, an employee of LinkedIn, a Microsoft 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 its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors. Lou Whiteman owns shares of Leidos Holdings, ManTech International, and PayPal Holdings. The Motley Fool owns shares of and recommends Datadog, Facebook, Microsoft, MongoDB, and PayPal Holdings. The Motley Fool owns shares of Palantir Technologies Inc and recommends the following options: long January 2022 $75 calls on PayPal Holdings. 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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Palantir Technologies (NYSE: PLTR) 45* Datadog (NASDAQ: DDOG) 60 MongoDB (NASDAQ: MDB) 39 Booz Allen Hamilton (NYSE: BAH) 1.7 Mantech (NASDAQ: MANT) 1.6 Leidos (NYSE: LDOS) 1.3 Data source: YCharts, as of Jan. 20, 2020. Indeed, prior to going public, Palantir was perhaps best known for its controversial contracts with various intelligence agencies and Immigration and Customs Enforcement, work that it has defended despite a great deal of scrutiny. Among defense IT companies, Palantir has technology and expertise that few can match, but its tech is arguably more specialized and tougher to sell to a broader set of customers.
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Palantir Technologies (NYSE: PLTR) 45* Datadog (NASDAQ: DDOG) 60 MongoDB (NASDAQ: MDB) 39 Booz Allen Hamilton (NYSE: BAH) 1.7 Mantech (NASDAQ: MANT) 1.6 Leidos (NYSE: LDOS) 1.3 Data source: YCharts, as of Jan. 20, 2020. If you compare its valuation to other IT-focused government contractors such as Booz Allen Hamilton, ManTech International, and Leidos Holdings, Palantir looks way overvalued. The Motley Fool owns shares of and recommends Datadog, Facebook, Microsoft, MongoDB, and PayPal Holdings.
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Palantir Technologies (NYSE: PLTR) 45* Datadog (NASDAQ: DDOG) 60 MongoDB (NASDAQ: MDB) 39 Booz Allen Hamilton (NYSE: BAH) 1.7 Mantech (NASDAQ: MANT) 1.6 Leidos (NYSE: LDOS) 1.3 Data source: YCharts, as of Jan. 20, 2020. None of those companies have exactly comparable tech to Palantir, but arguably, Palantir doesn't have anything near their breadth of technology or diversity of revenue sources. The Motley Fool owns shares of Palantir Technologies Inc and recommends the following options: long January 2022 $75 calls on PayPal Holdings.
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Palantir Technologies (NYSE: PLTR) 45* Datadog (NASDAQ: DDOG) 60 MongoDB (NASDAQ: MDB) 39 Booz Allen Hamilton (NYSE: BAH) 1.7 Mantech (NASDAQ: MANT) 1.6 Leidos (NYSE: LDOS) 1.3 Data source: YCharts, as of Jan. 20, 2020. What's an investor to think about Palantir shares today? None of those companies have exactly comparable tech to Palantir, but arguably, Palantir doesn't have anything near their breadth of technology or diversity of revenue sources.
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ebe3b518-0542-478a-844a-2bd90d2f595f
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718917.0
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2021-01-22 00:00:00 UTC
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Are These The Top Software Stocks To Buy Next Week? 4 To Consider
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DDOG
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https://www.nasdaq.com/articles/are-these-the-top-software-stocks-to-buy-next-week-4-to-consider-2021-01-22
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nan
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nan
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Looking For The Best Software Stocks To Buy Ahead Of February?
Software stocks have been and are still flourishing in the stock market today. The reason for this lies in two words. Digital acceleration. It is no surprise that the coronavirus pandemic has virtually forced organizations and businesses towards digital acceleration. As a result, this has fueled top-line growth for the top software stocks to watch now. Because of this sudden movement, corporate spending in the software industry has gone through the roof. Key areas that have blown up are cloud services, cybersecurity, big data analytics, and digital transformation services in general. With so much movement in the sector, investors likely have their eyes peeled looking for the best software stocks for their portfolios.
I don’t blame them for doing so. For example, The Trade Desk (NASDAQ: TTD) and Magnite (NASDAQ: MGNI) have seen their shares gain by over 400% since mid-March. Understandably, the two companies provide online advertising services. But, in the bigger picture, they provide a vital service to companies in these times. Given the plethora of software companies that fulfill the same role, the industry is a booming one. Reading till this point, you may be eager to jump on the software train yourself. Well if you are, here is a list of the top software stocks to buy [or avoid] ahead of next week’s trading session.
4 Software Stocks To Watch Right Now
BigCommerce Holdings Inc. (NASDAQ: BIGC)
Fastly Inc. (NYSE: FSLY)
Datadog Inc. (NASDAQ: DDOG)
Workday Inc. (NASDAQ: WDAY)
BigCommerce Holdings Inc.
Right off the bat, we will be looking at BigCommerce. It operates a leading SaaS (Software as a Service) e-commerce platform that empowers merchants of varying sizes to grow their businesses online. It caters to a wide array of customers across numerous industries and 150 countries. Notably, BIGC stock popped by over 13% during intraday trading yesterday on its recent announcement.
BigCommerce announced that it would be reporting its financial results for its fourth quarter next month on February 18. Based on its recent-quarter fiscal, investors could be anticipating another quarter of growth from the company. In detail, the company saw a 40% year-over-year rise in total revenue. This added up to $39.7 million. BigCommerce reported that it was one of the company’s best quarters to date. On top of all that, investors could be awaiting robust gains from the holiday season.
Despite all this, BigCommerce is not resting on its laurels just yet. Earlier today, the company announced JBS Custom Software Solutions as a new partner. Through this, BigCommerce is bolstering its portfolio with JBS’s cloud-based app development expertise. As it continues to improve its array of services, do you think BIGC stock is in for big gains this year?
Read More
3 Renewable Energy Stocks To Watch Before February 2021
Is Ford (F) Stock A Better EV Stock To Buy Than Nio & Tesla Right Now?
Fastly Inc.
Another top software stock in focus now would be cloud computing service provider Fastly. Through its proprietary edge cloud platform, Fastly powers fast, secure, and scalable digital experiences for its clients. Seeing as the general population is consuming digital content more than ever, the company appears well-positioned for growth. Likewise, FSLY stock has skyrocketed by over 320% in the past year. Naturally, this caught the eye of investors and analysts.
Investment bank Oppenheimer (NYSE: OPY) analyst Timothy Horan gave the stock a shining review. Horan gave FSLY stock an Outperform rating and set a new target price of $125 a share. This would explain why it gained by over 6% just passing the $104 mark at yesterday’s closing bell. On top of that, Horan also mentioned that Fastly could surpass Wall Street consensus estimates for its recent quarter revenue by over $1 million. Time will tell if this will be the case. If it is, FSLY stockholders would likely rejoice.
If that wasn’t enough, Fastly wowed investors with a solid performance in its recent quarter as well. The company reported a 41% year-over-year rise in total revenue which totaled $70.64 million. Additionally, it ended the quarter with $309 million in cash on hand which reflected a massive 466% jump year-over-year. Could all this make FSLY a top software stock? You tell me.
[Read More] Could These Be The Best Tech Stocks To Watch Ahead of February?
Datadog Inc.
Next up, we will be looking at cloud-monitoring SaaS company, Datadog. It offers a wide array of tools and services through its proprietary data analytics platform. As countless businesses port to the cloud, Datadog would provide key monitoring services to keep their clients’ digital assets safe. Similarly, DDOG stock is looking at gains of 256% since the pandemic hit in March. Given its current value, investors may wonder if it still has room to grow.
Looking at its recent quarter fiscal posted in November, this could be the case. Datadog reported a 61% year-over-year leap in total revenue which added to over $154 million. Furthermore, it ended the quarter with $198 million in cash on hand. CEO Olivier Pomel said, “We have maintained our strong track record of innovation and extended our leadership as the most complete and cloud-native end-to-end observability platform. We continue to make meaningful R&D investments toward what is a very significant long-term opportunity.”
Adding to that, news broke earlier this week that N2W Software will now support Datadog integration. N2W Software is a leading backup and recovery solution for Amazon (NASDAQ: AMZN) Web Services. With increased integration with other software, do you think DDOG stock is poised for more growth?
[Read More] Are These The Best Entertainment Stocks To Watch Right Now?
Workday Inc.
Last but not least is Workday. The company is an on-demand financial management and human capital management software vendor. It caters to a wide variety of organizations ranging from medium-sized businesses to over 60% of the Fortune 50. Indeed, its services would be vital amidst the pandemic where offices were forced to make major shifts. For one thing, WDAY stock does reflect this as it has doubled in price since the March selloffs.
Not to mention, Workday has been hard at work lately. Last week, it launched a vaccine management solution and bolstered its existing services. The earlier solution helps customers ensure the health and safety of their remote and on-sight workers. The latter introduced the Workday Accounting Center (WAC) to existing clients. Through the WAC, Workday’s clients can manage operational and financial data from multiple sources with a single point of control across the enterprise. As Workday is firing on all cylinders, WDAY stockholders could be in for a treat.
In its recent quarter fiscal, the company even posted solid figures. Workday reported $1.1 billion in total revenue and $1.07 billion in cash on hand. CEO Aneel Bhusri said, “As we enter Q4, we are increasing our pace of investments to capitalize on the long-term opportunity that we see ahead.” Given all of this, will you be adding WDAY stock to your watchlist?
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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4 Software Stocks To Watch Right Now BigCommerce Holdings Inc. (NASDAQ: BIGC) Fastly Inc. (NYSE: FSLY) Datadog Inc. (NASDAQ: DDOG) Workday Inc. (NASDAQ: WDAY) BigCommerce Holdings Inc. Similarly, DDOG stock is looking at gains of 256% since the pandemic hit in March. With increased integration with other software, do you think DDOG stock is poised for more growth?
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4 Software Stocks To Watch Right Now BigCommerce Holdings Inc. (NASDAQ: BIGC) Fastly Inc. (NYSE: FSLY) Datadog Inc. (NASDAQ: DDOG) Workday Inc. (NASDAQ: WDAY) BigCommerce Holdings Inc. Similarly, DDOG stock is looking at gains of 256% since the pandemic hit in March. With increased integration with other software, do you think DDOG stock is poised for more growth?
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4 Software Stocks To Watch Right Now BigCommerce Holdings Inc. (NASDAQ: BIGC) Fastly Inc. (NYSE: FSLY) Datadog Inc. (NASDAQ: DDOG) Workday Inc. (NASDAQ: WDAY) BigCommerce Holdings Inc. Similarly, DDOG stock is looking at gains of 256% since the pandemic hit in March. With increased integration with other software, do you think DDOG stock is poised for more growth?
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4 Software Stocks To Watch Right Now BigCommerce Holdings Inc. (NASDAQ: BIGC) Fastly Inc. (NYSE: FSLY) Datadog Inc. (NASDAQ: DDOG) Workday Inc. (NASDAQ: WDAY) BigCommerce Holdings Inc. Similarly, DDOG stock is looking at gains of 256% since the pandemic hit in March. With increased integration with other software, do you think DDOG stock is poised for more growth?
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2c814302-2671-4ce0-bec2-53e73602a9fa
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718918.0
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2021-01-22 00:00:00 UTC
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Better Buy: Snowflake vs. Datadog
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DDOG
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https://www.nasdaq.com/articles/better-buy%3A-snowflake-vs.-datadog-2021-01-22
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nan
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nan
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Snowflake (NYSE: SNOW) and Datadog (NASDAQ: DDOG) have both generated massive returns since their IPOs. Snowflake's stock has more than doubled in price since its IPO last September, while Datadog's stock has nearly quadrupled in value since its public debut in September 2019.
Both software stocks help large organizations break down data silos. Snowflake's cloud service gathers data across multiple computing platforms and centralizes the results so they can be read by data visualization services. Datadog's platform lets developers and IT professionals monitor the performance of different servers, databases, cloud services, and mobile apps on unified dashboards.
Snowflake and Datadog's tools help companies gain broader views of their infrastructure, streamline their operations, and make data-driven decisions. But which silo-busting stock will be the better overall investment for 2021?
Image source: Getty Images.
The differences between Snowflake and Datadog
Snowflake and Datadog might seem superficially similar, but their platforms are very different.
Snowflake's platform allows users to store, manage, analyze, and share high volumes of structured and semi-structured data. Unlike a traditional data storage network -- which includes multiple databases, data warehouses, and data lakes -- Snowflake breaks down those silos and places the data on a unified platform where it can be accessed by data visualization services like salesforce.com's Tableau.
Datadog makes sure services like Snowflake are running properly. Through Datadog, IT professionals can view Snowflake's platform and optimize its storage usage, monitor its performance, and detect misconfigurations and security threats. In other words, Snowflake stores and crunches the data, while Datadog makes sure the entire system is running smoothly -- along with hundreds of other services.
Which company is growing faster?
Snowflake's revenue soared 174% to $264.7 million in fiscal 2020, and surged another 127% year over year to $401.6 million in the first nine months of fiscal 2021 (which started last February).
Its total number of customers rose 14% sequentially to 3,554 in the third quarter. Within that total, 65 of its customers generated more than $1 million in trailing 12-month product revenue, up from 56 in the second quarter. Snowflake also ended the third quarter with a net retention rate of 161% -- which means its existing customers spent 61% more on its services year over year.
Snowflake expects its product revenue, which accounts for over 90% of its top line, to rise 113%-115% for the full year. Analysts expect its total revenue to rise 119% this year and 89% next year. However, Snowflake isn't profitable by GAAP or non-GAAP metrics, and analysts expect it to remain unprofitable for the foreseeable future.
Image source: Getty Images.
Datadog's revenue rose 83% to $362.8 million in fiscal 2019, and it grew another 71% year over year to $425.9 million in the first nine months of 2020.
It ended the third quarter with 1,107 customers generating more than $100,000 in annual recurring revenue, up from 727 a year earlier. It also noted that 20% of its customers were using four or more of its products, up from just 7% a year ago, which indicates its "land and expand" strategy -- in which it signs on customers with a single service to cross-sell additional ones -- is paying off. Datadog also maintained a healthy net retention rate of over 130%.
Datadog is growing at a slower rate than Snowflake, but it's more profitable. Its GAAP net loss narrowed year over year from $17.6 million to $8.4 million in the first nine months of 2020, and it generated a non-GAAP net profit of $52.5 million -- compared to a loss of $11.5 million a year ago.
Datadog expects its revenue to rise 62%-63% for the full year, and for its non-GAAP earnings to stay in the black. Next year, analysts expect Datadog's revenue and non-GAAP earnings to rise 36% and 6%, respectively.
The valuations and verdict
Snowflake and Datadog trade at 73 times and 40 times next year's sales estimates, respectively. Those frothy price-to-sales ratios could limit the upside potential for both stocks this year, especially if investors rotate from high-growth tech stocks to battered value stocks in unloved sectors after the pandemic passes.
That being said, I'd rather buy Datadog than Snowflake up here, because it's cheaper relative to its sales, it's profitable, and it's plugged into the same silo-busting secular trend as its pricier peer.
10 stocks we like better than Snowflake
When investing geniuses David and Tom Gardner have 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.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Snowflake 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 November 20, 2020
Leo Sun owns shares of Salesforce.com. The Motley Fool owns shares of and recommends Datadog and Salesforce.com. 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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Snowflake (NYSE: SNOW) and Datadog (NASDAQ: DDOG) have both generated massive returns since their IPOs. Datadog's platform lets developers and IT professionals monitor the performance of different servers, databases, cloud services, and mobile apps on unified dashboards. Through Datadog, IT professionals can view Snowflake's platform and optimize its storage usage, monitor its performance, and detect misconfigurations and security threats.
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Snowflake (NYSE: SNOW) and Datadog (NASDAQ: DDOG) have both generated massive returns since their IPOs. Unlike a traditional data storage network -- which includes multiple databases, data warehouses, and data lakes -- Snowflake breaks down those silos and places the data on a unified platform where it can be accessed by data visualization services like salesforce.com's Tableau. Its GAAP net loss narrowed year over year from $17.6 million to $8.4 million in the first nine months of 2020, and it generated a non-GAAP net profit of $52.5 million -- compared to a loss of $11.5 million a year ago.
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Snowflake (NYSE: SNOW) and Datadog (NASDAQ: DDOG) have both generated massive returns since their IPOs. The differences between Snowflake and Datadog Snowflake and Datadog might seem superficially similar, but their platforms are very different. Unlike a traditional data storage network -- which includes multiple databases, data warehouses, and data lakes -- Snowflake breaks down those silos and places the data on a unified platform where it can be accessed by data visualization services like salesforce.com's Tableau.
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Snowflake (NYSE: SNOW) and Datadog (NASDAQ: DDOG) have both generated massive returns since their IPOs. Analysts expect its total revenue to rise 119% this year and 89% next year. That's right -- they think these 10 stocks are even better buys.
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73d7436f-bb7d-4a3e-941d-434ccc1cf0e7
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718919.0
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2021-01-22 00:00:00 UTC
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Is Elastic Stock a Buy?
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DDOG
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https://www.nasdaq.com/articles/is-elastic-stock-a-buy-2021-01-22
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nan
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nan
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Shares of data search and analytics firm Elastic (NYSE: ESTC) had a stellar 2020, soaring 127%. And the stock's momentum has extended into 2021 -- it's up another 15% year to date as of this writing. Even after that incredible run, though, Elastic still might be a buy as it strikes a balance between enviable growth and a reasonable valuation compared to some of its highest-flying peers.
Data search and observability is a modern staple
Elastic has built itself into a top destination in the data and analytics space with its open-source Elasticsearch software. In fact, Elasticsearch has free-to-use basic functionality on Amazon's (NASDAQ: AMZN) AWS cloud computing platform, and paid premium enterprise search and cloud operations observability features are available as Amazon Elasticsearch Service.
Image source: Getty Images.
In spite of its free software tier -- and a big, worrisome competitor in AWS -- Elastic has expanded rapidly. Its paid services have become must-haves for many companies as they help organizations develop a wide range of applications from data and document search to cloud security -- all available via a single software platform. And after growing revenue 57% in its fiscal 2020 (which ended April 30), the software firm got off to another great start through the first half of its fiscal 2021.
METRIC
6 MONTHS ENDED OCT. 31, 2020
6 MONTHS ENDED OCT. 31, 2019
CHANGE
Total revenue
$273.8 million
$190.8 million
43.5%
Gross profit margin
73.2%
71.2%
2.0 pp
Free cash flow (including acquisition costs)
$3.05 million
($29.0 million)
N/A
Data source: Elastic. PP = percentage points.
As Elastic expands, its profit margins keep improving. The company also recently turned free cash flow positive -- although growth is the priority right now rather than maximizing the bottom line. Nevertheless, that was a notable milestone for this software outfit as it means it's no longer using cash from its balance sheet to cover its heavy marketing and research expenses.
A not-so-unreasonable price tag
Elastic stock could have some serious legs. Within its software subscription model for data management, cloud-based software-as-a-service (SaaS) subscriptions are in high demand right now given the digital transformations many organizations are trying to achieve amid the pandemic. SaaS revenue increased 81% year over year during the fiscal 2021 second quarter to $37.4 million. And since business overall is still growing, Elastic isn't suffering from the accounting effects that can come with migrating to a cloud-based model -- a problem that cropped up for its data analytics peer Splunk in the last year as it switches its customers over from its legacy software subscriptions to cloud subscriptions.
Granted, many investors might be uncomfortable with investing in Elastic since it intentionally operates at breakeven. The heavy rate of spending on sales, marketing, and development of new platform features isn't likely to ease anytime soon as long as the cloud computing market continues to expand. Various estimates expect global cloud computing spending to double within the next decade. Given this situation and Elastic's fast pace of expansion and improving profit margins, shares look like a relative value at 30 times trailing 12-month sales.
By comparison, Splunk trades for only 12 times trailing revenue, but it has yet to start reporting year-over-year growth as it continues to manage its transformation to a cloud-first company. Datadog trades for 59 times sales, though, a far higher premium. However, its top line grew at a faster 61% year-over-year pace in its last reported quarter. Of these three names, Datadog also has the most net cash and short-term investments on its books ($927 million after subtracting debt as of Sept. 30), but Elastic has a respectable war chest too with $349 million and no debt.
Simply put, Elastic strikes an enviable balance between strong growth, an operation that's now self-funding (since free cash flow is no longer negative), and shares that are trading at a relative value. As the ability to make use of data in the cloud is only going to increase in importance for businesses, Elastic is a solid buy in my book.
10 stocks we like better than Elastic
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David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Elastic 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 November 20, 2020
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Nicholas Rossolillo owns shares of Splunk. His clients may own shares of the companies mentioned. The Motley Fool owns shares of and recommends Amazon, Datadog, Elastic, and Splunk and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon. 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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Its paid services have become must-haves for many companies as they help organizations develop a wide range of applications from data and document search to cloud security -- all available via a single software platform. By comparison, Splunk trades for only 12 times trailing revenue, but it has yet to start reporting year-over-year growth as it continues to manage its transformation to a cloud-first company. Simply put, Elastic strikes an enviable balance between strong growth, an operation that's now self-funding (since free cash flow is no longer negative), and shares that are trading at a relative value.
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In fact, Elasticsearch has free-to-use basic functionality on Amazon's (NASDAQ: AMZN) AWS cloud computing platform, and paid premium enterprise search and cloud operations observability features are available as Amazon Elasticsearch Service. Total revenue $273.8 million $190.8 million 43.5% Gross profit margin 73.2% 71.2% 2.0 pp Free cash flow (including acquisition costs) $3.05 million ($29.0 million) The Motley Fool owns shares of and recommends Amazon, Datadog, Elastic, and Splunk and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon.
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Total revenue $273.8 million $190.8 million 43.5% Gross profit margin 73.2% 71.2% 2.0 pp Free cash flow (including acquisition costs) $3.05 million ($29.0 million) And since business overall is still growing, Elastic isn't suffering from the accounting effects that can come with migrating to a cloud-based model -- a problem that cropped up for its data analytics peer Splunk in the last year as it switches its customers over from its legacy software subscriptions to cloud subscriptions. The Motley Fool owns shares of and recommends Amazon, Datadog, Elastic, and Splunk and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon.
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SaaS revenue increased 81% year over year during the fiscal 2021 second quarter to $37.4 million. By comparison, Splunk trades for only 12 times trailing revenue, but it has yet to start reporting year-over-year growth as it continues to manage its transformation to a cloud-first company. That's right -- they think these 10 stocks are even better buys.
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288da50c-fa4d-4a0f-b410-ae09f3e6b6dc
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718920.0
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2021-01-20 00:00:00 UTC
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Why Datadog Stock Jumped Today
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DDOG
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https://www.nasdaq.com/articles/why-datadog-stock-jumped-today-2021-01-20
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nan
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nan
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What happened
Shares of Datadog (NASDAQ: DDOG) jumped today, up by 6% as of 12:45 p.m. EST, after a Wall Street analyst initiated coverage on the company. Truist Securities has started Datadog stock with a buy rating and assigned a price target of $120, which represents 21% upside from yesterday's close.
So what
Analyst Joel Fishbein acknowledges that Datadog is currently trading at lofty valuation multiples but believes that the company's strong growth and leadership in the growing observability market justifies the premium. Revenue jumped 61% in the third quarter, and sales are forecast to increase by 62% for the full-year 2020.
Image source: Getty Images.
Datadog's cloud-based platform has "superior architecture" and offers better monitoring capabilities compared to its legacy rivals, while companies continue to migrate to the cloud. "We see near-term elongation of sales cycles giving way to a catch-up in demand and a long tail of durable growth for the company," Fishbein wrote in a research note to investors.
Now what
Datadog has not yet scheduled its fourth-quarter earnings release but is expected to report in mid-February. The technology company's outlook calls for revenue of $162 million to $164 million, which should result in adjusted earnings per share of $0.01 to $0.02. Analysts are currently expecting Datadog to report $163.6 million in sales and $0.02 per share in adjusted profits.
On the lastearnings call CFO David Obstler said that Datadog is taking a conservative approach to guidance due to ongoing macroeconomic uncertainties related to the COVID-19 pandemic.
10 stocks we like better than Datadog
When investing geniuses David and Tom Gardner have 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.*
David and Tom 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 November 20, 2020
Evan Niu, CFA has no position in any of the stocks mentioned. The Motley Fool owns shares of 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) jumped today, up by 6% as of 12:45 p.m. EST, after a Wall Street analyst initiated coverage on the company. So what Analyst Joel Fishbein acknowledges that Datadog is currently trading at lofty valuation multiples but believes that the company's strong growth and leadership in the growing observability market justifies the premium. "We see near-term elongation of sales cycles giving way to a catch-up in demand and a long tail of durable growth for the company," Fishbein wrote in a research note to investors.
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What happened Shares of Datadog (NASDAQ: DDOG) jumped today, up by 6% as of 12:45 p.m. EST, after a Wall Street analyst initiated coverage on the company. Analysts are currently expecting Datadog to report $163.6 million in sales and $0.02 per share in adjusted profits. 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) jumped today, up by 6% as of 12:45 p.m. EST, after a Wall Street analyst initiated coverage on the company. 10 stocks we like better than Datadog When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. * David and Tom 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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What happened Shares of Datadog (NASDAQ: DDOG) jumped today, up by 6% as of 12:45 p.m. EST, after a Wall Street analyst initiated coverage on the company. Analysts are currently expecting Datadog to report $163.6 million in sales and $0.02 per share in adjusted profits. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.
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b69dfbc6-62ba-4998-9005-d49e3a00426f
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718921.0
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2021-01-19 00:00:00 UTC
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Notable Tuesday Option Activity: OLED, DDOG, FSLR
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DDOG
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https://www.nasdaq.com/articles/notable-tuesday-option-activity%3A-oled-ddog-fslr-2021-01-19
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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 Universal Display Corp (Symbol: OLED), where a total volume of 1,766 contracts has been traded thus far today, a contract volume which is representative of approximately 176,600 underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 59.8% of OLED's average daily trading volume over the past month, of 295,105 shares. Especially high volume was seen for the $290 strike call option expiring September 17, 2021, with 251 contracts trading so far today, representing approximately 25,100 underlying shares of OLED. Below is a chart showing OLED's trailing twelve month trading history, with the $290 strike highlighted in orange:
Datadog Inc (Symbol: DDOG) options are showing a volume of 17,830 contracts thus far today. That number of contracts represents approximately 1.8 million underlying shares, working out to a sizeable 59.8% of DDOG's average daily trading volume over the past month, of 3.0 million shares. Especially high volume was seen for the $120 strike call option expiring February 12, 2021, with 9,395 contracts trading so far today, representing approximately 939,500 underlying shares of DDOG. Below is a chart showing DDOG's trailing twelve month trading history, with the $120 strike highlighted in orange:
And First Solar Inc (Symbol: FSLR) saw options trading volume of 18,502 contracts, representing approximately 1.9 million underlying shares or approximately 59.3% of FSLR's average daily trading volume over the past month, of 3.1 million shares. Especially high volume was seen for the $101 strike call option expiring January 22, 2021, with 1,098 contracts trading so far today, representing approximately 109,800 underlying shares of FSLR. Below is a chart showing FSLR's trailing twelve month trading history, with the $101 strike highlighted in orange:
For the various different available expirations for OLED options, DDOG options, or FSLR 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 $120 strike call option expiring February 12, 2021, with 9,395 contracts trading so far today, representing approximately 939,500 underlying shares of DDOG. Below is a chart showing OLED's trailing twelve month trading history, with the $290 strike highlighted in orange: Datadog Inc (Symbol: DDOG) options are showing a volume of 17,830 contracts thus far today. That number of contracts represents approximately 1.8 million underlying shares, working out to a sizeable 59.8% of DDOG's average daily trading volume over the past month, of 3.0 million shares.
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Below is a chart showing OLED's trailing twelve month trading history, with the $290 strike highlighted in orange: Datadog Inc (Symbol: DDOG) options are showing a volume of 17,830 contracts thus far today. Below is a chart showing DDOG's trailing twelve month trading history, with the $120 strike highlighted in orange: And First Solar Inc (Symbol: FSLR) saw options trading volume of 18,502 contracts, representing approximately 1.9 million underlying shares or approximately 59.3% of FSLR's average daily trading volume over the past month, of 3.1 million shares. Below is a chart showing FSLR's trailing twelve month trading history, with the $101 strike highlighted in orange: For the various different available expirations for OLED options, DDOG options, or FSLR options, visit StockOptionsChannel.com.
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Below is a chart showing DDOG's trailing twelve month trading history, with the $120 strike highlighted in orange: And First Solar Inc (Symbol: FSLR) saw options trading volume of 18,502 contracts, representing approximately 1.9 million underlying shares or approximately 59.3% of FSLR's average daily trading volume over the past month, of 3.1 million shares. Below is a chart showing OLED's trailing twelve month trading history, with the $290 strike highlighted in orange: Datadog Inc (Symbol: DDOG) options are showing a volume of 17,830 contracts thus far today. That number of contracts represents approximately 1.8 million underlying shares, working out to a sizeable 59.8% of DDOG's average daily trading volume over the past month, of 3.0 million shares.
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Below is a chart showing DDOG's trailing twelve month trading history, with the $120 strike highlighted in orange: And First Solar Inc (Symbol: FSLR) saw options trading volume of 18,502 contracts, representing approximately 1.9 million underlying shares or approximately 59.3% of FSLR's average daily trading volume over the past month, of 3.1 million shares. Below is a chart showing FSLR's trailing twelve month trading history, with the $101 strike highlighted in orange: For the various different available expirations for OLED options, DDOG options, or FSLR options, visit StockOptionsChannel.com. Below is a chart showing OLED's trailing twelve month trading history, with the $290 strike highlighted in orange: Datadog Inc (Symbol: DDOG) options are showing a volume of 17,830 contracts thus far today.
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1a806549-b851-4557-8636-3e5db1ff8aae
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718922.0
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2021-01-17 00:00:00 UTC
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Top Tech Stocks for 2021
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DDOG
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https://www.nasdaq.com/articles/top-tech-stocks-for-2021-2021-01-17
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nan
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nan
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In this episode of Industry Focus: Tech, host Dylan Lewis and Motley Fool contributor Brian Feroldi kick off 2021 with their favorite tech stocks for the upcoming year (but really, decade) and take a look back at 2020 -- the biggest winners, regrets, and the lessons from the past year. Find out more about these companies' growth opportunities, their valuation and more.
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.
10 stocks we like better than Walmart
When investing geniuses David and Tom Gardner have an investing 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.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Walmart 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 2/1/20
This video was recorded on Jan. 8, 2021.
Dylan Lewis: Awesome. All right. It's Friday, Jan. 8, and we are talking about the top tech stocks for 2021. I'm your host, Dylan Lewis, and I'm joined by fool.com's tenacious, trusted, treasure trove of tip top tongue-twister titles, Brian Feroldi. Brian, how are you doing?
Brian Feroldi: Dylan, you're starting off the new year with nailing my title yet again, but it is good to see you, my friend.
Lewis: Well, I had some encouragement. I was delighted to get the Feroldi family holiday card over the course of December and that just reminded me I've got to stay on top of my game. We took a couple of weeks off there, but I'm not sleeping. I'm still doing my tongue-twisters even if we're not airing.
Feroldi: It is going to be, I think, three weeks since we had a Friday where we could do Industry Focus, so awesome to be back.
Lewis: In some ways, it was nice to get the break but I've got to say, I'm ready. We've been planning, we've got a killer show, I'm really excited. We are going to be talking about the top tech stocks for us for 2021 in terms of what we see out there, and what we're interested in, and put some money behind. We're also going to be talking a little bit about the year that was with 2020 in both our biggest winners and some of our biggest regrets. Loved this, though. We've had a week of people from Industry Focus pitching their top tech shares. We're giving people a nice, well-rounded basket of stocks for 2021, all the sectors represented, Brian.
Feroldi: I think it's a great idea and of course, we couldn't finish out this week without talking about some tech stocks, because tech was, once again, the sector to be in in 2020.
Lewis: It was. I don't know about you, I'm someone that is heavily, heavily overweight tech. I figure, you know what, I'm a little bit more balanced when it comes to the stuff in my 401(k) and some of my retirement accounts. My personal brokerage account, I can be a little bit more focused. I can invest individually in stocks that I follow and understand more, and take a little bit more risks. Because of that, my portfolio did pretty well in 2020. Brian, how about you?
Feroldi: I'm not a big believer that you have to own stocks from every sector. My personal strategy is to own as many awesome companies as I can and as few terrible ones that I can. There's a lot of awesome tech stock, so I, like you, I'm very exposed to the sector.
Lewis: I think owning a few terrible companies is possible. It's just a great mission statement here for your portfolio.
Feroldi: Easier said than done.
Lewis: But that's the beauty of being an individual stock picker, because you get to choose. In my case, because of being over way tech, and because the beauty of the Fool community and the Fool universe, had a lot of really great winners myself in 2020; to give a couple names and some shine there, DocuSign, MercadoLibre, Square, all multibagger of years for me. I think businesses across the board that saw really big step changes in trends that we're already going to be benefiting them. And boom, just to the next level, adoption skyrocketed. I know the same. It's probably true for stuff you are on, Brian.
Feroldi: That's exactly what we saw in 2020. If you had a positive trend in your favor prior to 2020, the odds are pretty good, it got sped up and your stock price went above bananas. If you had a headwind in 2020, the odds are pretty good that your stock got smashed. Since I tend to invest in companies that I think can grow for a long period of time, I had a lot of winners in my portfolio. For me, my absolute biggest winner, it wasn't even close, it was Tesla (NASDAQ: TSLA). I've been invested in Tesla since 2013 or 2012, a long time, and I've added along the way. Tesla putting up a 734% return in 2020, that's certainly boosted my portfolio.
Lewis: Brian, we've talked about it on the show before, but there are folks out there that are listening, that are Tesla shareholders, and they're happy right alongside you. There are probably some people that feel like they miss the boat. I can represent that side of things when it comes to Tesla. I think I had a basis of about 200 pre-split and around the private takeout point had hit my limit and wound up selling. It's hard to look at those gains and say, "Man, the opportunity costs and what I wanted to do with that money instead." But if I'm being honest, I think if I had held on, I would've been right for the wrong reason. I don't think it would've been aligned with what I saw happening. It's a regret in a way, but I think ultimately, I was true to what I wanted there.
Feroldi: That's perfectly fine. You don't have to own every big winner to do well, and there are lots of companies that you just shouldn't own. If there's any company in the universe that is easy to have a wrong opinion on, it is Tesla. Yes, no shame in selling or taking a pass on Tesla altogether.
Lewis: I like your philosophy there, not having to own all of them. Because you take that step back and you look at your overall portfolio performance. If you're outperforming the S&P 500, you're beating most people. If you could take that step back and see great returns, and thankfully, I was in that position for 2020, then it makes it a little easier to swallow some of those huge winners that you don't have a ticket to. But the reality is there are a lot of really great winners in the Fool universe, and I'm lucky enough to own several of them.
Feroldi: I think you said something that's really worth double-clicking on. How did your portfolio do versus whatever benchmark you are measuring? Whatever you would be invested in if you weren't stock picking. Stock picking is wonderful, it's super fun, it's highly engaging, but if you are stock picking and you are not outperforming indexes over lengthy periods of time, you're doing extra work to be less wealthy. So, make sure you measure your returns against a benchmark.
Lewis: Yeah, and I will say, if you're using the S&P 500, use the total return. There are some people that just look at the price return. Look at the total return, don't slight yourself there. Make sure that you're holding yourself accountable because there will be an extra 1% or 2% there, because of the dividends being reinvested.
Feroldi: That's a good point though.
Lewis: I dared my soul a little bit with Tesla, Brian. When it comes to the past year, what do you personally have a regret with when you look at your portfolio or some of the decisions that you made?
Feroldi: It's really easy to look backwards in time and play the "woulda, shoulda, coulda" game. It's not that hard to look back and say, "Wow, Wayfair is like a 20-bagger off of its low. I really should have put all my money into Wayfair in March; because of course, it wasn't going to disappear. Of course, home furnishing was going to take off immediately after that." That's not a very useful exercise because would you have made that decision in real-time with the information that you had at the time? I don't like to look backwards and say, "I did this wrong. I did that wrong." I think it's OK to look back, see what happened, and see if you can learn the lessons from them that you can apply forward. But I don't really have any big regrets. But for the sake of saying something, I do remember the day that Pinterest (NYSE: PINS) hit $10 per share, and I said, "That makes no sense." That price makes no sense. This is a very high-quality business, I think it can grow for a long period of time. That was pretty much the low. When I said that to myself, I should've been quiet about it on Motley Fool Live and bought like crazy.
Lewis: That's one of the things of what we do. Because we talked about businesses so often, we have our trading rules in place here at The Fool that can occasionally lock us out from buying something that we might be very, very interested in doing. But it's important. We think that that's a really valuable element of what we do here. I will say, Brian, I went through that Fool arc of having a couple winners that I missed out on, and had the teachable moment for myself from it. I think what's hard and maybe what might be helpful for listeners is, we talk all the time about getting skin in the game on something that you want to own. Even as someone who says it a lot, I still don't always manage to do it. There are two businesses in particular with 2020. One of them, Datadog and another one's Zoom, where I remember doing the S-1 shows on those companies. I remember loving everything about them. They were just compelling, best-in-class companies, great retention rates, checked all the boxes, the valuation spooked me. Ultimately, that's what scared me off from getting a start-up position. I think my teachable moment for myself with 2020 is particularly if it's at first position. Just take a small bite; I say it all the time, but just take a small bite. The difference between having sold your brokerage account and tracking it, and not having it is huge in terms of how much you pay attention to it.
Feroldi: I think that's a wonderful lesson, but that is an incredibly hard lesson to internalize. If you like everything but the price is just insane, it's awfully hard to buy if you have any valuation vent at all. For example, what about Snowflake today? Seems like a really great business, will you pay 200 times sales for a company that's worth $100 billion plus? Boy, is that really hard to do. The good news is, if you really like Zoom, that stock has been falling drastically, so you might have another chance, Dylan.
Lewis: Hey, you never know when the discounts are going to come. Things go on sale when you don't expect them to.
Feroldi: That's right. But I do like the general point that you're making. If a company checks a lot of boxes for you, just get a little bit of skin in the game to put it on your radar and hope that the price declines, you can add your positioning over time.
Lewis: I think the reason I'm harping on that a little bit for myself is you have your watch list, and in my case, it's a physical list, sometimes it's a digital list in a Google Drive folder or something like that. But I tend to revisit that list when I have cash, just as a matter of the investing process. What I noticed is I'm far more in tune with what I own. I want to check my brokerage company pretty much daily. It's a lot easier for me to spot opportunities in stuff that I own or see success in stuff that I own, just because I'm regularly in the routine of checking that. I'm not so frequently checking my watch list and updating it, which is another lesson, I think, for me. If you're only putting a small amount of money toward it, there's nothing wrong with really liking everything and then being like, you know what? It's got to grow into this valuation. But as we saw, the stuff changes can happen, Brian, and then the valuation could start making a lot more sense.
Feroldi: It's very, very difficult to do that with you, Dylan. Yes, I have made that mistake and I can guarantee I will make that mistake constantly for the rest of my investing career.
Lewis: Listeners, you'll hear us doing this show on Snowflake in exactly one years' time. Brian, you talked about your regret being Pinterest. I feel like that's a half regret because as it turns out, you did wind up having a position in the stock. If I'm not mistaken, it's your stock for 2021?
Feroldi: That is correct. When I looked at my portfolio, I was like, what stock has done really well that I think is going to be permanently benefited because of COVID? I just came back to Pinterest. While the stock has done extremely well in 2020, I still think the growth story here is just getting started. When I look back at the most recent numbers we have to work off, it is the third quarter. Pinterest reported 37% growth in users and this is at a pretty decent scale. They're at 442 million users with the bulk of that growth coming in international markets. So, about two-thirds or three-quarters of their users are in international markets. Pinterest said that they're seeing particular growth from users under age 25. That's really attractive to me, because that is where advertisers want to put their dollars behind and overtime, the purchasing power of that cohort will certainly grow.
Beyond just the growing user numbers, which I think were boosted heavily from COVID, Pinterest also rolled out a number of tools during the year that are really going to make its platform much more attractive for advertisers as well as for posters. They made a big push into video. My wife is a heavy Pinterest user and she absolutely says, "I've seen tons more videos on the sites than I ever have before." They also launched an automatic bidding future for advertisers, they launched this product in July. In the third quarter, it already represented half of the company's conversion revenue. Talk about success with a product that easy. It's clear that those tools are very, very useful for advertisers.
The reason I'm so bullish on Pinterest easing from up here though has to do with ARPU, average revenue per user. Pinterest is so early in its monetization efforts. In the third quarter, it pulled in on average $1.03 off of the average user on its platform. For comparison, Facebook in the same period, $7.90. Facebook is pulling in more than seven times the revenue per user. Now, Facebook has been monetizing for much longer, it has a lot more data. But I think that the drumbeat away from Facebook and Twitter, is just going to get louder and louder, and Pinterest doesn't have to deal with any of those problems. I think, between the growing user base, as well as the company's continued monetization efforts, the next +10 years, we'll see double-digit growth for this company.
Lewis: Yeah, I think that ARPU comparison is probably one of the most succinct and compelling thesis you can have on a company. If you think Pinterest is going to ultimately grow to match the worst most prevalent social media company, that means that they still have a 2.5X on their current ARPU. Right?
Feroldi: Exactly. As they roll out the tools, to me, the big thing is that they're not plagued with any of the negativity that many other platforms are. I've seen the power of the platform in real-time, where my wife goes on, she looks at some image she's liked and she is like, what about this, and it's like, OK yeah, that makes sense for our life, let's buy that thing. I think that a lot of users are going to do that exact same journey.
Lewis: Yeah, I'm interested in that growth in the age under-25 element, Brian, because I think that that's a little bit of like a narrative shifting data point for a platform like Pinterest. When we talk about accessing the -- I guess, is that Gen-Z, sub-25? Is that the market we're talking about?
Feroldi: Sure, you've sold me. It's Gen-Z.
Lewis: People under 25. We're going to leave it at that, so I don't step at it and say something that's the wrong label. But for that market, typically we're talking about Instagram, and for a long time, it was Snapchat as the go-to way for advertisers to access that market. If they're able to really build themselves as someone that can offer advertisers access there, that's another major selling point for them as they go out to advertisers.
Feroldi: I think that's completely right. And again, why do people go to Pinterest? Back it up. Why do people go to Facebook? People go to Facebook to connect with and see photos of their friends and family. Why do people go to Twitter? To communicate with each other. Why do people go to Pinterest? To see images that will inspire them to do something in their life. Of those three, I think that Pinterest is the most natural place to go for advertising. They called this outright in their S-1. Advertisements do not compete with native content, advertising is the native content. Not only do I think that there's room for Pinterest to grow its ARPU, to match Facebook overtime, it would not shock me if in time they eclipse Facebook.
Lewis: Yeah. Advertisements that naturally fit into native content is basically the advertiser's dream. We see that in written content, in video content all the time. I think that the closer and closer you can get to that in the way that it doesn't feel intrusive on the consuming experience, the better. The other thing, and listeners may be able to figure this out by now, I don't own Pinterest, but it is basically in the top three on my "2020, Dylan, get a stake in this company" list. One of the other things that is just so compelling to me is the automatic bidding process because that gives you scale. That is one of those things that if you are running a platform, you need advertisers to be able to participate at scale,and then you see numbers start really taking off. The fact that they are early on in that means that these numbers are probably going to start getting big pretty quickly in the following years.
Feroldi: Let's remember, last quarter revenue growth, 58%, gross margin expanded 400 basis points to 75%, so that's almost 60% top-line growth combined with a gross margin of 75%. They have crossed into the profitability on an adjusted basis, they have tons of stock-based compensation, which is dragging them down. But even though the stock has gone up a lot in 2020, the valuation to me is not insane. It's high, but it's not insane. 29 times sales. But more importantly, because they're now focused on producing non-GAAP earnings, they're trading at less than 100 times next year's earnings estimates. That's a high number, very high number, but given that I think that there is operating leverage ahead, and there's huge room for them to grow their top-line. I don't think it's crazy.
Lewis: I think it's helpful to take that valuation and not just look at it as a multiple on earnings or sales, but look at it overall and how it stacks up to some other social media companies. We're talking about a business that's worth just over $40 billion. For a social media business, a digitally scalable business, that is not that big. It really isn't. When you factor in the ad load coming, them getting better and better about bringing advertisers in, there's a lot to like and it's not very hard to see this business being multiples bigger five years from now.
Feroldi: To your point, Facebook is worth $755 billion and I still think that number is going to go up too, by the way. I could very easily see Facebook being a $1 trillion company someday. So yes, I don't think Pinterest will ever match Facebook's size and scale, but is there room for it to grow between $40 billion and $800 billion? I think so.
Lewis: Yeah, I think them being a $100+ billion company in five-years is not hard to forecast. If everything goes according to plan and the thesis plays out, that's a relatively easy thing to see. That's what we like, right, Brian? We like easy, we don't like hard.
Feroldi: I look forward to you joining me as a shareholder, Dylan.
Lewis: I will let you know when it happens. For me, for my top stock, I have two, because I don't want to short change folks. I did wind up pitching a business when we did our all host round table that aired on December 23rd. To give people a quick recap on that. Beautifully, Brian, this is a company that you are familiar with, so we can kick this one around a little bit. But for folks that listened to that episode you heard me talk about Axon (NASDAQ: AAXN). I think that was my stock basically for the next year. But I think just in general, wonderful business. For the folks that are not super familiar, it's the company that's formerly known as TASER, they rebranded to reflect the fact that they are focused on their Axon body cameras and the Evidence.com cloud storage business. The short thesis here is basically that they supply body cameras that you see law enforcement wearing, and when it comes to that market, Brian, they are basically the only game in town. They're the only ones there.
Feroldi: That's correct. They have as strong a competitive position as you can have in a market. I believe they got there and the body camera by both organically and through acquisition, if memory serves.
Lewis: I think that's right, yeah. You're getting to the deeper sensors in my brain there. But really, this went from being something that was a tiny portion of their business, and really something that had to play out over time to what we have seen become a very large contributor to revenue. What I like is we've seen the thesis materialize. Axon cloud grew 40% in 2019, the sensors grew 60% in 2019. Management sees margin expansion across the board in all of its major segments. I think the body camera and the cloud storage is only going to become a larger part of this company going forward. From the investing side, that's high-margin revenue on the cloud side. These are recurring revenue cycles for them. They have customers that are going to be locked in for a long time, and they're the only player in this space, which you love. You love to see that. I think importantly, Brian, for me with this one, it's a really easy company to get behind. I'm going to highlight three points from the mission slide of their most recent earnings presentation. One, obsolete the bullet. Two, reduce social conflict. Three, enable a fair and effective justice system. Really, when I look at a company like Axon, what they're trying to do, they're trying to save lives, carry out more fair and equitable justice, and they are trying to add accountability and provide an unbiased record of what happens when things happen. I think as long as it's good for civilians, it's good for law enforcement. It's just a win-win all around.
Feroldi: I like to look at the softer side of investing things, and Axon here is one of Brian Stoffel's biggest holdings and investments. One of the reasons why is because it probably has the best mission statement I've ever heard, which is to protect life. Three words, ridiculously inspirational, very simple, and that is what the company is hyper-focused on. Now, that's all great and I do like to chat about the body camera business. To me, what makes it such a compelling investment is the software. The software that underpins it all, and how much emphasis that they are putting on getting that software into police offices. Once the software is in there, and it works seamlessly with the hardware that goes in there, that creates a product ecosystem that, to me, just reminds me of Apple. It's no stretch I think to call this company, the Apple of law enforcement.
Lewis: Yeah. The reason I wanted to pitch one Brian, is I think there are probably a lot of folks out there that look at the tax base and are really scared of some of the valuations that they're seeing right now. There are a variety of reasons why the multiples have been expanded for a lot of these companies. We're seeing SaaS companies that have recurring revenue, very high-margin revenue coming in, and we're trying to figure out how to value them. But also, there's really not a lot of money to be made in putting money into debt. There's a lot of money going into the stock market, a lot of money going into real estate. I look at this company and I say, there are a lot of elements of it that are exactly what you want in a tech business. You have high-margin revenue coming in, it's really sticky. What I really like in their case though, is this is something that law enforcement needs to have. They are basically installed with who they already have relationships with. They're not going anywhere, and they're only really going to be adding customers. I don't see this going away. Really, no matter what happens, it's I think it's the new normal. That's good for a lot of people. But I think on the investing side, it means that yes, there are elements of this that are tech, but this is a much more stable tech investment than a lot of things we normally talk about on the show.
Feroldi: Yep, I think margins are going to grow too as their software offering gets out there and becomes more popular. This is a company that purposely was profitable, and then went backwards as it invested aggressively to both develop its software capabilities and get them out there into police offices for, I think, free for the first year or something like that. They knew that once police offices gave this product a try that they were going to become heavily reliant on it. It's a strategy that I think over the next five years will produce huge growth in earnings.
Lewis: Since I pitched that one already, Brian, I want to give some folks that are listening something new as well. I feel like it's only fair. I will add another one, and we're talking up our own book here Brian, because you own Pinterest. I will be a shareholder when I'm able to be a shareholder, I already own Axon, and this third company I'm going to name, I own, I believe you might own it as well, and that is MercadoLibre (NASDAQ: MELI). We talked about it briefly before being a huge winner in 2020. It has been a huge winner, basically, no matter how far back you look, I don't see that ending anytime soon.
Feroldi: Tesla is my No. 1 holding. My No. 2 holding, Dylan, is MercadoLibre, if that gives you [laughs] any sense of what I think about the long-term potential of the business.
Lewis: Yeah. It's my largest holding. Some of that is me putting the money behind it, but a huge chunk of that is really just the share price appreciation, the fact that the business has continued to execute. There are a few companies that I think benefit from as many mega trends as MercadoLibre does. It is so squarely positioned behind e-commerce, digital payments, fintech, and that space is absolutely exploding. I think what is particularly incredible about this business is they operate in fragmented markets in South America, that insulates them a lot from competitive pressure. What we're seeing with them, when we talk a little bit of Mercado Pago, their payment solution, is they've created things that are being used within their ecosystem, but they have also made the leap to being used off of their ecosystem and have basically become the way that people transact without traditional financial systems.
Feroldi: To me, MercadoLibre is a case study in the power of optionality. When I first became aware of this business, it was pretty much the eBay of Latin America and that's it. You could make a very compelling argument today that this company is the PayPal of Latin America with an eBay ticker to it. Not only that, but they have invested heavily in the logistics side of their platform and they are even getting into the asset management business. This company has proven itself to be incredibly innovative to roll out new products and services and it is winning everywhere that it goes.
Lewis: I think even calling it the PayPal, you're selling it short, Brian. It's basically, you take eBay, you take Amazon, you take PayPal, throw Square in there. There are so many different services that it is able to bundle up in a really effective way. That, to me, is just a very easy investing case. We've seen this model work. We're seeing it now being applied to a different market, and we talked a little bit before about the businesses that 2020 created step changes for. The numbers for this company got huge in 2020, just put a couple of numbers to do that: in Q3 of 2019, companies saw year-over-year gross merchandise volume of $3.6 billion, which was a 21.6% increase in U.S. dollars, 37% increase if you're neutral on foreign exchange. Q3 of 2020, a year later, gross merchandise volume almost $6 billion, an increase of 62% in U.S. dollars and 117% on an FX neutral basis. Items sold over 200 million for the most recent quarter that we have data on, double what it was a year ago. It doesn't really matter what core business metric you look at, everything went off in 2020. I look at this and I say it's a business that was already experiencing adoption, Brian. I think those are people who are probably going to be here to stay.
Feroldi: Well, I would have to agree with you there. If you want to go really exciting, despite this company being one of the biggest winners in the market over the last 10 years and having been a monster, I think multi-hundred bagger, since coming public, it's an $84 billion business. It hasn't even crossed the $100 billion mark. Again, with companies like Amazon, well over $1 trillion, I think there's upside here too.
Lewis: Yeah. I look at this and I say, it's easy. It's really easy to see this company being much bigger in three years, five years, 10 years. I don't see a lot that's going to disrupt the thesis. It's nice to be able to have short parts, Brian. That's what we're looking for here.
Feroldi: That's right. Now, the valuation is pretty darn high. It wouldn't surprise me if the stock traded sideways for a couple of years while the fundamentals caught up to the valuation. But like you, I think five years from now, 10 years from now, this company will be bigger.
Lewis: Yeah. The necessary caveat, I always have to add this when we talk about MercadoLibre, I mentioned before, they do business in fragment markets, they're in I think over a dozen countries in South America. They have to take results that are reported in a bunch of different currencies and then basically repatriate them, state them in U.S. dollars, and because of that, a lot of crazy things can happen with currency swings and what that actually reflects in their financials. If you're looking at things on a U.S. dollar reported basis, there are going to be some weird times, particularly as there is some volatility in some of the markets they operate in. This is a business where you have to look, I think, at the key business metrics and really follow those to get a sense of what is going on. As long as those continue to post insane growth, which they have, I am going to be a long-term ball on this business.
Feroldi: The interesting thing there, Dylan, is the currency movements have worked against this company heavily for as long as I've been following them, at least five years. Currencies tend to ebb and flow, and there might be a day when currency movements actually work in this company's favor. Imagine what it could do if currency all of a sudden became a reason to own this stock.
Lewis: Yeah. You talked about the last five years, Brian. In that period, it's been a 15%, 100% winner. Something roughly in that neighborhood. Despite operating in a very tough economic environment during that period, it has proven to be a very strong business. It's my largest holdings, it's one of Brian's largest holdings. I know a lot of Fools are huge fans. But I know a lot of the names we threw out here, Brian, are ones that are very popular in the Fool universe. I think if you looked around, if we were at HQ, rather than doing this virtually, you would find a lot of fans for all of these businesses.
Feroldi: Importantly, the biggest lesson I've learned in investing is that winners keep on winning. All the companies that we've talked about thus far have been winners and I would personally bet that all of them are going to keep on winning.
Lewis: Yeah. That's a great way to end this on, Brian, because I'm sure a lot of folks look at the stock price charts for these companies and say, oh, come on, you're telling me to pick up shares of this thing? Yeah, I've said that pretty much every time I've bought back into Axon and MercadoLibre. I'm sure in three or five years from now, I'll be saying that when I buy back into Pinterest, again. [laughs]
Feroldi: Enough, Dylan. Yes, it is extremely mentally difficult to buy something like Pinterest. Pinterest is $70 today. As I said, nine months ago, this company was trading at $10. I said, wow, that just makes no sense. It's incredibly hard to say, "I'm going to buy this thing at $70 today, but I could have bought nine months ago at $10." But you have to be willing to do that if you want to buy into the best growth stocks.
Lewis: It's part of the mindset when it comes to investing, it's just what you have to suffer through. But when you look at the returns, it makes it worth the anguish, I think.
Feroldi: I think that's right, Dylan.
Lewis: Just quickly to recap our tech stocks for 2021. We got Pinterest, we have Axon, we have MercadoLibre. I think we can say collectively, we have a high degree of conviction in all three of those, just based on the fact that we've got skin in the game on two out of three, soon to be three out of three for both of us.
Feroldi: I own all three, Dylan, so you can catch up anytime you would like.
Lewis: I was saying "we," Brian. I was saying "we." [laughs] Because this is a theme week, I just want to quickly recap what we had earlier in the week. Matt Frankel pitched Wells Fargo on Monday. On the Consumer Goods show on Tuesday, Asit Sharma pitched Sleep Number, and Emily Flippen pitched Airbnb. On Wildcard Wednesday, we had Brendan Matthews with Workday, and Jason Moser with Masimo, and then Energy, oh my gosh, these guys went crazy. We had Jason Hall pitching Brookfield Infrastructure Partners, you can tell I don't say that name a lot, BIP, and Nick Sciple pitching Berkshire Hathaway and NV5 and Texas Pacific Land. A lot of names there, Brian. I think that's going to be a fun basket to track in 2021.
Feroldi: That's a motley group of stocks and we would have no other way, right?
Lewis: Absolutely. That's the beauty of the show because we talk about every sector of the stock market, get a little exposure to everything. Brian, so great to be back with you. Happy to be in 2021, happy to be back on the podcasts routine.
Feroldi: I'm thrilled to be here, Dylan.
Lewis: Thanks for joining me.
Feroldi: You too, buddy.
Lewis: Listeners, that's going to do it for this episode of Industry Focus. If you have any questions or you want to reach out and say, "Hey", shoot us an email at industryfocus@fool.com, or you can tweet us @MFindustryfocus. If you want to look for more of our stuff, subscribe on iTunes or wherever you get your podcast.
As always, people on the program may own companies discussed on the show and The Motley Fool may have formal recommendations for or against the stocks mentioned, so don't buy or sell anything based solely on what you hear. Thanks to Tim Sparks for all his work behind the glass today, and thank you for listening. Until next time, Fool on!
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Brian Feroldi owns shares of Amazon, Axon Enterprise, DocuSign, MercadoLibre, PayPal Holdings, Pinterest, Square, and Tesla. Dylan Lewis owns shares of Amazon, Apple, Axon Enterprise, DocuSign, MercadoLibre, PayPal Holdings, and Square. The Motley Fool owns shares of and recommends Amazon, Apple, Axon Enterprise, Berkshire Hathaway (B shares), Datadog, DocuSign, Masimo, MercadoLibre, NV5 Global, PayPal Holdings, Pinterest, Snowflake Inc., Square, Tesla, Twitter, Wayfair, Workday, and Zoom Video Communications. The Motley Fool recommends Brookfield Infrastructure Partners and eBay and recommends the following options: short March 2021 $225 calls on Berkshire Hathaway (B shares), short January 2023 $200 puts on Berkshire Hathaway (B shares), long January 2022 $1920 calls on Amazon, short January 2021 $200 puts on Berkshire Hathaway (B shares), long January 2023 $200 calls on Berkshire Hathaway (B shares), short January 2022 $1940 calls on Amazon, and long January 2022 $75 calls on PayPal Holdings. 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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If you could take that step back and see great returns, and thankfully, I was in that position for 2020, then it makes it a little easier to swallow some of those huge winners that you don't have a ticket to. That's a great way to end this on, Brian, because I'm sure a lot of folks look at the stock price charts for these companies and say, oh, come on, you're telling me to pick up shares of this thing? As always, people on the program may own companies discussed on the show and The Motley Fool may have formal recommendations for or against the stocks mentioned, so don't buy or sell anything based solely on what you hear.
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Brian Feroldi owns shares of Amazon, Axon Enterprise, DocuSign, MercadoLibre, PayPal Holdings, Pinterest, Square, and Tesla. The Motley Fool owns shares of and recommends Amazon, Apple, Axon Enterprise, Berkshire Hathaway (B shares), Datadog, DocuSign, Masimo, MercadoLibre, NV5 Global, PayPal Holdings, Pinterest, Snowflake Inc., Square, Tesla, Twitter, Wayfair, Workday, and Zoom Video Communications. The Motley Fool recommends Brookfield Infrastructure Partners and eBay and recommends the following options: short March 2021 $225 calls on Berkshire Hathaway (B shares), short January 2023 $200 puts on Berkshire Hathaway (B shares), long January 2022 $1920 calls on Amazon, short January 2021 $200 puts on Berkshire Hathaway (B shares), long January 2023 $200 calls on Berkshire Hathaway (B shares), short January 2022 $1940 calls on Amazon, and long January 2022 $75 calls on PayPal Holdings.
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In this episode of Industry Focus: Tech, host Dylan Lewis and Motley Fool contributor Brian Feroldi kick off 2021 with their favorite tech stocks for the upcoming year (but really, decade) and take a look back at 2020 -- the biggest winners, regrets, and the lessons from the past year. You don't have to own every big winner to do well, and there are lots of companies that you just shouldn't own. The Motley Fool recommends Brookfield Infrastructure Partners and eBay and recommends the following options: short March 2021 $225 calls on Berkshire Hathaway (B shares), short January 2023 $200 puts on Berkshire Hathaway (B shares), long January 2022 $1920 calls on Amazon, short January 2021 $200 puts on Berkshire Hathaway (B shares), long January 2023 $200 calls on Berkshire Hathaway (B shares), short January 2022 $1940 calls on Amazon, and long January 2022 $75 calls on PayPal Holdings.
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Since I tend to invest in companies that I think can grow for a long period of time, I had a lot of winners in my portfolio. You don't have to own every big winner to do well, and there are lots of companies that you just shouldn't own. You talked about the last five years, Brian.
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These Stocks Would Have Doubled Your Money Last Year
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DDOG
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https://www.nasdaq.com/articles/these-stocks-would-have-doubled-your-money-last-year-2021-01-15
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It isn't unusual for a stock's price to double after a few years. However, many tech stocks doubled, tripled, or even quadrupled their value in 2020 as the pandemic turned the sector into a safe haven for growth-oriented investors.
Tech stocks were naturally insulated from the worst effects of the pandemic and other macro headwinds, while stay-at-home measures lifted PC sales, online shopping, and the usage of cloud-based software. Let's take a look at three tech stocks that rode those tailwinds and doubled in value last year: Advanced Micro Devices (NASDAQ: AMD), Datadog (NASDAQ: DDOG), and JD.com (NASDAQ: JD).
1. Advanced Micro Devices
AMD, the world's second-largest producer of x86 CPU and discrete GPU computer chips, saw its stock double in value in 2020. Sales of its Ryzen CPUs surged as rival Intel (NASDAQ: INTC) struggled with chip manufacturing shortages and delays, while stay-at-home measures sparked increased sales of its chips for new PCs.
Image source: Getty Images.
AMD didn't suffer the same setbacks as Intel because it doesn't manufacture its own chips like its larger rival. Instead, AMD outsources the production of its chips to big foundries like Taiwan Semiconductor Manufacturing.
AMD is also led by a seasoned engineer, Dr. Lisa Su, while Intel has been led by Bob Swan, the former CFO who took the helm two years ago. Under Su, AMD launched new CPUs and GPUs that offered comparable performance to Intel's and NVIDIA's chips but at lower prices. Under Swan, who recently resigned under pressure from an activist investor, Intel mainly focused on cutting costs and repurchasing shares. As a result, Intel's stock declined 17% last year as the bulls rushed to AMD.
AMD could continue to outperform Intel this year if demand for its CPUs and GPUs remain elevated. Robust sales of Sony's PS5 and Microsoft's Xbox Series X and S gaming consoles, which AMD supplies chips for, could amplify those gains. Analysts expect AMD's revenue and earnings to rise 27% and 47%, respectively, next year -- which arguably justifies its forward P/E ratio of 52.
2. Datadog
Share prices of Datadog surged 160% last year as its data monitoring platform locked in more customers. Datadog pulls all of a company's data from different computing platforms -- including servers, databases, and apps -- onto unified dashboards for developers and IT professionals.
Datadog's silo-busting approach helps companies streamline their businesses and cut costs. More than 400 platforms, including big cloud platforms like Microsoft's Azure and Amazon Web Services (AWS), can be integrated with its dashboards.
Image source: Getty Images.
Datadog deploys a "land and expand" model, in which it signs a customer to one service to cross-sell additional services, to grow its revenue. It's an effective strategy -- 20% of its customers were using four or more products last quarter, up from just 7% a year ago, and its net retention rate (which measures its revenue growth per existing customer) surpassed 130% over the past few quarters.
Datadog has had a great run, but its revenue growth is decelerating. It expects its revenue to rise 62%-63% this year, compared to 83% growth last year, and analysts anticipate just 36% growth next year. That slowdown, along with competition from similar platforms like Splunk and New Relic, could limit the stock's gains next year -- since it already trades at 40 times next year's sales.
3. JD.com
Shares of JD, the largest direct retailer in China, surged 150% last year as its growth in annual active customers accelerated, its margins expanded, and its profits soared.
Unlike Alibaba (NYSE: BABA), which runs paid listing platforms but doesn't take on inventories, JD takes on inventories and fulfills its orders through its first-party logistics network. JD's business model is more capital-intensive than Alibaba's, but it's better shielded from fraud and counterfeit products.
JD significantly expanded its reach into China's lower-tier cities, which accounted for about 80% of its new shoppers last quarter, to widen its moat against Pinduoduo in the lower-end market. Sales of grocery items, healthcare products, consumer electronics, and home appliances also remained robust on its core marketplace website.
That momentum could continue next year, and JD could profit from Alibaba's recent antitrust troubles as regulators take drastic steps to loosen Alibaba's grip on China's e-commerce market. JD should remain well-insulated from antitrust threats since its ecosystem is much narrower than Alibaba's.
Analysts expect JD's revenue and earnings to rise 23% and 40%, respectively, next year -- which are high growth rates for a stock that trades at 40 times forward earnings and less than one times next year's sales.
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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. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Leo Sun owns shares of Amazon and JD.com. The Motley Fool owns shares of and recommends Alibaba Group Holding Ltd., Amazon, Datadog, JD.com, Microsoft, New Relic, NVIDIA, Splunk, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Intel and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon. 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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Let's take a look at three tech stocks that rode those tailwinds and doubled in value last year: Advanced Micro Devices (NASDAQ: AMD), Datadog (NASDAQ: DDOG), and JD.com (NASDAQ: JD). Tech stocks were naturally insulated from the worst effects of the pandemic and other macro headwinds, while stay-at-home measures lifted PC sales, online shopping, and the usage of cloud-based software. JD.com Shares of JD, the largest direct retailer in China, surged 150% last year as its growth in annual active customers accelerated, its margins expanded, and its profits soared.
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Let's take a look at three tech stocks that rode those tailwinds and doubled in value last year: Advanced Micro Devices (NASDAQ: AMD), Datadog (NASDAQ: DDOG), and JD.com (NASDAQ: JD). Analysts expect JD's revenue and earnings to rise 23% and 40%, respectively, next year -- which are high growth rates for a stock that trades at 40 times forward earnings and less than one times next year's sales. The Motley Fool owns shares of and recommends Alibaba Group Holding Ltd., Amazon, Datadog, JD.com, Microsoft, New Relic, NVIDIA, Splunk, and Taiwan Semiconductor Manufacturing.
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Let's take a look at three tech stocks that rode those tailwinds and doubled in value last year: Advanced Micro Devices (NASDAQ: AMD), Datadog (NASDAQ: DDOG), and JD.com (NASDAQ: JD). It expects its revenue to rise 62%-63% this year, compared to 83% growth last year, and analysts anticipate just 36% growth next year. Analysts expect JD's revenue and earnings to rise 23% and 40%, respectively, next year -- which are high growth rates for a stock that trades at 40 times forward earnings and less than one times next year's sales.
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Let's take a look at three tech stocks that rode those tailwinds and doubled in value last year: Advanced Micro Devices (NASDAQ: AMD), Datadog (NASDAQ: DDOG), and JD.com (NASDAQ: JD). Sales of its Ryzen CPUs surged as rival Intel (NASDAQ: INTC) struggled with chip manufacturing shortages and delays, while stay-at-home measures sparked increased sales of its chips for new PCs. Datadog Share prices of Datadog surged 160% last year as its data monitoring platform locked in more customers.
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a248085f-9781-4d15-a3e7-559170a68363
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718924.0
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2021-01-13 00:00:00 UTC
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Where Will Datadog Be in 1 Year?
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DDOG
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https://www.nasdaq.com/articles/where-will-datadog-be-in-1-year-2021-01-13
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nan
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nan
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Datadog's (NASDAQ: DDOG) stock surged about 160% over the past 12 months as the data monitoring company impressed investors with its robust revenue growth. But with a market cap of $31.7 billion, this high-flying stock now trades at 40 times next year's sales. Can Datadog justify that premium valuation throughout 2021 and head even higher?
A disruptive silo-buster
Large companies often store their data across a wide range of computing platforms, including servers, databases, cloud services, and mobile apps. Monitoring all that data can be tedious for developers and IT teams, so Datadog's platform breaks down the silos and pulls all the information onto unified dashboards.
Image source: Getty Images.
Over 400 platforms, including Microsoft's Azure and Amazon Web Services (AWS), can be integrated into Datadog's platform. Over the past year, Datadog expanded that platform with new features, including new security services, mobile app monitoring tools, and its Datadog Marketplace for third-party integrated apps.
It ended last quarter with 1,107 large customers, which were generating more than $100,000 in annual recurring revenue (ARR), up from 727 a year earlier. Like many other software companies, Datadog deploys a "land and expand" model, in which it locks in a customer with a single product to cross-sell additional services.
Over 70% of its customers were using two or more of its products last quarter. About 20% were using four or more products, up from just 7% a year ago. It also maintained a net retention rate of more than 130% over the past few quarters, which means its existing customers are paying 30% more year-over-year for its services.
Why did Datadog dazzle the bulls?
Datadog's revenue rose 83% to $362.8 million in fiscal 2019. Its GAAP net loss widened from $10.8 million to $16.7 million, but narrowed on a non-GAAP basis from $5.0 million to $1.9 million.
In the first nine months of 2020, Datadog's revenue rose another 71% year-over-year to $425.9 million. Its GAAP net loss narrowed from $17.6 million to $8.4 million, and it generated a non-GAAP net profit of $52.5 million, up from a loss of $11.5 million a year earlier.
Datadog expects its revenue to rise 62%-63% for the full year, and to remain profitable on a non-GAAP basis. Next year, analysts expect its revenue to rise 36%, and for its non-GAAP earnings to grow 6%.
Why Datadog's stock could attract the bears
Datadog's core business looks healthy, but its decelerating revenue growth makes it difficult to justify its frothy price-to-sales ratio. There are plenty of other software companies generating comparable revenue growth but trading at lower valuations.
JFrog (NASDAQ: FROG), which also breaks down silos with its universal repository for software updates, is expected to generate 31% revenue growth next year, but trades at less than 30 times that forecast. Zoom (NASDAQ: ZM), the video conferencing darling that became a household name during the pandemic, is expected to generate 38% revenue growth next year -- but trades at less than 30 times next year's sales.
Datadog also faces competition from similar data monitor companies like Splunk, New Relic, and Elastic. Diversified tech giants like Cisco and IBM can also bundle similar dashboards with their software services.
The fragmentation of this market could throttle Datadog's long-term growth, even if it widens its moat via streamlined integrations with cloud giants like AWS and Azure. On the bright side, Datadog's expanding gross margins indicate it still has plenty of pricing power in this high-growth market.
Datadog's stock could tread water in 2021
Datadog is a promising growth stock, but I doubt it can replicate its gains from 2020 this year. The stock is priced for perfection at these levels, and the company will need to crush -- not just beat -- Wall Street's estimates to keep advancing.
I don't expect Datadog's stock to decline significantly this year, since its core business still looks strong. However, I expect its stock to tread water as the business catches up to the stock and its red-hot valuations.
10 stocks we like better than Datadog
When investing geniuses David and Tom Gardner have 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.*
David and Tom 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 November 20, 2020
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool's board of directors. Leo Sun owns shares of Amazon and Cisco Systems. The Motley Fool owns shares of and recommends Amazon, Datadog, Elastic, Microsoft, New Relic, Splunk, and Zoom Video Communications and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon. 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 surged about 160% over the past 12 months as the data monitoring company impressed investors with its robust revenue growth. A disruptive silo-buster Large companies often store their data across a wide range of computing platforms, including servers, databases, cloud services, and mobile apps. JFrog (NASDAQ: FROG), which also breaks down silos with its universal repository for software updates, is expected to generate 31% revenue growth next year, but trades at less than 30 times that forecast.
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Datadog's (NASDAQ: DDOG) stock surged about 160% over the past 12 months as the data monitoring company impressed investors with its robust revenue growth. Over the past year, Datadog expanded that platform with new features, including new security services, mobile app monitoring tools, and its Datadog Marketplace for third-party integrated apps. Its GAAP net loss narrowed from $17.6 million to $8.4 million, and it generated a non-GAAP net profit of $52.5 million, up from a loss of $11.5 million a year earlier.
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Datadog's (NASDAQ: DDOG) stock surged about 160% over the past 12 months as the data monitoring company impressed investors with its robust revenue growth. Over the past year, Datadog expanded that platform with new features, including new security services, mobile app monitoring tools, and its Datadog Marketplace for third-party integrated apps. Why Datadog's stock could attract the bears Datadog's core business looks healthy, but its decelerating revenue growth makes it difficult to justify its frothy price-to-sales ratio.
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Datadog's (NASDAQ: DDOG) stock surged about 160% over the past 12 months as the data monitoring company impressed investors with its robust revenue growth. Over 400 platforms, including Microsoft's Azure and Amazon Web Services (AWS), can be integrated into Datadog's platform. There are plenty of other software companies generating comparable revenue growth but trading at lower valuations.
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507cbe75-a00e-4fca-a5db-cad70553b9e0
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718925.0
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2021-01-12 00:00:00 UTC
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Datadog Reaches Analyst Target Price
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DDOG
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https://www.nasdaq.com/articles/datadog-reaches-analyst-target-price-2021-01-12
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nan
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nan
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In recent trading, shares of Datadog Inc (Symbol: DDOG) have crossed above the average analyst 12-month target price of $100.36, changing hands for $104.25/share. When a stock reaches the target an analyst has set, the analyst logically has two ways to react: downgrade on valuation, or, re-adjust their target price to a higher level. Analyst reaction may also depend on the fundamental business developments that may be responsible for driving the stock price higher — if things are looking up for the company, perhaps it is time for that target price to be raised.
There are 14 different analyst targets contributing to that average for Datadog Inc, but the average is just that — a mathematical average. There are analysts with lower targets than the average, including one looking for a price of $50.00. And then on the other side of the spectrum one analyst has a target as high as $126.00. The standard deviation is $18.784.
But the whole reason to look at the average DDOG price target in the first place is to tap into a "wisdom of crowds" effort, putting together the contributions of all the individual minds who contributed to the ultimate number, as opposed to what just one particular expert believes. And so with DDOG crossing above that average target price of $100.36/share, investors in DDOG have been given a good signal to spend fresh time assessing the company and deciding for themselves: is $100.36 just one stop on the way to an even higher target, or has the valuation gotten stretched to the point where it is time to think about taking some chips off the table? Below is a table showing the current thinking of the analysts that cover Datadog Inc:
RECENT DDOG ANALYST RATINGS BREAKDOWN
» Current 1 Month Ago 2 Month Ago 3 Month Ago
Strong buy ratings: 6 7 7 8
Buy ratings: 1 1 0 1
Hold ratings: 11 10 7 9
Sell ratings: 0 0 0 0
Strong sell ratings: 0 0 0 0
Average rating: 2.28 2.17 2.0 2.06
The average rating presented in the last row of the above table above is from 1 to 5 where 1 is Strong Buy and 5 is Strong Sell. This article used data provided by Zacks Investment Research via Quandl.com. Get the latest Zacks research report on DDOG — FREE.
The Top 25 Broker Analyst Picks 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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In recent trading, shares of Datadog Inc (Symbol: DDOG) have crossed above the average analyst 12-month target price of $100.36, changing hands for $104.25/share. But the whole reason to look at the average DDOG price target in the first place is to tap into a "wisdom of crowds" effort, putting together the contributions of all the individual minds who contributed to the ultimate number, as opposed to what just one particular expert believes. And so with DDOG crossing above that average target price of $100.36/share, investors in DDOG have been given a good signal to spend fresh time assessing the company and deciding for themselves: is $100.36 just one stop on the way to an even higher target, or has the valuation gotten stretched to the point where it is time to think about taking some chips off the table?
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In recent trading, shares of Datadog Inc (Symbol: DDOG) have crossed above the average analyst 12-month target price of $100.36, changing hands for $104.25/share. But the whole reason to look at the average DDOG price target in the first place is to tap into a "wisdom of crowds" effort, putting together the contributions of all the individual minds who contributed to the ultimate number, as opposed to what just one particular expert believes. And so with DDOG crossing above that average target price of $100.36/share, investors in DDOG have been given a good signal to spend fresh time assessing the company and deciding for themselves: is $100.36 just one stop on the way to an even higher target, or has the valuation gotten stretched to the point where it is time to think about taking some chips off the table?
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And so with DDOG crossing above that average target price of $100.36/share, investors in DDOG have been given a good signal to spend fresh time assessing the company and deciding for themselves: is $100.36 just one stop on the way to an even higher target, or has the valuation gotten stretched to the point where it is time to think about taking some chips off the table? In recent trading, shares of Datadog Inc (Symbol: DDOG) have crossed above the average analyst 12-month target price of $100.36, changing hands for $104.25/share. But the whole reason to look at the average DDOG price target in the first place is to tap into a "wisdom of crowds" effort, putting together the contributions of all the individual minds who contributed to the ultimate number, as opposed to what just one particular expert believes.
|
In recent trading, shares of Datadog Inc (Symbol: DDOG) have crossed above the average analyst 12-month target price of $100.36, changing hands for $104.25/share. But the whole reason to look at the average DDOG price target in the first place is to tap into a "wisdom of crowds" effort, putting together the contributions of all the individual minds who contributed to the ultimate number, as opposed to what just one particular expert believes. And so with DDOG crossing above that average target price of $100.36/share, investors in DDOG have been given a good signal to spend fresh time assessing the company and deciding for themselves: is $100.36 just one stop on the way to an even higher target, or has the valuation gotten stretched to the point where it is time to think about taking some chips off the table?
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04dcd7e3-03a3-4c19-89e3-db0e6c01fffd
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718926.0
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2021-01-09 00:00:00 UTC
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December Mailbag: Post-Traumatic Growth
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DDOG
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https://www.nasdaq.com/articles/december-mailbag%3A-post-traumatic-growth-2021-01-09
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nan
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nan
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In this episode of Rule Breaker Investing, Motley Fool co-founder David Gardner goes through the Fool mailbag, to read about your journeys as investors, your success stories, lessons learned, and reflections on the future. With the new year come new opportunities for growth and optimism.
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.
10 stocks we like better than Walmart
When investing geniuses David and Tom Gardner have an investing 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.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Walmart 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 2/1/20
This video was recorded on December 18, 2020.
David Gardner: Here we are at the end of it all. All 2020. All of it. You and me here together at the end of it all. What did you make of it? How did you do? How would you score yourself? What's your single favorite memory or moment? Did you have your heart broken? I bet you did at least once. Never forget that, but do get past it. What three lessons will you take away and with whom will you share those three lessons? When English speakers worldwide sing tomorrow, "Should old acquaintance be forgot," remember that lyric is just the start of a rhetorical question. I don't think 18th century Scottish poet Robert Burns was suggesting that you forget old acquaintances, but some non trivial amount of this year and feel free to round it up, we might want to forget. If that's you, you have my Foolish permission to do so.
None of us though will forget the stock market, how it dove and rose. How many of our favorite companies went on to higher heights than we would've dreamed at this time last year. Do you remember? Think about it. Could you have imagined, dear fellow Tesla shareholder, that as Tesla started the fateful year of 2020 below $100 a share, that it would finish over $600? That is an acquaintance not to be forgotten. So here, at the end of it all, I say, we close things out as we always do every month. This for the 62nd time in Rule Breaker Investing podcast history, the 62nd mailbag at the end of it all, only on this week's Rule Breaker Investing.
Welcome back to Rule Breaker Investing. My producer, Rick Engdahl, mentioned to me when I said 62nd, that's a six with the two after it. But it also sounds like we're about to do a mailbag in exactly one minute, 60-seconds. But that is definitely not the case. In fact, our mailbag runneth over this month and as usual, there is no way for me to take 38 pages of amazing questions, stories, and thoughts, and do any real justice to more than about a third of it. We'll have approximately 12 points to finish your year here in 2020. We will be doing this in more than 60 seconds on the 62nd historical Rule Breaker Investing mailbag. Well, at the end of it all, in this case, just the end of this month, I always like to look back to the month briefly that has been. We kicked it off with Games, Games, Games: Volume 2, that was my holiday game gift buying guide. This podcast, which was actually recorded on Friday, December 18th, Rick and I, I hope are enjoying the holidays with our families as you hear us. By the way, we've never taken a week off. Every single week since July of 2015, you've gotten a fresh new podcast. Darn it, we're certainly not going to stop that record now.
Even though we recorded this on December 18th, it's somewhere right near the end of the year, which means a holiday gift game buying guide might not be that useful. However, if you are still looking for a late gift, that Games, Games, Games episode, in which I reveal 15 games in three different lists, that should suit, I hope, any taste might still be helpful. The week after was gratitude 2020. It was time to say thank you to many for this year. The week after that, the third week of the month, it was our Besties of 2020, thinking back on what I found to be some of the most compelling podcasts we got to bring you in the year 2020 with cameos. Everybody, from my brother, Tom, to my friend Vennard Wright, to our Board Member, John Mackey, the founder of Whole Foods, all with a few minutes of thinking about this year and next. I hope you enjoyed our first annual Besties.
Last week, of course, the Market Cap Game Show, because that's what we do the second to last Wednesday of every quarter. That was our 14th episode. Congratulations, again, to Maria Gallagher, which brings us to this mailbag. I have already conveyed, we have a lot to get through. I say we get started. I always like to start with hot takes from Twitter. I've got four tweets to share this time. The first one comes from my friend Mahan Tavakoli, @Mahany, that's Mahan with a Y on the end of it, "@DavidGFool, the conversations you have with your people team on the Rule Breaker Investing podcast are some of my favorites. I use those as examples of what great organizational culture and truly caring about people looks like." Well, wow, thank you, Mahan. Coming from you, that means a lot. You're reflecting on the conversation I had with Lee Burbage and Kara Chambers as well. We had a few this year, but especially our work from home edition, where we shared some of The Motley Fool's best tips we could give you if you are also working from home or a leader trying to help others work from home. That was certainly one of our besties of 2020. Mahan, thank you for that.
By the way, I can mention that I was on Mahan's podcast. Occasionally, I'm on other people's podcast. So if you're interested in hearing a conversation about leadership and some more personal life stuff, I'm sure as well, please, join me and Mahan. His website is partneringleadership.com and that's the name of the podcast. If you want too much of me this month, I'm there for you.
The next one comes from @Inveduko. That's Inveduko LLC. Looks like some kind of a money management firm, "@DavidGFool, do you think the S&P 500 is still the best benchmark for the types of companies you recommend, given that many of them are high growth tech stocks?" Not a phrase I use but, "Would the QQQ possibly be a better benchmark than Nasdaq Composite?" Well, thanks, Inveduko. First of all, I encourage anybody to compare my performance or your performance or anyone else's against any benchmark that they like. For me, I've always used the S&P 500 because it's the gold standard. It's the one that all mutual funds or index funds get compared to. From day one of The Motley Fool, we've said we think you can beat the market. We think you could beat the S&P 500. That really is the most representative index that I can think of. While it's certainly true that a lot of our companies are Nasdaq companies and some of our New York Stock Exchange companies look more like tech-centric Nasdaq companies. At the same time, we have a wide variety of different companies. I actually think that if I started comparing my performance to the Nasdaq, some people would say, "Why aren't you using the S&P 500? That's what everybody else uses." But again, anybody is welcome to compare our performance to anything that they would like.
All right, tweet No. 3. This one is from @chrisc195, Chris says, "Are you saying that out of 135 picks over 5+ years, that they averaged 97% gains each?" Well, first of all, thank you, Chris, for that. What he is referring to is the performance of our five-stock samplers. So, any new listener should know that every 10 weeks or so on this podcast for five years now, I've picked a basket of five stocks, usually to a theme. Sometimes a serious minded theme and sometimes a completely silly theme, but each time, we're typically picking them for three years. Now, we like them past those three years, but we make it a three-year game and we track it here on this podcast. That's been an important part of Rule Breaker Investing, really from day one. So, if you do that for 5+ years every 10 weeks or so, you end up doing it 27 times, which is exactly how many five stock samplers we have presented. If you multiply 27 times 5, you end up with 135 stocks. So, Chris said, "Are you saying that out of 135 picks over 5+ years, that they averaged 97% gains each?" I'm really happy and I'm amazed to be able to say, yes, Chris. That is exactly what I was saying. I've got an update. Again, we're recording on Friday, December 18th, but as of now, they now average 108%, so we're beating that 97%, at least, with one week to go in the year.
I'm absolutely flabbergasted myself by the performance of the five stock samplers, certainly the ones from this year, to think that the Coronavirus stocks picked in April would average those five stocks a gain of 264% is well above and beyond any expectations I or you should ever have going forward. But even going back some years, it wasn't just about hot stocks in 2020, it was about the track that we've been laying for years and years. Now, as Rule Breaker investors following this strategy, both the types of companies we pick and how we treat them, yes, I do think you can do with the academics. Think you can't, I think you can beat the market and beat it really badly by following this approach over time. So Chris, yes, 135 picks, 5+ years, and if you take all 135 of those stocks and you simply average their gain, as of now, they're up 108% each as a group.
The last tweet, this one comes from Vince [...], "None of the so-called experts on the talking head shows ever keep score and review their picks. You've set the bar not only for performance but for transparency, fair play, and genuine optimism." Vince, thank you very much for that. This is going to sound too much like chess pounding, so I'm just going to stop it right now because that's not the purpose of Rule Breaker Investing. But I do believe that the more other people hold themselves accountable in front of their audiences with the stocks that they're picking or their predictions that they're making, the more successful they will be, the more successful you listening to them will be, the better our world will be. I sure hope that somebody will start copying me and doing his or her own five stock samplers on a regular basis and scoring it in front of their audience as well. It can get addictive, and it's pretty fun.
Well, a reminder, you can follow our podcast @RBIpodcast, on Twitter. I'm at @DavidGFool on Twitter. Just maybe before the year ends, you'd like to drop us a review. Maybe you followed us on Spotify or on iTunes. Yeah, you can drop reviews of any podcast right there, and we love to hear from you. We love to hear how we're doing. Throw me some stars, we read every one. That's a nice little way to show some gratitude right at the end of the year, if you want to. Thanks. All right.
Rule Breaker mailbag, item No. 1, "David, I just wanted to say thank you for sharing a little of your private life on your latest podcast. Hearing your gratitude and love for your wife, Margaret, was deeply moving and brought a tear to my eye." Wow. Thank you, Bryce G., what a beautiful sentiment, you go on to say, "I don't know if she listens to the podcast regularly, but I hope she listens to that one." Well, I'm happy to say she does occasionally listen to this podcast. She's certainly not expected to and she sure hasn't gone through all of them or anything, but I did make a point of taking her out for a car ride. Yeah, we occasionally go out in the car these days. Is there anybody else still occasionally going out with the car these days? We just went out on a car ride in the past week and I just played that last bit for her. Bryce goes on to say, ''I'm a private person myself, I don't really participate or write into things like this very often, so I hope you received this.'' Well, thank you, Bryce. Yeah, I get it all. In fact, Rick Engdahl puts time in to gather all of your notes, rbi@fool.com is the email address. We gather those every month along with the tweets, and so I read them all, "That said, I'd like to also share my gratitude to you and Tom," Bryce continues, "for creating The Motley Fool and for making me smarter, happier, and richer. I've been a member for over 12 years now of various services, Stock Advisor, Rule Breakers, Options, Duke Street, back in the day, Supernova and now, back to Stock Advisor and Rule Breakers, and I try to share your words of wisdom with those closest to me whenever I can. I know at least three of my friends have signed up for the services." Wow, thanks, Bryce. "Keep doing the great work you do and I look forward to the next 12 years and beyond, Fool on, Bryce."
Well, just a lovely sentiment and thank you for calling out my gratitude episode. I appreciate you as a fellow private person taking time to reach out to us. My friend Bob [...], who is a longtime Motley Fool member, said he was surprised when I described myself as a private person, because you said you share quite a lot through your podcast, and you talked a lot about your life. He thought it was ironic, but the truth is, I rarely have talked about my family. Of course, I spend so much time with them, thinking about them all the time and as a more public person, I don't try to make them part of my public life, so that's why I put it that way. But Bryce, thank you so much for the note.
This reminds me, before I go onto some of the other mailbag items this month, these are long on gratitude. In fact, there are well more than a dozen that I'm not getting to share with you, but they all read fairly similarly. They are gratitude for extreme performance or outperformance in this year of 2020, which puts me in a tough position because, first of all, I want to say, thank you back. That's what I'm going to say right now, if you found that you didn't get to read this particular mailbag, and you put your heart and soul into it, and you said a huge thanks, you should know, I'm saying back to you along with my brother, Tom, and our whole company, you are welcome. Thank you for taking the time. At the same time, mailbag wouldn't be that interesting or it would be seemy if I just shared all of those back. There's certainly some of those running through these, in particular this month, with so much gratitude, I thought, what are some of the ones that teach a lesson or make a good point in addition? Especially, tie would go to those who've been with us for a long time.
If you just started investing in 2020, which took some courage if it was around March or April, I congratulate you. But if you find that I'm not reading your story, it's probably because I'm reading the story of somebody who's been with The Motley Fool for five years, not just one, or for 12 years, not just five. Because that's the real game that we're playing. We're playing the long game at The Motley Fool, and you as a fellow Fool, I hope you're doing the same. Still, you'll understand if I didn't get to that many people, who are just amazed by their nine-month returns at the same time, I sure hope you turn those nine months into nine years. With every passing year, there's more chance that I'll read your mailbag item.
Rule Breaker mailbag item No. 2, this one comes from long time Fool, Darren from Raleigh, North Carolina. By the way, Raleigh, North Carolina, I think I saw that it was named one of America's five happiest cities and the happiest one in the state of North Carolina. Hope things are going well, Darren, it sure seems like it based on this note. "David, good morning. Quick update, on track for 95% return this year and 175% over the last three years, mainly from letting winners win and losers lose. I have not sold anything beyond Rule Breakers and Stock Advisor sell recommendations, which we don't make too many of, since we met up five-years ago." Wow, that long. Darren's referring to a trip he made to Fool HQ. He is one of those members who thought, if I'm going to be taking financial advice from you guys, and that's going to matter a lot in my life, maybe I should take the time out to see who you are. This was probably before we started to do podcasts.
These days, I hope you've got to know me and a lot of other Fools through this podcast and all of our podcasts. But pre the Rule Breaker Investing podcasts, people will sometimes seek me out saying, "Who is this guy, who is this Fool?" Darren was one of them. All right. He goes on, two notes, first, "Loved the episode on losing to win, and I can personally attest to this strategy, my long-term positions in Tesla, Netflix, Activision Blizzard, and Amazon alone have trounced my losses. My recent additions over the last three years, pre-pandemic and Robinhood stock trading of Shopify, MercadoLibre, Square, Roku, Match Group and Nvidia, Twilio, Zoom, MongoDB among others, have rewarded my patience. I forgot the name of your ratio of stocks to age." That would be, of course, the Gardner-Kretzmann Continuum, he said, "But mine is 1.45. I just finished Morgan Housel's book, which was further confirmation of my entire posture over the last 12 Foolish years of investing." Another member of the 12-year club. "I have recommended it to three friends so far." Second note, "I want to thank you for introducing me to positive intelligence, and the work of Shirzad Chamine, too much to write in an email. Short version, I read the book, identified saboteurs. In my case," Darren says. "they were hyper-rational and hyper-vigilant, committed to the PQ exercises, raised my PQ," that would be his positive intelligence quotient from 48 to 92 in one month. Darren goes on, "I eliminated the crushing daily anxiety of owning a business from my life. Personally, I'm identifying and eliminating all kinds of blind spots in my marriage, parenting and friendships. I've recommended the book to at least 10 people and I'm in a book study with four of my male friends, all of us seeing profound changes in our lives. While this may sound cultish or a ridiculous adulation for The Motley Fool, it isn't. I'm not sure how to articulate it, maybe it's this simple. I've received far more from The Fool than I have ever paid in subscription dues. For me, The Fool has far exceeded its mandate to educate, amuse, and enrich with an emphasis on enrich. Have a blessed, safe, and happy holiday. Darren from Raleigh, North Carolina." Well, thank you very much for that, Darren.
The reason I wanted to share this one is your callout of Shirzad Chamine. Certainly, a new friend of Rule Breakers everywhere and a friend of this podcast. That was one of my Besties of 2020, Positive Intelligence with Shirzad Chamine. I'm not going to go on even to summarize it, because anybody can listen to it. All of these podcasts are available for free. This one was October 21st. But Darren, you're not the first one who's written me saying that that was a profound hour for you to listen to and a life improver for you. Since I'm a friend of yours, that means a lot to hear this coming from you. I also want to mention that I had hoped to get Shirzad onto our Besties of 2020 because that podcast certainly won a Bestie of 2020 and yet we had a miscommunication with Shirzad. He very much wanted to join. I was excited to hear from him some positive thoughts for 2021. But unfortunately, due to that snafu, we did not get to feature Shirzad, so I trust we'll get to touch base with him sometime in the new year. Anyway, thank you, Darren. All right.
Rule Breaker mailbag item No. 3, this one from another Darren, this time Darren [...], "Hi, David. Hope you're safe and well." Well, thank you, Darren, I am. "I'm new to the stock market and listening to your podcast. I've really appreciated your transparency with your five-stock samplers. The fact that they are recorded, timestamped, allows people like myself to do some due diligence when trying to determine the number of people giving stock advice on the Internet. From my understanding, you hold stocks for a minimum of three years." Well, that's right. "I appreciate the reviews, but would be very interested to know if you sell any of those or plan on continuing to hold them after the three-years. Is there any circumstance where you would sell? Is your strategy to take a certain percentage of your income and invest every two weeks contributing to winners or hold onto the next five stock samplers? Thank you for reading my email, stay safe, happy holidays to you and your family. Darren."
Well, I wanted to share this one for two reasons. First of all, I wanted to make it really clear, Darren and everybody, especially new listeners, that for our five-stock samplers, we play the game for three years. I've said this a few times in the past, but if we played the game for longer than that, given that we report updates every year after the five-stock sampler has been picked, so we check back in after year one, year two, year three. If I allowed these samplers to go on indefinitely and tried to keep you updated, there would be no other content on the Rule Breaker Investing podcast other than an occasional new five-stock sampler and reviews of dozens and dozens of past ones. So, what I've specifically done in 90% or more of the cases is say, we're going to do this for three years. I want to make sure you understand why we do that. I also want to make sure you understand point No. 2: absolutely, we do not plan on selling stocks that are in these five-stock samplers. All of our members, so many of whom listen to this podcast, will know that all of my five stock samplers, every one of the 135 stocks, has been picked from the services we're already using. These are all active recommendations. That's why I call them a sampler. There are small samples of Motley Fool Stock Advisor and Motley Fool Rule Breakers.
What we do in those services is typically, we've held those for years before I ever present them here on a five-stock sampler and we'll continue holding them for years after the three-year game of a given five-stock sampler concludes. Please don't think that there's any trading strategy. I'm not even sure what to call that, where you would bounce from one five-stock sampler to the next, selling out of that one before buying the next one. That is certainly not what I would do or what I intend at all from this. I think that you understand that, but sometimes it's worth putting extra time in for clarity.
Point No. 4, and we're going to continue on this subject of five-stock samplers, some fun analysis here coming in for Matt Rantala. Matt, thank you for this note. "Dear David, thank you for the podcast and for reviewing the Five Stocks that Let You Eat Cake, which was another market beating five-stock sampler. I have been listening to the back catalog of the Rule Breaker Investing podcasts and building my own spreadsheet of your five-stock samplers as I go. Now, I'm doing this partially because I crave data, but also because of some advice I was given about learning to write. Copying verbatim the words of a master can be a helpful tool not to plagiarize, but as a form of deliberate practice. Some of your investing principles have been reinforced by systematically copying your samplers."
By copying, I hear Matt to be saying he listens to the old podcast, he takes down the stocks in order, he types them into a spreadsheet and he tracks them, which, guess what, fellow Fools, that's exactly what I've done. I have a spreadsheet of all the past five-stock samplers, simply a homebrewed spreadsheet with some help for my assistant Milena, that we've created so we can track and report back to you for all of these many review uploads over the years. It sounds like Matt, you're on the same adventure. Well, he goes on, "First, and this will not surprise you, is that you frequently repick some of the same stocks. Now, why is that? Probably, because winners win. The stocks that have succeeded in previous samplers are likely to be reselected because they are winning. I try to remember this," says Matt, "when I hesitate to increase my position in a stock that has already increased significantly. The second principle that I've seen in action is how one big winner can overcome the losing stocks. In three of the four samplers that I have now closed out on my spreadsheet," says Matt, "the one largest winner, has earned enough Alpha to make up for all the losers. A principle you often repeat, but sinks in a bit more when you see it in action. When I see some red in my portfolio, I try to remember that winners lose a lot of the time." I'll read out just a little bit more, this one additional observation Matt adds is that, "your selections may often be targeted for acquisition. While the sample size is still small," he's just reviewed the first seven samplers. He says, "I have seen three companies that were acquired before the sampler was closed. While it's not your intention to select companies with the hope of acquisition, companies that are attractive to investors are also attractive to bigger companies." He closes it out, "Thank you again for the public samplers. I'll continue to copy them into Excel with the goal of continuing to become a bit smarter, happier, and richer. Fool on. Matt Rentala."
Well, Matt, I congratulate you on taking the time to go back from the earliest days, listen to what was being said, copy it down. In so doing, as you say, by copying it out and writing it out yourself, it helps you learn better. In a lot of ways, that's why we also review them. I could just do the five-stock sampler, and then at the end of three years, just tell you how it did, which as we've mentioned earlier, would be a lot more than many other people picking stocks in popular media do. But no, we really do purpose every year to check in year one, year two, year three. You're right, some of the lessons that we're repeatedly providing here on the podcast are illustrated in that spreadsheet you're putting together. Winners win is a clear one, and you're right, I do tend to look back and repick some of the same stocks. I try to mix it up, because I don't ever want to be too samey. But MercadoLibre is probably over represented in those 27 five-stock samplers, for example.
In some cases, of the five stocks, three or even four of them were actually losers. But the one, for whatever reason did so well, that it wiped out all of the others. That's why the vast majority, over 85% of those 27 five-stock samplers have beaten the market. You're right, it comes down to often one or two big winners bringing up the whole crew. Because as much as winners win you're right, a lot of the winning companies I love, can lose for a three-year period sometimes. Sometimes we just make bad investments. Anyway, thanks so much for sharing and I was happy to share your lessons out to the whole community, Matt Rentala.
Enough for the five-stock samplers. Let's move right along now to Amit Somani, Rule Breaker mailbag, item No. 5, "Hi, David and The Motley Fool team. I was a long time Fool from the early days after reading the Rule Breakers, Rule Makers book in the late 1990s." I love hearing that, Amit. Thank you. "Lost my interest, pun intended, along the way and restarted on Rule Breakers and Stock Advisor for the past few years. In 2020, so glad you guys started Motley Fool Live," that's live.fool.com, "and I also discovered the awesome RBI podcast. My comment is on rerecommendations. I looked through the performance scorecard for Rule Breakers and I realized a rerecommendation appears to have a better risk-reward ratio while still crushing the S&P 500. Some of the best stocks, such as MercadoLibre and Intuitive Surgical have been rerecommended many times. A few that have been initiated and rerecommended just in the last 12-18 months, a company like Roku, let us say." So yes, we've kept it up in the near-term as well as the long-term, Amit. You go on to say, "In some sense, this seems akin to how a Venture Capitalist does a follow on round in a company, which is a sign of higher conviction, albeit, at a higher valuation. I'm definitely going to use this as a strong signal and would love to get your views on it, perhaps even an episode on just the rerecommended stocks and how their narratives have evolved for the better. Thank you. Happy holidays. Keep inspiring, amusing, and enriching the world. Regards, Amit Somani."
Well, thank you, Amit, and I wanted to read this one right after Matt Rentala, because it's just reinforcing again this same point, "Sometimes the best new stock you can buy is more of an existing stock that you have." As I was picking two new stocks every month starting in October 2004 for the Motley Fool Rule Breakers service, somewhere about 10 or 12 years in, so this is somewhere around 2015, I decided instead of coming up with two new stocks every month, many months in the year, I would actually have one rerecommendation and one new stock, and the theory at the time was probably a rerecommendation of a company that I really like at whatever the new price is, is going to be a higher probability win for all of us than whatever I think is the second best new stock of the month. So, that subtle change was made several years ago and it's very much in keeping with what you just said, Amit, and what Matt said as well. I do think that there is power in rerecommendations, and that's why I've made a regular habit of it with Motley Fool Rule Breakers, and of course, our most popular feature of the Rule Breakers service and of Motley Fool Stock Advisor is actually the Best Buys Now that come out every month; and what are those?
But basically, rerecommendations of existing stocks that we already have in our portfolios, a new five-stock sampler every month, if you will, both in Rule Breakers and Stock Advisor. I hope all of these habits, practices, and processes, again, undergirded by constant repetition orally through this podcast, have reminded all of us of the power of going back to what works, and the rerecommendations are a great example. All right. It's poem time. Rule Breaker mailbag item No. 6. This is from frequent correspondent, Lisa John Wharton. Lisa, thank you for this note, "Dear Rule Breaker Fools, I'm very grateful to you, the Rule Breaker team and the Stock Advisor team, and David and Tom Gardner. I had a great year. My portfolio's returned almost 90% in 2020. It's really changed my life and made me feel like writing poetry. I don't have to work anymore, and it's offered me the financial freedom that I have never dreamed of. I've written this acrostic poem, which has the following role, and I know this as an English major. As an acrostic, the first letter of each line spells out the title of the poem, which happens to be Motley Fool." That's right. The first letter of the first line is M, the first letter of the second line is O, it spells Motley Fool right down the margin. That's the first rule. The second rule Lisa mentioned is that she has a rhyming scheme here of AA, BB, CC, DD, etc. This is optional. She says it's her choice. Third, it also has a trochaic meter, which means it has a rhythm of emphasize syllable on emphasize syllable, a trochee, if you will.
Lisa concludes, "I might send in a Shakespearean sonnet in the next email. Sincerely, Lisa John Wharton," and here it goes, "Motley Fool is what I want to cheer, Oh I have had such a gainful year. Teams, you have short give the best advice, let me write full-time and exercise. Each day, when I look at my account, yes, it has become a large amount. For me, things could be mad on Wall Street, oh a spiffy-pop is making me upbeat. Oh to buy and hold is easy, so I boast, let me offer them a sincere toast." Well, thank you again, Lisa. Now, once again, I'm very conscious that we have a lot of us celebrating the returns that we've had this year. I just want to briefly reflect on that, reminded of one of my favorite documentary films that I saw, this one, almost 20 years old. Hoop Dreams, it turns out came out in the year 1994, which would make it more than 20 years old. It's 26 years old. Perhaps some of you have seen it. The real life story of a couple of kids who become grown men and have a dream to make the NBA. They enter college basketball, and the documentarians have followed them from the earliest days as these little kids, showing real clips of their lives all the way through, checking in with them, interviewing them. I've thought Hoop Dreams was a sensation. I think for many of us who enjoyed Hoop Dreams, there was a line there that we still remember because it broke your heart a little bit when William Gates, not that Bill Gates, no, this William Gates, when William Gates at one point in the documentary as a rising star college basketball player said this, he said, "People always say to me when you get to the NBA, don't forget about me." He goes on, "Well, I should have said back if I don't make it to the NBA, don't you forget about me."
Spoiler alert, William Gates and Arthur Agee, the two stars of Hoop Dreams, never did make the NBA. It's a haunting line, and I think it was supposed to be a haunting line. I want this line, this thought to haunt you a little bit in the year 2021 and beyond. If the stock market doesn't keep going up 90% for your portfolio next year or any of the five years after, I sure hope you won't forget about us. That you won't forget about us at The Motley Fool, because we have lived through probably the greatest stock market year. Most of us will see, maybe for the rest of our lives, but certainly for the near-term. I mentioned Tesla earlier. It started the year below $100, it's over $600. How about The Trade Desk? That stock is up 250% since the year started as of this recording anyway. MongoDB, ticker symbol MDB, has spiffy-popped a few times in December for a lot of members. It's nearly a triple. Ever heard of a little company called Zoom Video Communications? I bet a lot of you have, and it might be in your portfolio, I sure hope it is. That stock is up 500%, that's six times in value just this calendar year.
These are not normal times, Fools. I think we all know that 2020 was not a normal year in just about every way, but I sure hope, along with William Gates, that years from now, if you don't manage to score a five-bagger on your brand new pick eight months later, that you'll still remember us and you won't forget. Some of my status conversations will be casual cocktail-hour conversations where somebody will say, "Yeah, I followed you guys back in the 1990s," but then there's nothing really after that, and that would be somebody who, when 2001 hit and everybody's stock sold off, they lost the love for the stock market altogether and then they are the cocktail party. Once we get back to cocktail parties, telling me that they don't really do it anymore. They burned out on the market drop in 2001. Well, the market dropped again in 2008, '09. It had a really big drop in the fourth quarter of 2018, it had a horrific drop in the first quarter of this year. But take it all in all, and you will take it all in all, wouldn't you? Because it has been a spectacular run. Whether we're charting it from 2001-2008 or 2015 through to today, it has been incredible. Please know these times are not normal. You will probably not see an IPO market where stocks will tend to double on their first day in 2021 or 2022 or beyond, and it's very unlikely that your favorite stocks in mind will multi-bag in the course of a single calendar year. Now, I'm not saying I don't want it to happen. I would love to see it keep happening forever, but the mathematician inside me, the Fool, I hope the wise Fool inside me and the friend of yours that's inside me wants you to know that these are very unusual times. So, with William Gates, I'm going to say once again, I hope you will still remember us even when markets drop.
All right, Rule Breaker mailbag item No. 7, this is from Jeremy Nichols. Jeremy says, "Dear David, I've been enormously enriched by you and your team and your ongoing dedication to making financial literacy and wisdom fun and engaging. Thanks to you, as I approach the end of 2020 and the close of my 40th year on this planet. I'm glad to report that I have 11 times my annual gross salary in my retirement and brokerage accounts." Wow, congratulations, Jeremy. Your annual salary, you multiply that and you have more than 10 times that saved and invested. That makes me a very happy co-founder of The Motley Fool. Jeremy goes on, "I first stumbled across The Motley Fool when I was 23 years old and delivering pizza, where I used to listen to audio books every Friday and Saturday night while I drove to earn extra money. I stumbled across The Motley Fool investment guide, a multi-CD set at the public library next to the Blockbuster video in 2004," you know I'm loving this Jeremy, "From you and your brother I learned that it was possible to beat the market averages. Inspired by you, I decided to step away from the 'financial advisor,' who was actually an insurance salesperson, and began to manage my own Roth IRA. I will say that I've made my fair share of mistakes along the way, often selling too soon and missing out on larger gains. For instance, I'm one of those who sold out of Netflix at the Qwikster announcement and who didn't buy Apple, Google [Alphabet], or Amazon until 2016, thinking they were overvalued and all the growth already behind them. How foolish of me? Most of my investments were small, until I made the decision to leave my employer of 12 years in the year 2016 and take a new role. This allowed me to transfer my 401(k) and Roth 401(k) investments, totaling about 1.5X my annual salary to a discount broker and began to make sizable investing decisions on my own. I want to emphasize this point, because the gains that I have achieved would have been impossible within the confines of a conventional retirement plan," and I'm reading that slower and my voice should be bolding the text in your ears because that's an important point that Jeremy is making here.
This is not to say, by the way, that retirement plans can, even conventional ones aren't valuable, they really are. But many of them, many people are operating in offices or workplaces where their only choice in their 401(k) is to pick from a small menu of mutual funds. Sometimes, those mutual funds overcharge for underperformance, which leads to pretty paltry returns for a lot of the people following those plans over the course of time. We've always favored just a Vanguard S&P 500 index fund or the total market index fund if you have only mutual funds in your retirement plan. But most of all, we celebrate those who take the extra step and open up a Roth IRA or within their corporate IRA. Sometimes, they have the freedom to invest in individual stocks. Indeed, Jeremy, I think that's when you really set yourself up for some spectacular long term success of the kind that you've achieved. Let me continue his note, "The decision to leave that job of 12 years was not motivated by this factor, but more than any other, this has been responsible for the improvement in my family's financial life. I was able to go from a 6%-10% a year return with the funds within that plan, to a compound annual growth rate of 56%," Wow, "since the end of 2016. Here are three lessons I've learned from you and your team. One, how to take a punch in the portfolio." Jeremy says, "Since I started tracking seriously, I have had what I consider three serious hits to my portfolio value. In December 2018, I experienced a 29% drawdown from an all-time high." Yeah, I remember that fourth quarter of 2018. "In September 2019, it was a 32% drawdown from an all-time high. Then again in March 2020, March of this year, I experienced a 41% drawdown. These are not fun, but going through these has helped my long-term perspective. I also actually appreciate checking my account balances in these situations, as it helps acclimate me emotionally so that I can start to overcome the natural bias, to experience pain at loss that is three times the happiness of my gains. I am also harking back to your saying, David, that the market goes down faster than it goes up, but it always goes up more than it goes down, and Chris Hill's saying is also helpful. That when you are suffering outsized losses, you are paying the dues required to get outsized gains. After each drop, I found myself with less panic and having made fewer impulsive decisions."
Well, wow. Before I go on to conclude with his last two points, think about that, fellow Fools everywhere. Three consecutive years in a row at one point, Jeremy had experienced drops of 29%, 32%, and 41%, and held all the way through. A lot of people don't want to see a drop like that more than once in a decade. Admittedly, some of our Rule Breaker stocks have, in some cases, extreme volatility. Think about companies like Tesla to the upside and the downside. You can see how these drops could happen and certainly do with the Rule Breaker investing approach. But learning to take it, as Jeremy says, to take a punch in the portfolio is so valuable. "Lesson No. 2, asset location, location, location." He says, "This one is from Robert Brokamp," the long time host of Motley Fool Answers along with Alison Southwick, as well as the Rule Your Retirement guru, and yes, Robert, you're a guru. "This one's from Robert Brokamp, who's shared that your Roth account should be where you house the portions of your portfolio you expect to grow the most. Taking advantage of the long-term tax-free nature of gains in this account. This has been a great lesson coming into 2020 because in 2019, I sold Roth positions in larger, slower growing companies, and bought those same shares back in my IRA and vice-versa, to shift my expected biggest winners to my Roth. This led to a Roth which is loaded up with all stars like The Trade Desk, Datadog, CrowdStrike, Cloudflare, Pinterest, Sea Limited, Livongo, now Teladoc, and Roku. These have led to a compound annual growth rate in my Roth of 76% since January 2017."
Finally, Jeremy's third lesson, "Play great games, win great prizes." He says, "This is the opposite of play stupid games, wins stupid prizes. I remember a Rule Breaker podcast where you talked about investing and the world of business as a game, where you are playing against the whole world. You can win financial independence as your prize depending on your performance. I wanted to thank you for that analogy as it truly has made investing more fun. This is only scratching the surface. In conclusion of how The Fool has made me smarter, happier and richer since I first dip my toes in the water with you more than 15 years ago, I would like to thank you for introducing me to this game. Well, thanks to good choices from your universal picks, I've been able to win a most excellent prize. Best wishes, Merry Christmas, and a happy New Year to you and yours, Jeremy Nichols." Merry Christmas and a Foolish New Year to you, Jeremy.
Rule Breaker mailbag item No. 8. Do you see why I said our mailbag was stuffed this month? "Hi, David." This one comes from Sydney Steel. "Hi, David. You just made my year with your games episode. I'm a huge gamer. I met my husband at a mutual friend's New Year's Eve gaming marathon a couple of years ago. I appreciate you sharing your love of games with the greater investing world. May I suggest another way for you and your listeners to indulge in gaming? Just like your fabulous suite of podcasts, shout out to Motley Fool Money", says Sydney Steel, "gaming has its own plethora of them. I will start with my husband's conversational gaming podcast, Tabletop Game Talk, or TGT for short." Sure, Sydney, I'll give a plug here. TabletopGametalk.com is their website, and they've got a podcast. "Or the weekly gaming news podcast, Dice Tower News," which I've certainly seen a lot of over the years on, "which my husband has a recurring Kickstarters segment." Well, I think she is referring to all of the games these days that get kick started to come out on Kickstarter, and it sounds like her husband, Chris Steel, is the one who monitors what's happening on Kickstarter and does a Dice Tower News segment. She goes on to say, "In another segment, they look at the top 10 games on the boardgamegeek.com hotness list. Both of those podcasts are in the network of podcasts called the Dice Tower Network, which has an incredible amount of gaming content over multiple different platforms. Look them up and game on." Then she ends with, "I mean, Fool on," with a smiley.
Well, thank you very much, Sydney Steel. I really appreciate you letting us know. Not only are you a Motley Fool podcast fan, but you were also part of a great gaming couple. I wish you and your husband, Chris, the very gaming best. I'm delighted to know that he is helping more people find great games, whether it's on Kickstarter or on BoardgameGeek. I'm just delighted to be in touch with fellow gamers. So, thanks for writing in, Sydney. Good luck, Chris. Fool on!
All right. Rule Breaker mailbag item No. 9, "Dear David, I will be celebrating my fifth anniversary of being a Motley Fool member in March of this coming year. But in the spirit of Thanksgiving, I wanted to express my huge thanks to you and all of The Motley Fool for transforming my financial life. As of today, the worth of my portfolio has tripled, yes, tripled, since March of 2016, when I bought my first Motley Fool services, which were Motley Fool Options and Motley Fool Stock Advisor. During these 4+ years, I've subscribed to several other Fool services, including Rule Breakers and a few Fool portfolio services. I began as an investing illiterate, and I've learned so much. It's been a tremendous fund, not to speak of tremendously profitable. I came to The Motley Fool because the asset management company that I was with, a wonderful socially responsible assessment management service, alerted me that if I kept up the spending as I was doing, I would be out of money in 10 to 12 years." Carol Davies writes, "They actually did quite well for me, but given the fact that my portfolio is virtually my soul source of income for living, it wasn't enough. Now, I don't have to be concerned about figuring out how to cut my expenses, thanks to The Motley Fool. I hope one day to meet you and Tom so I can thank you in person, but for now, thank you, thank you, thank you to you, Tom and your wonderful team of analysts whom I've gotten to know through the community boards." Those, of course, are our discussion boards, which we make ample use of on our site through their articles on the services, and now, of course, through Motley Fool Live, which Carol Davies says she loves.
"I also listen each week to the Rule Breaker Investing podcast. You're always engaging, bringing so much investing and living knowledge for free to so many people. With best wishes for success and bliss in bringing these wonderful investing principles and the profits that go with them, including benefiting our whole world in a socially responsible way to our whole world family." Signed, Carol Davies. Carol concludes with, "Forgot to say, I did leave that asset management company in March 2016, and I went totally on my own, solely with the Motley Fool's help. The triple value of my portfolio does not include all the options income from applying the Motley Fool Options from people like Jim Mueller, Jim Gillies, Jeff Fischer, all of their principles and the stocks that are sold to cover my living expenses these years. So, if I included that, the value would be significantly more than triple, all thanks to The Motley Fool." Carol, you know how happy notes like that make us. I hope you heard my line earlier from Hoop Dreams, which I've co-opted for the purpose of this podcast at the end of it all, to remember to pinch yourself, because there will not be many years or many four-year periods like the one we've just seen, but of course, eyeswide-open, I continue to think, hey, I think the market is going to go up next year.
All right. Rule Breakers mailbag item No. 10, "Dear David, a year ago, I wrote to you about how my wife and I recently had given a perhaps unique wedding gift. Instead of buying the equivalent of a lovely set of candle sticks off the registry, we instead opened a brokerage account for the bride and groom. We started it out with single shares of 16 different companies. So, one share each, 16 companies, all but two of which traded at under $100, worth about $1,000 in total." Well, what a generous, wonderful thought for a wedding gift. I think it's about to get better, let's listen. "The intent of the gift was education. Our hope was that the young couple, with decades of compounding ahead of them, would watch these small, diversified positions and learn. We couldn't help hoping that, as they added to this little portfolio, it might be the acorn that grows into something bigger than they ever thought possible, and the wedding gift that makes the biggest difference in their lives. Well, I write to give you an update. This month, the young couple and their little portfolio celebrate their first anniversaries. The bride and I have been in touch several times a month, all year. New all-time highs were a reason to text screenshots of stock charts. Ends of quarters caused an email reminder to calculate performance against the S&P because, of course, we keep score. This week we sat down over Zoom to review their positions in the past year. The S&P 500 is up about 15% since the portfolio's inception, and the couple is up 40% after adjusting for the $50 a month they have added to the account. Infused with Foolish companies and a Foolish approach, the little portfolio has grown from $1,000 to about $2,300 over the year. Their biggest winners are Etsy, Teladoc, Match Group, and PayPal, up variously as high as 245% to as low as just +85%. Their biggest loser is DAL." Well, that's certainly not one of my picks. I'm pretty sure that's Delta Airlines, but I'm not looking at the internet right now. "DAL down 35%. They've added to winners. They've bought an additional share of Teladoc, and of eBay. They've seen one holding, Dunkin, as in Dunkin Donuts. Dunkin Holdings gets taken private for a 40% gain. They experienced their first bear market in March, a psychological test for any investors, seasoned or novice. They did not sell, but found the courage to buy, adding a share of Microsoft and Hospital Corp of America to their portfolio during those dark days."
"Then, they observed how markets go down faster than they go up, but go up more than they go down. I am somewhat chagrined," says our correspondent, "to report their performance over those 12 months is beating my own on a percentage basis. I'm forced to smile when I look over the list of companies that didn't make the cut for my original buy list, which included Square and Zoom, up three and six times respectively over the past year. With modesty, I have to rate this experiment an unqualified success. I feel like this young couple is on their way financially. They have good habits in terms of being savers. They are responsible about debt. They think in terms of the long term and they are learning about investing. I end with the same request as last year. If you end up using the story on the podcast, please make us anonymous. My hope is that other listeners might consider doing something similar for young couples in their lives. With gratitude," and I'm going to sign it, anonymous.
Well, as that is a Motley Fool member whom I've met before, I congratulate you, Sir, on what you've done. I love that story and I was so pleased to share it with our worldwide audience because the idea of giving a stock or a small portfolio as a wedding gift instead of candlesticks, I like my candlesticks but wow, what a valuable contribution. Beyond just giving the money or the stocks, of course, it was your attention. It was the hand holding through some really bad times in March and April, it was your thought in the first place of what 16 diversified companies that they would like, could I get them? Then of course, your regular check-ins, whether on a monthly or a celebratory quarterly basis, that was worth its weight in gold. Congratulations to you, Sir, and to all of those whose lives you touch. Happy anniversary, bride and groom. All right.
Well, for our last two points, we have one silly and one sublime, let's do them in that order. Rule Breaker mailbag, item No. 11, this one from Eric Eason, "Hi, David and Rick. I began daydreaming as you spoke in the recent Rule Breaker podcast about your high school lead role in the musical The Music Man, because I was the stage right spotlight crew on that musical during my sophomore year of high school. We had some exciting technical difficulties, including all of the power for the stage lighting going out during the Mayor's soliloquy in that musical from which the three spotlights saved the play by flooding the stage with our light," Eric goes on, "but the most enjoyable memory for me was during one of the last performances, after which I had grown comfortable with the play and my role. Again, I was a spotlight newbie. My spotlight, we knew, had a damaged fresnel lens, and so I had to turn it off whenever it wasn't in use to protect the lens from overheating, which could break it. At one point, my spotlight had a longest pause in the play so I turned it off, leaned back against the wall and simply enjoyed the show." Eric continues, "Well, after a bit, I heard some really good acapella harmonies far off stage which gradually, ever so gradually, grew louder. I was thoroughly enjoying it when suddenly, I realized with the shock, 'Oh no, that's my queue.' I rolled my spotlight onto the edge of the stage right curtains, set my aperture, turned on my spotlight, and prayed I was on target and on queue. Thankfully, I was spot on with both for my beam illuminated the lead barbershop quartet singer as he emerged on stage, followed by his companions. Well now, here's the wonderful serendipitous twist to the story. Just as I was daydreaming of the barbershop quartet stepping onto stage with my fortuitously aimed and timed spotlight, your producer, Rick Engdahl, speaks up on the podcast to say, "Hey, I was in The Music Man too, David, I was in the barbershop quartet. Well, I burst out laughing with glee and shouted, "Rick, I've got you covered, my good man. Here's a toast to small world stories and the stories of redemption like The Music Man." Signed, Eric Eason. Through my headphones, my producer Rick is telling me he thinks it was probably Lida Rose. I remember that, to Lida Rose, old Lida Rose. Yeah, they came on slowly, and then it got bigger, louder, and faster. That's a beautiful song. Thank you, Eric Eason.
At the end of it all, well, here's the end mailbag item from Zach Kennely. "Greetings, David. The Motley Fool has changed my life and made me and my family smarter, happier, and richer. I subscribed to multiple Motley Fool services like Rule Breakers, Stock Advisors, Marijuana Masters, and Blast Off 2020. In partnership with The Fool, our portfolio is up 88% in just the last year. The Motley Fool has made our family smarter. We now deeply analyze present and future economic trends with an eye for how excellent businesses can capitalize on those trends. We ask curious questions like the questions at the end of this mailbag message. The Motley Fool has made our family happier. As a result of our investing, we now have the savings rate up more than 25%, up from less than 10% before becoming investors in individual stocks. Investing with The Motley Fool has taught me how to think about money by playing the long game and prioritizing what we want most over what we want now. We've begun communicating effectively about money, finance, and investing. A ripple effect is happening in our circle of influence, inspiring investing across three generations of our family. The Motley Fool has made our family richer. My wife and I are both teachers in Denver, Colorado. We are not rich. Though we are now on the path to financial independence through a strong savings rate, we spread our passion for saving and investing throughout our community. We are also bringing our passion for investing to our students, helping our community to understand that building a more equitable world is about more than just earning money, it is about investing that money and compounding it into wealth, which can be used to create the world they envision. It is not an exaggeration to say that The Motley Fool has truly changed the trajectory of my life, the lives of my family members, and even more incredibly, the lives of those in our circle of influence. I've been an educator for 10 years. In August of 2018, I was an initial responder to a shooting at my school. A student that I had worked with for many years had been shot in the head at school. Miraculously, because of this middle schooler's incredible tenacity, he is alive and living a fulfilling life today. As a result of this experience, I struggled with post-traumatic stress for some time, yet the darkness of post-traumatic stress has only been a small part of the story for me. The real story for me has been the profound personal post-traumatic growth I have experienced as a result of this humbling experience. Through this experience, I've grown as a husband, a father, a son, a brother, a friend, and community member. At the root of that growth has been me discovering my passion for investing, ignited by The Motley Fool. This brings me to the framing of my question for you, 2020 has been deeply traumatic for America. We are in the throes of a life altering COVID-19 pandemic, significant civil unrest, as contentious an election as my generation has seen ever, and growing inequality. Do you think it is possible that out of the trauma of 2020, America and the world may be prime for an explosion of post-traumatic growth? If America is primed to experience post traumatic growth in our post-vaccine world, then what industries and/or trends ride the wave and win the day as a result of America's post-2020 traumatic growth? Thank you for taking the time to read my mailbag letter. I'm truly grateful to be a Foolish investor and for everything The Motley Fool brings to the world. Grateful, Zach Kennely."
Well, Zach, thank you for that beautiful note, and a big part of me was tempted to just cut it off right at the end of your story and not address the question because it was such a beautiful story. Talk about making lemonade out of lemons, what a wonderful reflection on what happened to you on that hard, hard day to say nothing of your students some years ago and how you both have turned it into a win. Just hearing about the success that you're having for your family and your community brings a huge smile to my face and I know so many people listening to me right now.
But you did ask a question and it was a question from a great place, a place of optimism. A place that asks, what about post-traumatic growth? What about the possibilities there? Well, my word for a long while now, for months now, for 2021, I've said it on this podcast, my word for 2021 is "comeback." That always has a little bit of a sports lilt to me as a sports fan. But you don't need to be a sports fan to recognize the beauty of comebacks. You've lived one yourself. As I think about the comeback in store for our society, I think about a society that has more conscious leadership. I've already said, one of my favorite books this year was Conscious Leadership by John Mackey. Had them on the podcast, had them again on the podcast, just to double underline that. One of the things that you learned is that a conscious leader is the best leader, the leader that you and I want, whether it's in the White House, in the corporate boardroom, or the heads of the households for every family across the world, what you want in that leadership is people who can find win, win, win.
As I asked myself what are some of the industries or the leaders that will create value in a post traumatic world of growth, I think it's going to be the conscious ones. That's why so many of our stocks, they are in the five stock samplers, they're in our services, our conscious capitalism companies, companies that recognize that holding a purpose above profits is the best way for that organization to thrive and the secret is often, they get the most profits too. Yes, they're managing for wins for all of their stakeholders. What I love about this answer is it's not just true of an industry or a certain trend or a tech trend that somebody is looking at, I like to look across the broad swath of all of business and say, where are the conscious leaders? Where are the people doing good things in this world and creating a lot of value for everyone around them? I know I'm talking to one right now, Zach Kennely, because you are that for your family and your community, that's the growth I'm investing in. Thank you. Thank you to all my fellow Fools everywhere for a most remarkable year, 2020. Here we are, now truly at the end of it all. Fool on!
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. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool's board of directors. David Gardner owns shares of Activision Blizzard, Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Intuitive Surgical, Match Group, MercadoLibre, Netflix, and Tesla. The Motley Fool owns shares of and recommends Activision Blizzard, Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Cloudflare, Inc., CrowdStrike Holdings, Inc., Datadog, Etsy, Intuitive Surgical, Match Group, MercadoLibre, Microsoft, MongoDB, Netflix, NVIDIA, PayPal Holdings, Pinterest, Roku, Sea Limited, Shopify, Square, Teladoc Health, Tesla, The Trade Desk, Twilio, and Zoom Video Communications. The Motley Fool recommends Delta Air Lines and eBay and recommends the following options: long January 2022 $1920 calls on Amazon, long January 2022 $580 calls on Intuitive Surgical, short January 2022 $1940 calls on Amazon, long January 2022 $75 calls on PayPal Holdings, and short January 2022 $600 calls on Intuitive Surgical. 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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My recent additions over the last three years, pre-pandemic and Robinhood stock trading of Shopify, MercadoLibre, Square, Roku, Match Group and Nvidia, Twilio, Zoom, MongoDB among others, have rewarded my patience. I stumbled across The Motley Fool investment guide, a multi-CD set at the public library next to the Blockbuster video in 2004," you know I'm loving this Jeremy, "From you and your brother I learned that it was possible to beat the market averages. I also actually appreciate checking my account balances in these situations, as it helps acclimate me emotionally so that I can start to overcome the natural bias, to experience pain at loss that is three times the happiness of my gains.
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David Gardner owns shares of Activision Blizzard, Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Intuitive Surgical, Match Group, MercadoLibre, Netflix, and Tesla. The Motley Fool owns shares of and recommends Activision Blizzard, Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Cloudflare, Inc., CrowdStrike Holdings, Inc., Datadog, Etsy, Intuitive Surgical, Match Group, MercadoLibre, Microsoft, MongoDB, Netflix, NVIDIA, PayPal Holdings, Pinterest, Roku, Sea Limited, Shopify, Square, Teladoc Health, Tesla, The Trade Desk, Twilio, and Zoom Video Communications. The Motley Fool recommends Delta Air Lines and eBay and recommends the following options: long January 2022 $1920 calls on Amazon, long January 2022 $580 calls on Intuitive Surgical, short January 2022 $1940 calls on Amazon, long January 2022 $75 calls on PayPal Holdings, and short January 2022 $600 calls on Intuitive Surgical.
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I've said this a few times in the past, but if we played the game for longer than that, given that we report updates every year after the five-stock sampler has been picked, so we check back in after year one, year two, year three. As I was picking two new stocks every month starting in October 2004 for the Motley Fool Rule Breakers service, somewhere about 10 or 12 years in, so this is somewhere around 2015, I decided instead of coming up with two new stocks every month, many months in the year, I would actually have one rerecommendation and one new stock, and the theory at the time was probably a rerecommendation of a company that I really like at whatever the new price is, is going to be a higher probability win for all of us than whatever I think is the second best new stock of the month. I do think that there is power in rerecommendations, and that's why I've made a regular habit of it with Motley Fool Rule Breakers, and of course, our most popular feature of the Rule Breakers service and of Motley Fool Stock Advisor is actually the Best Buys Now that come out every month; and what are those?
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We're playing the long game at The Motley Fool, and you as a fellow Fool, I hope you're doing the same. As I was picking two new stocks every month starting in October 2004 for the Motley Fool Rule Breakers service, somewhere about 10 or 12 years in, so this is somewhere around 2015, I decided instead of coming up with two new stocks every month, many months in the year, I would actually have one rerecommendation and one new stock, and the theory at the time was probably a rerecommendation of a company that I really like at whatever the new price is, is going to be a higher probability win for all of us than whatever I think is the second best new stock of the month. It's 26 years old.
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4fa58553-aab9-4609-b3cd-d41e1a629c1f
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718927.0
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2021-01-08 00:00:00 UTC
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How Datadog Stock Rose 161% Last Year
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DDOG
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https://www.nasdaq.com/articles/how-datadog-stock-rose-161-last-year-2021-01-08
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nan
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nan
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What happened
Shares of Datadog (NASDAQ: DDOG) gained 160.1% in the calendar year 2020, according to data from S&P Global Market Intelligence. The provider of monitoring tools for cloud computing systems and services delivered nothing but stellar earnings reports all year long, and the company signed a potentially game-changing partnership with computing giant Microsoft (NASDAQ: MSFT) along the way.
So what
Datadog's monitoring service became a first-class citizen of Microsoft's Azure cloud computing platform on Sept. 30. Investors sat up and took notice, and the stock closed 12.4% higher that day. Beyond simply allowing Azure customers to install and run Datadog's tools with full technical support, the two companies also committed to cross-selling and promoting each others' products. That's a big win for Datadog, which is this partnership's smaller company by far.
Image source: Getty Images.
Among the year's earnings reports, the first-quarter update stands out as the most impressive showing. Sales rose 87% year over year to $131 million thanks to a healthy inflow of long-term subscription contracts. The adjusted bottom line swung from a $0.09 loss per share to a net profit of $0.06 per share. Your average analyst would have settled for a loss of $0.01 per share on revenue near $118 million. Datadog's stock closed 23% higher the next day.
Now what
As cloud-based services continue to take over the software industry, Datadog's tools become more and more crucial to operating a modern IT department. It's not the only game in town but a well-respected competitor for pretty much every contract in the cloud monitoring market. This is not a cheap stock by any stretch of the imagination, but growth investors with a high tolerance for valuation risk may want to take a closer look at Datadog.
10 stocks we like better than Datadog
When investing geniuses David and Tom Gardner have 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.*
David and Tom 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 November 20, 2020
Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool's board of directors. Anders Bylund has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Datadog 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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What happened Shares of Datadog (NASDAQ: DDOG) gained 160.1% in the calendar year 2020, according to data from S&P Global Market Intelligence. Beyond simply allowing Azure customers to install and run Datadog's tools with full technical support, the two companies also committed to cross-selling and promoting each others' products. This is not a cheap stock by any stretch of the imagination, but growth investors with a high tolerance for valuation risk may want to take a closer look at Datadog.
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What happened Shares of Datadog (NASDAQ: DDOG) gained 160.1% in the calendar year 2020, according to data from S&P Global Market Intelligence. So what Datadog's monitoring service became a first-class citizen of Microsoft's Azure cloud computing platform on Sept. 30. Investors sat up and took notice, and the stock closed 12.4% higher that day.
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What happened Shares of Datadog (NASDAQ: DDOG) gained 160.1% in the calendar year 2020, according to data from S&P Global Market Intelligence. The provider of monitoring tools for cloud computing systems and services delivered nothing but stellar earnings reports all year long, and the company signed a potentially game-changing partnership with computing giant Microsoft (NASDAQ: MSFT) along the way. 10 stocks we like better than Datadog When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen.
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What happened Shares of Datadog (NASDAQ: DDOG) gained 160.1% in the calendar year 2020, according to data from S&P Global Market Intelligence. The provider of monitoring tools for cloud computing systems and services delivered nothing but stellar earnings reports all year long, and the company signed a potentially game-changing partnership with computing giant Microsoft (NASDAQ: MSFT) along the way. * David and Tom 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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311c04a7-1a0c-4067-9ddb-f46799039916
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718928.0
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2021-01-01 00:00:00 UTC
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Got $10,000 and 10 Years to Wait? These 3 Stocks Could Make You a Fortune
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DDOG
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https://www.nasdaq.com/articles/got-%2410000-and-10-years-to-wait-these-3-stocks-could-make-you-a-fortune-2021-01-01
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nan
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nan
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This year has certainly been one like no other. Pandemic-induced fear resulted in one of the fastest declines in stock market history, followed by one of the most rapid recoveries on record. The recent introduction of at least two coronavirus vaccines has given people hope and pushed the major stock market indexes to new all-time highs.
It's still unclear when this pandemic-influenced economy will actually get back to normal and uncertainty still reigns. Yet two things are certain: Investing in quality stocks over years or perhaps decades remains the clearest path to generate wealth over the long term, and there are still stocks worth buying, even as the market is setting new benchmarks.
Assuming you have a sufficient emergency fund built up and $10,000 (or less) that you don't expect to need over the next five to 10 years, here are three companies that are set up to flourish in the years and decades to come.
Image source: Getty Images.
1. CrowdStrike: Providing digital safety in an uncertain world
There's no denying the massive shift to remote work that occurred as the result of the pandemic. The scattering of the workforce presented unprecedented challenges for IT departments trying to protect businesses and employees from the growing threat of cyber-intrusion. CrowdStrike Holdings (NASDAQ: CRWD) was there to answer the call.
Stopping cybersecurity threats before they take hold is key to the cloud-native company's offering. This comes courtesy of its Falcon platform, which focuses on protecting the endpoints -- servers, desktops, laptops, and mobile devices -- from recognized threats.
But its work doesn't stop there. CrowdStrike's cutting-edge protection uses cloud analytics, artificial intelligence (AI), and real-time visibility to power its Threat Graph Breach Prevention Engine. These sophisticated algorithms not only detect breaches and stops them in their tracks, but they also learn and improve over time, harnessing the power of AI to stop the next generation of threats. As new customers join the fold, its network becomes stronger.
Business is booming. For the first nine months of 2020, CrowdStrike's revenue is up 85% year over year. This was driven by annual recurring revenue that jumped 81% and the addition of net new subscription customers that increased 88%. The company has yet to produce a profit, but the results are moving in the right direction, as CrowdStrike cut its losses by nearly 62% so far this year.
CrowdStrike is well-positioned to not only benefit from the ongoing need for remote work but to continue to provide cybersecurity in an increasingly dangerous digital world.
Image source: Getty Images.
2. Twilio: Making in-app communications a snap
One thing that became abundantly clear this year was the need to keep the lines of communications open between businesses and their customers. Rather than reinvent the wheel, many companies with consumer-facing apps turned to Twilio (NYSE: TWLO) to bridge the gap. A growing number of developers embed the company's communications technology into their apps, which works behind the scenes to process calls, video, and text messages without ever leaving the app.
Sound familiar? Those real-time messages you get from your food delivery service or rideshare provider? The ability to reset a password without leaving an app? Those in-app chats with customer service? There's a pretty good chance that many of those experiences were powered by Twilio's technology.
The importance of reaching customers where they live took on even greater significance during the pandemic, helping boost Twilio's fortunes. During the first nine months of 2020, revenue grew 51% year over year. In a surprise development, Twilio delivered an adjusted (non-GAAP) profit in the third quarter, when investors were expecting a loss.
Twilio's active customer base continues to edge higher, up 21% year over year. Not only is the company adding new customers at a brisk pace, but existing customers are expanding their relationship with Twilio, spending 37% more, on average, than they did this time last year.
Even more important for investors was the recent acquisition of customer data platform Segment, which pushes Twilio further into the field of customer engagement services. This will provide businesses with a single view of customer information from a variety of channels, providing for more seamless and effective customer engagements. The move also significantly increases Twilio's total addressable market.
The importance of customer communications has never been more important and Twilio provides the tools that help bridge the gap.
Image source: Getty Images.
3. Datadog: Giving the cloud a silver lining
The shift to cloud computing was already in full swing but was unceremoniously pushed forward by the pandemic. The strategic importance of monitoring and maintaining these cloud-based systems can't be overstated, and it's more important than ever before to keep these employee- and customer-facing systems up and running, as any downtime can become critical and costly. That's where DataDog (NASDAQ: DDOG) comes in.
The cloud-native platform-as-a-service (PaaS) provider offers a wide variety of monitoring services that gather vital information from across a business's cloud operations, pulling the data into a single dashboard, and notifying developers when there's a problem that could result in crucial downtime. DataDog's ability to break down silos and bring together otherwise fragmented data into one place makes it a top pick among developers.
That's why the platform has been selected as a top choice for application performance monitoring by research company Gartner, which named it one of the "Visionaries" for 2020 in its vaunted Magic Quadrant. The company was also identified as an industry leader in intelligent application and service monitoring by Forrester Research. Customers agree, with a whopping 98% giving DataDog a four or five-star rating.
Business is brisk. For the first nine months of 2020, DataDog reported revenue that grew 71% year over year. The company is also on the verge of consistent profitability, cutting its losses by 85% so far this year. What's even more impressive is that DataDog has notched these achievements just one year after the company went public.
The need to keep critical systems up and running has never been more important, so investors should consider taking DataDog for a walk.
Data by YCharts
A word on valuation
Each of these companies offers the opportunity for mind-boggling growth over the coming decade, but like many high-growth stocks, they land in the high-risk, high-reward category. As such, they are by no means cheap. CrowdStrike, DataDog, and Twilio are selling at 53, 51, and 34 times forward sales, respectively -- when a good price-to-sales ratio is generally considered to be between 1 and 2. That high sticker price is partially explained by each stock's performance so far this year, as noted in the chart above.
Each of these companies has come to understand a fundamental, yet critical fact for software-as-a-service businesses: the lifetime value of new customers is much higher than what's being spent now to acquire them, so profits could remain elusive for these high-flyers.
Thus far, however, investors have been more than willing to pay up for the impressive top-line growth and the potential for explosive profits that remains.
Find out why CrowdStrike Holdings, Inc. is one of the 10 best stocks to buy now
Motley Fool co-founders Tom and David Gardner have 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.*
Tom and David 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.
Click here to get access to the full list!
*Stock Advisor returns as of November 20, 2020
Danny Vena owns shares of CrowdStrike Holdings, Inc., Datadog, and Twilio. The Motley Fool owns shares of and recommends CrowdStrike Holdings, Inc., Datadog, and Twilio. 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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That's where DataDog (NASDAQ: DDOG) comes in. The cloud-native platform-as-a-service (PaaS) provider offers a wide variety of monitoring services that gather vital information from across a business's cloud operations, pulling the data into a single dashboard, and notifying developers when there's a problem that could result in crucial downtime. Data by YCharts A word on valuation Each of these companies offers the opportunity for mind-boggling growth over the coming decade, but like many high-growth stocks, they land in the high-risk, high-reward category.
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That's where DataDog (NASDAQ: DDOG) comes in. The cloud-native platform-as-a-service (PaaS) provider offers a wide variety of monitoring services that gather vital information from across a business's cloud operations, pulling the data into a single dashboard, and notifying developers when there's a problem that could result in crucial downtime. That's why the platform has been selected as a top choice for application performance monitoring by research company Gartner, which named it one of the "Visionaries" for 2020 in its vaunted Magic Quadrant.
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That's where DataDog (NASDAQ: DDOG) comes in. Twilio's active customer base continues to edge higher, up 21% year over year. Not only is the company adding new customers at a brisk pace, but existing customers are expanding their relationship with Twilio, spending 37% more, on average, than they did this time last year.
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That's where DataDog (NASDAQ: DDOG) comes in. This year has certainly been one like no other. This will provide businesses with a single view of customer information from a variety of channels, providing for more seamless and effective customer engagements.
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5d5ab6bd-b8d0-4c3e-a6df-48ff8db5fa50
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718929.0
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2020-12-31 00:00:00 UTC
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DDOG February 2021 Options Begin Trading
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DDOG
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https://www.nasdaq.com/articles/ddog-february-2021-options-begin-trading-2020-12-31
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nan
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nan
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Investors in Datadog Inc (Symbol: DDOG) saw new options begin trading today, for the February 2021 expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the DDOG options chain for the new February 2021 contracts and identified one put and one call contract of particular interest.
The put contract at the $95.50 strike price has a current bid of $5.40. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $95.50, but will also collect the premium, putting the cost basis of the shares at $90.10 (before broker commissions). To an investor already interested in purchasing shares of DDOG, that could represent an attractive alternative to paying $98.23/share today.
Because the $95.50 strike represents an approximate 3% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 59%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would represent a 5.65% return on the cash commitment, or 48.00% annualized — at Stock Options Channel we call this the YieldBoost.
Below is a chart showing the trailing twelve month trading history for Datadog Inc, and highlighting in green where the $95.50 strike is located relative to that history:
Turning to the calls side of the option chain, the call contract at the $100.00 strike price has a current bid of $5.80. If an investor was to purchase shares of DDOG stock at the current price level of $98.23/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $100.00. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 7.71% if the stock gets called away at the February 2021 expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if DDOG shares really soar, which is why looking at the trailing twelve month trading history for Datadog Inc, as well as studying the business fundamentals becomes important. Below is a chart showing DDOG's trailing twelve month trading history, with the $100.00 strike highlighted in red:
Considering the fact that the $100.00 strike represents an approximate 2% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 99%. On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 5.90% boost of extra return to the investor, or 50.12% annualized, which we refer to as the YieldBoost.
The implied volatility in the put contract example above is 71%.
Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 252 trading day closing values as well as today's price of $98.23) to be 66%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.
Top YieldBoost Calls 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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Of course, a lot of upside could potentially be left on the table if DDOG shares really soar, which is why looking at the trailing twelve month trading history for Datadog Inc, as well as studying the business fundamentals becomes important. Below is a chart showing DDOG's trailing twelve month trading history, with the $100.00 strike highlighted in red: Considering the fact that the $100.00 strike represents an approximate 2% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. Investors in Datadog Inc (Symbol: DDOG) saw new options begin trading today, for the February 2021 expiration.
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Below is a chart showing DDOG's trailing twelve month trading history, with the $100.00 strike highlighted in red: Considering the fact that the $100.00 strike represents an approximate 2% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. Investors in Datadog Inc (Symbol: DDOG) saw new options begin trading today, for the February 2021 expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the DDOG options chain for the new February 2021 contracts and identified one put and one call contract of particular interest.
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Below is a chart showing DDOG's trailing twelve month trading history, with the $100.00 strike highlighted in red: Considering the fact that the $100.00 strike represents an approximate 2% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. Investors in Datadog Inc (Symbol: DDOG) saw new options begin trading today, for the February 2021 expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the DDOG options chain for the new February 2021 contracts and identified one put and one call contract of particular interest.
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At Stock Options Channel, our YieldBoost formula has looked up and down the DDOG options chain for the new February 2021 contracts and identified one put and one call contract of particular interest. Below is a chart showing DDOG's trailing twelve month trading history, with the $100.00 strike highlighted in red: Considering the fact that the $100.00 strike represents an approximate 2% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. Investors in Datadog Inc (Symbol: DDOG) saw new options begin trading today, for the February 2021 expiration.
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76030bb0-f437-434b-bd28-76c06e872406
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718930.0
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2020-12-30 00:00:00 UTC
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SolarWinds or Datadog: Which Tech Stock Has Higher Upside Potential?
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DDOG
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https://www.nasdaq.com/articles/solarwinds-or-datadog%3A-which-tech-stock-has-higher-upside-potential-2020-12-30
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nan
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nan
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Among other things, 2020 saw ransomware and malware attacks spike amid accelerated digitization triggered by the pandemic. SolarWinds has been in the news over the past few days due to a cyberattack that exploited a vulnerability in the company’s Orion products.
The network management software specialist’s Orion platform was compromised by a malware. As a result, several US government agencies and companies using SolarWinds’ Orion products became victims of the cyberattack allegedly by Russian hackers (though the company stated that it has not independently verified the identity of the attacker).
So, where does SolarWinds stand now and what do analysts think about the impact of this malicious attack on the company’s prospects? We will discuss SolarWinds and use the TipRanks Stock Comparison tool to compare it with Datadog to choose the stock that offers a better investment opportunity.
SolarWinds (SWI)
SolarWinds is a leading IT infrastructure management software provider that boasts over 320,000 customers. The company’s Orion monitoring and management software, which the hackers attacked recently, is a key growth driver and accounted for about 45% of the overall revenue in the first nine months of 2020.
Last week, SolarWinds announced that it has released updates in response to the malware, now called Supernova, for all supported versions of Orion platform products and a fix for customers on unsupported versions of these products.
The company has not yet provided any details on the financial impact of the cyberattack. This brings a lot of uncertainty into the picture, according to Truist Financial analyst Terry Tillman, who downgraded SolarWinds to Hold from Buy last week and lowered the price target to $14 from $26. The analyst cited the cyberattack and the inability to properly measure the impact as the reasons for the downgrade.
Tillman stated, “We lack visibility into potential business and financial model impact." (See SWI stock analysis on TipRanks)
Likewise, Robert W. Baird analyst Robert Oliver downgraded SolarWinds to Hold from Buy and brought down his price target to $15 from $24. The 5-star analyst feels that the recent cyberattack may create "prolonged uncertainty," which could continue to pressure shares even after the recent pullback.
Oliver feels that the breach could impact SolarWinds' growth expectations due to potential damage to its brand. Prior to the current malware chaos, the company predicted revenue growth of 8%-9% on a non-GAAP basis for 2020.
Oliver also pointed out the "unfortunate timing" of the CEO transition, which he says brings an "unknown" to investors at a critical time.
Ahead of the cyberattack news, SolarWinds announced the appointment of Sudhakar Ramakrishna as the company’s new President and CEO and a member of the Board of Directors, effective Jan. 4, 2021. Ramakrishna will succeed Kevin B. Thompson, who has been SolarWinds’ CEO since March 2010.
Currently, the Street is cautiously optimistic about SolarWinds, with 3 Buys, 3 Holds and 1 Sell adding up to a Moderate Buy analyst consensus. Owing to the recent sell-off, shares are down 19.2% year-to-date. The average price target of $20.86 indicates upside potential of 39.1% from current levels.
Datadog (DDOG)
Datadog, which went public last year, is a cloud-native monitoring and security platform. Last month, the company posted better-than-anticipated 3Q results and ended the quarter with 13,100 customers. That’s a 38% jump from the prior-year quarter. Furthermore, the number of customers with annual run rate revenue, or ARR, of at least $100,000 grew 52% to 1,107.
The company’s revenue increased 61% year-over-year to $154.7 million and helped it generate adjusted EPS of $0.05 compared to break-even earnings in the prior-year quarter. Datadog is gaining from pandemic-induced rapid digital transformation and cloud migration. (See DDOG stock analysis on TipRanks)
To expand its reach, Datadog recently announced a strategic partnership with Microsoft, under which Datadog tools will be available to Microsoft Azure customers as “a first class service.” Last month, it announced the extension of its partnership with Google Cloud. Under the extended deal, Datadog will have an additional presence in Google Cloud regions and there will be deeper sales alignment between the two entities. The company also has an alliance with leading cloud vendor AWS or Amazon Web Services.
Rosenblatt Securities analyst Blair Abernethy recently initiated a Hold rating on Datadog with a $97 price target. Abernathy draws attention to the fact that the company is pursuing an attractive and growing total addressable market of over $35 billion.
He pointed out that enterprise IT is moving more workloads to the cloud and at the same time, merging DevSecOps teams are driving more frequent enterprise software releases. Both factors are expected to drive demand for monitoring software capabilities. “Datadog targets new cloud migrations and these merging IT teams across any size business with its low-cost product entry point,” stated Abernethy.
He also noted that Datadog has been expanding into the government vertical, further increasing its addressable market. Plus, the analyst believes that the company’s rapid innovation will help drive upsell opportunity.
However, despite these favorable trends, Abernethy remains on the sidelines as he feels that much of his positive outlook is already priced into the stock and the valuation (in terms of Enterprise Value/Sales) is at the high end of comparable high growth enterprise software vendors. The analyst awaits a “more attractive entry point.”
The rest of the Street has a Moderate Buy analyst consensus for Datadog, based on 5 Buys versus 10 Holds. With shares rising 162.1% year-to-date, the average price target of $106.45 implies an upside potential of 7.6% in the months ahead.
Bottom line
Datadog’s growth prospects look promising in the current scenario but certain analysts are concerned about its valuation. Owing to the recent pullback, the Street’s average price target indicates a higher upside potential in SolarWinds stock than DataDog. That said, investors need to be cautious with regard to the uncertainty surrounding SolarWinds and keep an eye on any further updates that could impact the stock.
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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Datadog (DDOG) Datadog, which went public last year, is a cloud-native monitoring and security platform. (See DDOG stock analysis on TipRanks) To expand its reach, Datadog recently announced a strategic partnership with Microsoft, under which Datadog tools will be available to Microsoft Azure customers as “a first class service.” Last month, it announced the extension of its partnership with Google Cloud. The company’s Orion monitoring and management software, which the hackers attacked recently, is a key growth driver and accounted for about 45% of the overall revenue in the first nine months of 2020.
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(See DDOG stock analysis on TipRanks) To expand its reach, Datadog recently announced a strategic partnership with Microsoft, under which Datadog tools will be available to Microsoft Azure customers as “a first class service.” Last month, it announced the extension of its partnership with Google Cloud. Datadog (DDOG) Datadog, which went public last year, is a cloud-native monitoring and security platform. (See SWI stock analysis on TipRanks) Likewise, Robert W. Baird analyst Robert Oliver downgraded SolarWinds to Hold from Buy and brought down his price target to $15 from $24.
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(See DDOG stock analysis on TipRanks) To expand its reach, Datadog recently announced a strategic partnership with Microsoft, under which Datadog tools will be available to Microsoft Azure customers as “a first class service.” Last month, it announced the extension of its partnership with Google Cloud. Datadog (DDOG) Datadog, which went public last year, is a cloud-native monitoring and security platform. (See SWI stock analysis on TipRanks) Likewise, Robert W. Baird analyst Robert Oliver downgraded SolarWinds to Hold from Buy and brought down his price target to $15 from $24.
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Datadog (DDOG) Datadog, which went public last year, is a cloud-native monitoring and security platform. (See DDOG stock analysis on TipRanks) To expand its reach, Datadog recently announced a strategic partnership with Microsoft, under which Datadog tools will be available to Microsoft Azure customers as “a first class service.” Last month, it announced the extension of its partnership with Google Cloud. Rosenblatt Securities analyst Blair Abernethy recently initiated a Hold rating on Datadog with a $97 price target.
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a705e67a-7783-48de-8893-7c49031a7b1a
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718931.0
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2020-12-28 00:00:00 UTC
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Looking For The Top Software Stocks To Watch Ahead Of 2021? 1 Up 180%+ YTD
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DDOG
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https://www.nasdaq.com/articles/looking-for-the-top-software-stocks-to-watch-ahead-of-2021-1-up-180-ytd-2020-12-28
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nan
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nan
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Should Investors Be Watching These Top Software Stocks This Week? 3 Names To Know
It has been a fantastic year for software stocks in the stock market so far. Understandably, this is because of the surging demand for software services in 2020 that was caused by the coronavirus pandemic. Companies and businesses were forced to prioritize digital acceleration and software is what facilitates this process. Accordingly, investors appear to be well aware of this. Software companies that have stepped up in these times have become some of the top software stocks in the stock market today. Prime examples of this would be companies such as DocuSign (DOCU Stock Report) and Twilio (TWLO Stock Report). These two companies provide e-signature and cloud communication services respectively. Admittedly, both of these are essential aspects of running an online business.
It should also be noted that our two examples earlier are in the Software-as-a-Service (SaaS) space. These kinds of companies provide ongoing support for clients looking to bolster their digital workspaces. As a result, the SaaS market has grown significantly this year thanks to acceleration from coronavirus tailwinds. In fact, Valuates Reports predicts that the global SaaS market will be worth $307 billion by 2026. Based on these impressive figures, I’m not surprised to see investors flocking to the software industry.
Nevertheless, some of the best software stocks to buy now face the same question as most top growth stocks this year. That is, can they keep this momentum up in a post-pandemic world? Well, your guess is as good as mine. Time will tell if the efficiency and ease of use brought about by the SaaS industry sticks for good. With that in mind, here are the top software stocks to watch right now.
Read More
Looking For SPAC Stocks To Buy In 2021? 3 Names To Watch
Are These The Best Stocks To Buy With Your Stimulus Check? 3 For Your List
Best Software Stocks To Watch Right Now: Salesforce.com, Inc.
Starting us off, we have software giant Salesforce (CRM Stock Report). Salesforce is the largest SaaS company in the U.S. with a market capitalization of over $206 billion. For some context, it is a California-based cloud software company that specializes in customer management services. Customer feedback informs businesses of issues in any new online services they may be offering. Understandably, this makes it a vital aspect of running an online business right now. This is reflected in CRM stock which is up by over 80% since the March lows.
Correspondingly, its third-quarter fiscal paints a clearer picture of its impressive growth. In it, the company reported total revenue of $5.42 billion for the quarter. On top of that, it also ended the quarter with $3.72 billion in cash on hand. CEO Marc Benioff said, “We had another record quarter, and now we’re raising our FY21 revenue guidance to $21.11 billion at the high end and initiating FY22 guidance of $25.5 billion. No other major enterprise software company is growing at this rate.” Salesforce appears to be confident about its ability to deliver strong results moving forward. As a result, I would expect investors to be wondering what the company plans to do to achieve its growth goals.
Just last week, India’s Yes Bank announced a team-up with Salesforce. Yes Bank is the first private bank in India to collaborate with the company. The deal involves the creation of a technology platform that will bolster the bank’s retail lending business. In turn, the bank would be able to provide personalized solutions and connected banking experiences for consumers across its retail segments. More importantly, customers will be exposed to the Salesforce platform. With solid financial prospects and ever-growing international influence, do you think CRM stock will continue to rise in 2021?
[Read More] Looking For Best Tech Stocks To Buy Before January 2021? 2 Up By 100%+ Since March
Best Software Stocks To Watch Right Now: Datadog Inc.
Following that, we have Datadog (DDOG Stock Report). Notably, the company’s share prices are up by over 180% year-to-date. The key to this explosive growth could lie in its key offerings. In summary, Datadog offers cloud-monitoring services. It does so via its proprietary SaaS-based data analytics platform. Logically, it would be in the limelight this year as many large companies rely on the cloud to store data. Conveniently, Datadog would provide much-needed oversight throughout the process of digital acceleration.
The company recently revealed that leading U.S. smart parking solutions provider ParkMobile has been using its services. To elaborate, the company has been using Datadog for monitoring and logging its migration from an on-premises environment to a cloud-based environment on Amazon Web Services. ParkMobile CTO Matt Ball hailed Datadog saying, “Datadog is intuitive and cost-effective, and it has allowed us to index all our logs, see them alongside our metrics, and trace our applications with support for the languages we use. We adopted Datadog in February 2020 and we were fully out of the data center by June. Datadog really accelerated our migration.” This is a spectacular play by the company as it is able to flex its prowess. In the long-run, this could benefit the company as larger clients seek to fortify their cloud infrastructure.
Datadog’s capabilities are also reflected in its third-quarter fiscal posted in November. In it, the company reported a 61% year-over-year surge in total revenue. Datadog also announced strategic partnerships with Microsoft (MSFT Stock Report) and Google (GOOGL Stock Report) in the same quarter. The company seems to be firing on all cylinders going into 2021. Given all of this, will you be adding DDOG stock to your January watchlist?
[Read More] Looking For The Best Stocks To Buy For 2021? 3 Growth Stocks To Watch
Best Software Stocks To Watch Right Now: Zendesk Inc
Last but not least, we turn to Zendesk (ZEN Stock Report). It is a customer service software company that is based in California. The company builds software that serves to improve customer relationships. It does so by providing a simple customer support platform for small to medium-sized businesses (SMB). The company uses software that is powerful and scalable to meet the needs of its 160,000 customers worldwide. To highlight, ZEN shares are up by over 150% since the March lows.
In the company’s third-quarter fiscal posted in October, Zendesk reported that its revenue grew by an impressive 24% year-over-year at $262 million. The company also claims that its churn rates had returned to pre-pandemic levels and its SMB revenue has stabilized. Evidently, there is a strong demand for Zendesk’s solutions and good growth in the number of new paid customer accounts. Zendesk also reports a net income of $21 million, which is a 50% increase compared to a year earlier. In the company’s financial guidance, it expects to hit the $1 billion mark for its full-year 2020 revenue.
Recently, it was announced that Zendesk is the first customer relationship management platform to join Unity’s (U Stock Report) Verified Solutions Partner (VSP). By being a VSP, Zendesk will be able to provide integrated customer support functions that can be set up in minutes. It allows players to get immediate help without having to leave the game. This is a great play by the company as the gaming industry is booming due to pandemic tailwinds. It seems that Zendesk is diving in to get a share of this growing market. Will it be enough to see ZEN stock hit new highs in 2021? I’ll let you decide.
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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Following that, we have Datadog (DDOG Stock Report). Given all of this, will you be adding DDOG stock to your January watchlist? No other major enterprise software company is growing at this rate.” Salesforce appears to be confident about its ability to deliver strong results moving forward.
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Following that, we have Datadog (DDOG Stock Report). Given all of this, will you be adding DDOG stock to your January watchlist? In it, the company reported a 61% year-over-year surge in total revenue.
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Following that, we have Datadog (DDOG Stock Report). Given all of this, will you be adding DDOG stock to your January watchlist? Software companies that have stepped up in these times have become some of the top software stocks in the stock market today.
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Following that, we have Datadog (DDOG Stock Report). Given all of this, will you be adding DDOG stock to your January watchlist? 2 Up By 100%+ Since March Best Software Stocks To Watch Right Now: Datadog Inc.
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849cd154-372b-4cc0-89e0-5471a5568d28
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718932.0
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2020-12-21 00:00:00 UTC
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Noteworthy Monday Option Activity: OPY, DDOG, AGIO
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DDOG
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https://www.nasdaq.com/articles/noteworthy-monday-option-activity%3A-opy-ddog-agio-2020-12-21
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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 Oppenheimer Holdings Inc Class A (D (Symbol: OPY), where a total volume of 885 contracts has been traded thus far today, a contract volume which is representative of approximately 88,500 underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 92.1% of OPY's average daily trading volume over the past month, of 96,050 shares. Particularly high volume was seen for the $40 strike call option expiring January 15, 2021, with 604 contracts trading so far today, representing approximately 60,400 underlying shares of OPY. Below is a chart showing OPY's trailing twelve month trading history, with the $40 strike highlighted in orange:
Datadog Inc (Symbol: DDOG) options are showing a volume of 29,160 contracts thus far today. That number of contracts represents approximately 2.9 million underlying shares, working out to a sizeable 82.5% of DDOG's average daily trading volume over the past month, of 3.5 million shares. Particularly high volume was seen for the $135 strike call option expiring January 15, 2021, with 15,055 contracts trading so far today, representing approximately 1.5 million underlying shares of DDOG. Below is a chart showing DDOG's trailing twelve month trading history, with the $135 strike highlighted in orange:
And Agios Pharmaceuticals Inc (Symbol: AGIO) options are showing a volume of 6,503 contracts thus far today. That number of contracts represents approximately 650,300 underlying shares, working out to a sizeable 78.1% of AGIO's average daily trading volume over the past month, of 832,185 shares. Particularly high volume was seen for the $45 strike call option expiring January 15, 2021, with 1,099 contracts trading so far today, representing approximately 109,900 underlying shares of AGIO. Below is a chart showing AGIO's trailing twelve month trading history, with the $45 strike highlighted in orange:
For the various different available expirations for OPY options, DDOG options, or AGIO 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 $135 strike call option expiring January 15, 2021, with 15,055 contracts trading so far today, representing approximately 1.5 million underlying shares of DDOG. Below is a chart showing OPY's trailing twelve month trading history, with the $40 strike highlighted in orange: Datadog Inc (Symbol: DDOG) options are showing a volume of 29,160 contracts thus far today. That number of contracts represents approximately 2.9 million underlying shares, working out to a sizeable 82.5% of DDOG's average daily trading volume over the past month, of 3.5 million shares.
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Below is a chart showing OPY's trailing twelve month trading history, with the $40 strike highlighted in orange: Datadog Inc (Symbol: DDOG) options are showing a volume of 29,160 contracts thus far today. That number of contracts represents approximately 2.9 million underlying shares, working out to a sizeable 82.5% of DDOG's average daily trading volume over the past month, of 3.5 million shares. Below is a chart showing DDOG's trailing twelve month trading history, with the $135 strike highlighted in orange: And Agios Pharmaceuticals Inc (Symbol: AGIO) options are showing a volume of 6,503 contracts thus far today.
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Particularly high volume was seen for the $135 strike call option expiring January 15, 2021, with 15,055 contracts trading so far today, representing approximately 1.5 million underlying shares of DDOG. Below is a chart showing OPY's trailing twelve month trading history, with the $40 strike highlighted in orange: Datadog Inc (Symbol: DDOG) options are showing a volume of 29,160 contracts thus far today. That number of contracts represents approximately 2.9 million underlying shares, working out to a sizeable 82.5% of DDOG's average daily trading volume over the past month, of 3.5 million shares.
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Below is a chart showing AGIO's trailing twelve month trading history, with the $45 strike highlighted in orange: For the various different available expirations for OPY options, DDOG options, or AGIO options, visit StockOptionsChannel.com. Below is a chart showing OPY's trailing twelve month trading history, with the $40 strike highlighted in orange: Datadog Inc (Symbol: DDOG) options are showing a volume of 29,160 contracts thus far today. That number of contracts represents approximately 2.9 million underlying shares, working out to a sizeable 82.5% of DDOG's average daily trading volume over the past month, of 3.5 million shares.
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ccc6fa1c-37d3-4798-81d0-fe094e6ba33b
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718933.0
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2020-12-14 00:00:00 UTC
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One Big Danger for Snowflake Investors
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DDOG
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https://www.nasdaq.com/articles/one-big-danger-for-snowflake-investors-2020-12-14
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nan
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nan
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While Snowflake (NYSE: SNOW) is an exciting company with a great future, the stock might have the wrong kind of excitement over the next several months. This stock scares me for two reasons.
One, the valuation is insane. Snowflake is priced at 200 times revenues. That's way higher than Zoom (NASDAQ: ZM) or Datadog (NASDAQ: DDOG). Snowflake has a $100 billion market cap, and it hasn't even made $1 billion in revenues yet. This valuation means there's a lot of room to fall just on the basis of multiple contraction.
Image source: Getty Images.
What might start a mini-crash is the second issue. Over the next few months, investors are facing a series of escalating lock-up expirations. Insiders will soon be allowed to sell their shares.
The lock-up expiration on Dec. 15 is tiny. This one allows employees and former employees to start selling 25% of vested stock options. As of July 31, this represents just 1,295,695 shares. There are 50 million shares outstanding, so it's not a big deal. And yet on Monday, the stock is dropping 7% in anticipation of this event.
By the end of December, this class might expand to non-employee insiders. That's a much bigger deal. Potentially, over 37 million shares might be allowed to trade. And then, two days after the second quarterly report in March, all the insider shares are unlocked. This is a mind-numbing 345 million shares that might hit the market.
I'd avoid these shares until spring.
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Taylor Carmichael owns shares of Datadog. The Motley Fool owns shares of and recommends Datadog, Snowflake Inc., and Zoom Video Communications. 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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That's way higher than Zoom (NASDAQ: ZM) or Datadog (NASDAQ: DDOG). When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. * David and Tom 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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That's way higher than Zoom (NASDAQ: ZM) or Datadog (NASDAQ: DDOG). This one allows employees and former employees to start selling 25% of vested stock options. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.
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That's way higher than Zoom (NASDAQ: ZM) or Datadog (NASDAQ: DDOG). 10 stocks we like better than Snowflake Inc. See the 10 stocks *Stock Advisor returns as of November 20, 2020 Taylor Carmichael owns shares of Datadog.
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That's way higher than Zoom (NASDAQ: ZM) or Datadog (NASDAQ: DDOG). Insiders will soon be allowed to sell their shares. 10 stocks we like better than Snowflake Inc.
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2020-12-14 00:00:00 UTC
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7 ‘Trendy’ Growth Stocks That Could Make You Exponentially Richer
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https://www.nasdaq.com/articles/7-trendy-growth-stocks-that-could-make-you-exponentially-richer-2020-12-14
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
This year is shaping up to be one of the best years ever for growth stocks. The fiscal fears of the pandemic, which hurt markets in March, are pretty much a distant memory now.
Why? For one, the Federal Reserve’s commitment to sustain market liquidity did more than it should have for the markets. Once this is all over, value investors will have broken even at best. Meanwhile, growth stocks are poised to keep rising, so long as certain trends continue.
For instance, many of the stocks on this list would benefit from the work-from-home model staying intact. Additionally, as healthcare authorities approve the distribution of a Covid-19 vaccine, cloud software stocks will keep growing. And even after the pandemic, the momentum of electronic transactions, pockets of strength in the Chinese retail market and the need for Software as a Service (SaaS) will lift the following picks.
7 Electric Vehicle Stocks With Style And Substance
So, here are seven growth stocks that could make you rich as they ride the trends:
Square (NYSE:SQ)
JD.com (NASDAQ:JD)
Palantir Technologies (NYSE:PLTR)
Elastic (NYSE:ESTC)
Datadog (NASDAQ:DDOG)
StoneCo (NASDAQ:STNE)
FedEx (NYSE:FDX)
Square (SQ)
Source: IgorGolovniov / Shutterstock.com
First on my list of growth stocks is SQ stock. In the electronic transaction space, Square’s moat continues to widen. Plus, its usage will continue to grow as it adds more services to the platform.
On Nov. 25, Square said it would buy Credit Karma Tax for $50 million to grow its Cash App business. This adds a “free, do-it-yourself tax filing service for consumers.” Given its strong platform and stickiness, the small cost of the deal will likely create billions in future revenue for the company
On top of this announcement, the seasonality chart below also suggests that Square stock is set to rise for the first nine months of 2021:
Source: Chart courtesy of Stock Rover
Growth investors may ignore metrics like price-to-earnings and price-to-sales. What’s clear from Square’s recent quarters, though, is that small product enhancements lead to strong revenue growth.
And if that wasn’t enough, Square will also benefit from the pandemic-driven momentum. For instance, it helped users directly deposit stimulus payments. If the government approves another stimulus, Square will benefit from even more usage.
JD.com (JD)
JD) logo displayed at the entrance to the company's Silicon Valley office." width="300" height="169">
Source: Sundry Photography / Shutterstock.com
In the Chinese market, JD is a winning e-commerce retailer. For instance, it’s JD Health business raised $3.5 billion in a Hong Kong initial public offering (IPO). The listing will give the company plenty of capital for investing back into the business.
Plus, another part of JD.com — JD Logistics — could raise another $3 billion in the first half of 2021 from its public listing.
8 Battery Stocks That Electric Vehicle Companies Rely On
In the third quarter of 2020, the company reaffirmed its spot as one of the top e-commerce retailers in China. From 2012 to now, its compounded annual growth rate (CAGR) hit 32%. JD’s gross profits also continue to steadily rise. For example, it reached 14.6% in 2019 versus 12.2% in 2015. Economies of scale are increasing its business efficiency and as the company improves its logistics, it will be able to scale even further.
Click to Enlarge
Source: Chart courtesy of Stock Rover
On top of that, JD has the highest growth score compared to American retailers.
According to Simply Wall St, the stock’s fair value is currently on par with its price at $82.25. However, if the company continues to post increasing growth rates, the site will revise its price target higher. That’s certainly a distinct possibility with this pick of the growth stocks.
Palantir Technologies (PLTR)
Source: rblfmr / Shutterstock.com
After a successful IPO, Palantir’s stock price has tripled from the $9 range to over $27. So, this software firm’s growth could definitely make investors rich. But what are some signs of that? Well, on Nov. 18, the company announced a contract with the U.S. Army.
Doug Philippone, Palantir’s Global Defense lead, said about the deal, “The Army’s proactive approach in seeking out opportunities to deploy commercially-available solutions has been instrumental in getting critical capabilities into the hands of warfighters faster.”
Despite this important development for PLTR, though, Wall Street analysts are not completely sold on the company’s upside as one of the growth stocks. According to Tipranks, the average price target is currently $13.83 and most analysts rate it as a hold. However, in my opinion, the pros fail to recognize Palantir’s ability to win big, growth-spurring contracts.
Elastic (ESTC)
Source: Shutterstock
Elastic’s strong revenue growth and increased full-year forecast reaffirm the software company’s strength, making it a solid pick for investors considering growth stocks.
In its most recent quarter, ESTC stock rallied on Dec. 2 after posting revenue growth of 43% year-over-year (YOY) to $144.9 million. Within that, SaaS revenue rose 81% YOY to $37.4 million. Plus, Elastic ended the quarter with $349 million in cash and cash equivalents. CEO Shay Banon noted, “We are innovating across our three solutions built on a single stack, expanding our relationships with key partners, and empowering our customers to drive outcomes through data, insights, and action.”
On top of those numbers, the company also achieved total subscriptions of 12,900 for the quarter and 650 of its annual contracts were worth over $100,000. Most importantly, though, subscription revenue made up 93% of the total revenue. That recurring income is predictable and suggests the company will only keep expanding.
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Expert readers on Finbox model a 5-year discounted cash flow model, assuming a discount rate of 9% as seen below.
Metrics Range Conclusion
Discount Rate 9.5% – 8.5% 9.00%
Terminal Revenue Multiple 18.2x – 19.2x 18.7x
Fair Value $193.85 – $212.36 $202.95
The fair value from this model is over $200 a share.
Datadog (DDOG)
DDOG) logo displayed on a laptop screen." width="300" height="169">
Source: Karol Ciesluk / Shutterstock.com
On Nov. 10, Datadog posted Q3 sales that rose 61% YOY to about $155 million. DDOG stock initially fell that day, but the eight new products and features it announced at the annual Dash conference suggest strong software growth ahead.
CEO Olivier Pomel said, “[W]e have maintained our strong track record of innovation and extended our leadership as the most complete and cloud native end-to-end observability platform”
So, DDOG stock has tremendous upside moving forward. For example, it just signed a deal with Microsoft’s (NASDAQ:MSFT) Azure and extended its partnership with Alphabet’s (NASDAQ:GOOG, NASDAQ:GOOGL) Google Cloud.
On Nov. 17, the company also announced a monitoring cloud infrastructure deal with Oracle (NYSE:OCL). The arrangement will allow customers to move data logs from Oracle Cloud Infrastructure (OCI) to Datadog and run analytics. Having the ability to consolidate those logs will be a major convenience, as well as an incentive for users to add the firm’s service offering.
Metrics Range Conclusion
Discount Rate 9.5% – 8.5% 9.00%
Terminal Revenue Multiple 23.7x – 24.7x 24.2x
Fair Value $108.19 – $116.71 $112.39
In the above 5-year DCF Revenue exit model from Finbox, this pick of the growth stocks has a fair value of at least $112.
StoneCo (STNE)
Source: Wright Studio / Shutterstock.com
Next on my list of growth stocks is StoneCo. Despite having not announcing quarterly results since Oct. 30, the stock continues to rise nicely.
In Q3 of 2020, the company posted its highest historical figures on total payment volume (TPV), total revenue, adjusted net income and more. As a fintech platform, investors are rushing to buy STNE stock before it rises even further.
7 Tech Stocks To Buy For A Very Happy Holiday Season
Additionally, the company’s revenue retention of above 100% with digital small and medium business clients shows how sticky its platform is. StoneCo will become a full commerce platform after enhancing its product with the Linx acquisition.
Surprise Type Announce Date Period End Date Actual Est. Surprise (%)
EPS EPS
Positive 10/29/2020 9/30/2020 $0.16 $0.13 23.10%
Negative 8/12/2020 6/30/2020 $0.09 $0.12 -25.00%
Negative 5/26/2020 3/31/2020 $0.13 $0.15 -13.30%
Positive 3/2/2020 12/31/2019 $0.23 $0.22 4.50%
Negative 11/21/2019 9/30/2019 $0.17 $0.18 -5.60%
Negative 8/14/2019 – $0.15 $0.17 -11.80%
As shown in the Stock Rover chart above, the company’s results are at odds with Wall Street consensus estimates. Though it is unlikely, an earnings miss might create a better entry price.
FedEx (FDX)
FDX) employee loads a FedEx Express truck in Manhattan." width="300" height="169">
Source: Antonio Gravante / Shutterstock.com
Last on my list of growth stocks is FedEx. When it comes to the integrated freight and logistics sector, this company often gets overlooked. However, after UPS (NYSE:UPS) placed shipping limits on some retailers, the reduced supply of shipping options will help FedEx’s profit margins. Plus, FDX stock also pays a token dividend. That signals the firm’s confidence in its cash flow.
Source: Chart courtesy of Stock Rover
So, when the company reports quarterly results this month, expect revenue and earnings per share (EPS) to top expectations again. This will repeat its Q1 strength, when operating margin rose to 8.5%. At the time, FedEx warned investors of continued uncertainties ahead. Still, it expected to benefit from its strong position in the U.S. market. International package and freight markets will also lift its quarterly results.
On its September conference call, COO Raj Subramaniam said, “[T]he e-commerce market is large and it’s growing. And the growth has accelerated as pull forward by three years.” FedEx is a central player in this growth phenomenon, especially in the domestic market. So, to capitalize on the trend, investors may hold FDX instead of expensive online retailers. The firm manages its capital conservatively and delivers on steady revenue growth.
On Tipranks, the average price target on FDX stock is over $319. When the company raises its guidance again, expect analysts to lift their fair value forecast, too.
On the date of publication, Chris Lau did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Chris Lau is a contributing author for InvestorPlace.com and numerous other financial sites. Chris has over 20 years of investing experience in the stock market and runs the Do-It-Yourself Value Investing Marketplace on Seeking Alpha. He shares his stock picks so readers get original insight that helps improve investment returns.
The post 7 ‘Trendy’ Growth Stocks That Could Make You Exponentially Richer 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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CEO Olivier Pomel said, “[W]e have maintained our strong track record of innovation and extended our leadership as the most complete and cloud native end-to-end observability platform” So, DDOG stock has tremendous upside moving forward. 7 Electric Vehicle Stocks With Style And Substance So, here are seven growth stocks that could make you rich as they ride the trends: Square (NYSE:SQ) JD.com (NASDAQ:JD) Palantir Technologies (NYSE:PLTR) Elastic (NYSE:ESTC) Datadog (NASDAQ:DDOG) StoneCo (NASDAQ:STNE) FedEx (NYSE:FDX) Square (SQ) Source: IgorGolovniov / Shutterstock.com First on my list of growth stocks is SQ stock. Datadog (DDOG) DDOG) logo displayed on a laptop screen."
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7 Electric Vehicle Stocks With Style And Substance So, here are seven growth stocks that could make you rich as they ride the trends: Square (NYSE:SQ) JD.com (NASDAQ:JD) Palantir Technologies (NYSE:PLTR) Elastic (NYSE:ESTC) Datadog (NASDAQ:DDOG) StoneCo (NASDAQ:STNE) FedEx (NYSE:FDX) Square (SQ) Source: IgorGolovniov / Shutterstock.com First on my list of growth stocks is SQ stock. Datadog (DDOG) DDOG) logo displayed on a laptop screen." DDOG stock initially fell that day, but the eight new products and features it announced at the annual Dash conference suggest strong software growth ahead.
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7 Electric Vehicle Stocks With Style And Substance So, here are seven growth stocks that could make you rich as they ride the trends: Square (NYSE:SQ) JD.com (NASDAQ:JD) Palantir Technologies (NYSE:PLTR) Elastic (NYSE:ESTC) Datadog (NASDAQ:DDOG) StoneCo (NASDAQ:STNE) FedEx (NYSE:FDX) Square (SQ) Source: IgorGolovniov / Shutterstock.com First on my list of growth stocks is SQ stock. Datadog (DDOG) DDOG) logo displayed on a laptop screen." DDOG stock initially fell that day, but the eight new products and features it announced at the annual Dash conference suggest strong software growth ahead.
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7 Electric Vehicle Stocks With Style And Substance So, here are seven growth stocks that could make you rich as they ride the trends: Square (NYSE:SQ) JD.com (NASDAQ:JD) Palantir Technologies (NYSE:PLTR) Elastic (NYSE:ESTC) Datadog (NASDAQ:DDOG) StoneCo (NASDAQ:STNE) FedEx (NYSE:FDX) Square (SQ) Source: IgorGolovniov / Shutterstock.com First on my list of growth stocks is SQ stock. Datadog (DDOG) DDOG) logo displayed on a laptop screen." DDOG stock initially fell that day, but the eight new products and features it announced at the annual Dash conference suggest strong software growth ahead.
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2020-12-11 00:00:00 UTC
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5 Top Stock Trades for Monday: TWLO, QCOM, DDOG, NLS, SPY
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DDOG
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https://www.nasdaq.com/articles/5-top-stock-trades-for-monday%3A-twlo-qcom-ddog-nls-spy-2020-12-11
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
The markets displayed a bit more weakness on Friday, as investors got a little worried about a potentially larger pullback. I’ll end the column with a look at the S&P 500 — but for now, let’s focus on a few top stock trades for next week.
Top Stock Trades for Monday No. 1: Twilio (TWLO)
Click to Enlarge
Source: Chart courtesy of StockCharts.com
Twilio (NYSE:TWLO) has quietly made its way higher, hitting new 52-week highs on Friday. However, the stock is still contending with resistance near $340.
This mark has stymied Twilio stock a few times since shares made new highs in October. I want to see if the stock can break out over this level, running through $350.
If it can do so, it will put the 138.2% and 161.8% extensions in play up near $375 and $395, respectively. Those extensions are measured from the November low to the October high.
7 Electric Vehicle Stocks With Style And Substance
If $340 again rejects Twilio, look for support from the 20-day and 50-day moving averages.
Top Stock Trades for Monday No. 2: Qualcomm (QCOM)
Click to Enlarge
Source: Chart courtesy of StockCharts.com
Qualcomm (NASDAQ:QCOM) fell almost 9% at one point on the day on reports that Apple (NASDAQ:AAPL) will make its own modems.
At first, the dip looked quite buyable, as Qualcomm was selling off right into prior resistance near $150 and the 20-day moving average. However, both marks failed to buoy the stock, which fell into low $140s.
From here, short-term uptrend support (blue line) is coming into play, but I’m not sure I’d put too much weight into that. I’d like QCOM more on a dip to the 50-day moving average or on a rotation back over $150.
Above $150, and look for a gap-fill back up toward Thursday’s range (Dec. 10). Below the 50-day moving average, and look for a test of $130.
Top Stock Trades for Monday No. 3: DataDog (DDOG)
Click to Enlarge
Source: Chart courtesy of StockCharts.com
Datadog (NASDAQ:DDOG) just keeps lingering in this current range, trapped between $93 and $103.
Ranges can be frustrating, but they also provided us with clarity. For instance, a close below $90 tells us this dog doesn’t have any bite.
That would put the stock below the 20-day, 50-day and 100-day moving averages, as well as this month’s low. It would even potentially put the November lows back on the table.
On the upside, we need to see some rotation over resistance. It looked like we were going to get that move on Thursday, but DDOG stock lacked follow-through. Look for a move above $103.95. That gives us a weekly-up and a monthly-up rotation.
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It would open the door to $115-plus, potentially.
Top Trades for Monday No. 4: Nautilus (NLS)
Click to Enlarge
Source: Chart courtesy of StockCharts.com
I have waited for this backtest for a long time in Nautilus (NYSE:NLS). Now, this stock won’t be for everyone, but if it can find its footing, we could see a nice boost in the name.
The stock is finally retesting the August high at $15.91. While NLS stock was able to break over this mark in September and run through $28, this level seemed notable to me. Hammering off it twice now, I really want to see a rotation back over the 100-day moving average for confirmation.
If we can get that, $20 and the 50-day moving average could be on the table. Above $22, and perhaps NLS stock can fill the gap back up to $26.
On the downside, however, a close below the $15.91 mark and we could see selling pressure unless it is quickly reclaimed. It may even put the 200-day moving average on the table.
Top Trades for Monday No. 5: S&P 500 ETF (SPY)
Click to Enlarge
Source: Chart courtesy of StockCharts.com
Okay, let’s talk about the S&P 500 really quick, using the liquid and very accessible SPDR S&P 500 ETF (NYSEARCA:SPY).
Many investors have been clamoring for a pullback, arguing that stocks have run too far, too fast. Maybe that is the case — but maybe it’s not.
Adding to that, many investors had a bee in their bonnet from the bearish engulfing candle on Wednesday, the weakness on Thursday and more selling on Friday.
At midday Friday, traders seemed to be panicking. But let’s pump the brakes a bit here.
Perhaps the macro environment eventually rattles the cage enough to see some notable selling pressure in the market. That’s definitely possible. But as I wrote on Nov. 30, the trend isn’t breaking down just yet.
Sure, the SPY broke the 10-day moving average on Friday. But all it did was dip to the 21-day moving average and fill that little gap from November. If anything it created a nice little buying opportunity on Friday afternoon, potentially paving the way for a larger move into year-end.
Before we panic, maybe use these little shakes and bounces to trim some winners and after a big run — before the dip — it’s prudent to shift into smaller position sizes. Because remember, stocks take the escalator up and the elevator down.
For now, though, it’s not time to panic. A close below this week’s low could trigger a quick move down to the $352 to $355 area.
On the date of publication, Bret Kenwell held a long position in TWLO and NLS.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell.
The post 5 Top Stock Trades for Monday: TWLO, QCOM, DDOG, NLS, SPY 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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3: DataDog (DDOG) Click to Enlarge Source: Chart courtesy of StockCharts.com Datadog (NASDAQ:DDOG) just keeps lingering in this current range, trapped between $93 and $103. It looked like we were going to get that move on Thursday, but DDOG stock lacked follow-through.
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Click to Enlarge Source: Chart courtesy of StockCharts.com Datadog (NASDAQ:DDOG) just keeps lingering in this current range, trapped between $93 and $103. The post 5 Top Stock Trades for Monday: TWLO, QCOM, DDOG, NLS, SPY appeared first on InvestorPlace. 3: DataDog (DDOG)
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The post 5 Top Stock Trades for Monday: TWLO, QCOM, DDOG, NLS, SPY appeared first on InvestorPlace. 3: DataDog (DDOG) Click to Enlarge Source: Chart courtesy of StockCharts.com Datadog (NASDAQ:DDOG) just keeps lingering in this current range, trapped between $93 and $103.
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The post 5 Top Stock Trades for Monday: TWLO, QCOM, DDOG, NLS, SPY appeared first on InvestorPlace. 3: DataDog (DDOG) Click to Enlarge Source: Chart courtesy of StockCharts.com Datadog (NASDAQ:DDOG) just keeps lingering in this current range, trapped between $93 and $103.
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2020-12-08 00:00:00 UTC
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C3.ai IPO: What Investors Need to Know
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DDOG
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https://www.nasdaq.com/articles/c3.ai-ipo%3A-what-investors-need-to-know-2020-12-09
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In this episode of Industry Focus: Tech, Dylan Lewis and Motley Fool contributor Brian Feroldi do a deep dive on C3.ai, which is soon coming public. They discuss the company's operations and expansion strategy, and why they think its management inspires confidence in investors who are new to the AI space and gives the company an edge. They also get into the company's financials, growth potential, some things to keep an eye on, and much more.
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.
10 stocks we like better than Walmart
When investing geniuses David and Tom Gardner have an investing 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.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Walmart 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 2/1/20
This video was recorded on December 4, 2020.
Dylan Lewis: It's Friday, December 4th, and we're talking about C3.ai. I am your host Dylan Lewis, and I'm joined by Fool.com's, other opal opportunist of owning outrageously optimistic opulence, Brian Feroldi. The tongue twister is back, that means that one of my favorite co-hosts is back. Brian, how are you doing?
Brian Feroldi: And it means that yet again, Dylan, I failed. [laughs]
Lewis: [laughs] You know, there's a rhythm to it, I'm usually like, OK, there's going to be, like, six words here. And I think you managed to sneak an extra one or two in; I almost ran out of breath.
Feroldi: [laughs] There you go. Well then, I guess that's the best that I can hope for, given your flawless track record.
Lewis: [laughs] You know, I think we're just going to hit the day where eventually you're like, you know what, I'm throwing 13 at him. And we're just going to see how long he can go until he doesn't have any oxygen left in his lungs and that will be the day that I don't get through your kickoff.
Feroldi: I'll build it up, Dylan, one word at a time each week. [laughs]
Lewis: [laughs] But then you'd be training me; you'd be slowly building up my resistance and make me capable.
We're talking about a business today, Brian, that has a much shorter name than the introduction that you give yourself, and that is C3.ai. Interesting business. If you're trying to do your homework about this business, the name of the company, also the website, is C3.ai. So, you can just pop that directly into your address bar.
Feroldi: This is a company that one of my Twitter followers sent me. This is @bleurakoon. I'm assuming that's blue raccoon, but misspelled. And one of the things I love about Twitter is, listeners pitch me ideas all the time, and they're like, hey, check this out. I will be completely honest, I saw the name C3.ai, I am just like, oh! This is going to be a disaster, that was just my initial thought. Then, as I did initial research, boy! Did I become interested quickly.
Lewis: And you know, Brian, it's worth just reflecting on that for a second. There is a lot of power that comes in what you call a company. And you know, I mean, we talk a lot about a company like Lemonade, you know, totally different from the space that they're in, and I think it evokes this freshness for the industry that they're operating in. But there are a lot of businesses that wind up being discounted or, kind of, cast aside because of their name, it would be [laughs] easy to do that with this business because it's so out there.
Feroldi: And sometimes that could actually be a positive sign. I still don't like the name Datadog, like, I just think [laughs] that's a terrible name; the company is doing OK though.
Lewis: Yeah, numbers don't lie, right? [laughs] And that's really what it comes down to at the end of the day. It doesn't matter what you call it, if it's a successful business, it's going to be a successful business, but an odd name or maybe one that causes people to dismiss it can often create opportunities for investors.
Feroldi: It certainly can. And I just want to say right up front, the thing that jumped off the page to me, I always like when I see that, when I'm reading through them and I'm like, wait! what? And that makes me do a double take. The thing that jumped off the page to me here was the Founder. This is the name that I have known for years, and if you know anything about the tech space, you probably do too. Thomas Siebel the architect behind Siebel Systems. He is a billionaire. He has been well-known in Silicon Valley. Extremely successful track record. That is the Founder and CEO here, so right out of the gate we are a good start.
Lewis: Yeah, I think if you want to give a quick bio on him, it's basically, in the '80s joined a little known tech company called Oracle and [laughs] wound up seeing a lot of success there. In the '90s, as you mentioned, founded Siebel Systems, went on to then sell that to Oracle, coincidentally enough, for just under $6 billion. So, this is someone who has been in the tech space, has seen a lot of evolutions in tech, has created successful businesses before, and it's nice when you can invest along a leadership team that has that track record.
Feroldi: And one thing that you have to love about people like this, I saw this in an interview that I read of his, he basically said he founded this company, because this is my idea of a good time. This is just a person that loves technology, loves business, loves founding companies, and this is what he wants to do. He says this isn't going to change my life financially if this is successful, I am in this because I enjoy it. How do you not love that if you're an investor?
Lewis: [laughs] Yeah, I saw the quote, it was like, I'm going to have the same car, I'm going to have the same house, basically regardless of what happens with this business. I'm doing this because I love to do it. And you know, what more could you ask for? I mean, that's passion and that says, you know, he doesn't need the money, but this is what he gets out of bed every morning wanting to do. And I think we can get into a lot of the different things here, but particularly in a space that is -- let's be honest, AI is kind of black-boxy, and it's a little bit [laughs] mysterious, particularly as someone who doesn't have a deep technical knowledge. It's a big stamp of approval when you have a track record like this and you have a successful leadership team, it gives me a lot more confidence investing in a space where I don't know if I have a technical edge.
Feroldi: And I feel the same way. AI is complex! and we are still so early on. And it's hard to even fathom the number of companies that are investing in AI technology right now. Who's going to win? Who's going to be the market share leader? What's AI going to look like? My best guess right now would be that there's not going to be one winner, I think there's going to be maybe a dozen winners, because the opportunity for AI is so huge. When it comes to things like that, one nice shortcut that I like is say, all right, who are the people in this industry that I respect, [laughs] that I trust, that have an eye for this kind of thing? No doubt in my mind, Siebel is the guy.
Lewis: Yeah. And why we have this company now, I think, is really foresight that he had about 10, 11 years ago, realizing that this is where the industry was going. And one of the things I really like about him as a leader is that he has recognized the major technological shifts as they've happened, he's been in the industry for decades at this point. And it seems like he is someone who likes to ride the hot hand and understand where money is going and where the industry is going. This business is really built on capitalizing on that, because we are still in the infancy.
Feroldi: And because we're so early on in the infancy, what's the most important thing at this stage of the game? Talent. You just want to attract and retain the smartest people that you can. Period. How do you do that? You create a fantastic culture that people want to work at. Thomas Siebel has the name and he has created the culture, as we'll get to later, that attracts people to the organization, that allows them to pick the best and the brightest and be extremely picky with defending their corporate culture. That I think is in advance for this company.
Lewis: It's a huge edge, and you need that talent if you're in a space like this. And frankly, [laughs] the talent is going to be expensive, but it's probably going to be worth it when you're building out their products. Speaking of, why don't we talk a little bit about what the company does here? They are operating on the enterprise side, you know, they are a software provider. And I'm going to steal directly from their website here to explain them: Enterprise AI is a category of enterprise software that harnesses advanced AI techniques to drive digital transformation. Developing and deploying enterprise AI at scale requires a new technology stack. The last part of that, not so relevant, but I copy-and-pasted, Brian, and we wind up [laughs] with it live, so there it is.
But put another way, this business offers Software-as-a-Service applications that enable rapid deployment of enterprise AI applications, and wind up basically being able to provide businesses the keys to a lot of AI apps, but then also make sense of things on their own within the AI suite that that business maintains.
Feroldi: Yeah, it's a little bit complex, but I think you nailed the most important points. This is a Software-as-a-Service company that, if you are an enterprise and you're interested in deploying AI in your company to make better decisions, C3.ai allows you to do that. They offer almost like an online app store where you can go in and plug-and-play and use different applications to find the information that you need and process massive amounts of data. At the end of the day it's all about decision-making, that's the real promise of AI at enterprise level. And C3.ai, in theory, [laughs] makes it easy for companies to do that.
Lewis: Yeah, they have the AI suite, which is an app development and runtime environment that basically allows customers to do what they want, allows them to design, develop and kind of have this environment to work within. Then they have the AI apps, which is a little bit like the iOS Store or the Google Play Store that we would be familiar with, it's kind of an easy ecosystem way to understand. And that comes with a lot of benefits, you know, if you create a marketplace in, kind of, a developer environment, there are a lot of really nice benefits that come with that, some network effects and some nice tailwinds that come with that as well.
They have a third segment I'm, admittedly, not as familiar with, Brian.
Feroldi: Yeah, they call it Ex Machina, however you pronounce it, but essentially, it's a no-code platform that allows non-data scientists to rapidly use AI to build things, to configure them. My best analogy would be, it's similar to -- what's the company that everyone at The Fool loves?
Lewis: Twilio.
Feroldi: No. I'm totally blanking on the name. The no-code platform for building software products; why am I blanking on this company ...
Lewis: ... oh, Appian?
Feroldi: Appian! Geez! That took way too long for me to get out. Appian. Appian is a no- or extremely low-code solution for building applications. This product tool seems to be a no- or low-code tool for making AI modules.
Lewis: You mentioned the decision-making part of this. And I think what's interesting is, you know, you look at the first couple of pages of any company's prospectus and you're going to see what they want to highlight, what they really want to get out there front-and-center. There's going to be a pretty graphic, the numbers are going to be huge. The numbers that we're seeing for this one are a little different in terms of metrics than what we might be used to seeing from companies. Front-and-center on their S-1: 1.1 billion predictions per day, 4.8 million machine learning models in production use, and 622 million sensors generating data for the C3.ai suite. That's a massive scale given how small this company is in a lot of ways, but it kind of [laughs] speaks to the way that they're looking at things.
Feroldi: And that's important what you said, in the way that they're looking things. They look at themselves as "the world's largest enterprise AI production footprint" they believe that that's an advantage that they have, or essentially, they're operating at scale in this environment. I don't know if that is a correct statement, because I know a little bit about a little company called Google, [Alphabet] I hear they're OK at AI. But you know, this company is, as you said, putting front-and-center that they are already operating at scale, that makes them an attractive choice.
Lewis: Yeah, and for them, we were talking about it before, this is SaaS, so it all rolls up into a subscription revenue model. They also have a Professional Services segment, but the subscription revenue is about 85% of the topline. They use a couple of different interesting strategies here, Brian, when it comes to acquiring customers and maintaining customers. And I think I want to start there before we get too deep into the financials.
But one of the things that I think is really interesting is they have this lighthouse strategy. And so for them, they go out there and they say, we're going to focus on the big industry stalwarts, the people that have huge use cases for our technology and the people that, if others see us being used by them are going to be wanting to be customers, they're basically proof-of-concept type customers. And so, they don't have a lot of customers at the moment, but they are using this approach. And I think they're using it because, what we're talking about, in terms of the space and the benefits, are kind of hard to wrap your head around otherwise.
Feroldi: Yes. And that's a shortcut that many of the companies -- or that's the strategy, as you said, they're going after the big, the industry leaders. And when they're entering a new industry vertical, they want to start at the top, and if they can land that big customer, that gives them almost like permission or street credibility to land a lot of customers that are smaller. So, they have already landed AstraZeneca in the pharmaceutical space, Raytheon in the defense base, Con Edison in the utility space, the United States Airforce, they have numerous of these big contracts already in place. And they are also signed to multiyear deals. When you sign up with C3.ai, you typically sign a three-year contract.
Because of this strategy, their sales growth and their sales cycle is extremely long. They have to spend a ton of resources to land that first customer. And it takes them a long time from initial contact with the customer to actually become a paying customer to convert them. So, that's a risk for investors to watch right now. However, I could very easily see all of those numbers trending in the right direction because of this strategy. They basically front-load all of the hard work in an industry, and after they nail that, after they landed that lighthouse customer, the selling becomes easier from there.
Lewis: Yeah. And I've seen some estimates on what that sales cycle looks like for them. At one point, I think like, 13 months or something like that on average. I believe it's been consolidated a little bit down to the single-digits in terms of months now. Some of that is sales expertise, some of that is them being able to, kind of, speak the language and better structure deals, make those integrations happen a little bit earlier, and some of it's just people being able to wrap their head around the benefits that this business is offering. But once they get in the door, it is the more classic land-and-expand strategy that you expect to see from a Software-as-a-Service provider.
Feroldi: Yeah, as we said at the top of the show, this is a Software-as-a-Service company that comes with all the usual benefits that we absolutely love about the space. Getting your foot in the door, extremely hard, extremely costly. Once you're in, companies tend to become very reliant on your products and you just become another ongoing operating expense for them. Moreover, that tends to lead to expansion of revenue opportunities over time. So, they have numerous use cases that they point out, where they landed a customer at, let's say, $10 million in contract revenue, and they quickly boosted up to over $30 million. So, that's the tried-and-true formula that we love to see with SaaS stocks.
Lewis: Yeah. The downside with the long sales cycle is that it takes a while to bring someone on and there's a lot of upfront investment when it comes to getting customers. The upside is, [laughs] once they're there, you know, you don't want to have to go through that process again every three or four years with a new supplier. So, if you're happy with what you've got, you are probably going to stick around, particularly if the product is useful. And what we've seen with some of their customer metrics is that that is the case. They note that with their 15 largest customers, overall spend has on average expanded to 3X the initial contract that they signed. So, that's what we have in terms of expansion.
The one thing I have as, kind of, a frustration with this business, Brian, and we'll get into this a little bit more when we talk about some of the key business metrics, is we don't get the typical dollar-based net expansion or retention rate number that we would expect to get from a Software-as-a-Service provider.
Feroldi: It's really interesting that they're breaking with industry norms here, and they've basically come out and say, we're not providing you with revenue retention, we're not providing you with any of this. You know that metric that you all love, yeah, we're not giving you that. The logic behind them holding that back is that they admit, we only have a few dozen customers at this point and what the decision of any one customer is would wildly make that metric -- would wildly inflate or deflate that metric. So, I agree with that. I think that the volatility of that number would be extreme. And we've seen with SaaS companies, investors are so laser-focused on that number that if this company came public, and it was 170% one quarter and then 102% the next quarter, their stock would get absolutely crushed. So, they seem to be holding that closer to the vest and saying, pay attention to our remaining performance obligations as well as our revenue, don't so much look at that number yet.
Hopefully, in time, as their customer count grows, they'll start to provide that to us, but for now, they're not.
Lewis: So, what we get instead with this company is RPO, which is something that we're probably going to have to unpack a little bit, but it's their Remaining Performance Obligations. And this is basically contracted future revenue that has not yet been recognized. You can, kind of, put two different numbers together and get it, it's a look at deferred revenue plus the added value of a non-cancellable contract. Which is nice, because you know, that money is pretty much money in the bank, it's not going anywhere.
But basically, the easiest way to think about this is, RPO increases when they sign new customers and when existing customers expand their relationship, and it decreases when revenue is being recognized on existing contracts during a period. So, in a perfect world, I think this number is continuing to go up over time, [laughs] because it shows that they are getting more commitments and they are onboarding new customers. We have some sense of how it is tracked over time, but because of how low their customer count is, it is a little bit of a lumpy number, Brian.
Feroldi: It definitely is lumpy, and particularly in 2020, that makes sense to me. This seems like a software product that, again, is really hard to wrap your head around upfront, so I can imagine this company having to go through a tremendous sales process to really land a customer. That was made much harder because of COVID, you can't do as many in-person meetings and this kind of thing. I have a hard time getting a CIO to sign the dotted line over a Zoom meeting, I would guess [laughs] they want to have a relationship with the person for months ahead of time. So, we did see this number slowed down significantly in 2020. If this company is the real deal, I could easily see this number starting to reinflate in 2021 and beyond.
Lewis: Yeah. So, what we have in terms of year-over-year-over-year, the easiest one to look at is the July period for reporting. In 2018, this RPO was $123 million. In 2019, $295 million. And now in July 2020, $275 million. But a couple of contracts can swing that pretty wildly. And so, you know, if they wind up onboarding several new clients in a relatively short period of time, that number is going to be posting back over to year-over-year growth fairly quickly.
Feroldi: Yeah. And just put some percentages on that. So, in July of 2019, 140% year-over-year growth. July of 2020, -7% year-over-year growth. So, we'll have to see if once the world opens back up, if they can get this number humming in the right direction again.
Lewis: So, when we actually look at what this turns into in terms of the [laughs] company's financials, because I guess we can kind of get away from some of the core business and idiosyncratic ways that they look at their company. 2020 is their most recent full fiscal year, they posted revenue of $157 million, up 71% year-over-year, Brian, which is actually an acceleration from where they were in 2019.
Feroldi: Yeah. Good to see strong topline growth, the thing we love about all SaaS companies are, most of them have very strong gross margins too. In this case, 75% gross margin. Keep in mind that a good chunk of their revenue is earned from services, or at least 14%, so that is going to act as a natural drag on the gross margin. So, really good to see that at this stage of the game, they're already at 75%. And that figure was up 800 basis points over the prior year. No surprise, given everything we just said about sales and marketing, that the company is operating at a huge [laughs] net loss. Last year, their net loss was about $70 million on $157 million in revenue. I can see that number rapidly improving over time, but for right now, make no mistake, this company is setting fire to capital.
Lewis: Yeah, this is a classic story of let's get to scale, the margin profile looks really strong if we get to a certain size and we're going to be able to become profitable, particularly when you have some long-term contracts that can really assure that the spend is going to continue to be there. One note I will make on that RPO number that we threw out there, while it does take the vast majority of their revenue into account, their future revenue into account, there are revenue sources for that business that aren't going to be captured by that metric. So, you know, it's probably going to be the thing that we track most closely as we watch this company, but it doesn't necessarily factor in everything. And so, that's where you get into some of the services stuff and some of the overages and, kind of, usage things that come with the contract actually being fulfilled.
Feroldi: And you also shouldn't be too scared about the company's net losses at this stage of the game. They do plan to raise about $500 million at the IPO, at a roughly $4 billion valuation. When you add in the cash they had prior to the IPO, of over $100 million, they're going to have plenty of liquidity to get them where they need to go. But you just need to know at the beginning that the company is still losing money.
Lewis: Still losing money, but in a pretty good cash position, going to be pretty flexible, and I have to trust management to be correctly allocating capital here. You know, when you have someone that has successfully run a business that is already bigger than what this company currently is. You know, Siebel Systems, I believe was just under $6 billion acquisition, I think at IPO this is going to be about a $4 billion business. So, it's not [laughs] like this is his first time running a company of this size.
Feroldi: And I could see this very quickly after IPO being much bigger than a $4 billion business, given what we've seen what have happened to tech valuations this year, so, but to your point, yes, the management team here does have the pedigree to run a company of this size.
Lewis: So, we talked a little bit about just some of the core business model elements that lend themselves to, kind of, having a moat and having a little bit of insulation from competition, despite there being a lot of people in the space and a lot of very deep-pocketed players that have existing infrastructure deals with a lot of people that might be interested in these types of products, it's not the only thing, though, I think that's insulating them from competitive pressure.
Feroldi: So, the switching costs are definitely, I would say, the No. 1 thing here, but they also have numerous data integrations, as well as, relationship with some of the biggest companies in the industry to deploy their products. So, they have a relationship with Adobe, Amazon, Baker Hughes in the oil and gas, Fidelity National Information Services in financial services, Google, IBM, Microsoft, Raytheon, and as I said, 770 unique data integrations, that makes it very easy to get your information onto their platform, and those are certainly some big guns that are partnering with this company.
Lewis: Yeah. And I think, I try not to over-index to management, but I think that this is one of those businesses where management, leadership, and culture are kind of an X factor that gives it an edge. And it's such a hard thing to quantify. We use some shorthand to try to get a sense of what a company is like, but I think Siebel's pedigree and what we see when we look at Glassdoor for this business, are things that are going to help them continue to retain talent and acquire new talent in spaces as they need to.
Feroldi: I agree. I mean, as I said at the top of the show, the AI industry is still so early about what it could become in time. So, I think that having a leadership team and a culture at this stage of the game is especially important, and Siebel historically has definitely been someone to bet on. I also really like his motivations. The thing that I look at when I'm looking at inside ownership and culture is, I'm trying to assess does the CEO here have soul in the game? Like, do they care about this company succeeding more than just for financial reasons? Now, financial reasons indicate that the management team cares about the success of the company, but this guy was already a billionaire, I totally believe him that he is not [laughs] founding this company just for the sake of the money, like, what's he going to do with a couple more billion dollars? I truly believe that he generally enjoys building businesses and he generally cares about the company and the corporation that he's making. So, I really like that.
Lewis: Yeah. And when I look at the way that the voting structure and ownership structure is set up, like, he owns 30% of the company, he is going to benefit financially [laughs] if the company does well, but I think crucially, he has over 70% voting power. And so, if you have someone who is really driven, really motivated and holds the keys, you know that they are going to be able to follow his playbook without too much intervention.
Feroldi: Exactly. Plus, his name himself, I think that he can buy himself a whole lot of goodwill with Wall Street. I mean, how badly would this company be getting roasted right now if they said, oh, we're not going to provide a net-dollar retention rate, right? But this is a company that I think is going to get away with that with no problem because of who the CEO is here, so.
And if you look at Glassdoor, the numbers are spectacular. 4.6 stars out of 5. 90% approve of the CEO. And even in their S-1, they called that they got over 50,000 job applications last year and they took about 200 of them. So, that shows you that top talent wants to work at this company and they can be extraordinarily picky with who they hire.
Lewis: Yeah. Smart people want to solve big challenges, right? That's what it comes down to. If you're providing people with a space where they have freedom and flexibility and they're able to go after really big hairy things, then they are going to generally enjoy doing that. And so, I think that they've cracked that well.
That's not to say that there aren't risks with this business. And we talked about where they are in terms of revenue right now, you know, $150 million-ish for their fiscal year. They do not have a lot of customers at this point, and I think customer concentration risk, in particular, is a very big risk for this company.
Feroldi: No doubt. I mean, last year or last fiscal year, two customers accounted for more than 10% of revenue. The loss of any one of them would certainly hurt this company financially, so that is a risk for investors to watch. To me, the bigger risk here is just competition. They claim that they are the leader in what they do and they claim that their size and their scale gives them all kinds of advantages, but there are so many unknowns with AI at this point, it's really hard to say if this company is going to be one of the emerging leaders. So far, the numbers that we've seen do suggest that. Will they be able to retain that over the long-term? That's something I don't know. That's why, in many ways, I view this company as more of a jockey play on Siebel than anything else.
Lewis: [laughs] Yeah. And I think that if you have the right leadership team, it's OK to make those bets and just say like, this is a smart person who is positioning the company well to take on a big challenge. I think Siebel is one of those leaders that you can invest alongside relatively comfortably, but you need that. I said at the beginning of the show, particularly if you feel like you're a little bit beyond your depth in a space, and I think AI, you know for me at least is one of those space where it's like, I can't tell who really has the best tech there, I just I can't. So, I need to have the X factor, and he is someone who helps bring that X factor.
Feroldi: Totally. And the other thing that I really like about this IPO is they're planning on coming public at a $4 billion valuation. It's not like this company is already worth $50 billion and it's really hard to justify, really hard to see them growing hugely from here. They're probably going to come public at a very, very high price-to-sales ratio, and I predict that that price-to-sales ratio is going to expand rapidly as soon as these shares come public. But even still, the potential of AI is in the hundreds of billions of dollars, like it's just massive. This company has under $200 million in trailing revenue. If this thesis works out and this company is a leader, I could very easily see this being a multi-bagger from here. And if it's not, you can only lose 90%-ish of your capital, so it's a very asymmetric bet that you can make by buying this company.
Lewis: Yeah, I think they're operating in a high upside space. I kind of like the fact that they've been a private business for about 10 years too. There's an element of them, I think, choosing to go public rather than feeling like they have to go public that I think is kind of nice here. And so, I think that if companies are able to stay private for a little while, it allows them to, kind of, create the culture that they want to create. Obviously, things are going to change a little bit as they go public, but I think when you take seasoned leadership and then you also apply the fact that this business has been allowed to grow in the way that they want to for an extended period of time, that really says a lot about how they're going to be to handle themselves as a publicly traded business.
Feroldi: Yup! And I very much see this IPO as a marketing event for the company. When you become a public company, you get the eyes of people in the business community far more than you were when you are a private company. Once they come public, if they have some success, I could very much see that helping them to retain customers. I mean, they could have easily raised capital in the private markets, at the valuations that they're coming public at, to fund themselves. So, I see that as more of a coming out moment than a, hey, we really need capital to keep this business going moment.
Lewis: All right, Brian, I'm sure the listeners at home are wondering, is this a watchlist stock for you, is this a must-buy stock for you, how are you looking at C3.ai?
Feroldi: I don't think that many things are a must-buy stock for me, and as we've said before, I always like to give companies like this time on the public markets, so that we can see how the culture changes, how management performs. I'm guessing that this company is going to do just fine for public investors, so I could very much see it being high on my watchlist after it comes public. Plus, awesome ticker, right, AI, how can you beat that?
Lewis: [laughs] You'll always know how to pull up the [laughs] stock symbol, you know, I think it's the beauty, but sometimes you really have to jog your brain trying to remember what you should be searching for. I'm with you, I mean, I think that the size that they're coming public at provides pretty decent multi-bagger potential, particularly with the space that they're operating in. I love investing alongside leadership teams that have demonstrated success in the past, I think this is a very classic, you know, you don't need to put much into it, because frankly, if it works out, there's going to be a lot of upside. And if you don't put a lot into it and it doesn't work out, you'll be pretty happy. I think it's one of those types of investments, but how do you feel about that?
Feroldi: One of my favorite investing quotes ever comes from Tom Engle, TMF1000 on the boards, and he says, "If this company is the next great growth stock, a little is all I need. If it's not, a little is all I want." So, to me, it's just that, if you're interested in this, buy a little bit, if it 10-bags, you'll do very, very well, and there's no reason you can't add along the way as it grows. If they get crushed by some other competitor and they become a rounding error in your portfolio.
Lewis: Yeah. Well, Brian, we'll be following up, I'm sure, we need some more details on when this company is actually going public, but thank you and thank @bleurakoon for throwing this one on our radar. We always like getting suggestions for show ideas and topics.
Feroldi: Especially when there are awesome companies.
Lewis: [laughs] Yeah, that makes it even more fun. And frankly, Brian, I will say, I wasn't sure what kind of year 2020 was going to be for IPOs, but it's been an embarrassment of riches, we've had a lot of really great companies come public and we've had a lot of really fun S-1 shows.
Feroldi: We really haven't had the chance to do the normal format that we do here, like, let's talk about three companies in this space or three companies in this space. It's like, every episode we do, it's S-1, S-1, S-1, because there's so many great companies to talk about.
Lewis: Yeah, even today we're like, are we going to be talking about C3.ai or are we going to talk about Roblox? [laughs]
Feroldi: Right. And hopefully we're doing Roblox next week.
Lewis: Yeah, unless something more interesting comes along, in which case, sorry, Roblox. [laughs]
Feroldi: [laughs] No, no, no, Roblox is going to be a very fun company to talk about, that is a product that all three [laughs] of my children are addicted to.
Lewis: [laughs] Well, we have at least three listeners for that episode; Brian, thank you so much for joining me on today's.
Feroldi: Any time, Dylan. Nice to be back.
Lewis: Listeners, that's going to do it for this episode of Industry Focus. If you have any questions or you want to reach out and say, "Hey!" shoot us an email at IndustryFocus@Fool.com or tweet us @MFIndustryFocus. If you're looking for more stuff, subscribe on iTunes or wherever you get your podcasts.
As always, people on the program may own companies discussed on the show, and The Motley Fool may have formal recommendations for or against stocks mentioned, so don't buy or sell anything based solely on what you hear.
Thanks to Tim Sparks for all his work behind the glass today, and thank you for listening. Until next time, Fool on!
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. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool's board of directors. Brian Feroldi owns shares of Adobe Systems, Alphabet (A shares), Alphabet (C shares), Amazon, Appian, IBM, Microsoft, and Twilio. The Motley Fool owns shares of and recommends Adobe Systems, Alphabet (A shares), Alphabet (C shares), Amazon, Appian, Datadog, Lemonade, Inc., Microsoft, Twilio, Twitter, and Zoom Video Communications and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. 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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It's a big stamp of approval when you have a track record like this and you have a successful leadership team, it gives me a lot more confidence investing in a space where I don't know if I have a technical edge. Some of that is sales expertise, some of that is them being able to, kind of, speak the language and better structure deals, make those integrations happen a little bit earlier, and some of it's just people being able to wrap their head around the benefits that this business is offering. As always, people on the program may own companies discussed on the show, and The Motley Fool may have formal recommendations for or against stocks mentioned, so don't buy or sell anything based solely on what you hear.
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But put another way, this business offers Software-as-a-Service applications that enable rapid deployment of enterprise AI applications, and wind up basically being able to provide businesses the keys to a lot of AI apps, but then also make sense of things on their own within the AI suite that that business maintains. Brian Feroldi owns shares of Adobe Systems, Alphabet (A shares), Alphabet (C shares), Amazon, Appian, IBM, Microsoft, and Twilio. The Motley Fool owns shares of and recommends Adobe Systems, Alphabet (A shares), Alphabet (C shares), Amazon, Appian, Datadog, Lemonade, Inc., Microsoft, Twilio, Twitter, and Zoom Video Communications and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon.
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But put another way, this business offers Software-as-a-Service applications that enable rapid deployment of enterprise AI applications, and wind up basically being able to provide businesses the keys to a lot of AI apps, but then also make sense of things on their own within the AI suite that that business maintains. Lewis: So, when we actually look at what this turns into in terms of the [laughs] company's financials, because I guess we can kind of get away from some of the core business and idiosyncratic ways that they look at their company. Feroldi: We really haven't had the chance to do the normal format that we do here, like, let's talk about three companies in this space or three companies in this space.
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But put another way, this business offers Software-as-a-Service applications that enable rapid deployment of enterprise AI applications, and wind up basically being able to provide businesses the keys to a lot of AI apps, but then also make sense of things on their own within the AI suite that that business maintains. Now, financial reasons indicate that the management team cares about the success of the company, but this guy was already a billionaire, I totally believe him that he is not [laughs] founding this company just for the sake of the money, like, what's he going to do with a couple more billion dollars? Feroldi: I don't think that many things are a must-buy stock for me, and as we've said before, I always like to give companies like this time on the public markets, so that we can see how the culture changes, how management performs.
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dccb13ac-1b7e-4989-9451-d2c57e7ad798
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718937.0
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2020-12-07 00:00:00 UTC
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DDOG Crosses Above Average Analyst Target
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DDOG
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https://www.nasdaq.com/articles/ddog-crosses-above-average-analyst-target-2020-12-07
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nan
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nan
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In recent trading, shares of Datadog Inc (Symbol: DDOG) have crossed above the average analyst 12-month target price of $99.78, changing hands for $101.57/share. When a stock reaches the target an analyst has set, the analyst logically has two ways to react: downgrade on valuation, or, re-adjust their target price to a higher level. Analyst reaction may also depend on the fundamental business developments that may be responsible for driving the stock price higher — if things are looking up for the company, perhaps it is time for that target price to be raised.
There are 14 different analyst targets contributing to that average for Datadog Inc, but the average is just that — a mathematical average. There are analysts with lower targets than the average, including one looking for a price of $50.00. And then on the other side of the spectrum one analyst has a target as high as $126.00. The standard deviation is $19.327.
But the whole reason to look at the average DDOG price target in the first place is to tap into a "wisdom of crowds" effort, putting together the contributions of all the individual minds who contributed to the ultimate number, as opposed to what just one particular expert believes. And so with DDOG crossing above that average target price of $99.78/share, investors in DDOG have been given a good signal to spend fresh time assessing the company and deciding for themselves: is $99.78 just one stop on the way to an even higher target, or has the valuation gotten stretched to the point where it is time to think about taking some chips off the table? Below is a table showing the current thinking of the analysts that cover Datadog Inc:
RECENT DDOG ANALYST RATINGS BREAKDOWN
» Current 1 Month Ago 2 Month Ago 3 Month Ago
Strong buy ratings: 7 6 8 7
Buy ratings: 1 0 1 1
Hold ratings: 10 7 8 7
Sell ratings: 0 0 0 0
Strong sell ratings: 0 0 0 0
Average rating: 2.17 2.08 2.0 2.0
The average rating presented in the last row of the above table above is from 1 to 5 where 1 is Strong Buy and 5 is Strong Sell. This article used data provided by Zacks Investment Research via Quandl.com. Get the latest Zacks research report on DDOG — FREE.
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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In recent trading, shares of Datadog Inc (Symbol: DDOG) have crossed above the average analyst 12-month target price of $99.78, changing hands for $101.57/share. But the whole reason to look at the average DDOG price target in the first place is to tap into a "wisdom of crowds" effort, putting together the contributions of all the individual minds who contributed to the ultimate number, as opposed to what just one particular expert believes. And so with DDOG crossing above that average target price of $99.78/share, investors in DDOG have been given a good signal to spend fresh time assessing the company and deciding for themselves: is $99.78 just one stop on the way to an even higher target, or has the valuation gotten stretched to the point where it is time to think about taking some chips off the table?
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In recent trading, shares of Datadog Inc (Symbol: DDOG) have crossed above the average analyst 12-month target price of $99.78, changing hands for $101.57/share. But the whole reason to look at the average DDOG price target in the first place is to tap into a "wisdom of crowds" effort, putting together the contributions of all the individual minds who contributed to the ultimate number, as opposed to what just one particular expert believes. And so with DDOG crossing above that average target price of $99.78/share, investors in DDOG have been given a good signal to spend fresh time assessing the company and deciding for themselves: is $99.78 just one stop on the way to an even higher target, or has the valuation gotten stretched to the point where it is time to think about taking some chips off the table?
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And so with DDOG crossing above that average target price of $99.78/share, investors in DDOG have been given a good signal to spend fresh time assessing the company and deciding for themselves: is $99.78 just one stop on the way to an even higher target, or has the valuation gotten stretched to the point where it is time to think about taking some chips off the table? In recent trading, shares of Datadog Inc (Symbol: DDOG) have crossed above the average analyst 12-month target price of $99.78, changing hands for $101.57/share. But the whole reason to look at the average DDOG price target in the first place is to tap into a "wisdom of crowds" effort, putting together the contributions of all the individual minds who contributed to the ultimate number, as opposed to what just one particular expert believes.
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In recent trading, shares of Datadog Inc (Symbol: DDOG) have crossed above the average analyst 12-month target price of $99.78, changing hands for $101.57/share. But the whole reason to look at the average DDOG price target in the first place is to tap into a "wisdom of crowds" effort, putting together the contributions of all the individual minds who contributed to the ultimate number, as opposed to what just one particular expert believes. And so with DDOG crossing above that average target price of $99.78/share, investors in DDOG have been given a good signal to spend fresh time assessing the company and deciding for themselves: is $99.78 just one stop on the way to an even higher target, or has the valuation gotten stretched to the point where it is time to think about taking some chips off the table?
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ea816876-9c2c-41bc-9576-71f1215850f1
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718938.0
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2020-12-03 00:00:00 UTC
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PSJ, SHOP, DDOG, ATVI: ETF Inflow Alert
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DDOG
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https://www.nasdaq.com/articles/psj-shop-ddog-atvi%3A-etf-inflow-alert-2020-12-03
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nan
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nan
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Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the Invesco Dynamic Software ETF (Symbol: PSJ) where we have detected an approximate $175.2 million dollar inflow -- that's a 31.5% increase week over week in outstanding units (from 3,970,000 to 5,220,000). Among the largest underlying components of PSJ, in trading today Shopify Inc (Symbol: SHOP) is up about 2.2%, Datadog Inc (Symbol: DDOG) is up about 4.4%, and Activision Blizzard, Inc. (Symbol: ATVI) is higher by about 0.5%. For a complete list of holdings, visit the PSJ Holdings page » The chart below shows the one year price performance of PSJ, versus its 200 day moving average:
Looking at the chart above, PSJ's low point in its 52 week range is $70.36 per share, with $143.25 as the 52 week high point — that compares with a last trade of $143.05. Comparing the most recent share price to the 200 day moving average can also be a useful technical analysis technique -- learn more about the 200 day moving average ».
Exchange traded funds (ETFs) trade just like stocks, but instead of ''shares'' investors are actually buying and selling ''units''. These ''units'' can be traded back and forth just like stocks, but can also be created or destroyed to accommodate investor demand. Each week we monitor the week-over-week change in shares outstanding data, to keep a lookout for those ETFs experiencing notable inflows (many new units created) or outflows (many old units destroyed). Creation of new units will mean the underlying holdings of the ETF need to be purchased, while destruction of units involves selling underlying holdings, so large flows can also impact the individual components held within ETFs.
Click here to find out which 9 other ETFs had notable inflows »
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 largest underlying components of PSJ, in trading today Shopify Inc (Symbol: SHOP) is up about 2.2%, Datadog Inc (Symbol: DDOG) is up about 4.4%, and Activision Blizzard, Inc. (Symbol: ATVI) is higher by about 0.5%. For a complete list of holdings, visit the PSJ Holdings page » The chart below shows the one year price performance of PSJ, versus its 200 day moving average: Looking at the chart above, PSJ's low point in its 52 week range is $70.36 per share, with $143.25 as the 52 week high point — that compares with a last trade of $143.05. These ''units'' can be traded back and forth just like stocks, but can also be created or destroyed to accommodate investor demand.
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Among the largest underlying components of PSJ, in trading today Shopify Inc (Symbol: SHOP) is up about 2.2%, Datadog Inc (Symbol: DDOG) is up about 4.4%, and Activision Blizzard, Inc. (Symbol: ATVI) is higher by about 0.5%. For a complete list of holdings, visit the PSJ Holdings page » The chart below shows the one year price performance of PSJ, versus its 200 day moving average: Looking at the chart above, PSJ's low point in its 52 week range is $70.36 per share, with $143.25 as the 52 week high point — that compares with a last trade of $143.05. Comparing the most recent share price to the 200 day moving average can also be a useful technical analysis technique -- learn more about the 200 day moving average ».
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Among the largest underlying components of PSJ, in trading today Shopify Inc (Symbol: SHOP) is up about 2.2%, Datadog Inc (Symbol: DDOG) is up about 4.4%, and Activision Blizzard, Inc. (Symbol: ATVI) is higher by about 0.5%. Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the Invesco Dynamic Software ETF (Symbol: PSJ) where we have detected an approximate $175.2 million dollar inflow -- that's a 31.5% increase week over week in outstanding units (from 3,970,000 to 5,220,000). For a complete list of holdings, visit the PSJ Holdings page » The chart below shows the one year price performance of PSJ, versus its 200 day moving average: Looking at the chart above, PSJ's low point in its 52 week range is $70.36 per share, with $143.25 as the 52 week high point — that compares with a last trade of $143.05.
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Among the largest underlying components of PSJ, in trading today Shopify Inc (Symbol: SHOP) is up about 2.2%, Datadog Inc (Symbol: DDOG) is up about 4.4%, and Activision Blizzard, Inc. (Symbol: ATVI) is higher by about 0.5%. Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the Invesco Dynamic Software ETF (Symbol: PSJ) where we have detected an approximate $175.2 million dollar inflow -- that's a 31.5% increase week over week in outstanding units (from 3,970,000 to 5,220,000). For a complete list of holdings, visit the PSJ Holdings page » The chart below shows the one year price performance of PSJ, versus its 200 day moving average: Looking at the chart above, PSJ's low point in its 52 week range is $70.36 per share, with $143.25 as the 52 week high point — that compares with a last trade of $143.05.
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3da18171-596e-4996-907f-4a6c51019372
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718939.0
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2020-12-02 00:00:00 UTC
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Is Palantir's Stock Getting Too Hot to Handle?
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DDOG
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https://www.nasdaq.com/articles/is-palantirs-stock-getting-too-hot-to-handle-2020-12-02
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nan
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nan
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Palantir (NYSE: PLTR), a data-mining firm that generates most of its revenue from government contracts, went public via a direct listing in late September. The New York Stock Exchange set a reference price of $7.25 per share for the stock, and it closed at $9.50 on its first trading day.
However, Palantir's stock subsequently traded sideways as insiders sold tens of millions of shares. Those sales weren't surprising, since direct listings let private shareholders sell their shares to public investors. That's different from a traditional IPO, in which new shares are issued and sold.
But in early November, Palantir's stock started climbing ahead of the release of its third-quarter report on Nov. 12. After Palantir posted those numbers, the stock price surged to the low $30s by the end of November before pulling back to the low $20s currently.
Palantir's growth rates are impressive, but is the stock getting too hot to handle after tripling (at least temporarily) in just over two months? Let's review its growth rates and valuations to decide.
Image source: Getty Images.
How fast is Palantir growing?
Palantir's revenue rose 25% to $743 million for the full year in 2019. But in the first nine months of 2020, its revenue rose 50% year over year to $771 million.
During that period, 55% of its revenue came from Gotham, its platform for government agencies. The remaining 45% came from Foundry, a version for large companies that carves its features up into smaller modules. Both platforms operate by gathering and organizing data on individuals through disparate sources.
Image source: Getty Images.
During the first nine months, Palantir's revenue from Gotham rose 73% year over year. That growth was mainly attributed to several recent deals, including a $91 million artificial intelligence (AI) contract with the U.S. Army and a $36 million contract with the U.S. National Institutes of Health for cancer and coronavirus research. It also noted its work with federal healthcare organizations had "accelerated" throughout the pandemic.
Palantir's revenue from Foundry rose 30% year over year. It secured a $300 million renewal from a top aerospace customer and noted its software was increasingly used to optimize operations across the "automotive, manufacturing, aviation, healthcare, and banking sectors" during the pandemic. Foundry's robust growth was encouraging since the enterprise market arguably has more long-term growth potential than its walled garden of government contracts.
It isn't profitable, but its margins are improving
Palantir's net loss narrowed slightly from $580 million in 2018 to $579.6 million in 2019. In the first nine months of 2020, its net loss widened from $420.3 million to a whopping $1.02 billion -- mainly due to stock-based compensation expenses and its direct listing costs.
However, Palantir's adjusted gross margin, which excludes those expenses, actually expanded year over year from 71% to 79% during the first nine months. On the same basis, it posted a positive operating margin of 25% in the third quarter -- up from a negative operating margin of 48% a year ago.
This means that Palantir's net losses could gradually narrow after it moves past the initial costs of its public debut, but it probably won't turn profitable on a GAAP basis anytime soon.
Is Palantir's stock overvalued?
Palantir expects its revenue to rise by 44% to $1.07 billion for the full year. It hasn't offered any guidance beyond that, but analysts expect its revenue to rise 32% to $1.41 billion next year.
Based on those forecasts and a stock price of $27, Palantir's stock trades at 48 times this year's sales and 36 times next year's sales. Here's how that price-to-sales ratio compares to two other silo-busting companies with similar revenue growth rates, JFrog (NASDAQ: FROG) and Datadog (NASDAQ: DDOG):
COMPANY
REVENUE GROWTH
(CURRENT FISCAL YEAR)
REVENUE GROWTH
(NEXT FISCAL YEAR)
P/S RATIO
(NEXT FISCAL YEAR)
Palantir
44%
32%
36
JFrog
43%
31%
33
Datadog
63%
36%
25
Source: Yahoo Finance, Dec. 1.
Palantir's valuation looks comparable to JFrog's and only a bit pricier than Datadog's. Therefore, Palantir was merely catching up to those hot IPOs over the past two months after its initial wave of insider selling. JFrog and Datadog both went public via traditional IPOs and skyrocketed on the first day.
I recently noted JFrog's stock was getting too hot to handle at these levels, however, and the same should now be said about Palantir. Paying over 30 times sales for an unprofitable company with decelerating revenue growth is risky in this frothy market, especially when some companies with comparable growth rates are trading at lower valuations.
For example, analysts expect Alibaba's (NYSE: BABA) revenue and earnings to rise 31% and 21%, respectively, next year. But the Chinese giant's stock still trades at 29 times forward earnings and five times next year's sales -- which makes it much cheaper than Palantir.
I'm not selling, but I'm not buying right now either
I bought all my shares of Palantir below $10 back in September, and I didn't add any more shares over the past two months. I won't sell my shares anytime soon, since I still admire Palantir's long-term growth potential, but I also won't add more shares right now -- there's already too much optimism baked into the stock.
10 stocks we like better than Palantir Technologies Inc.
When investing geniuses David and Tom Gardner have 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.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Palantir Technologies 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 November 20, 2020
Leo Sun owns shares of Palantir Technologies Inc. The Motley Fool owns shares of and recommends Alibaba Group Holding Ltd. 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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Here's how that price-to-sales ratio compares to two other silo-busting companies with similar revenue growth rates, JFrog (NASDAQ: FROG) and Datadog (NASDAQ: DDOG): Palantir (NYSE: PLTR), a data-mining firm that generates most of its revenue from government contracts, went public via a direct listing in late September. It secured a $300 million renewal from a top aerospace customer and noted its software was increasingly used to optimize operations across the "automotive, manufacturing, aviation, healthcare, and banking sectors" during the pandemic.
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Here's how that price-to-sales ratio compares to two other silo-busting companies with similar revenue growth rates, JFrog (NASDAQ: FROG) and Datadog (NASDAQ: DDOG): During the first nine months, Palantir's revenue from Gotham rose 73% year over year. Based on those forecasts and a stock price of $27, Palantir's stock trades at 48 times this year's sales and 36 times next year's sales.
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Here's how that price-to-sales ratio compares to two other silo-busting companies with similar revenue growth rates, JFrog (NASDAQ: FROG) and Datadog (NASDAQ: DDOG): During the first nine months, Palantir's revenue from Gotham rose 73% year over year. Based on those forecasts and a stock price of $27, Palantir's stock trades at 48 times this year's sales and 36 times next year's sales.
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Here's how that price-to-sales ratio compares to two other silo-busting companies with similar revenue growth rates, JFrog (NASDAQ: FROG) and Datadog (NASDAQ: DDOG): Based on those forecasts and a stock price of $27, Palantir's stock trades at 48 times this year's sales and 36 times next year's sales. Palantir 44% 32% 36 JFrog 43% 31% 33 Datadog 63% 36% 25 Source: Yahoo Finance, Dec. 1.
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a2c502c5-2212-4ec9-9870-ee6b9af43f15
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718940.0
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2020-11-25 00:00:00 UTC
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4 Growth Stocks Billionaires Can't Stop Buying
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DDOG
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https://www.nasdaq.com/articles/4-growth-stocks-billionaires-cant-stop-buying-2020-11-25
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nan
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nan
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November has been busy for Wall Street and investors. The first half of the month was spent digesting the outcome of the U.S. election, with coronavirus disease 2019 (COVID-19) vaccine results dominating the conversation over the past two weeks. There have been so many headlines that it's been easy to overlook important news or events.
Monday, Nov. 16, was arguably the most important day of the month for the investing community. That's when investment firms with more than $100 million in assets under management were required to file Form 13F with the Securities and Exchange Commission. In simple terms, 13Fs provide an under-the-hood look at what the brightest money managers have been up to in the most recent quarter.
This 13F round showed that billionaire money managers remain very much captivated by growth stocks. Here are four that billionaires can't stop buying.
Image source: Getty Images.
Datadog
Software-as-a-service (SaaS) stock Datadog (NASDAQ: DDOG) saw 13F filers and billionaires pile in for the ride. Aggregate ownership among 13F filers increased by more than 11 million shares (8.8%) from the sequential quarter, with Gabe Plotkin's Melvin Capital Management opening a 2.88-million-share position and Larry Fink's BlackRock adding over 3 million shares to its existing stake.
Why the love for SaaS stocks like Datadog? The answer boils down to post-pandemic changes. With consumers shopping online and many businesses operating remotely, the reliance on cloud-based applications, especially when it comes to sharing and overseeing data, has grown exponentially.
Datadog, which provides cloud-based application monitoring services, delivered 61% sales growth in the third quarter, and more importantly had over 1,100 customers generating $100,000 or more in annual recurring revenue. Datadog's solutions are resonating with growing businesses, pushing the company firmly into the adjusted profitability column.
Datadog is pricey, but looks to be well worth the premium billionaires are paying.
Image source: Pinterest.
Pinterest
The social media space may be competitive, but up-and-comer Pinterest (NYSE: PINS) has certainly caught the attention of billionaire money managers. By the end of the third quarter, 13F filers had added almost 40 million shares from Q2 2020, with Melvin Capital tacking on 7.62 million shares to an existing position and Dan Loeb's Third Point initiating a 3.58-million-share stake.
What continues to stand out about Pinterest is the company's ability to tack on new monthly active users (MAU). Whereas most social platforms eventually run into a user growth wall, Pinterest was growing its MAUs at a 30% clip prior to the pandemic, and an even more robust rate with folks stuck in their homes. While a majority of these new users are from international markets and therefore generate much lower average revenue per user when compared to U.S. MAUs, these overseas pinners are the company's key to sustainable double-digit growth.
The Pinterest growth story is also about its emergence as a budding e-commerce play. Since pinners are willingly sharing the products, places, and services they like, Pinterest can provide small businesses with precise audience targeting. It's simply up to Pinterest to keep its user base engaged and growing.
Image source: Getty Images.
Innovative Industrial Properties
Perhaps surprisingly, billionaires are also attracted to the ongoing cannabis revolution in the U.S. Although marijuana-focused real estate investment trust (REIT) Innovative Industrial Properties (NYSE: IIPR) only saw its aggregate ownership by 13F filers increase by 2% (about 360,000 shares) in the third quarter, BlackRock upped its stake by 573,754 shares to 3.56 million. Jim Simons' Renaissance Technologies also initiated a 72,000-share position.
Most money managers aren't comfortable buying over-the-counter-listed stocks -- which is where you'll find many U.S. marijuana stocks. Innovative Industrial Properties, which is listed on the NYSE, offers a solution for those who want an ancillary presence in the industry. Ongoing acquisitions, coupled with modest organic growth via rental increases and management fees, have allowed IIP to grow like a weed while offering highly transparent and predictable cash flow.
It's unlikely that we'll see marijuana legalized at the federal level anytime soon, which includes cannabis banking reform. That's important, because IIP's sale-leaseback agreements have been driving growth for the company. With limited access to basic banking services, multistate operators (MSO) have turned to IIP for help. IIP acquires cultivation and processing assets for cash, and immediately leases these properties back to the seller for 10 or 20 years. It's a win-win for all involved.
Image source: Getty Images.
Snowflake
Rounding out the list of growth stocks is cloud data warehousing company Snowflake (NYSE: SNOW), which only made its public debut in September. In aggregate, 13F filers scooped up almost 66 million shares before the end of the third quarter, with Warren Buffett's Berkshire Hathaway adding a little over 6.1 million shares and Philippe Laffont's Coatue Management buying more than 4 million shares.
Snowflake isn't your traditional cloud services provider that leans on subscriptions to drive growth. Rather, Snowflake's operating model is based on usage. The more data stored, and the more Snowflake Compute Credits used, the higher the charge to its customers. This pay-as-you-go model is exceptionally transparent, and has apparently been well-received by its customers.
Furthermore, since Snowflake is built atop other cloud infrastructure services, such as S3 and Azure, it works around one of the biggest issues at the infrastructure level: sharing information. Competing infrastructure services make this difficult, but Snowflake's software breaks this barrier by incorporating S3, Azure, and other platforms.
Billionaires buying into Snowflake are counting on high double-digit growth for years to come, and they're paying one heck of a premium for this performance: 67 times next year's sales. If you ask me, it's perhaps a bit too aggressive a premium to pay.
10 stocks we like better than Snowflake Inc.
When investing geniuses David and Tom Gardner have 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.*
David and Tom 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 October 20, 2020
Sean Williams owns shares of Pinterest. The Motley Fool owns shares of and recommends Berkshire Hathaway (B shares), Datadog, Innovative Industrial Properties, Pinterest, and Snowflake Inc and recommends the following options: long January 2021 $200 calls on Berkshire Hathaway (B shares), short January 2021 $200 puts on Berkshire Hathaway (B shares), and short December 2020 $210 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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Datadog Software-as-a-service (SaaS) stock Datadog (NASDAQ: DDOG) saw 13F filers and billionaires pile in for the ride. Datadog, which provides cloud-based application monitoring services, delivered 61% sales growth in the third quarter, and more importantly had over 1,100 customers generating $100,000 or more in annual recurring revenue. Whereas most social platforms eventually run into a user growth wall, Pinterest was growing its MAUs at a 30% clip prior to the pandemic, and an even more robust rate with folks stuck in their homes.
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Datadog Software-as-a-service (SaaS) stock Datadog (NASDAQ: DDOG) saw 13F filers and billionaires pile in for the ride. Aggregate ownership among 13F filers increased by more than 11 million shares (8.8%) from the sequential quarter, with Gabe Plotkin's Melvin Capital Management opening a 2.88-million-share position and Larry Fink's BlackRock adding over 3 million shares to its existing stake. By the end of the third quarter, 13F filers had added almost 40 million shares from Q2 2020, with Melvin Capital tacking on 7.62 million shares to an existing position and Dan Loeb's Third Point initiating a 3.58-million-share stake.
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Datadog Software-as-a-service (SaaS) stock Datadog (NASDAQ: DDOG) saw 13F filers and billionaires pile in for the ride. Aggregate ownership among 13F filers increased by more than 11 million shares (8.8%) from the sequential quarter, with Gabe Plotkin's Melvin Capital Management opening a 2.88-million-share position and Larry Fink's BlackRock adding over 3 million shares to its existing stake. In aggregate, 13F filers scooped up almost 66 million shares before the end of the third quarter, with Warren Buffett's Berkshire Hathaway adding a little over 6.1 million shares and Philippe Laffont's Coatue Management buying more than 4 million shares.
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Datadog Software-as-a-service (SaaS) stock Datadog (NASDAQ: DDOG) saw 13F filers and billionaires pile in for the ride. Image source: Pinterest. Most money managers aren't comfortable buying over-the-counter-listed stocks -- which is where you'll find many U.S. marijuana stocks.
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bada14dc-f95f-4486-8971-ce79ff22e6ef
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718941.0
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2020-11-22 00:00:00 UTC
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Avoid this Trendy Stock No Matter What
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DDOG
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https://www.nasdaq.com/articles/avoid-this-trendy-stock-no-matter-what-2020-11-22
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nan
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nan
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Snowflake (NYSE: SNOW) was arguably the trendiest tech stock of 2020. It went public in September as the largest software IPO in history, attracted big investments from Warren Buffett's Berkshire Hathaway and salesforce.com, and doubled in value on the first day.
It's easy to see why investors fell in love with Snowflake. Its revenue surged 174% in fiscal 2020 and rose another 133% to $242 million in the first half of fiscal 2021. It boasted a net retention rate of 158% over the past six months -- the highest retention rate for any cloud software company at the time of its public debut.
Snowflake's technology is also disruptive. Its core service pulls all of a company's data onto a central cloud-based platform, where it can analyzed and fed into third-party data visualization software. That solution, which is easier to scale than on-premises data warehousing services, helped companies break down restrictive silos and streamline their businesses.
Image source: Getty Images.
Snowflake's growth potential is still impressive. Its total number of customers more than doubled year over year in the second quarter, yet it still serves only 146 of the Fortune 500 companies. The data-warehouse-as-a-service market could grow at a compound annual growth rate of 23.8% between 2018 and 2023, according to market research firm Markets and Markets, so its total addressable market is still expanding.
Those all sound like great reasons to buy Snowflake. Unfortunately, I believe investors should still avoid this trendy stock for three simple reasons.
1. You shouldn't pay the wrong price for the right company
Snowflake went public at $120 per share, which valued the company at $33 billion, or just over 80 times its trailing-12-month sales. That was already a nosebleed valuation, but the stock now trades at about $260 -- which gives it a market cap of roughly $73 billion, or 181 times its trailing-12-month sales.
Analysts expect Snowflake's revenue to soar 114% to $565.8 million this year. But even if it hits that lofty target, it will still trade at 129 times this year's sales and remain one of the market's priciest tech stocks.
By comparison, videoconferencing darling Zoom Video Communications (NASDAQ: ZM) expects its revenue to rise 281%-284% this year, but its stock is already considered expensive at 50 times that estimate.
Therefore, Berkshire and Salesforce might have considered 80 times sales an acceptable price for Snowflake, but they probably aren't accumulating more shares at its current valuations.
2. It could lose its first mover's advantage
Snowflake's main competitors include Amazon Web Services' (NASDAQ: AMZN) Redshift and Microsoft's (NASDAQ: MSFT) Azure SQL Warehouse, which are both integrated into their cloud infrastructure platforms.
Image source: Getty Images.
That's problematic for two reasons. First, Snowflake's services run on AWS, Azure, and other cloud infrastructure platforms. Therefore, a large portion of Snowflake's operating expenses actually fund its largest rivals.
Second, AWS and Azure can undercut Snowflake's prices and bundle their competing services with other cloud services. Amazon and Microsoft can also afford to take losses on their data warehousing solutions for years to drive Snowflake out of the market.
Snowflake initially grew because Amazon and Microsoft didn't prioritize the growth of their data warehousing solutions in the past. Snowflake's service is also generally faster and more efficient because it processes computing and storage tasks separately, while Redshift and Azure bundle them together.
That technological advantage granted Snowflake a first mover's advantage in the market, but Snowflake's blockbuster IPO is likely causing both tech giants to rethink their data warehousing strategies.
3. It lacks a path toward profitability
Snowflake's revenue growth is explosive, but it remains deeply unprofitable. Its net loss widened last year and narrowed only slightly year over year, from $177.2 million to $171.3 million, in the first half of 2020.
Snowflake could struggle to narrow those losses if Amazon, Microsoft, and other larger rivals undercut its prices. The bulls might claim Snowflake's record-high net retention rate indicates it has staying power, but retention rates generally decline over time for even the highest-growth tech companies.
For example, the cloud-based cybersecurity company CrowdStrike (NASDAQ: CRWD) went public last June with a trailing net retention rate of 147% over the previous 12 months. As of last quarter, that rate had fallen to just over 120%.
Datadog (NASDAQ: DDOG), another silo-busting company that pulls all of a company's data onto a unified dashboard, went public last September with a net retention rate of 146% over the past 12 months. That percentage dipped to about 130% last quarter.
Snowflake might buck that trend, but the competitive headwinds and the law of large numbers suggest its net retention rates are peaking.
The key takeaway
Snowflake is still an impressive growth stock, but it's tough to ignore the glaring flaws. I'd consider buying this stock if a market crash resets its valuation, but it's still too rich for my blood at these levels.
10 stocks we like better than Snowflake Inc.
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*Stock Advisor returns as of October 20, 2020
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool's board of directors. Leo Sun owns shares of Amazon. The Motley Fool owns shares of and recommends Amazon, Berkshire Hathaway (B shares), CrowdStrike Holdings, Inc., Datadog, Microsoft, Salesforce.com, Snowflake Inc., and Zoom Video Communications and recommends the following options: long January 2021 $200 calls on Berkshire Hathaway (B shares), short January 2021 $200 puts on Berkshire Hathaway (B shares), long January 2021 $85 calls on Microsoft, short January 2021 $115 calls on Microsoft, short January 2022 $1940 calls on Amazon, long January 2022 $1920 calls on Amazon, and short December 2020 $210 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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Datadog (NASDAQ: DDOG), another silo-busting company that pulls all of a company's data onto a unified dashboard, went public last September with a net retention rate of 146% over the past 12 months. It went public in September as the largest software IPO in history, attracted big investments from Warren Buffett's Berkshire Hathaway and salesforce.com, and doubled in value on the first day. That solution, which is easier to scale than on-premises data warehousing services, helped companies break down restrictive silos and streamline their businesses.
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Datadog (NASDAQ: DDOG), another silo-busting company that pulls all of a company's data onto a unified dashboard, went public last September with a net retention rate of 146% over the past 12 months. It boasted a net retention rate of 158% over the past six months -- the highest retention rate for any cloud software company at the time of its public debut. It could lose its first mover's advantage Snowflake's main competitors include Amazon Web Services' (NASDAQ: AMZN) Redshift and Microsoft's (NASDAQ: MSFT) Azure SQL Warehouse, which are both integrated into their cloud infrastructure platforms.
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Datadog (NASDAQ: DDOG), another silo-busting company that pulls all of a company's data onto a unified dashboard, went public last September with a net retention rate of 146% over the past 12 months. That technological advantage granted Snowflake a first mover's advantage in the market, but Snowflake's blockbuster IPO is likely causing both tech giants to rethink their data warehousing strategies. The bulls might claim Snowflake's record-high net retention rate indicates it has staying power, but retention rates generally decline over time for even the highest-growth tech companies.
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Datadog (NASDAQ: DDOG), another silo-busting company that pulls all of a company's data onto a unified dashboard, went public last September with a net retention rate of 146% over the past 12 months. 10 stocks we like better than Snowflake Inc. * David and Tom 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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00347cbe-9330-4301-9195-e905aafb36c0
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718942.0
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2020-11-22 00:00:00 UTC
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What to Do When You Just Don't Understand a Tech Stock
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DDOG
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https://www.nasdaq.com/articles/what-to-do-when-you-just-dont-understand-a-tech-stock-2020-11-22
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nan
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nan
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Investing in tech stocks can be exciting, but no stock is right for everyone. Sooner or later every investor comes across a company with a story that they just don't get, even if others love the company and the stock is soaring higher.
Appearing on Motley Fool Live to record the "Industry Focus" podcast, Motley Fool analyst Tim Beyers talks with "Industry Focus" host Dylan Lewis about what he does when he comes across a stock that he doesn't understand.
10 stocks we like better than Datadog
When investing geniuses David and Tom Gardner have 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.*
David and Tom 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 October 20, 2020
Dylan Lewis: Tim, I mean, you've been in tech for such a long time, directly and as an analyst. And I'm guessing, at this point, there is not a lot that is going to get past you, but I'm curious --
Tim Beyers: Oh, you'd be surprised. [laughs]
Lewis: [laughs] I'm curious if you still have those moments of, you know, I don't get it, or is this too hard. And like, what do you do when that's what you're, kind of, facing?
Beyers: Well, the beauty of the stock market is that -- I mean, I'm stealing from Warren Buffett here, but you know, you can just keep the bat on your shoulder, man, you do not have to swing at every pitch. And that's the beauty of it. So, if I don't get it, and this happens to me all the time, I don't get it, then I don't swing. And I can give you a clear example of this. You know, when there is a company that is assembled from a lot of different parts, particularly a lot of old tech, like, I am just -- we talked before we came on air, about whether or not I'm superstitious, so I'm not really superstitious, but I'll tell you, I'm really suspicious of a company that rebrands, has a lot of old tech and is layering new tech on top of it. That kind of gives me the heebie-jeebies, and sometimes unfairly so.
Like, I have immediately taken out, and said nope, I don't want any part of that. And I've done that. The most recent time I did that was with Dynatrace (NYSE: DT). So, that ticker is DT. This is a company that does application performance management. So, essentially looking at how your infrastructure is performing; it's a Datadog (NASDAQ: DDOG) competitor, and I really like Datadog. And so, I have been admittedly dismissive of this company, because it's founded back in, like, 2004. Then was formed and sort of bulked up after purchase in private equity, I believe. There is an older company called Compuware that brought it in and then brought it all together, and then it was a private equity firm came in, a good private equity firm, Thoma Bravo, came, brought it in, put some more money into it. And then spins it out. I'm like, God! I don't know, I don't know, man! This just feels like you're putting a lot of stuff together. And they promised they rebuilt everything from the ground-up, but really, did they? And so, I just got instantly suspicious of it.
But you could argue, if you look since IPO and over the past year, Dynatrace has beaten the market. Now, it's not beaten the market by as many companies that I chose to focus on, but it's still beaten the market. So, that was some unfair, arguably, suspicion on my part. But, yeah, every time that comes up, Dylan, and I'm thinking like, this is too hard, my response is, I'm not touching that one. I may come back to it, but I'm not touching it right now.
Lewis: Yeah, I think complicated leadership history or complicated corporate history, where it's been taken private, brought public again, it's changed hands a couple of times, usually if [laughs] someone likes something, they're going to hold onto it. And so, that's kind of a red flag for me as well.
Beyers: Yes. Yeah, absolutely. So, I have so far been wrong on Dynatrace, and I may prove to be wrong for the duration of this company. Because so far, they are winning, they're doing fine. They get reasonably good ratings from industry analysts like Gartner (NYSE: IT). So, is my skepticism warranted? I haven't gone back and reevaluated, but at least in terms of stock market performance, the answer is no, my skepticism was not warranted so far. Maybe later on I'll be proven right, I don't know.
Dylan Lewis has no position in any of the stocks mentioned. Lou Whiteman has no position in any of the stocks mentioned. Tim Beyers has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends 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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So, essentially looking at how your infrastructure is performing; it's a Datadog (NASDAQ: DDOG) competitor, and I really like Datadog. Appearing on Motley Fool Live to record the "Industry Focus" podcast, Motley Fool analyst Tim Beyers talks with "Industry Focus" host Dylan Lewis about what he does when he comes across a stock that he doesn't understand. Beyers: Well, the beauty of the stock market is that -- I mean, I'm stealing from Warren Buffett here, but you know, you can just keep the bat on your shoulder, man, you do not have to swing at every pitch.
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So, essentially looking at how your infrastructure is performing; it's a Datadog (NASDAQ: DDOG) competitor, and I really like Datadog. Appearing on Motley Fool Live to record the "Industry Focus" podcast, Motley Fool analyst Tim Beyers talks with "Industry Focus" host Dylan Lewis about what he does when he comes across a stock that he doesn't understand. There is an older company called Compuware that brought it in and then brought it all together, and then it was a private equity firm came in, a good private equity firm, Thoma Bravo, came, brought it in, put some more money into it.
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So, essentially looking at how your infrastructure is performing; it's a Datadog (NASDAQ: DDOG) competitor, and I really like Datadog. Appearing on Motley Fool Live to record the "Industry Focus" podcast, Motley Fool analyst Tim Beyers talks with "Industry Focus" host Dylan Lewis about what he does when he comes across a stock that he doesn't understand. See the 10 stocks *Stock Advisor returns as of October 20, 2020 Dylan Lewis: Tim, I mean, you've been in tech for such a long time, directly and as an analyst.
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So, essentially looking at how your infrastructure is performing; it's a Datadog (NASDAQ: DDOG) competitor, and I really like Datadog. Appearing on Motley Fool Live to record the "Industry Focus" podcast, Motley Fool analyst Tim Beyers talks with "Industry Focus" host Dylan Lewis about what he does when he comes across a stock that he doesn't understand. The most recent time I did that was with Dynatrace (NYSE: DT).
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77b4553a-b8dc-4dea-a2b9-4532535a45bd
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718943.0
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2020-11-19 00:00:00 UTC
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Noteworthy Thursday Option Activity: MDB, DDOG, BECN
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DDOG
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https://www.nasdaq.com/articles/noteworthy-thursday-option-activity%3A-mdb-ddog-becn-2020-11-19
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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 MongoDB Inc (Symbol: MDB), where a total volume of 3,972 contracts has been traded thus far today, a contract volume which is representative of approximately 397,200 underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 65.3% of MDB's average daily trading volume over the past month, of 608,675 shares. Especially high volume was seen for the $250 strike put option expiring January 15, 2021, with 802 contracts trading so far today, representing approximately 80,200 underlying shares of MDB. Below is a chart showing MDB's trailing twelve month trading history, with the $250 strike highlighted in orange:
Datadog Inc (Symbol: DDOG) options are showing a volume of 28,637 contracts thus far today. That number of contracts represents approximately 2.9 million underlying shares, working out to a sizeable 62.1% of DDOG's average daily trading volume over the past month, of 4.6 million shares. Especially high volume was seen for the $95 strike call option expiring November 27, 2020, with 2,419 contracts trading so far today, representing approximately 241,900 underlying shares of DDOG. Below is a chart showing DDOG's trailing twelve month trading history, with the $95 strike highlighted in orange:
And Beacon Roofing Supply Inc (Symbol: BECN) options are showing a volume of 2,965 contracts thus far today. That number of contracts represents approximately 296,500 underlying shares, working out to a sizeable 60.7% of BECN's average daily trading volume over the past month, of 488,660 shares. Especially high volume was seen for the $35 strike put option expiring November 20, 2020, with 708 contracts trading so far today, representing approximately 70,800 underlying shares of BECN. Below is a chart showing BECN's trailing twelve month trading history, with the $35 strike highlighted in orange:
For the various different available expirations for MDB options, DDOG options, or BECN 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 $95 strike call option expiring November 27, 2020, with 2,419 contracts trading so far today, representing approximately 241,900 underlying shares of DDOG. Below is a chart showing MDB's trailing twelve month trading history, with the $250 strike highlighted in orange: Datadog Inc (Symbol: DDOG) options are showing a volume of 28,637 contracts thus far today. That number of contracts represents approximately 2.9 million underlying shares, working out to a sizeable 62.1% of DDOG's average daily trading volume over the past month, of 4.6 million shares.
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Below is a chart showing MDB's trailing twelve month trading history, with the $250 strike highlighted in orange: Datadog Inc (Symbol: DDOG) options are showing a volume of 28,637 contracts thus far today. That number of contracts represents approximately 2.9 million underlying shares, working out to a sizeable 62.1% of DDOG's average daily trading volume over the past month, of 4.6 million shares. Especially high volume was seen for the $95 strike call option expiring November 27, 2020, with 2,419 contracts trading so far today, representing approximately 241,900 underlying shares of DDOG.
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Below is a chart showing MDB's trailing twelve month trading history, with the $250 strike highlighted in orange: Datadog Inc (Symbol: DDOG) options are showing a volume of 28,637 contracts thus far today. That number of contracts represents approximately 2.9 million underlying shares, working out to a sizeable 62.1% of DDOG's average daily trading volume over the past month, of 4.6 million shares. Especially high volume was seen for the $95 strike call option expiring November 27, 2020, with 2,419 contracts trading so far today, representing approximately 241,900 underlying shares of DDOG.
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Especially high volume was seen for the $95 strike call option expiring November 27, 2020, with 2,419 contracts trading so far today, representing approximately 241,900 underlying shares of DDOG. Below is a chart showing BECN's trailing twelve month trading history, with the $35 strike highlighted in orange: For the various different available expirations for MDB options, DDOG options, or BECN options, visit StockOptionsChannel.com. Below is a chart showing MDB's trailing twelve month trading history, with the $250 strike highlighted in orange: Datadog Inc (Symbol: DDOG) options are showing a volume of 28,637 contracts thus far today.
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d29550e2-cecb-4efa-84ce-ede805073494
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718944.0
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2020-11-18 00:00:00 UTC
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How to Pick Great Stocks
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DDOG
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https://www.nasdaq.com/articles/how-to-pick-great-stocks-2020-11-19
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nan
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nan
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In this episode of Industry Focus: Tech, Dylan Lewis chats with Motley Fool analyst Tim Beyers about how he analyzes stocks. Tim talks about his process for finding great companies and how he goes on to research them to find out if they make great investments.
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.
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When investing geniuses David and Tom Gardner have an investing 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.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Walmart 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 2/1/20
This video was recorded on November 13, 2020.
Dylan Lewis: It's Friday, November 13th, and we're talking about the process, building the process, and trusting the process. I'm your host Dylan Lewis, and I'm joined by longtime Fool and Lead Advisor on the Cloud Disruptors 2020 product, Tim Beyers. Tim, how's it going?
Tim Beyers: Going well, Dylan, going well. How about you?
Lewis: I can't complain, this is my favorite time of the year, I've got these burnt orange colors in Washington DC, the weather's beautiful, it's a great time to go walk outside, I'm hopping into Rock Creek Park as much as I can on the weekend these days.
Beyers: That's beautiful. I mean, it's pretty cold here in the mountains in Colorado, but it'll warm up a little bit the next few days and we'll get that beautiful Winter, but sort of Indian Summer-ish, and so, we've got the leaves but the snow hasn't come and stuck on the ground yet. If you've ever been to Colorado, you know that the snow does not stick on the ground for very long. We have one of the best Winters in the entire world I'll argue, but of course, I'm arguing for the home team here, so I've lived in Colorado for over 20 years.
Lewis: You know, I have been to Fool Colorado, I desperately want to get back and I'm excited to be able to do that at some time hopefully in 2021. Because in addition to Colorado being wonderful, you guys have some pretty cool stuff going on out there, it is a really awesome group of people and a very fun office. So, I'm crossing my fingers that I can make that happen sometime soon. In the meantime, Tim, I have to settle for virtual you, and [laughs] settle for hosting you on the show this way, which is fine by me, this is great too. And the reason I wanted to have you on is to, really, talk through the investing process that you like to use.
And folks that listen to the show, Brian Feroldi is on a lot, and what I love about having Brian on is he is someone who has a very set way of how he likes to look at businesses.
Beyers: He does, yeah.
Lewis: He's really, kind of, taken a methodical approach and honed it over time. And what's great is you can show your work when you're going through all these things. And Tim, I mean, you've been investing for quite some time, I think you are also someone who has put a lot of thought into how you look at businesses, and so I wanted to have you on to talk through how you do that and then just give people another take on what that looks like.
Beyers: Sure. So, you want to start with investing, like, where do the ideas come from?
Lewis: Yeah, I think we can go from, kind of, the initial spark of, like, this might be interesting, to how do you break that business down, and ultimately, what's the decisionmaker for you when you're deciding to put some money behind something? And so, I guess, yeah, let's start with the idea. I think there's a lot of lore to discovering companies, you know, there's this idea of sifting through spreadsheets or filters or that old wives' tale of being in line at a fast-casual restaurant and seeing the line is long and realizing, hey, this might be something, you know. So, where do the ideas come from for you?
Beyers: Yeah, it's very interesting. I hope this isn't a horribly boring answer, but there are three places, principally, and almost none of them have to do with the traditional things you might think of, like, looking at a list or doing a screen, I just really don't do that. And part of the process for me has been, I'm drawing on my experience in tech. And so, I started many years ago, like, I started my career as a sports reporter, you know, we talked about sports before we came on air here. I started as a sports reporter. I was a really terrible sports reporter, but I was a sports reporter. And then I worked in sports PR. And after a while when I got my graduate degree at Syracuse; so, you know, Go Orange! You know, I got a little exhausted with the process of just being in sports, because it was intense and it was amazing, and I'm so grateful for it, because -- and we can talk about this sometime or maybe even before the hour is over. But I had a chance twice, while I was at Syracuse, to cover NBA preseason games and I got to meet Charles Barkley and Michael Jordan.
And in the second game, I'm doing stats for the late, great Tom Mees of ESPN. And you know, it's a Chicago Bulls preseason game; I don't remember who they were playing, it might have been the Nets, which don't even ... you know, I guess the Nets is Brooklyn now? I'm not even sure, is that right? Okay. This is when they're still in New Jersey. And I'm just doing stats. And Michael Jordan comes over to the table, says "Hi!" to Mr. Mees. I'm like, wow! This is amazing.
And there were lots of great moments like that, but I got a little exhausted by it. So, when I went back to California, I started working for this tech PR firm and I got enamored instantly, I just got completely lost in it and learned everything I could about deep tech. And so now, when I start looking at deep tech stocks, I draw on that experience, and the first thing I do is talk with people, I talk with our developers, like, that's the No. 1 filter for me. Every two weeks I have this call on the books with one of our cyber security experts, this really wonderful guy named Jeff Levitt, and Jeff and I just spent an hour just talking about stuff. And he will help me dissect things that I don't see, because he's deep into the weeds.
And so, the first thing that happens when I'm looking at an idea is, somebody who has used the product or knows about the product has told me something that, sort of, sparks like, I heard something, OK, that's unusual. So, for example, people have heard me talk about Snowflake on Fool Live very often. When BG, who I've had gone on this week in tech, who's in our Data Platform team, when BG and Nicole, who are the leaders of our Data Platform team, tell me that this thing is amazing and it would be very hard for me to not use this, I get really interested.
Lewis: Yeah, there's usually good money to be made with delighted customers, I think, [laughs] that's a good investing axiom to follow.
Beyers: Big time. So, I really do start with the product, like, that's the thing in tech for me, there are many other investors who have different processes, like, Jim Gillies always starts with the proxy statement. He wants to see if leaders are aligned with investors; that's a great way to go. I always start with the product. Like, I want to know whether or not the product is a meaningful product that's going to delight customers in some way.
And sometimes, that comes, like, another thing that I'll use, I'll look for unusual stories. So, the way I found Peloton (NASDAQ: PTON), this is true. I don't know if I'm not proud of this or if it's just like, it's sort of just, kind of, sort of blew me away, like, I had heard about it --
Lewis: I can't wait to see where you're going with this, Tim. [laughs]
Beyers: I didn't know what it was -- I didn't really know what it was -- I had to ask people what it was. And then my wife told me a little bit more about what it was and how people really love it. And then I didn't really get serious about it until I read this article called, I Joined a Stationary Biker Gang, that was it, in The Atlantic. And the whole thesis for it was that people go crazy every year going to what's called Peloton Homecoming. Like, I knew about the bike and I knew that it was interesting, but nothing really put me over the edge on this until I learned about Peloton Homecoming. Do you know what this is?
Lewis: I don't, no. And I'm guessing a lot of our listeners don't, so [laughs] what's the 30- or 60 seconds on it?
Beyers: Peloton Homecoming, very simply, is like our FoolFest, people go to New York. And thousands and thousands of people pay to go to New York to get, like, facetime with the people that they workout with, because this is all virtual, but there are a lot of affinity groups that workout together, and they meet up at Peloton Homecoming. And they do these amazing things, it's like, you know, it's like a reunion, and it gets bigger every year. And so that told me that not only are they delighting customers, but they've actually built a community and that community is sticky, and it's independent of the product. And that gave me a lot of confidence that this business is more than what it was being depicted as.
Lewis: And so, I guess that filtering mechanism is a little bit different for how the ideas come in, but the core thing that you're looking for is the same, as your first example, when it comes to talking with the end user, where it's like, you want people that are delighted, you want rabbid users and people that are going to evangelize for this product or is this brand.
Beyers: The product matters. Yes, the product matters. And not the product itself, but people's experience with the product, this is something that Steve Jobs was really good at. And instead of the late Steve Jobs, as much, sort of, vitriol he gets for some of the ways he was just kind of cruel and some other things. Like, he didn't have universally good traits; I think we can fairly say that. But what he did understand is that what you're looking for is people's experience with the product, how people experience the product and their connection to it is an indicator of value, and so that's what I look for. I look for people's experience with the product. If they're meaningfully engaged, so like BG and Nicole tell me, this is crucial to our business, we're not looking at another data warehouse, this is the thing that we're going to use. And then I ask them the question, well, what would cause you to switch? And the answer, and this is true, from Nicole says, well, I can't really envision something that would force me to switch. And I say, OK, I'm going deeper on this one.
Lewis: [laughs] Yeah, bingo! That's what you want to hear if you're an investor. I'm sure there are some folks listening, Tim, that say, well, Tim you have a background in tech. You spend a lot of time in the space. And so, you've probably tuned some of your content-filtering, you know, the news you consume, whether it's newsletters or things you go to, to get some information. And there might be some people that are like, you know, it's awesome that you have these employees at The Fool that you can talk to that work in these spaces, I don't have access to those types of people in my everyday life. Are there any sites or forums or aggregators that you could point to and say, you know, this is a really good place, if you don't have those people, to start getting some of that information.
Beyers: Yeah. You know, if you're talking about a tech product -- let's just say we're talking about tech for a minute here -- there are a couple of things you could do, just about every one of these tech companies and tech products, they have some kind of community, so there are things you can look for. Like, you can go and join that community or you can observe it, and you can see how active it is. Like, if it's stale, like, the last message posted was three weeks ago, that tells you something, that tells you that it's not that interesting, whereas if you go to, say, one of the products that I use that I'm a big consumer of, Airtable. If you go to the Airtable community, which anybody can get into, if you take a look at that, you're going to see a boatload of messages, you're going to see a lot of messages. And what that tells you is that, even when those messages are frustrations, like, why can't you do this yet? Another way to frame, "Why can't you do this yet?" is I love your product, help me use it more, right? Like, that is --
Lewis: Tim, I think something that can sometimes get lost in the customer feedback loop or what could sound like criticism is like, I love you so much and I want you to be even better.
Beyers: I want you to be better. Yes. Why aren't you solving this problem for me yet, because I use you for so many things and I can envision, like, five other things I could do with your product, please help me do those things. When you see a customer begging for that; and you do see it, you know, you can go to some of these forums for these tech products and you'll see people saying, hey, when is this coming, when is this coming? That tells you that that company not only has customers who are interested, they have customers who want to buy more, which means they have optionality, so that community aspect can be very illuminating.
Lewis: I'm guessing Zoom is one of those businesses [laughs] so far in 2020, right, that has probably had an outpouring of folks reaching out. And just because we're, kind of, leading a lot of The Fool into this podcast episode, I'll just say, you know, you mentioned Airtable, I was in a meeting the other day where someone joked, just like, all right, we've said Airtable three times, take a drink, you know. Like, it's [laughs] basically like one of the most mentioned platforms internally at The Fool right now, and it has spread like wildfire because it's so successful.
Beyers: Yeah. And there are, admittedly, so there you go, there's my Airtable shirt. I'm not the only one, by the way, who's been an Airtable evangelist inside of The Fool. I mean, Doug Reale has been a big one, who's on our Blueprint team. Katie Carrera, who's like a power user of Airtable. And these people are growing up inside the company. When you start to see that, it is an indicator that things are going well.
So, yes, one thing you can do, if you don't have access to it, but I would also say, you know like, you could look at those communities, but I would also say, you probably have more connections than you know you do. And it could just be like asking your kid or asking an acquaintance and say, hey, do you know anybody who develops software, like, do you know any software developers? Or even just ask somebody at your work. You know, the vast majority of software developers are not working at a hi-tech company in Silicon Valley, they work in Middle America and they're either keeping software or they're developing new software for a company, it could be like a retailer. I mean, seriously, that's the vast majority of developers, do that stuff. So, you probably know them, you just haven't really engaged with them yet.
Lewis: So, Tim, with the sources that we just talked about for ideas, we've got basically, talking with folks and kind of just understanding people who have expertise, you know, what are they really focused on, what do they love. Looking for some of those unusual stories, like you mentioned with Peloton, or a product that just does something that nothing else in the marketplace can do, or addresses a need that you really need to be able to scratch.
You invest in a lot of things, we're going to keep this kind of in the techs sandbox, because this is a tech show. But when you see that, what is kind of the threshold for you being like, you know, I am going to dig deeper, and I'm going to spend -- you know, whatever that initial glance might be -- an hour, two hours, really starting to look at this business.
Beyers: Yeah, for me, it's usually pretty fast, only because I have an overdeveloped sense of this, and that's just a product of years, so for other people, you know, your mileage may vary. But the first thing I do is I use what I call the Ballmer test, which is just my silly way of saying like, does it appeal to developers? If you've never seen it, go look up, "Steve Ballmer: developers" you'll know exactly what I'm talking about, the YouTube will come up. [laughs] But Ballmer was right that developers do matter. And so, when you see developers that are, sort of, coming on board and using a tool or talking about a tool, it helps.
So, for me, like, I have access to developer, so I can verify that for us, because we use Fastly, and I can ask our developers how we use it, and I can get Dan Ceebus telling me, I can envision 10 different things we can do with this thing, it really starts to resonate with me. Independent of that, you can use this tool called GitHub. And GitHub is -- you know, you can look up how a company's product is actually rated. You know, you can look at the star ratings for some of the software libraries they'll put up there. And all of these companies, they usually put their software up on GitHub, it's a way to organize software development. And so, yeah, look for those stars, it can be very interesting.
Also, just look for stories. Honestly, you can do a Google search, and say like, you know, name your company, developers and see what pops up. If developers are talking about this, it's usually a good sign. So, that's one thing I do. If developers are interested, and sometimes in their SEC filings they'll say like, we have X many developers that use our product. All of those things are, it's a checkbox, if developers like it, I'm starting to get interested.
Another thing I'll say is that I want to look at this from the perspective of how was the company born? So, I really like to look at the origin story. We talked about product, like, product is what I lead with, right? Something, a historical pattern that I have found is that, especially in tech, when a founder is customer zero, like, they had this problem and they were determined to build a product to solve it, that's usually a really good indicator. And so, there are many companies like this, Fastly is like this, Artur Bergman, working at the Wikimedia Foundation, playing around with other content delivery networks not working for him, saying, screw it, I'm going to build my own. Builds his own, makes it better. That's a customer zero incident.
That's Fastly being founded by a CEO, now Chief Architect, who says, I'm going to be customer zero here and build something better. That was also true for MongoDB, it's also ...
Lewis: And for the folks that maybe aren't familiar with MongoDB and Fastly, Shopify is like, that is probably one of the best known and extremely [laughs] successful case studies in exactly what you're talking about there, Tim.
Beyers: Yeah, Tobi Lutke, customers zero, I'm going to build it myself, because the thing that I need does not exist. In tech, which is naturally an innovative field, when a founder comes in and is customer zero, pay attention to that.
Lewis: Yeah. I love that, because usually if that's the case, it isn't hard to find that, you know, it's going to be front-and-center in the prospectus, it's probably going to be in the About Us on the company website. Anybody who's covering it, especially if it's a lesser known company that's coming public, that's going to be in the lead of the news article about that company, that just becomes the story.
Beyers: Yeah, no doubt. And then the third thing I look for is how big of a problem is this? It can be an annoyance for a founder, but if it's not a big enough problem that it's shared widely, then that can be just a nice little hobby. But to be an investable business, it really does have to be a migraine-level problem. So, is it a shared problem, like, is the problem an annoyance for this founder, who is customer zero, and they have solved the problem that is a big problem? Like, in the case of Fastly, it clearly is a big problem. They're big sites that need to be able to dynamically update their content instantly, in microseconds, it cannot be, like, a 30-second delay, we can't have that. so, Fastly's innovations are necessary and applicable to a wide group. Same thing with MongoDB, and same thing with something like Twilio.
So, you do want to take a look at the Total Addressable Market. And last weekend I did a little bit of a deep dive on taking a look at Total Addressable Market by identifying who the ideal customer is. So, really, all this is, Dylan, is like, who's the ideal customer? How many of them are there? If there are a lot of them, you've got something. Like, in the case of Twilio, for example, you've got essentially the world's developers, because everybody is putting communications into their software; texting, email, what have you, right? So, you got tens of millions of developers; that's a pretty big market. So, yeah, I see it ...
Lewis: And Tim, you know it's funny you mentioned Twilio, I was going to mention Twilio, because you know, I think developers can be an overlooked element within the tech space. And for me, like, that company was a real turning point in understanding who needs to love a product. And part of it was that they were so open and candid about it, they were just like, [laughs] developers love us. Like, if you talked to developers, they're going to be like, yep, they give us the building blocks, they make our jobs way easier, we don't have to build this thing, we're able to integrate it. And that really changed the lens that I looked at a lot of companies with.
Beyers: Yeah, absolutely. Take a look at what the customers say about the company and be clear -- you know, very often a company will tell you who their ideal customer is, Twilio is very clear about this, they say right upfront in their SEC filings, developers are our customer, these are the people that we talk to. And you want to know that, and if a company is ambiguous, or let's do the warning sign. So, the flip side of this is to say, like, our stuff is for everybody. Run. Run away from that, because there's no such thing. You know, if you don't have a niche that you're starting with and you don't have a problem that you're solving for a very specific customer, then really you're just doing, you know, finger in the wind, that's all that is, that's a bad strategy, run from that.
Lewis: [laughs] So Tim, so far, we've spent a good chunk of the time on, kind of, the softer stuff that you need to do some reading, you need to get a feel for the business. You mentioned TAM, and I think we can briefly touch on a couple of financial elements that you tend to look for once you feel like this might be something, there might be something here. So, when you're looking at the numbers, does it start with Total Addressable Market, are you looking at the financials first? You know, where are you tending to focus your early research?
Beyers: The financials are the last thing that I look at, they quite literally are the last thing I look at. I look at customer and product, like, those two are the first two things that I look for, customer and product. Then I look at leadership and I look to see whether or not this is a customer zero company, if it's a customer zero company, I'm really interested. And one of the other patterns that I have found in tech that really resonates is a technical founder paired with a business founder. So, that's like HubSpot, you know, Brian Halligan, Dharmesh Shah, one is the CEO, one is the CTO. Shared vision, but division of responsibilities, that can be a really great combo.
That was also true, for example, at MongoDB. Now, those founders, more than 13 years later after starting the business, they've since moved on. I'm not really concerned about that, because 13 freaking years, [laughs] that's a long time to do a heavy-lift, right, but similar idea. So, I like that a lot. And then when I finally get to the financials, Dylan, I start looking at some metrics that are a little off-standard, I start looking for what I call the compounding metrics, because very often what you're seeing are things like, it's not profitable yet or, you know, revenue growth is off the charts, but they're burning cash. You know, how much money are they going to need to raise, when are they going to get profitable? Like, things like that.
So, instead, I started looking for high rates of revenue growth, but I started looking for things that give me some sense of unit economics. And unit economics meaning, for every product that they sell, say, every license, every time somebody uses the product, the more people that use it, the more profitable it becomes. Like, I want to be able to see evidence that that is going on. So, I look for things like gross profit growing faster than revenue, that's really useful. I also like to see, over a long period of time, when revenue growth is leading, let's say, R&D growth. Revenue growth leading R&D growth, that can be really useful as well, because I don't just want to see, like, good products, what I really want to see is good products that are saleable. So, if a company is spending a boatload on R&D, but revenue growth is slowing, you know, they may be throwing a lot of money at products that don't work, so I like to see that too.
And then there's this unusual statistic called the rule of 40, it's not a perfect statistic, but I like to see some improvement in this area. I don't need it to be over 40, but here's how the math works. You're taking the revenue growth rate, so as a percentage, so let's say, a company is growing 50% annually, and then I add to that the operating margins. So, revenue growth rate plus the operating margin percentage, so let's say a company is growing 50%, and its operating margin is -10%, still losing money, well, that's still 40%. So, the rule of 40 says there's enough growth there that over time we can expect this to be a cash generating company. I like to just see that, even if it's not 40, I like to just see it improving; if it's improving, I'm good. Like, I want to see signs that this company is gaining steam as it grows, if it's not, then I have to ask why.
Lewis: I love all of that. [laughs] And I think Brian and I have joked on the show before, you know, doing the prospectus breakdowns, like, it's a high growth company that's losing a ton of money because they're just shoveling money into sales and marketing. Tell me if you've heard this before, right --
Beyers: Yeah, right ...
Lewis: And just like, we see this over and over and over again. And so, I think, to be clear, we're talking about relatively early stage businesses with a lot of the criteria that you're using. This kind of goes out the window for something that has been profitable for maybe five or 10 years and is a lot firmer in its position in the market that it's going to be growing into.
Beyers: Yeah, totally. I mean, a mature business, you really wouldn't want to use the same level of diligence. You would want to be looking at profit, you want to be looking at margins and you'd really want to be looking at, like, if this was a dominant tech business, one metric, it's not a bulletproof metric, but one you could really look at, is free cash flow margin. You know, the best of these tech businesses have ridiculous free cash flow margins.
Let me give you an example; Amazon Web Services, 30% free cash flow margin. That is bananas. Meaning, $0.30 of every $1 of revenue flowing down for Amazon Web Services shows up as cash. Period. Just cash. Like, that is extraordinary.
Lewis: Yeah. And that's why they can do everything that they can do, right? They have that huge cash engine that's pushing everything forward for them.
Beyers: 100%, yep.
Lewis: And one of the other things, I think one of the threads I want to pull from what you laid out with the financials is. When you see things like gross profit growing faster than revenue or growing faster than R&D or sales and marketing spend, it kind of signals a couple of different things. One of them is that there's leverage that the company is enjoying. And it is basically being able to spread more usage over whatever fixed costs they may have in place, and that leads to a more profitable business over time. One of the other things that that can hint at is, existing users are continuing to spend and they maybe are even spending more. And so, that initial sales and marketing investment that you're making winds up really paying off down the road as you're in year two, three, four, five of your relationship with your customers.
Beyers: Yeah. And you should always ask. So, when you see those, let's take that one step further, and say like, when you see that, you may also see the company support or publish a statistic called, either dollar-based net expansion rate or dollar-based net retention rate. And if it's high, then what you're seeing is customers spending more. The difference between those two, by the way, you know, you're just comparing a cohort of customers year-over-year, and if it's greater than 100%, that means they're spending more. The greater it is over 100%, the more they're spending.
If it's an expansion rate, you're taking the same cohort of customers. You know, these 30 customers, and then these 30 customers a year later. If it's a retention rate, it's all the customers that started a year ago and then the customers that remained. So, it could be like there were 60 customers here and now there are 55 left, but we're counting everything from that 60, including when those others dropped off, everything that dropped off, and then we're just comparing it to a year later, and is it higher? So, that retention rate includes churn.
Lewis: Yeah, we often say on the show, retention rate is the good one. [laughs] You know, expansion rate is helpful, but if retention looks good, then that's even better, because it's a little bit more of a complete number.
Beyers: It is, it's absolutely right. And then the other thing you may find is, you know, if you're seeing these efficiencies, that a company may have introduced new products. Like, as part of that R&D spend, there are new products that have come out and now they're selling those new products and it's gaining efficiency. This is why we like optionality so much, that's why you hear us talking about optionality all the time. When a company is making new products and then rolling them out and then you see this divergence, revenues growing faster than, say, sales and marketing spend, they're gaining some efficiency here. That's the beauty of innovation. You know, you found something else you could do for your customer, you solve that problem, the customer spends more, margins increase. That's good.
Lewis: And I think what we should, kind of, remind people of, is we talked about TAM before, TAM is not necessarily a static number, you know, it's not established once and then that is the TAM. If you start realizing that there are adjacent markets that you can work in, that TAM could become bigger over time.
Beyers: For sure. You know, Total Addressable Market is not necessarily useful to say, like, wow! This company says its TAM is $80 billion and its revenue is only $200 million right now, it's going to get to $80 billion in revenue some day! No, don't think about it like that. But do think about it in terms of how is that company behaving. If it has a large market and that TAM has historically been growing, and it's serving its ideal customers with more stuff, and it's growing the amount of business it does with those customers over time, and its TAM is growing, then this company is probably very healthy, it may be expensive, but it's probably very healthy and has more runway than even the street expects.
Lewis: So far, when we've been talking numbers, Tim, we talk TAM and I think we wound up hitting cash flow and the income statement. Before we leave numbers, is there anything on the balance sheet that you really tend to focus on with the first glance at a business?
Beyers: Yeah, I want to see if they're not yet cash flow positive, you know, what's the burn rate? So, if they are burning cash, how much are they burning and how much do they have in the bank after you subtract all of their lease obligations and bank debt, how much do they have and how long could they support this cash burn? So, let's say they have $200 million in cash and $100 million in debt and leases, that's $100 million of excess cash. If they're only burning $10 million of cash a year; that's 10 years of runway. That's fine. But if it's $70 million that they're burning, I may not want to invest here, because they're going to have to go back to the well real soon, and the terms on that may not be great.
Lewis: Yeah. And as an investor that puts you in a spot where they're either going to be taking on more debt or you're going to get diluted as a shareholder.
Beyers: You're going to get diluted, and you really don't know. And here's the thing that I ask in that situation is, why is the cash burn so high? Like, what is it they're trying to achieve, and is it worth it? And that's a good question to ask. Like, every time you're looking at a business where there's some unknown, asking, what is it this company is trying to achieve and is it worth it? That's a really useful question to be asking yourself ...
Lewis: And other people, [laughs] it is, and that's the beauty of it, you can simply throw that question out there. And, you know, some management teams are responsive, and would be happy to answer those questions.
Tim, I mean, you've been in tech for such a long time, directly and as an analyst. And I'm guessing, at this point, there is not a lot that is going to get past you, but I'm curious --
Beyers: Oh, you'd be surprised. [laughs]
Lewis: [laughs] I'm curious if you still have those moments of, you know, I don't get it, or is this too hard. And like, what do you do when that's what you're, kind of, facing?
Beyers: Well, the beauty of the stock market is that -- I mean, I'm stealing from Warren Buffett here, but you know, you can just keep the bat on your shoulder, man, you do not have to swing at every pitch. And that's the beauty of it. So, if I don't get it, and this happens to me all the time, I don't get it, then I don't swing. And I can give you a clear example of this. You know, when there is a company that is assembled from a lot of different parts, particularly a lot of old tech, like, I am just -- we talked before we came on air, about whether or not I'm superstitious, so I'm not really superstitious, but I'll tell you, I'm really suspicious of a company that rebrands, has a lot of old tech and is layering new tech on top of it. That kind of gives me the heebie-jeebies, and sometimes unfairly so.
Like, I have immediately taken out, and said nope, I don't want any part of that. And I've done that. The most recent time I did that was with Dynatrace (NYSE: DT). So, that ticker is DT. This is a company that does application performance management. So, essentially looking at how your infrastructure is performing; it's a Datadog competitor, and I really like Datadog. And so, I have been admittedly dismissive of this company, because it's founded back in, like, 2004. Then was formed and sort of bulked up after purchase in private equity, I believe. There is an older company called Compuware that brought it in and then brought it all together, and then it was a private equity firm came in, a good private equity firm, Thoma Bravo, came, brought it in, put some more money into it. And then spins it out. I'm like, God! I don't know, I don't know, man! This just feels like you're putting a lot of stuff together. And they promised they rebuilt everything from the ground-up, but really, did they? And so, I just got instantly suspicious of it.
But you could argue, if you look since IPO and over the past year, Dynatrace has beaten the market. Now, it's not beaten the market by as many companies that I chose to focus on, but it's still beaten the market. So, that was some unfair, arguably, suspicion on my part. But, yeah, every time that comes up, Dylan, and I'm thinking like, this is too hard, my response is, I'm not touching that one. I may come back to it, but I'm not touching it right now.
Lewis: Yeah, I think complicated leadership history or complicated corporate history, where it's been taken private, brought public again, it's changed hands a couple of times, usually if [laughs] someone likes something, they're going to hold onto it. And so, that's kind of a red flag for me as well.
Beyers: Yes. Yeah, absolutely. So, I have so far been wrong on Dynatrace, and I may prove to be wrong for the duration of this company. Because so far, they are winning, they're doing fine. They get reasonably good ratings from industry analysts like Gartner. So, is my skepticism warranted? I haven't gone back and reevaluated, but at least in terms of stock market performance, the answer is no, my skepticism was not warranted so far. Maybe later on I'll be proven right, I don't know.
Lewis: [laughs] And that's the beauty of this, we get to keep scoring the whole time.
Beyers: We get to keep scoring; yes, exactly.
Lewis: [laughs] And that's the fun of it. And we -- I think, one of the things I love about being at The Fool is we have that transparency. One. And what we do allows for that transparency. You know, I did a show last week where I was like, I was dead wrong about Upwork versus DocuSign, thankfully, I bought them both, [laughs] and, you know, wound up benefiting from the multi-bagger returns that DocuSign has enjoyed, but I was dead wrong about Upwork. And that's going to happen, you're not going to be right all the time, you're going to be wrong sometimes.
Beyers: No, you're going to be wrong a lot. So, if I could just, kind of, if you're going to distil the process that I use, I recognize that it is not the Brian Feroldi process where it's like a deep checklist, and I'm just checking boxes. I don't do that. And that's primarily because I am relying a lot on my experience. But I can tell you, I start with the product and the customer. I look for the ideal customer and I look for the appeal of the product, is there a real connection to the product. And if the founder or even the CEO or the team, if there is a customer zero mentality there, if those three things, if I can check the box on those three things, there's a clear product here that really has a big customer base and that customer base is obviously growing, they have an attachment to it, because there's a clear need. That really excites me. And sometimes I get that from developers, sometimes I get that from articles. But if I can identify that, that's the first thing I look for.
And then, you know, customer enthusiasm wrapped around that, so I can tell that there's a big problem here, it's a meaty problem and a lot of people have it, then I'm really interested. And if there's a customer zero mentality here, so that I know that there's going to be more building, more improving, like there's a lot of investment that's going to grow this company over time, I'm interested. But I get to the financials at the end of the process. I'm really looking at, is this a migraine-level problem? Are customers really excited, and I can identify who those customers are? And you know, is this a killer product? Like, that's what I want to know; that's what I want to know.
Lewis: I think I know the answer to this, but is there a point where valuation factors in?
Beyers: There is. Like, in the case of Snowflake, which is a company that I love, but there's no way I can justify that valuation, because the amount of growth required is, you know, so massive that I'm just not willing to make a big bet on it. So, for me, a company like that, I might even want to own, like, one share, but that's it, and then I'm kind of waiting to see, because, you know, I can be patient, the market is always going to give you more opportunities. So, yeah, my valuation exercises, Dylan, are working back to see what's the required revenue growth or cash flow yield for some of these companies. So, if I can justify the revenue growth that's required, given the present valuation, then I'm interested. And I have a little bit of a model to do that, it's not the same thing as a discounted cash flow analysis, but it's kind of close. And that's how I look at it. But it's the end of the process.
It's more important for me to see that this is a company that actually has rabid customers and has a market that it can grow over a long period of time, because the products are clearly needed. Because this is the thing with tech, right, there are a lot of faker products, in tech in particular. You know, boy! You want to have a drinking game, play buzzword bingo on any kind of tech. [laughs] You will not survive the night. [laughs]
Lewis: [laughs] To make sure we didn't miss anything, Tim, we have the focus on the product, the users, leadership team, the founding story, financials and valuation wind up coming in there at the end; is there anything that we missed in that process where you're ultimately saying, like, yep, this is something I want to put some money behind?
Beyers: Incentives. I mean, incentives do matter. So, when I see how a company and a leadership team measures itself, and if it is consistent with what we want as investors, that is usually a nice proof point. If it's really off-kilter, then I get a little bit concerned. It's something I check; it's definitely something I check. It's not the first thing I check, but I do want to know how the incentives line up.
Lewis: Yeah. I mean, a company with warped incentives can provide shareholder returns, I am less convinced it will happen consistently.
Beyers: Yeah, I think that's right; I think that's a great way to put it.
Lewis: Yeah. Well, Tim, thank you so much for talking through this with me.
Beyers: Yeah, absolutely.
Lewis: I think that this is a very good option B., not to say that Brian Feroldi is the A. choice, but another, a multiple-choice approach to --
Beyers: I'll give him the A. choice. Can we just say, like, if you can do it and you have a very clearly defined checklist for yourself that the amount of stress that takes off of you mentally I think is worth its weight in gold. So, I give a strong +1 to a great checklist, and both Brians have great checklists.
Lewis: Yeah, Brian Stoffel being the other Brian, who has been on the show before. But, yeah, we're trying to give something to everyone here. Some people like the clear framework, other people like the thought exercises that I think you tend to go through with your approach. And you know, I know in Brian's case it's like, I have the framework, so that I can blame the framework, you know. [laughs] You create these systems, so that there are times where it just doesn't work, it doesn't come together and you can at least, kind of, dissociate from it a little bit. [laughs]
Beyers: Yes. And in my case, I have nobody to blame but myself here, because if I am making erroneous judgments or my filter is wrong -- this is why I talk to a lot of people though, I mean, I don't want to make it seem like I just make snap judgments here, I tend to talk to a lot of people. Like, before I made a bigger bet on Fastly, I wanted to talk to a lot of different analysts and developers about it, because it is really complex, and I needed to know more. And as I've gone deeper and I've learned more, it has confirmed for me. But this is not a short process, [laughs] it was not a short process with Fastly at all.
Lewis: That's actually my immediate question in hearing you say that is, if you were to ballpark this whole thing that we've just run through in real time, what does it look like, is it days, weeks, months?
Beyers: It's usually a couple of weeks to get to a place where I feel very confident, but -- and this is the big but -- if it's really complicated and I feel like I'm in the right ballpark, then I will take extra time. So, like, with Fastly I really felt like I needed to take extra time, you know, with Arista Networks, I feel like I needed to take extra time, because these are deeply complicated businesses. But generally, you know, like Peloton, a couple of weeks.
Lewis: Well, Tim, I think I speak for our members and our listeners when I say I am happy that you put in that extra time, because you are an awesome source of investing ideas, and as we found out today processes as well.
Beyers: I appreciate that. I probably get way more credit than I deserve here, but I'll take it and I'll take it humbly. Thank you.
Lewis: Yeah, thanks again for joining me, Tim.
Listeners, that's going to do it for this episode of Industry Focus. If you have any questions or you want to reach out and say, "Hey!" shoot us an email at IndustryFocus@Fool.com. In fact, if you have a really awesome checklist or approach to investing, we want to hear about it, maybe we can do a listener-focused show at some point. We're always looking for ideas, always looking for different ways to look at companies. You can always get us on Twitter as well @MFIndustryFocus. If you want more of our stuff, subscribe on iTunes or wherever you get your podcasts.
As always, people on the program may own companies discussed on the show, and The Motley Fool may have formal recommendations for or against stocks mentioned, so don't buy or sell anything based solely on what you hear.
Thanks to Tim Sparks for all his work behind the glass today, and thank you for listening. Until next time, Fool on!
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Dylan Lewis owns shares of Amazon, DocuSign, Shopify, Twilio, and Upwork. Tim Beyers owns shares of Arista Networks, Fastly, HubSpot, MongoDB, Peloton Interactive, Shopify, and Twilio. The Motley Fool owns shares of and recommends Amazon, Arista Networks, Datadog, DocuSign, Fastly, HubSpot, MongoDB, Peloton Interactive, Shopify, Snowflake Inc., Twilio, and Twitter. The Motley Fool recommends Gartner and Upwork and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. 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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I mean, it's pretty cold here in the mountains in Colorado, but it'll warm up a little bit the next few days and we'll get that beautiful Winter, but sort of Indian Summer-ish, and so, we've got the leaves but the snow hasn't come and stuck on the ground yet. As always, people on the program may own companies discussed on the show, and The Motley Fool may have formal recommendations for or against stocks mentioned, so don't buy or sell anything based solely on what you hear. The Motley Fool owns shares of and recommends Amazon, Arista Networks, Datadog, DocuSign, Fastly, HubSpot, MongoDB, Peloton Interactive, Shopify, Snowflake Inc., Twilio, and Twitter.
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Tim Beyers owns shares of Arista Networks, Fastly, HubSpot, MongoDB, Peloton Interactive, Shopify, and Twilio. The Motley Fool owns shares of and recommends Amazon, Arista Networks, Datadog, DocuSign, Fastly, HubSpot, MongoDB, Peloton Interactive, Shopify, Snowflake Inc., Twilio, and Twitter. The Motley Fool recommends Gartner and Upwork and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon.
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You know, if you're talking about a tech product -- let's just say we're talking about tech for a minute here -- there are a couple of things you could do, just about every one of these tech companies and tech products, they have some kind of community, so there are things you can look for. Take a look at what the customers say about the company and be clear -- you know, very often a company will tell you who their ideal customer is, Twilio is very clear about this, they say right upfront in their SEC filings, developers are our customer, these are the people that we talk to. And if the founder or even the CEO or the team, if there is a customer zero mentality there, if those three things, if I can check the box on those three things, there's a clear product here that really has a big customer base and that customer base is obviously growing, they have an attachment to it, because there's a clear need.
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[laughs] Beyers: I didn't know what it was -- I didn't really know what it was -- I had to ask people what it was. Lewis: I don't, no. Then I look at leadership and I look to see whether or not this is a customer zero company, if it's a customer zero company, I'm really interested.
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718945.0
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2020-11-17 00:00:00 UTC
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Forget New Relic, Datadog Is a Better Silo-Busting Growth Stock
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DDOG
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https://www.nasdaq.com/articles/forget-new-relic-datadog-is-a-better-silo-busting-growth-stock-2020-11-17
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nan
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nan
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Datadog's (NASDAQ: DDOG) stock recently dropped after the data visualization company posted its third-quarter earnings. Its revenue rose 61% year over year to $155 million, beating estimates by $10 million. Its adjusted net income surged from $783,000 to $16 million, or $0.05 per share, which also beat estimates by a nickel.
Datadog expects its revenue to rise 62%-63% for the full year, compared to expectations for 57% growth, with adjusted earnings of $0.17-$0.18 per share -- which was well above the consensus forecast of $0.12 per share.
Those numbers were impressive, but investors seemed concerned about two things: The company's revenue growth had gradually decelerated from its 83% growth rate in 2019, and the stock looked frothy at 44 times this year's sales.
By comparison, Datadog's peer New Relic (NYSE: NEWR) trades at just five times this year's sales. Those concerns are valid, but I believe Datadog remains a much better "silo-busting" play than New Relic.
Image source: Getty Images.
What do Datadog and New Relic do?
Large companies usually host their data across a wide range of software, cloud services, and apps. Keeping track of all that data can be challenging, so Datadog and New Relic both break down the silos and pull the information onto unified dashboards.
Datadog and New Relic didn't start out as competitors. Datadog initially helped companies monitor their cloud infrastructure services, while New Relic mainly tracked the performance of a company's websites and apps. However, both companies' APM (application performance management) platforms are now overlapping as they expand their ecosystems.
Datadog is growing faster
Datadog's growth is decelerating, but it's still outpacing New Relic, which grew its revenue just 14% year over year to $166 million last quarter. Wall Street expects New Relic's revenue to rise just 11% this year.
Next year, analysts expect Datadog's revenue to rise 36%, but for New Relic's revenue to rise just 12%.
Image source: Getty Images.
Demand for Datadog's service is surging because it seamlessly straddles public cloud services, on-site private clouds, and other connected services. AWS and Azure offer their own cloud infrastructure monitoring tools, but these tools generally can't access a company's legacy computing platforms the way Datadog can.
New Relic chased Datadog by launching New Relic One, an upgraded dashboard that offers broader monitoring tools for other cloud services, last year. New Relic One supports over 300 integrations with other services, while Datadog supports more than 400 integrations.
But Datadog is still locking in large customers at a faster rate than New Relic. Datadog's total number of customers generating over $100,000 in annualized recurring revenue (ARR) grew 52% year over year to 1,107 last quarter. New Relic's number of customers with more than $100,000 in ARR rose just 14% to 1,039 last quarter.
Datadog is more profitable
Datadog and New Relic are both unprofitable by GAAP measures, mainly due to high stock-based compensation expenses. But on a non-GAAP basis, Datadog became profitable this year as New Relic turned unprofitable.
Last quarter, New Relic posted a non-GAAP net loss of $4 million, compared to a profit of $15 million a year earlier, as its transition from subscriptions to consumption-based pricing dented its profits.
Subscriptions generate sticky recurring revenue and lock in users. But in a consumption-based model, customers only pay for the services they use.
New Relic's strategic shift was poorly timed, because many of its customers in the hospitality, travel, and leisure sectors conducted less business throughout the pandemic. Datadog, which uses a subscription-based model, was much better insulated from those headwinds.
Moreover, 20% of Datadog's customers used four or more of its products at the same time last quarter, up from just 7% a year ago -- which indicates its ecosystem is becoming stickier.
Analysts expect New Relic to post a loss this year but possibly generate a non-GAAP profit next year -- assuming the pandemic passes and its consumption-based model actually boosts its revenue per customer. They expect Datadog to remain profitable this year, and for its non-GAAP earnings to rise 6% next year.
The key takeaways
Datadog isn't a stock for queasy investors, and they shouldn't dismiss the competitive threats and its high valuation.
However, Datadog still remains cheaper than some other recent high-growth tech IPOs, and it will likely benefit from the secular expansion of the APM market -- which could grow at a compound annual growth rate of 11.2% between 2020 and 2027, according to ReportLinker.
Investors should do more homework and compare Datadog to other similar companies like Splunk and Elastic, but they shouldn't adopt a value-seeking mindset and assume New Relic is a good APM stock simply because it's cheaper relative to its annual revenue.
10 stocks we like better than Datadog
When investing geniuses David and Tom Gardner have 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.*
David and Tom 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 October 20, 2020
Leo Sun has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Datadog, Elastic, New Relic, and Splunk. 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 recently dropped after the data visualization company posted its third-quarter earnings. New Relic's strategic shift was poorly timed, because many of its customers in the hospitality, travel, and leisure sectors conducted less business throughout the pandemic. However, Datadog still remains cheaper than some other recent high-growth tech IPOs, and it will likely benefit from the secular expansion of the APM market -- which could grow at a compound annual growth rate of 11.2% between 2020 and 2027, according to ReportLinker.
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Datadog's (NASDAQ: DDOG) stock recently dropped after the data visualization company posted its third-quarter earnings. Datadog's total number of customers generating over $100,000 in annualized recurring revenue (ARR) grew 52% year over year to 1,107 last quarter. Last quarter, New Relic posted a non-GAAP net loss of $4 million, compared to a profit of $15 million a year earlier, as its transition from subscriptions to consumption-based pricing dented its profits.
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Datadog's (NASDAQ: DDOG) stock recently dropped after the data visualization company posted its third-quarter earnings. Datadog is growing faster Datadog's growth is decelerating, but it's still outpacing New Relic, which grew its revenue just 14% year over year to $166 million last quarter. Next year, analysts expect Datadog's revenue to rise 36%, but for New Relic's revenue to rise just 12%.
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Datadog's (NASDAQ: DDOG) stock recently dropped after the data visualization company posted its third-quarter earnings. What do Datadog and New Relic do? Datadog is growing faster Datadog's growth is decelerating, but it's still outpacing New Relic, which grew its revenue just 14% year over year to $166 million last quarter.
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718946.0
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2020-11-15 00:00:00 UTC
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Software Stocks Are Crashing. Here Are 3 Stocks You Can Buy Now
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DDOG
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https://www.nasdaq.com/articles/software-stocks-are-crashing.-here-are-3-stocks-you-can-buy-now-2020-11-15
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The market has been especially volatile lately, as investors continue to process news about the presidential election, the pandemic, and the U.S. recession.
Technology stocks, in particular, have experienced some big price swings as investors consider whether or not parts of the U.S. will return to lockdowns this winter, or if Pfizer's vaccine candidate will be available to the general population later next year.
But despite all of the market uncertainty, there are a few software stocks that investors should consider buying now and holding onto for the longterm. We asked three Motley Fool contributors which software stocks they think investors should consider right now, and they came back with Twilio (NYSE: TWLO), DataDog (NASDAQ: DDOG), and HubSpot (NYSE: HUBS). Here's why.
Image source: Getty Images.
Three signs this stock is a long-term winner
Brian Withers (Twilio): Twilio is getting caught up in the tech stock sell-off as investors may be cashing out to move to more conservative investments. This is a short-sighted approach and these sellers are going to miss out on the massive long-term prospects of this tech stock. With a pivot to become a customer engagement platform, the best days for the company are still ahead. Here are three recent events that show why.
The first event was the company's investor day presentation on Oct. 1, where management shared its long term vision and plans for the next few years. In short, the opportunity to grow is massive. Twilio has just a small portion of the potential market across all its product segments, its customer verticals, and in all regions around the globe. Given this huge opportunity, management committed that it would be able to achieve 30%-plus top-line annual growth for the next four years. This declaration should give investors confidence that the company plans to follow through on its growth plans and will be a much bigger platform in the years ahead.
The second event occurred on Oct. 12 when the company announced its $3.2 billion all-stock acquisition of Segment, a customer data platform company. This merger enables Twilio to tap into a deep set of customer insights to better inform its messaging applications, improve the platform's ability to engage with customers, and provide more personalized messages. Segment brings an additional $17 billion in addressable market opportunity. With the massive success Twilio's had in growing its customer base, this merger should help accelerate its top line even more.
The third event was its earnings release on Oct. 26. This report provided the cherry on top of what was an ice cream sundae of an October for the company. The 52% year-over-year growth beat management's increased guidance to hit a record $448 million in quarterly revenue. This incredible growth was driven by existing customers and new customer acquisitions. Existing customers drove its dollar-based net retention to 137% by expanding into new offerings and growing usage of their existing messaging products. The company added 8,000 customers in the quarter to hit a record 208,000, up 21% year over year. The company projected it would achieve 36% to 38% year-over-year top-line growth in the upcoming fourth quarter, but it's likely that it will beat those projections, too.
This customer engagement platform is on a roll. The investor day highlighted this growth company still has massive opportunities ahead. Its smart acquisition of Segment expanded its already huge addressable market even more. And its continued solid execution from its most recentearnings callmakes this software platform a long-term buy. With the recent sell-off, now's a good chance to pick up some shares at a discount.
Datadog: Explosive growth at a discount
Danny Vena (Datadog): You've likely heard the old saying, "Don't throw out the baby with the bathwater." Given the wholesale sell-off within the technology sector over the past several weeks, the saying is particularly applicable to the current situation. The rotation out of tech and software stocks that began in mid-October has resulted in a number of bargains, presenting investors with a number of compelling opportunities. I think that's the case with Datadog.
The stock had been on a hot streak this year, boasting more than triple-digit gains between January and Oct. 13. Since then the stock has lost more than 25% of its value and nothing about Datadog's growth story has changed.
The results from earlier this week tell the tale. For the third quarter, DataDog reported revenue of $155 million, up 61% year over year, only a slight deceleration from the 68% top-line growth it delivered in the second quarter. The company also generated a small adjusted earnings per share (EPS) for the quarter of $0.05, not bad for a company that went public just over a year ago. Both metrics sailed past analysts' consensus estimates, which called for revenue of $144.3 million and EPS of $0.01.
The company also continued its strong track record of attracting new clients, with large, more lucrative enterprise businesses at the top of the list. Customers representing annual revenue of more than $100,000 grew to 1,107, growing 52% from 727 in the prior-year quarter. At the same time, its overall client base climbed to 13,100, up 38%.
Another secret to Datadog's success is that once customers try out its services, they not only tend to stick around, but also spend more money. The company reported a dollar-based retention rate -- which measures the level of spending by existing customers -- of above 130% for the 13th consecutive quarter. Put another way, existing clients spent 30% more over the past year than they did in the preceding 12 months.
Datadog's lofty valuation probably contributed to its decline. Even after its recent haircut, the stock trades for roughly 52 times trailing-12-month sales.
That said, given Datadog's high-caliber growth, I'd argue it's worth its premium price tag and it's just taking a breather before climbing to even loftier heights. The stock might be worth a look at its recent discounted price.
HubSpot's fantastic year isn't over yet
Chris Neiger (HubSpot): HubSpot's software may not be well known to the average investor, but it's playing a critical role for small businesses, especially during the pandemic. HubSpot's inbound marketing software helps companies manage their current customer relationships while also providing online tools to acquire new ones.
With HubSpot focusing on small and medium-sized businesses, you might assume that the company has taken a hit this year as many small businesses have suffered from the negative economic effects of COVID-19. But HubSpot has proved to be very resilient and in the third quarter (reported on Nov. 5) HubSpot's sales spike 32% and adjusted diluted earnings per share reached $0.28, both of which outpaced the company's own guidance and beat Wall Street's expectations.
Even during this tough economic time, HubSpot grew its subscription revenue by 32% in the third quarter and boosted its total customers by an impressive 39% year over year. Part of the company's success this year came from its ability to work with businesses that were struggling, offering them free premium services or reduced rates in order to help them out. That type of strategy may seem counter intuitive for some businesses, but it's helped HubSpot build a large customer base that will likely be loyal to the company for years to come.
Even with the difficult economic situation, HubSpot's management said full-year 2020 revenue will be 28% higher than it was last year. Investors have taken notice of HubSpot's phenomenal growth this year and have pushed the company's share price up an impressive 122% year to date.
And while it may seem logical to think that there's no more room for current investors to benefit, consider that HubSpot's massive customer growth this year will likely boost sales and earnings down the line. When the pandemic is behind us and companies begin spending more money to grow their businesses, they'll likely do so using many of HubSpot's services that helped them get through this difficult year.
10 stocks we like better than HubSpot
When investing geniuses David and Tom Gardner have 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.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and HubSpot 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 October 20, 2020
Brian Withers owns shares of Twilio. Chris Neiger has no position in any of the stocks mentioned. Danny Vena owns shares of Datadog, HubSpot, and Twilio. The Motley Fool owns shares of and recommends Datadog, HubSpot, 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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We asked three Motley Fool contributors which software stocks they think investors should consider right now, and they came back with Twilio (NYSE: TWLO), DataDog (NASDAQ: DDOG), and HubSpot (NYSE: HUBS). Technology stocks, in particular, have experienced some big price swings as investors consider whether or not parts of the U.S. will return to lockdowns this winter, or if Pfizer's vaccine candidate will be available to the general population later next year. HubSpot's inbound marketing software helps companies manage their current customer relationships while also providing online tools to acquire new ones.
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We asked three Motley Fool contributors which software stocks they think investors should consider right now, and they came back with Twilio (NYSE: TWLO), DataDog (NASDAQ: DDOG), and HubSpot (NYSE: HUBS). With the massive success Twilio's had in growing its customer base, this merger should help accelerate its top line even more. The 52% year-over-year growth beat management's increased guidance to hit a record $448 million in quarterly revenue.
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We asked three Motley Fool contributors which software stocks they think investors should consider right now, and they came back with Twilio (NYSE: TWLO), DataDog (NASDAQ: DDOG), and HubSpot (NYSE: HUBS). HubSpot's fantastic year isn't over yet Chris Neiger (HubSpot): HubSpot's software may not be well known to the average investor, but it's playing a critical role for small businesses, especially during the pandemic. Even during this tough economic time, HubSpot grew its subscription revenue by 32% in the third quarter and boosted its total customers by an impressive 39% year over year.
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We asked three Motley Fool contributors which software stocks they think investors should consider right now, and they came back with Twilio (NYSE: TWLO), DataDog (NASDAQ: DDOG), and HubSpot (NYSE: HUBS). For the third quarter, DataDog reported revenue of $155 million, up 61% year over year, only a slight deceleration from the 68% top-line growth it delivered in the second quarter. Investors have taken notice of HubSpot's phenomenal growth this year and have pushed the company's share price up an impressive 122% year to date.
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bab14b0b-f5b2-4b9e-a510-2c68b957e448
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718947.0
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2020-11-13 00:00:00 UTC
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Datadog: Buy the Dip?
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DDOG
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https://www.nasdaq.com/articles/datadog%3A-buy-the-dip-2020-11-13
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nan
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nan
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Despite better-than-expected third-quarter results and raised full-year guidance, Datadog (NASDAQ: DDOG) stock has kept dropping. The market now values the high-growth cloud monitoring specialist at a more than 25% discount to its October all-time highs. Yet the company remains exposed to the secular strong growth of its vast cloud computing market. So should you buy the dip?
Strong short-term results
Even with the threat of pricing pressures given the recent generous free offerings from the cloud monitoring competitor New Relic, Datadog posted quarterly results above guidance. Revenue increased 61.3% to $154.7 million, way above the forecast revenue range of $143 million to $145 million.
The company's land-and-expand strategy, which consists of attracting new customers that will increase their consumption of Datadog's services over time, fueled that growth. And CEO Olivier Pomel indicated during the earnings call the coronavirus-induced uncertainties that led to rationalized cloud usage in the second quarter didn't materialize in the third.
As a result, the dollar-based net retention rate exceeded 130% for the 13th consecutive quarter, which means existing customers spent more than 30% more than last year as the company leveraged cross-selling opportunities between its different modules. During Q3, 71% of customers used at least two products, up from 50% in the prior-year quarter.
In addition, Datadog attracted approximately 1,000 new customers during last quarter, bringing the total number of customers to 13,100, up from 9,500 one year ago -- another indicator of the strength of the company's offering.
Image source: Getty Images.
Growth ahead
With the various modules it developed over time, Datadog now offers a comprehensive observability platform. "Observability" is a new buzzword, but it corresponds to real demand. Enterprises need to manage their cloud infrastructures and applications with end-to-end and easy-to-use solutions that help them optimize performance, plan resources, and troubleshoot issues.
And given the flexible consumption of resources cloud computing allows, enterprises should keep moving some of their computing infrastructures and applications to the cloud over the next many years. As a result, the global cloud computing market should grow at a compound annual rate (CAGR) of 17.5% by 2025, according to research outfit Research and Markets.
Given these attractive prospects, competition is intensifying. For instance, many monitoring specialists, such as Splunk and New Relic, have been expanding their offerings to propose similar cloud observability capabilities. Even tech giant Oracle revealed a new cloud observability and management platform in October.
The impact of such moves remains to be seen, but with so many players ramping up their efforts to address the cloud observability area, competitive pressures should intensify going forward.
In any case, Datadog should keep thriving with its cloud-native portfolio by capitalizing on its strengths. Pomel indicated during theearnings callthat he will still prioritize top-line growth over profitability with aggressive investments in research and development and sales and marketing efforts. As an illustration, a year ago, the company expanded its footprint into the growing cybersecurity area, which will provide extra cross-selling opportunities with its core offerings.
In addition, Datadog is developing various partnerships with the three major public cloud vendors: Amazon, Microsoft, and Alphabet's Google to fuel its long-term growth. For instance, the integration with Microsoft's cloud infrastructure (Azure) console will significantly reduce the friction to use Datadog's services for the tech giant's customers.
Buy the dip?
Despite the company's attractive long-term potential and strong Q3 results, the stock price remains well below its October all-time highs. Yet the market cap at 46 times the midpoint of management's full-year revenue guidance range of $566 million to $572 million still corresponds to phenomenal long-term expectations.
With scale, sustaining spectacular revenue growth will become more and more challenging. As an illustration, the midpoint of the fourth-quarter revenue guidance range represents 43% year-over-year growth. Many companies would dream of that outlook, but it represents a strong deceleration compared to Datadog's previous quarters of top-line growth way above 60%.
Thus, even though Datadog's stock price dropped by more than 25% below its recent all-time highs, investors should consider waiting for a deeper pullback to participate in the company's long-term growth story.
10 stocks we like better than Datadog
When investing geniuses David and Tom Gardner have 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.*
David and Tom 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 October 20, 2020
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. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool's board of directors. Herve Blandin has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Datadog, Microsoft, New Relic, and Splunk and recommends the following options: long January 2021 $85 calls on Microsoft, short January 2021 $115 calls on Microsoft, short January 2022 $1940 calls on Amazon, and long January 2022 $1920 calls on Amazon. 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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Despite better-than-expected third-quarter results and raised full-year guidance, Datadog (NASDAQ: DDOG) stock has kept dropping. As a result, the dollar-based net retention rate exceeded 130% for the 13th consecutive quarter, which means existing customers spent more than 30% more than last year as the company leveraged cross-selling opportunities between its different modules. In addition, Datadog is developing various partnerships with the three major public cloud vendors: Amazon, Microsoft, and Alphabet's Google to fuel its long-term growth.
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Despite better-than-expected third-quarter results and raised full-year guidance, Datadog (NASDAQ: DDOG) stock has kept dropping. Despite the company's attractive long-term potential and strong Q3 results, the stock price remains well below its October all-time highs. Yet the market cap at 46 times the midpoint of management's full-year revenue guidance range of $566 million to $572 million still corresponds to phenomenal long-term expectations.
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Despite better-than-expected third-quarter results and raised full-year guidance, Datadog (NASDAQ: DDOG) stock has kept dropping. Strong short-term results Even with the threat of pricing pressures given the recent generous free offerings from the cloud monitoring competitor New Relic, Datadog posted quarterly results above guidance. See the 10 stocks *Stock Advisor returns as of October 20, 2020 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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Despite better-than-expected third-quarter results and raised full-year guidance, Datadog (NASDAQ: DDOG) stock has kept dropping. In addition, Datadog attracted approximately 1,000 new customers during last quarter, bringing the total number of customers to 13,100, up from 9,500 one year ago -- another indicator of the strength of the company's offering. Despite the company's attractive long-term potential and strong Q3 results, the stock price remains well below its October all-time highs.
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718948.0
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2020-11-13 00:00:00 UTC
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Earnings Update: Datadog, Inc. (NASDAQ:DDOG) Just Reported Its Third-Quarter Results And Analysts Are Updating Their Forecasts
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DDOG
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https://www.nasdaq.com/articles/earnings-update%3A-datadog-inc.-nasdaq%3Addog-just-reported-its-third-quarter-results-and
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nan
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It's been a mediocre week for Datadog, Inc. (NASDAQ:DDOG) shareholders, with the stock dropping 10% to US$90.01 in the week since its latest third-quarter results. Sales of US$155m came in 7.2% ahead of expectations, although statutory earnings didn't fare nearly so well, recording a loss of US$0.05, a 14% miss. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
NasdaqGS:DDOG Earnings and Revenue Growth November 13th 2020
Taking into account the latest results, the current consensus from Datadog's 18 analysts is for revenues of US$798.4m in 2021, which would reflect a major 48% increase on its sales over the past 12 months. Losses are forecast to balloon 655% to US$0.19 per share. Before this earnings announcement, the analysts had been modelling revenues of US$773.4m and losses of US$0.18 per share in 2021. So it's pretty clear consensus is mixed on Datadog after the new consensus numbers; while the analysts lifted revenue numbers, they also administered a per-share loss expectations.
The consensus price target stayed unchanged at US$101, seeming to suggest that higher forecast losses are not expected to have a long term impact on the valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Datadog analyst has a price target of US$140 per share, while the most pessimistic values it at US$80.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. Next year brings more of the same, according to the analysts, with revenue forecast to grow 48%, in line with its 51% annual growth over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 13% per year. So it's pretty clear that Datadog is forecast to grow substantially faster than its industry.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that in mind, we wouldn't be too quick to come to a conclusion on Datadog. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Datadog going out to 2024, and you can see them free on our platform here..
We don't want to rain on the parade too much, but we did also find 5 warning signs for Datadog (1 is a bit concerning!) that you need to be mindful of.
This article by Simply Wall St is general in nature. 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.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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It's been a mediocre week for Datadog, Inc. (NASDAQ:DDOG) shareholders, with the stock dropping 10% to US$90.01 in the week since its latest third-quarter results. NasdaqGS:DDOG Earnings and Revenue Growth November 13th 2020 Taking into account the latest results, the current consensus from Datadog's 18 analysts is for revenues of US$798.4m in 2021, which would reflect a major 48% increase on its sales over the past 12 months. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business.
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NasdaqGS:DDOG Earnings and Revenue Growth November 13th 2020 Taking into account the latest results, the current consensus from Datadog's 18 analysts is for revenues of US$798.4m in 2021, which would reflect a major 48% increase on its sales over the past 12 months. It's been a mediocre week for Datadog, Inc. (NASDAQ:DDOG) shareholders, with the stock dropping 10% to US$90.01 in the week since its latest third-quarter results. So it's pretty clear consensus is mixed on Datadog after the new consensus numbers; while the analysts lifted revenue numbers, they also administered a per-share loss expectations.
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NasdaqGS:DDOG Earnings and Revenue Growth November 13th 2020 Taking into account the latest results, the current consensus from Datadog's 18 analysts is for revenues of US$798.4m in 2021, which would reflect a major 48% increase on its sales over the past 12 months. It's been a mediocre week for Datadog, Inc. (NASDAQ:DDOG) shareholders, with the stock dropping 10% to US$90.01 in the week since its latest third-quarter results. Next year brings more of the same, according to the analysts, with revenue forecast to grow 48%, in line with its 51% annual growth over the past three years.
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NasdaqGS:DDOG Earnings and Revenue Growth November 13th 2020 Taking into account the latest results, the current consensus from Datadog's 18 analysts is for revenues of US$798.4m in 2021, which would reflect a major 48% increase on its sales over the past 12 months. It's been a mediocre week for Datadog, Inc. (NASDAQ:DDOG) shareholders, with the stock dropping 10% to US$90.01 in the week since its latest third-quarter results. Before this earnings announcement, the analysts had been modelling revenues of US$773.4m and losses of US$0.18 per share in 2021.
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2020-11-12 00:00:00 UTC
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3 Stocks to Buy Now That They're Cheap Again
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DDOG
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https://www.nasdaq.com/articles/3-stocks-to-buy-now-that-theyre-cheap-again-2020-11-12
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Hot stocks cool down, and sector rotation hits even the best market darlings. Many names that hit fresh highs a few weeks ago are in the market doghouse right now, but quality will eventually win the day on Wall Street.
Datadog (NASDAQ: DDOG), DraftKings (NASDAQ: DKNG), and Fastly (NYSE: FSLY) are three stocks that have recently fallen at least 20% below their earlier highs. These are names that I expect will recover quickly. Here's why I'm bullish on these three briefly out-of-favor investments.
Image source: Getty Images.
Datadog
One of this year's bigger winners reported fresh financials this week, and Wall Street wasn't impressed. Shares of the cloud-based provider of website uptime tracking, security monitoring, and a growing suite of analytical tools declined 6% on Wednesday after posting its third-quarter results, and the stock is now 26% below the all-time high it hit just four weeks ago.
The quarter had everything you would expect in an applause-worthy performance. The 61% increase in revenue and adjusted profit of $0.05 a share were comfortably ahead of the 50% top-line growth and $0.01 a share in net income that analysts targeted. Datadog boosted its outlook for all of 2020, and the guidance it initiated for the current quarter is also above where the pros are parked.
Datadog's streak of dollar-based net retention rate above 130% (the rate of returning customers who are spending at least 30% more on Datadog's offerings than a year before) now stretches to 13 consecutive quarters. Bears can argue that Datadog's valuation was stretched when it peaked last month, but with revenue growth outpacing expectations, the bullish counter is that the multiple will keep retracting organically even as the stock bounces back in the near future.
DraftKings
I have a love-hate relationship with DraftKings as an investment, but there's no denying that it's the top dog in wagering on fantasy sports. More importantly, DraftKings is using that pole position as a Trojan horse to get its more traditional sportsbook betting platform into our heads. DraftKings has been brokering deals with leading sports networks, and it's going to pay off a lot sooner than you think.
Investors were hopping onto DraftKings stock over the summer and early fall as pro sports leagues across the country restarted their seasons, but investors who once bet on DraftKings are now wagering against the niche leader. The stock has fallen 35% since its early October highs as of Wednesday's close, and it's well positioned to crank out a blowout quarterly report on Friday morning. Revenue rose 24% for the quarter that ended in June, and that was without any of the major leagues in action. This is a classic pullback that could bounce back later this week if it's able to deliver a strong financial update.
Fastly
The hardest-hit of the three stocks here is Fastly. The next-gen content delivery network ranked as one of this year's biggest winners until it lowered its guidance four weeks ago, largely as a result of losing Tiktok as its largest customer.
Investors bailed on Fastly, which lost nearly half of its value after declining in 12 of the last 13 trading days of October. Fastly is now trading 47% below the all-time high it established in mid-October. Whenever a company slashes its guidance, it's going to raise red flags. Datadog this week showed us that even increasing your guidance sometimes isn't good enough.
However, the end result here is that Fastly is now roughly half the company it was a month ago in terms of market valuation. Even if TikTok doesn't come back -- and it was a big part of the business, constituting nearly 11% of its revenue through the first nine months of 2020 -- analysts see revenue growing by at least 30% in 2021.
10 stocks we like better than Fastly
When investing geniuses David and Tom Gardner have 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.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Fastly 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 October 20, 2020
Rick Munarriz owns shares of Datadog and Fastly. The Motley Fool owns shares of and recommends Datadog and Fastly. 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), DraftKings (NASDAQ: DKNG), and Fastly (NYSE: FSLY) are three stocks that have recently fallen at least 20% below their earlier highs. Shares of the cloud-based provider of website uptime tracking, security monitoring, and a growing suite of analytical tools declined 6% on Wednesday after posting its third-quarter results, and the stock is now 26% below the all-time high it hit just four weeks ago. Bears can argue that Datadog's valuation was stretched when it peaked last month, but with revenue growth outpacing expectations, the bullish counter is that the multiple will keep retracting organically even as the stock bounces back in the near future.
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Datadog (NASDAQ: DDOG), DraftKings (NASDAQ: DKNG), and Fastly (NYSE: FSLY) are three stocks that have recently fallen at least 20% below their earlier highs. Many names that hit fresh highs a few weeks ago are in the market doghouse right now, but quality will eventually win the day on Wall Street. Datadog One of this year's bigger winners reported fresh financials this week, and Wall Street wasn't impressed.
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Datadog (NASDAQ: DDOG), DraftKings (NASDAQ: DKNG), and Fastly (NYSE: FSLY) are three stocks that have recently fallen at least 20% below their earlier highs. Bears can argue that Datadog's valuation was stretched when it peaked last month, but with revenue growth outpacing expectations, the bullish counter is that the multiple will keep retracting organically even as the stock bounces back in the near future. See the 10 stocks *Stock Advisor returns as of October 20, 2020 Rick Munarriz owns shares of Datadog and Fastly.
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Datadog (NASDAQ: DDOG), DraftKings (NASDAQ: DKNG), and Fastly (NYSE: FSLY) are three stocks that have recently fallen at least 20% below their earlier highs. Many names that hit fresh highs a few weeks ago are in the market doghouse right now, but quality will eventually win the day on Wall Street. However, the end result here is that Fastly is now roughly half the company it was a month ago in terms of market valuation.
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718950.0
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2020-11-11 00:00:00 UTC
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Datadog Inc (DDOG) Q3 2020 Earnings Call Transcript
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DDOG
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https://www.nasdaq.com/articles/datadog-inc-ddog-q3-2020-earnings-call-transcript-2020-11-11
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Image source: The Motley Fool.
Datadog Inc (NASDAQ: DDOG)
Q3 2020 Earnings Call
Nov 10, 2020, 5:00 p.m. ET
Contents:
Prepared Remarks
Questions and Answers
Call Participants
Prepared Remarks:
Operator
Ladies and gentlemen, thank you for standing by, and welcome to the Datadog third-quarter 2020earnings call [Operator instructions] Please be advised that today's conference may be recorded. I'd now like to hand the conference over to your host today, Mr. A.J.
Ljubich, director of investor relations. Please go ahead, sir.
A.J. Ljubich -- Director of Investor Relations
Thank you, Liz. Good afternoon, and thank you for joining us today to review Datadog's third-quarter 2020 financial results, which we announced in our press release issued after the close of market today. 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 statements related to our business that are forward-looking under federal securities laws and made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements related to our future financial performance, including our outlook for the fourth quarter and for the full-year 2020, our strategy, potential benefits of our products, partnerships, and investments, anticipated hiring, our ability to capitalize on our market opportunity and the impact of the COVID-19 pandemic to our customers using our platform, and industry trends as well as our ability to benefit from these trends.
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 not as of any subsequent date. These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations. For a discussion of material risks and other important factors that could cause actual results to differ, please refer to the quarterly report on Form 10-Q for the quarterly period ending June 30, 2020, filed with the SEC on August 10, 2020.
10 stocks we like better than Datadog
When investing geniuses David and Tom Gardner have 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.*
David and Tom 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 October 20, 2020
Additional information will be made available on our quarterly report on Form 10-Q for the quarterly period ended September 30, 2020, and other filings and reports that we may file from time to time with the SEC. Our filings with the SEC are available on the Investor Relations section of our website. A replay of this call will be available there for a limited time. Non-GAAP financial measures will be discussed on this conference call.
Please refer to the tables in our earnings release, which you can find on the Investor Relations portion of our website, for a reconciliation of these measures to the most directly comparable GAAP financial measure. With that, I'd like to turn the call over to Olivier.
Olivier Pomel -- Founder and Chief Executive Officer
Thank you, A.J., and thank you all for joining us today. We are very pleased with our performance in Q3, which showed continued high growth at scale and demonstrated efficiencies. It was an exciting quarter in which we maintain our high velocity of product delivery, starting with the new products and features announced at Dash, our annual user conference. We are building on our strong track record of innovation and expanding our lead as the most complete and cloud-native end-to-end observability platform.
With the majority of our employees continuing to work from home, I am extremely impressed by our productivity. Our engineers continue to build and ship innovative solutions. Our go-to-market teams continue to efficiently deliver value to our customers, and we continue to hire rapidly across R&D and sales and marketing to best position ourselves for the future. We are strategic partners to our customers like never before as the importance of being digital-first and agile is more pronounced than ever.
Companies everywhere are continuing to migrate to the cloud and invest in their digital operations, especially these dot-coms. And as a market opportunity, driven by massive replatforming and cloud migration, has become clearer during this time, so has our ability to execute against it. Now on to a review of Q3 results. To summarize Q3 at a high level, revenue was $155 million, an increase of 61% year over year and above the high end of our guidance range.
We ended the quarter with 1,107 customers with ARR of $100,000 or more, up from 727 last year. These customers generate about 75% of our ARR. We have about 13,100 customers, up from about 9,500 last year, which means we've added about 1,000 customers in the quarter, meaningfully more than the 600 that are in Q2. We also continue to be capital efficient with a free cash flow of $29 million.
And as in past quarters, our dollar-based net retention rate was over 130% as customers increased their usage and adopted our newer products. Now to review Q3 in more detail. Throughout the quarter, the usage growth of existing customers was robust, which was a return to more normalized levels after slower usage expansion in Q2. To be more specific, the pace of user growth in Q3 was broadly in line with pre-COVID historical levels.
As a result, we feel comfortable that some of the rationalized cloud usage from our larger customers that we've seen in Q2 was transitory as many of those customers have now returned to steady growth for multiple consecutive months. Strength was also broad-based across customers of different sizes and within different industries. In addition to that, new logo generation continued to be robust with customers' additions in line with pre-COVID levels, and churn remains consistent with historical rates. Taking all of this into account, total ARR at the end of the quarter was a new record for the company, making this a very successful quarter.
Next, our platform strategy continues to resonate and win in the market. As of the end of Q3, 71% of customers are using two or more products, which is up from 50% last year. Approximately 20% of customers are using four or more products, which is up from only 7% a year ago. We had another quarter in which approximately 75% of new logos landed with two or more products.
And we continue to be pleased with the uptake of our newest products, including Synthetics from NPM and security. I will point out that synthetics have now been commercially available for about a year; and today, it is used by thousands of customers, has reached eight figures of ARR, and continues to be in hyper-growth. Adoption of Synthetics has exceeded our expectations, which I will attribute to the combination of the strength of the product itself and the power of our platform. As a reminder, frictionless adoption is a key value proposition of our platform, which we expect would benefit all of our products.
To conclude my review of the quarter, our ability to both land and expand during what has been a time of uncertainty demonstrates that is of importance as companies of all sizes and across all industries, even in the most challenged sectors, are turning to their digital operations as the most strategically important segment of their business. Now on to R&D. We have a proven and long track record of innovation, and our team lived up to that standard in Q3 with the introduction of eight new products and major features at Dash. Those announcements include: the introduction of the Datadog Marketplace to enable technology partners to build applications on top of our platform; the general availability of Continuous Profiler to measure code-level performance to an always-on and low-overhead solution; extending Synthetics to continuous integration deployment pipelines, which ended testing earlier in the development process; the introduction of Mobile Real User Monitoring for both Android and iOS; the general availability of Error Tracking to aggregate triage and prioritize front-end application errors; the beta launch of Incident Management for dev ops and security teams; the beta launch of Compliance Monitoring, which extends our security solutions to proactively notify on misconfigurations and compliance drift; and lastly, the beta launch of Recommended Monitors, a suite of preconfigured, curated and customizable alerts.
Additionally, we recently announced a strategic partnership with Microsoft currently in public preview, which will make Datadog available to purchase, implement and use directly from the Azure console, and Azure and Datadog sales teams will increase collaboration for co-selling to enterprise clients. Today, we also announced an expansion of our strategic partnership with Google Cloud Platform, which extends our GCP presence into new regions and enhances our go-to-market collaboration and sales alignment between Datadog and GCP. We believe these partnerships, along with our existing alliance with AWS, demonstrate our leadership in cloud environments as well as the collaborative nature of our relationships with the public cloud vendors. These are just a few of the new features and enhancements we shipped this quarter.
Rather than listing them all, I'll conclude on R&D with two main takeaways. First, I am very proud of the continued productivity of our teams. Together, we have not allowed the pandemic and work from home to slow down our road map; and we have also been able to successfully hire and onboard at scale throughout the challenging times. Second, we continue to deliver the most complete and cloud-native end-to-end observability platform; and yet, we are only getting started.
Now on to sales and marketing. As you know, this quarter, we hosted Dash, our annual user conference. While this was our first time hosting it in an all-virtual format, this enabled us to reach a broader audience of over 7,000 attendees, which is more than five times last year's count. That was a great success, bringing together our customers, prospects, and partners to show the power of Datadog and many of the new products discussed earlier.
And I want to give a special thank you to our events and community teams for excellent execution in a quickly shifting environment. Now let's discuss some of our wins this quarter. First, I'll highlight three notable upsells that demonstrate the broad move to digital channels that have been catalyzed by the pandemic and our ability to rapidly scale with our customers. First, the seven-figure upsell with a large Latin America e-commerce company that has been handling a record level of orders.
This company brought down silos and now has hundreds of users in Datadog collaborating around the shared view of the IT stack; next, a European on-demand delivery company that has seen its business more than double from last year and has grown its Datadog usage more than four times. The company has standardized monitoring on Datadog with a seven-figure deal featuring all seven of our platform products, including security to enhance real-time threat detection. And last, a U.S. gaming company that has seen material growth in their platform and now has a seven-figure commitment to Datadog.
In addition to using all three of our pillars, they are using Datadog to support their serverless architecture they harness on machine learning to detect anomalies before they occur, and they also report on key business metrics to finance and advertising teams. We also had good success with customers from traditional industries that need to transform. We had a six-figure new logo win from a 150 years old postal service in Europe. This organization aims to deliver more digital services to its customers while undergoing a transition to a multi-cloud and containerized environment.
They are using four products, including Synthetics, to monitor back to front end across both on-cloud and on-premise environments. Next, we had a sizable upsell to a European financial service institution. After joining as a customer just over a year ago, this company increased spend more than four times for their consolidated monitoring on Datadog to now exceed $1 million in ARR. Finally, we had an upsell with a 100-year-old global shipping company, which we mentioned on last year's call for Q3.
Back then, this customer was spending mid-six figures on Datadog infrastructure monitoring. Today, this customer's ARR has crossed into seven figures using infrastructure monitoring, APM, logs, Synthetics, RUM, NPM, and security. This is a great example of not only how companies of all stages are undergoing digital transformation but also of our powerful cross-selling motion as we introduce new products to market. Now moving on to our outlook.
As we look ahead to the final quarter of 2020, we continue to be excited about the market opportunity ahead of us, and we are confident in our ability to execute given continued strong performance through challenging times. After some of the rationalized cloud usage we saw in Q2, we've seen a clear return to normalized usage growth. It is apparent that cloud migration is not only resilient in the current environment but may even grow stronger longer term. Companies globally and across all industries are prioritizing digital operations like never before, and the cloud is a clear strategic winner to enable greater agility and innovation.
We continue to believe Datadog is a primary beneficiary of this trend and that we remain very well-positioned to win in the market. In other words, while the near-term macro environment remains uncertain and could cause bumps along the way, we are very confident in the long-term opportunity and our positioning, and we believe that we can continue to sustain strong growth both in the near term and over time. With that, I would like to turn the call over to our chief financial officer, David Obstler. David?
David Obstler -- Chief Financial Officer
Thanks, Olivier. As mentioned, we delivered strong third-quarter top and bottom-line results amid a difficult macro backdrop. Revenue was $154.7 million, up 61% year over year. Usage trends were robust and returned to more normalized growth after the pressure that we saw in Q2.
Meanwhile, platform traction continued to be strong. New logo generation was robust, and churn was in line with historical norms. To provide some more context, first on usage. Usage from existing customers was robust, and our third-quarter dollar-based net retention rate remained above 130% for the 13th consecutive quarter.
After some pressure seen in Q2 driven by optimization efforts from larger customers at scale in the cloud, Q3 was characterized by a decisive return to more normalized growth from our existing customers. Throughout the quarter, we saw usage growth that was more in line with pre-pandemic historical levels. The trend was broad-based and sustained throughout the quarter. This provides us with confidence that what we experienced in Q2 was a transitory optimization effort that were related to the challenging macro environment.
While further optimization may happen periodically as we've talked about previously, we feel confident that cloud migration is very much intact and perhaps even strengthening longer term. Recall that we have a ratable SaaS model. Therefore, while Q3 usage growth was back to pre-COVID levels, the pressure experienced in Q2 can still be seen in our year-over-year comparisons for a number of quarters. Our powerful land-and-expand model continues to be driven by both usage growth of existing products as well as the cross-selling to our newer solutions.
Next, in the third quarter, we saw continued strength in our platform strategy, with over 70% of our customers using two or more products and about 20% of our customers now using four or more products, up from only 7% a year ago. Continued product traction is being driven by adoption in the initial land as well as strong cross-selling. The newest products continue to perform well, growing run-rate quarter over quarter. I note that many of them, such as RUM, NPM, and Security, are still early and, therefore, small contributions to results in the quarter.
Next, new logo results were solid, with customer additions in line with pre-COVID levels and strength across sales channels and regions. And lastly, churn was stable, in line with historical levels, and improved from the slight elevation seen in Q2. Our dollar-based gross retention rate has remained largely unchanged in the low to mid-90s. Now turning to billings, which were $155.9 million, up 39% year over year against an exceptionally difficult compare.
We have said that we will provide a pro forma to more clearly align billings growth with the economics and growth of the business. And in Q3, there were a number of timing and duration differences that affected the growth of billings in the quarter. First, on last year's Q3 call, we had disclosed that there was an invoice timing difference, which increased billings by $6 million. Pro forma, excluding that bill, billings would have been $106.4 million.
Next, in the quarter, we had an $11 million impact to billings and deferred revenue from a few long-term large customers, which moved from annual billings to semiannual or shorter durations upon their renewals. Notably, all of these customers continue to commit on an annual basis. They're simply breaking up their bills, as we talked about on the last call, into smaller increments. If we pro forma for these timing effects, Q3 '20 billings would have been $166.9 million.
So now comparing the pro forma billings of $166.9 million to the year-ago apples to apples of $106.4 million, the growth is 57%, relatively in line with revenue growth. Remaining performance obligations, or RPO, was $316 million, up 50 per year. Current RPO growth was similar to pro forma billings growth. As a reminder, billings and RPO can fluctuate, as we've just discussed, versus revenue based on the timing of invoicing and signing of customer contracts, while revenue incorporates customer usage.
Now let's review the income statement in more detail. As a reminder, unless otherwise noted, all metrics are non-GAAP. We have provided a reconciliation of GAAP to non-GAAP financials in the release. Gross profit in the quarter was $121.5 million, representing a gross margin of 79%.
This compares to a gross margin of 80% last quarter and 76% in the year-ago period. Year-over-year improvement in gross margin was driven by more efficient use of cloud infrastructure. The slight decrease in gross margin sequentially was due to minor inefficiencies created from our investments in products and platform innovation, as we have discussed. As a reminder, our gross margins may fluctuate quarter-to-quarter within an acceptable range as we prioritize product development and innovation as well as the build-out of cloud data centers in newer geographies.
R&D expense in the quarter was $45.8 million or 30% of revenue, compared to 28% a year ago. We've continued to invest significantly in R&D, including high growth of our engineering headcount. We've been able to attract talent and execute on hiring and onboarding, enabling us to deliver multiple record quarters of engineering headcount additions. We continue to see a meaningful opportunity to innovate and expand our platform and therefore, plan to continue to make meaningful investments in R&D.
Sales and marketing expense for the quarter was $49.7 million or 32% of revenue compared to 39% in the year-ago period. Similar to R&D, we continue to make substantial investments in sales and marketing, but the pace of revenue growth continues to outpace that investment. This was another quarter of no in-person trade shows or marketing events. While we have successfully redeployed much of the events budget to advertising and other lead-generating activities, it was not on a one-for-one ratio.
G&A expense was $12.1 million or 8% of revenue, slightly lower than the 9% in the year-ago quarter. And operating income was $13.8 million or 9% operating margin compared to operating income of $726,000 or 1% in the year-ago period. In addition to the improvement in gross margin, the continued reduction in marketing events, travel, and entertainment and facilities overhead due to COVID contributed to operating margin. Headcount growth was approximately in line with revenue growth in the quarter.
Non-GAAP net income for the quarter was $16 million or $0.05 a share on 333 million weighted average diluted shares. We have a very efficient business model and have experienced a high return on our investments in sales and marketing and R&D. While we have delivered five consecutive quarters of breakeven or positive operating income, we note that our priority remains top-line growth, and we intend to continue aggressive investments in R&D and go to market. Finally, turning to the balance sheet and cash flow.
We ended the quarter with $1.5 billion in cash, cash equivalents, restricted cash, and marketable securities. Cash flow from operations was $36.3 million in the quarter. After taking into consideration CAPEX and capitalized software, free cash flow was $28.6 million in the quarter or a margin of 19%. Cash collections have been very strong amid COVID, a testament to the importance of our solution to our customers.
Now I would like to turn to our outlook for the fourth quarter and the full-year 2020. While we saw usage growth in Q3 that was consistent with pre-pandemic historical levels, the pandemic is still ongoing and uncertainty remains. Therefore, we are being prudent by factoring into our guidance usage growth trends below what we have seen in Q3 and conservative new business assumptions as well as continued strong investment in R&D and sales and marketing. Beginning with the fourth quarter, we expect revenue to be in the range of $162 million to $164 million, which represents year-over-year growth of 43% at the midpoint.
Non-GAAP operating income is expected to be in the range of $3 million to $5 million, and non-GAAP net income per share is expected to be in the $0.01 per share positive to $0.02 per share based on an approximately 335 million weighted average diluted shares outstanding. And for the full-year 2020, revenue is expected to be in the range of $588 million to $590 million, which represents 62% year-over-year growth at the midpoint. Non-GAAP operating income is expected to be in the range of $48.5 million to $50.5 million, and non-GAAP net income per share is expected to be in the range of $0.17 to $0.18 per share based on approximately 332 million weighted average diluted shares. Then some notes below operating income.
We expect approximately $1.9 million of quarterly non-GAAP other income, which is net including the interest income on our cash and marketable securities less the interest expense on convertible debt. And we do not expect to be a federal taxpayer again but have a tax provision related to our international entity, which we estimate to be approximately $450,000 in Q4. To summarize, we are pleased with the results for the quarter. Usage growth was strong as companies are prioritizing cloud migration and digital transformation more than ever, and we continue to execute at a high level.
We delivered an impressive velocity of product innovation in the quarter and are investing to continue that track record. While uncertainty related to the macro environment remains, we feel very well positioned to capture what is a large and growing long-term market opportunity. And now 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 with Morgan Stanley. Your line is now open.
Sanjit Singh -- Morgan Stanley -- Analyst
Hi, and thank you for taking the questions, and congrats on the Q3 results. David, maybe just to start with you. I think the message I heard off the script was a pretty emphatic view from your guys' perspective that the cloud rationing that you saw certainly improved. They became less of an issue.
Expansion trends look like they've gotten back to pre-COVID levels. If you could just bridge for us the slower revenue growth sort of in the low 60s versus the 80s, but at the same time, I think you mentioned or I think Oli mentioned a record new ARR quarter. And if I look at kind of the RPO based bookings, it seems like there's an acceleration there. If you could sort of just help us understand how those three metrics sort of tied together and give us a sense of whether the business is truly rebounding versus what seems like slower revenue growth.
David Obstler -- Chief Financial Officer
Yes. As we mentioned, organic growth is a very strong contributor, and that rebounded, particularly in the larger customers, to more historical trends. And we continued to have new sales in line. It's the combination of the two that contributed to the record ARR growth.
And so those are the main factors. Organic is always the majority of the growth in a quarter complemented by the new business.
Olivier Pomel -- Founder and Chief Executive Officer
And just to complement on that -- this is Olivier. If you compare it to last year, so one thing to remember is we have a ratable SaaS model. So the growth we did forego in Q2 is going to be with us in the year-to-year comparison a bit. Last year at the same time, we had an acceleration also, which makes it for a tougher compare.
And it's going to -- the increases in ARR only show up in revenue when they're actually incurred in the usage. So it depends on when we added those in the quarter and also what the exit velocity of ARR was in Q2. So basically, this is how you bridge the record ARR with the revenue as it were not recorded.
Sanjit Singh -- Morgan Stanley -- Analyst
OK. Understood. That makes sense. And then, Olivier, on the partnership front, you signed a follow-on partnership with Google Cloud that you announced today, and then you signed another strategic partnership with Azure sort of intra-quarter.
On the Azure front, can you sort of frame out what the opportunity is here? Can you give us a sense of what Azure represents as part of the business today? And with the ability of customers to sort of drawdown on their Azure credits using Datadog, how much of an opportunity is this in terms of sustaining revenue growth or potentially accelerating revenue growth with this Azure partnership? If you can just sort of frame out the opportunity for us, that would be great.
Olivier Pomel -- Founder and Chief Executive Officer
Yes. So first all, I should say, we already have customers mark up providers. We've been working with Azure before. So today, our customer distribution follows a little bit the arrival of the cloud providers.
So we still have many more customers and more revenue volume on AWS, for example, than we do in Azure. What's interesting with this new partnership is that we get more tightly integrated into the Azure console itself, and we're the first vendor to do that. What's interesting there is the user base for Azure tends to be a bit more homogeneous or used to be a bit more homogeneous in the technology they use, mostly for Microsoft. And so the ability to be more integrated with Microsoft really can reduce friction and help onboard new customers onto our platform.
So we see that as a great opportunity to get more customers, more usage from Azure as Azure itself is growing and as their customers are diversifying their tech stack. I should say that this is only one of the cloud providers we're working with. We're active on all of the other platforms. We announced another partnership with GCP today.
We have another one with AWS. So this is an evolution, not a revolution. To your point also, our customers can use their Azure credits, and there's going to be some cross-selling involved with the Microsoft team. So we're excited about the lift in go-to-market there.
One last thing to remember is that this is still in preview, so we don't expect any significant volume for that in the near term. That's something that's going to kick in over the next few quarters.
Sanjit Singh -- Morgan Stanley -- Analyst
Understood. Thanks, Olivier. Appreciate it.
Operator
Our next question comes from Sterling Auty with JP Morgan. Your line is now open.
Sterling Auty -- J.P. Morgan -- Analyst
Yeah. Thanks. Hi, guys. Oli, you kind of answered it with your last comment there, but I just want to make sure that we level set in terms of the timing of the ramp of the partnerships not only for Azure but also what you announced with Google as well.
How should we think of the timing of that flowing into revenue?
Olivier Pomel -- Founder and Chief Executive Officer
It's not going to be immediate. All right? So the Azure one is just in preview right now. It's not completely live yet. The GCP partnership involves a number of new technical things that need to happen but also some new go-to-market motions we're putting in place.
So there's not going to be an immediate impact. But we see that as being potentially meaningful contributors in the mid to long term.
Sterling Auty -- J.P. Morgan -- Analyst
That makes perfect sense. And just one follow-on to that. Are we looking at across the three pillars or just specifically for infrastructure on both of these partnerships?
Olivier Pomel -- Founder and Chief Executive Officer
Well, the entry point for most of our customers is usually infrastructure. But as we mentioned earlier in the call, in 75% of the cases, it also comes in with another product. So we see that really as a gateway into the platform and then a way for us to have customers use all three or four products in the end.
Sterling Auty -- J.P. Morgan -- Analyst
Got it. Thank you.
Operator
Our next question comes from Chris Merwin with Goldman Sachs. Your line is now open.
Chris Merwin -- Goldman Sachs -- Analyst
OK. Thanks very much for taking my question. I was hoping you could talk a bit about what you saw across the customer segments in the quarter. I think you mentioned that the strength was pretty broad-based.
But I guess within the enterprise segment specifically, are you starting to see more standardization around the Datadog platform not just with infrastructure obviously, but the log, APM and, of course, there's much, much broader suite of products that you now offer?
Olivier Pomel -- Founder and Chief Executive Officer
Yes. That's definitely what we see. I mean, we see -- I think it's very obvious for customers that they need to integrate various parts of observability together, and then having all that on top of the same platform is desired outcome. So we see more and more of that, but it's not specific to the enterprise.
We see that happening over all segments at this point.
Chris Merwin -- Goldman Sachs -- Analyst
Great. And maybe just a follow-up. In terms of usage stepping back up, it's very encouraging to hear. As you talk to customers, is there any pushback on pricing? I mean, I would think not given that you're seeing usage step back up here, but just curious what those conversations have been like and how you're thinking about the pricing model from here, or is there something that really works well for your customer base as it is and there's unlikely to be any evolution of that?
Olivier Pomel -- Founder and Chief Executive Officer
Yes. Look. The one thing I should say is anytime you charge customers for millions of dollars, they're going to ask questions about the price. It's a whole department in enterprises that are built just for that.
That being said, at the end of the day, what matters is how much value you deliver for that price. And I think for that, we're doing a pretty good job. I think the one thing everybody is grappling with is as more and more applications move into the cloud and those applications generate more and more data, what's the best way to align liquidities that are being used for observability reasons, for security reasons, other reasons, to align that with the -- as well the value with the price being paid. And when you look at our product offering and what we've been adding, that's why we've added all of these new SKUs to really unbundle what we're doing with the data so customers can really buy what's aligned with the needs they have.
For example, we announced more recently Tracing Without Limits, which is a way to send extremely large amounts of data to our APM but only retain the part of it that actually makes sense to customers and they want to retain long term. We've done the same thing with logs before. We're doing the same thing with our infrastructure product. These are the way we basically put our customers in control so they can align what they pay with the value they get.
Chris Merwin -- Goldman Sachs -- Analyst
Great. Thank you.
Operator
Our next question comes from Brad Zelnick with Credit Suisse. Your line is now open.
Brad Zelnick -- Credit Suisse -- Analyst
Great. Thanks so much, and congrats on another strong quarter and really nice to see usage growth returning to more normal levels. David, as investors try to think about the growth algorithm for Datadog in the years to come, clearly, you're levered to digital transformations and cloud migration. And we can look to many proxies for this opportunity, perhaps the growth rates of the large public clouds themselves, which, by the way, great to see the deeper partnerships with Microsoft and Google.
But I'd be curious to know how internally, from a planning perspective, how you all think about this. And although I get you're not going to give us guidance right now for next year, how should we think about how you're framing it and the rate of investment against that opportunity? And along with that, how would you characterize the ability to hire in this environment?
David Obstler -- Chief Financial Officer
Yes. Yes. Good question. So on revenue, we said that about 60% of our revenue growth comes from existing customers.
So we start with the land and expand and look at those cohorts inorganic. And I think we referred to looking at pre-pandemic and historical trends. So that's at the sort of linchpin, making the business relatively predictable even in uncertain times. And then we look at the market size, the opportunity, which tends not to be a limit.
And so what is, is that the execution, how many salespeople we get in, how we can ramp them, etc. And we then essentially have some experience in understanding ramp and understanding productivity, and those are the algorithms we use in looking at growth. I think we feel, and we said this over and over again, that there's a very big market, and we're very early on. So both in terms of product investment but also in go to market, there's a lot of areas that we are still building out.
There are a lot of opportunities. There are a lot of successful territories where we have to put more feet on the street. So we tend to build that from a bottom-up with sales headcount, and that's resulted in sales and capacity as we've talked about in the 60% to 70% growth. And we see that and we see that opportunity and based on our success in bringing people in and getting them productive.
As Oli mentioned, we have been successful in COVID in hiring, and it hasn't really held us back. We've seen a lot of good opportunities and continue to do that throughout the pandemic.
Olivier Pomel -- Founder and Chief Executive Officer
Yes. And I'll complement that. Sorry. I'll just compliment that on the growth side.
I mean, right now, we're so early in the opportunity that the way we think about the way we grow our team isn't directly related to the way we think about the growth we're going to get next year. We really think of it in terms of how fast we can grow them while optimizing for both short-term and long-term growth. So we are growing the team as fast as we can, basically, and we think there's enough opportunity to justify it. And that's true both on the R&D side and on the sales and marketing side, which is why you didn't see us slow down at all during the -- I would say the heart of COVID in Q2, we maintained our hiring and we are very convinced that the opportunity is there.
And just to put that into -- to frame that a little bit, we're growing a lot faster than the cloud providers as a whole, which would mean there's plenty, plenty of markets for us to get.
Brad Zelnick -- Credit Suisse -- Analyst
Thank you for that. Maybe just a follow-up and perhaps put a finer point on this correlation of sales headcount growth with top-line growth just as the portfolio continues to expand, especially recently with Dash, all the new product announcements. How should we think about the evolution of the sales force to drive efficient cross-selling and specialization that might be required in order to hit all the different buyers and cover all of the product capabilities within the customer base? Do you envision having to make any significant changes in the go-to market?
Olivier Pomel -- Founder and Chief Executive Officer
It's very possible. Every company which is large scale and grows at some point starts specializing their sales force. We haven't had to do that at this point. And I would say we're optimistic that, for the observability part of the stack at this point, we've been very successful at having one sales team sell that.
I think the issue might come first for the new categories we're entering such as security, where the barriers might be a little bit different. There, again, these products are new enough. And the customer base is for these products and the, I would say, the customers for which these products are mature enough are a small enough group targeting enough group that we don't need to specialize the sales team yet. But that's definitely something that's on our minds for the future.
Brad Zelnick -- Credit Suisse -- Analyst
Excellent. Thanks so much for the thorough explanations, guys. Congrats again.
Olivier Pomel -- Founder and Chief Executive Officer
Thank you.
Operator
Our next question comes from Raimo Lenschow with Barclays. Your line is now open.
Raimo Lenschow -- Barclays -- Analyst
Thanks. Two quick questions, and congrats from me as well. Olivier, like what are you seeing in terms of competitive dynamics? So we had like someone there in the broader space is kind of bring pricing down like crazy and is doing a lot of free stuff. Other guys are just trying to broaden the portfolio coming up with new cloud product.
Just sort of just a word on what are you seeing in that space.
Olivier Pomel -- Founder and Chief Executive Officer
So broadly, there's no change. The space is very much the same as it's been for the past few years. We don't see anything different day to day with customers. We don't see anything different in the adoption cycle.
We hear a lot about it still around earnings time, but that's about it. No big changes.
Raimo Lenschow -- Barclays -- Analyst
OK. Perfect. And then as you think about -- like as you kind of look at the landing motion and expand more the landing motion with all your new customers, have you seen like a change in terms of what people are taking up? You mentioned at the beginning of the call, a couple of extra stats around how many modules, etc. But do you see a change in nature in terms of people understanding observability better and kind of going from more than just infrastructure and just kind of thinking more about this whole thing holistically? What are your observations there?
Olivier Pomel -- Founder and Chief Executive Officer
Yes. Definitely, customers expect definitely to do more with observability than just infrastructure. I would say the field is understanding what it needs better there. At the same time, when we land with customers, the balancing act is between having them use more products on day one but also slowing down the landing, which is why the number has been pretty stable around 75% of the lands that include two or more products.
I think that corresponds to the right balance right now between landing fast and landing with more than one product. Again, landing fast is critical. Like it's a very important part of business, and we've been very successful at it with our infrastructure products in particular.
Raimo Lenschow -- Barclays -- Analyst
OK. Perfect. Thank you. Congrats.
Operator
Our next question comes from Matt Hedberg with RBC Capital Markets. Your line is now open.
Matt Hedberg -- RBC Capital Markets -- Analyst
Great, guys. Thanks for taking my question. At Dash, it was really good to hear the application marketplace going GA, really seems to open up a nice halo effect for developers to build application on your platform. Can you talk a little bit more about what sort of interest you're having from developers? And ultimately, you're not alone in software vendors doing this.
How do you think about monetizing this, or is it more of just trying to build up more awareness for additional features that you don't deliver as first-party features yourself?
Olivier Pomel -- Founder and Chief Executive Officer
Well, it's a collection of all of these. Right? I think we're still super early in this. At this point, we're working with our very first few partners to make sure that we develop the platform in a way that's helpful to them. And we think if we make them successful, they'll make us successful in the long run.
So as far as monetization comes in, we worry about them more than we worry about us at this point, just to make sure they're successful and they get what they want out of it. So super early. We think it's important. We think it's going to play a big role in the future, but we have many, many more quarters of innovation to come on these to fully deliver on the business.
Matt Hedberg -- RBC Capital Markets -- Analyst
That's great. And then maybe just one for David. Your explanation of billings was super helpful. Trying to kind of think about that on a normalized basis given all the nuances from Q3 of last year.
I guess I'm curious, though, when we look at deferred revenue this quarter, and maybe there's an obvious answer to this, but it looked kind of sequentially flat. Was there anything that impacted deferred this quarter, not necessarily looking on a year-over-year basis, but just sequentially from Q2 to Q3?
David Obstler -- Chief Financial Officer
Yes. It's the same factor that resulted in the pro forma analysis. There were $11 million of billings from some large customers that would have been 100% in billing, which were chunked up anywhere from semi-annual to monthly billing. So the way to look at that and do the apples to apples would be at that same $11 million, which reflects the economics, and you'll see the deferred revenue in the mid-50s, like the other metrics that we talked about.
Matt Hedberg -- RBC Capital Markets -- Analyst
I got it. So really just a relic of what happened last year then repeating itself this year in terms of the renewals.
David Obstler -- Chief Financial Officer
Exactly. It's deals that renewed annually and grew, and we said last time that we're trying to work with our clients keep the commitment. These are some very long-term large customers who are staying with us but to accommodate them in this environment in their requests to chunk up bills, that's what it is.
Olivier Pomel -- Founder and Chief Executive Officer
And just to point on that, we'll see more of that in the future. Right? I mean, the beauty of our model is because of the efficiency of our go-to market, we don't actually care if customers pay us upfront. We want to align with them on that. And so I'm pretty sure we'll see more of that as we grow.
Operator
Our next question comes from Brent Thill with Jefferies. Your line is now open.
Brent Thill -- Jefferies -- Analyst
David, I'm curious if you could just expand on the normalization comment you mentioned from Q2 to Q3, add a little more detail in terms of just overall customer behavior. And I'm curious if you could also just drill down on the security initiative, what you're seeing there and what metrics are standing out to you from that business unit.
David Obstler -- Chief Financial Officer
Yes. Let me just go over some of the metrics around organic growth and then Oli to security. So what we said in Q2 was that we had some of the larger customers rationalize. So, therefore, the slowdown of organic was concentrated first in the larger customers and that about 10% of our customer base and ARR was in impacted industries where there was some pressure.
And what we saw in Q3 was a sort of return to normalcy in those, meaning the larger customers continue to now, after that optimization, grow in pre-pandemic rates. And we also saw that the COVID impacted -- the impact the medicine was taken, and they also continue to be stable to slightly up. So essentially, it was across enterprise, mid-market, and SMB, and it was across also the large customer, the small customer that exhibited similar types of organic growth, which is what we've seen over the long period in the company but saw a different effect in Q2. Oli, on security?
Olivier Pomel -- Founder and Chief Executive Officer
Yes. On security, I think it's too early to have a lot to share there, but the product is growing very nicely. We're getting great adoption stories from customers, but it's growing very quickly from a very small number. And it's still very early in its life cycle.
So we fleshed out the offering a little bit at Dash with the compliance product. There's a lot more we're working on both of the existing bids and on new bids for security, so let's say, it's still early. And just to restate some of what David said on the growth, we're very happy with the growth we've seen in Q3. It really showed a reversion to normal for the month-to-month growth.
I mean if you look at the monthly growth in ARR, any of the months in Q3, like it could have slowed this month in Q3 or Q4 -- sorry, in Q4 or Q1, they would have fit right there. So I think it's not -- we're very happy with what we've seen. At the same time, we're still very careful of that because we don't -- given the macro backdrop, we're still not quite sure what can happen toward the end of Q4.
Brent Thill -- Jefferies -- Analyst
Thank you.
Operator
Our next question comes from Robert Majek with Raymond James. Your line is now open.
Robert Majek -- Raymond James -- Analyst
Great. Thanks. As part of the continual shift to a more multi-silo approach, curious if you could elaborate on the experience or results you've had as of late penetrating further into the log monitoring pillar.
Olivier Pomel -- Founder and Chief Executive Officer
Into log monitoring, you said?
Robert Majek -- Raymond James -- Analyst
That's correct.
Olivier Pomel -- Founder and Chief Executive Officer
Yes. I mean, look, the log product is in hyper-growth. Right? And it's a very exciting and also a challenging one for customers because it's one of the products for which it's the easiest to generate a lot of fairly useless data and have to pay for it, which is why a lot of the innovations we've made initially on that product were around giving customers more control to align what they pay with the value they get. So we've done quite a bit of that.
As we keep growing that product, we're getting into situations where customers are not standardizing on us for all of their observability, including logs. And we've been basically pulled by our enterprise customers to add a lot of the enterprise features that they would expect from a platform that they send all of their extremely confidential data into. So that's a lot to do what we've been doing more recently.
Robert Majek -- Raymond James -- Analyst
And then I know we're just three months out of Dash, but how has customer feedback been so far on some of the new announced products and features? What's resonated the most with customers?
Olivier Pomel -- Founder and Chief Executive Officer
It's interesting because we've announced many new products, and they all got quite a bit of attention. I would say, we've got quite a few eyes on the new Incident Management product, which is only in beta. We've got a lot of excitement for the profiler product. So there's a number of different things that customers are excited about from Dash.
I think we still have -- in all of those cases, it's still early for those products, so we still have to fully bring them to market. For most of them, we still have to charge for them, and we have to basically work with our customers to make sure that these products fully deliver on their promise and then our vision. But that's the way we build. Right? The way we build is we build with our customers.
We put the products in their hands. We make sure they see the value. We make sure they have the controls, so they can align what they pay with the value they get. And then we grow those customers on those products.
Robert Majek -- Raymond James -- Analyst
Great. Thanks.
Operator
Our next question comes from Brad Reback with Stifel. Your line is now open.
Brad Reback -- Stifel Financial Corp. -- Analayst
Great. Thanks very much. Oli, as your product set continues to diversify and the revenue stream with it, do you think that has any impact on gross margin longer term?
Olivier Pomel -- Founder and Chief Executive Officer
Today, we don't think so. There's no reason to think we're going to deviate from the model we've had so far. We might still see some fluctuation mostly because of the back and forth between building more products and optimizing our use of the infrastructure because they are the same engineers that do both and also because of our expansion to new geographies and new data centers and things like that, which might push the numbers up and down a little bit. But there's no reason to believe that we're heading to completely a different ZIP code there, at least not today.
Brad Reback -- Stifel Financial Corp. -- Analayst
Great. Thanks very much.
Operator
Our next question comes from Jack Andrews with Needham. Your line is now open.
Jack Andrews -- Needham and Company -- Analyst
Great. Thanks, and congrats on the results. I was wondering if you could just perhaps frame for us what percentage of your deals today are partner sourced and just how we should be thinking about new logos that could be generated from your partnership ecosystem given the launch of your partner network, I think, in January of this year.
Olivier Pomel -- Founder and Chief Executive Officer
Yes. Today, it's a very small part of our business that is partner sourced. And so all of the partnerships we've discussed are basically all upside for us, and that's why we're investing in all of those. We think there's a number of things we can get thanks to these partners, and we're investing in the partner organization in general.
We launched our partner program earlier this year. It's starting to see a bit amount of success, but it's still a small part of the business.
Jack Andrews -- Needham and Company -- Analyst
OK. And then if I could ask as a quick follow-up, could you describe some of the -- if you need to make some go-to-market changes, in particular, to scale your federal business and how we should be thinking about how big this business could become relative to some of your other vertical markets.
Olivier Pomel -- Founder and Chief Executive Officer
Yes. So we started building a team for that. Right? And, as you know, we have a number of things in process for FedRAMP and etc. We think it's going to be similar in many ways to the way we sell to all our customers and different in a few other ways.
In terms of the importance of the business, we think it can be a big part of the business. And if you look at other companies in comparable spaces, like it is a big part of their business, whether it's cloud providers or other vendors in security or observability. So we believe that there's really a real opportunity there. So, yeah, this is all upside for us.
Jack Andrews -- Needham and Company -- Analyst
Got it. Thanks for your perspective, and thanks for taking my questions.
Operator
Our next question comes from Ittai Kidron with Oppenheimer. Your line is now open.
Ittai Kidron -- Oppenheimer and Company -- Analyst
Thanks. Oli, I'll start with you on the cloud partnerships that you've talked about and mentioned before. Can you highlight what's unique? First of all, is there anything exclusive in those relationships, number one? And number two, in what way will it be either easy or difficult for some of your competitors to replicate either the quality of the relationship or the depth of the relationship with those cloud guys?
Olivier Pomel -- Founder and Chief Executive Officer
Well, I mean, there's nothing exclusive in most of these relationships. Right? But in many situations, like the way they are implemented and what they actually entail is a little bit different. And they're also different depending on the cloud provider we work with. So for example, the way we're going to integrate with Azure plugs directly to their console, which is not the case with some of the other cloud providers.
So that's something that's interesting there. Now in terms of what others could or could not do, it's hard for me to comment. I mean, I believe that it's software, so if we can do it, others might be able to do it. I think what we've proven time and time again is that, because of the overall structure of our products, because of the structure of our customer base and our go-to market, we end up having a product that is a lot easier and has a lot less friction to adopt ends up being more widely adopted by our customers and more successful in the end.
And I think that's what -- that would guide basically the way we run all those partnerships. So what attracted us to the Azure partnership was the ability to reduce friction there, and that's why we decided to invest in that first.
Ittai Kidron -- Oppenheimer and Company -- Analyst
That's great. And then, David, a question for you, again, sorry, going back to the duration on those large customers, the $11 million. Can you at least confirm that those customers have expanded roughly your net dollar expansion rate? Just trying to make sure that this isn't just taking a bill and splitting it by half, but he was taking a bigger bill and splitting it by half.
David Obstler -- Chief Financial Officer
Yes. No. They've been customers that have grown substantially. One of them is a customer that's more than doubled over the last year or so.
So this is merely that we have changed the billing terms, but they are all customers that have been growing with us over the last few years.
Ittai Kidron -- Oppenheimer and Company -- Analyst
Got it. And then lastly, on your underlying assumption for some softness in usage in your 4Q guide. Half pretty much into the quarter, it doesn't sound like there has been any unusual usage softness in that month and a half. Correct me if I'm wrong.
So aren't you just being a little bit too conservative here? I mean, what is it, the scenario that truly worries you with so little time left in the quarter?
David Obstler -- Chief Financial Officer
Yes. I think, just overall, we've tended to be conservative in our guidance to incorporate usage growth rates that are lower than what we have seen and new logo accumulation that's lower. And I think we said last time that given that velocity and the fact that we're in the pandemic and we can't predict what might happen around the world, we wanted to continue to roll that conservatism forward. So it's really that at the core of the guidance rather than anything that in particular, that we've seen that's different than what we said on the call today.
Ittai Kidron -- Oppenheimer and Company -- Analyst
Very good. Good luck, guys.
David Obstler -- Chief Financial Officer
Yeah.
Operator
Our next question comes from Bhavan Suri with William Blair. Your line is now open.
Bhavan Suri -- William Blair and Company -- Analyst
Hey, everyone. Thanks for taking my question. Olivier, I guess I'll touch on first a little bit about the technology architecture. This comes up a lot even we're talking to investors.
Maybe a little help in understanding. So today, when you look at sort of even the infrastructure monitoring space and the way Datadog works and the sampling model with logs, which data makes sense, which doesn't. But this is the idea that with sampling, you're not getting all the data, and some of the vendors in other markets are saying we can absorb all the data. How do you think about that? And would it be difficult for you to absorb all the data? Is that too much data? How do you explain that?
Olivier Pomel -- Founder and Chief Executive Officer
We totally absorb all the data. We totally absorb the data, absolutely. There's no sampling. Sampling is something customers can choose to do if they don't want to retain everything and store everything.
But absolutely, we take all the data. And actually, one thing we announced recently with our Tracing Without Limit product, it actually allows us to be -- we're the only ones to actually take absolutely 100% of the data sent to our infrastructure and available in real time, even in extremely high-volume environments. I mean, we have two environments where they're keeping track of millions and millions of requests per second. So we do that, and it's not something that the other vendors don't do.
So there's no sampling required. Sampling is just a way for customers to decide, hey, the millions and millions of debug logs my developers are sending, I only need to keep some of them to see what's going on as I retain that in storage for a longer time and for many months without having to pay for that.
Bhavan Suri -- William Blair and Company -- Analyst
No. Great. I appreciate the clarity. And my second one is kind of a more longer-term question, but it's about machine learning.
So some of the other vendors are marketing heavily the focal point of machine learning, and I'd love to understand sort of how you think about that vis-a-vis competition. And so to what extent are you seeing APM customers, especially leverage the Watchdog automatic anomaly detection service you introduced, maybe new was last year, 12 months ago? So I'd love to understand a little bit of the thought process there.
Olivier Pomel -- Founder and Chief Executive Officer
Yes. So a couple of ways to make. So the first one is we actually think it's a customer model and we're fully SaaS. Machine learning is a strength of ours because we actually see all of the data.
We can train our algorithms and all of the data. We can seek to choose the problems and the use cases that we want to solve with machine learning versus the ones that we don't. So it actually strengthens the long-term structural strength for what we do. That being said, we don't like to lead with the promise of an AI that fixes everything for you because we think, in general, those commitments underdeliver.
They look great in the demo, but then a number of specific use cases, you're going to find them to fall short, and that's not what we want. And that's true of pretty much all the products you see there today. So our approach is to basically underpromise, overdeliver, and we think we have long-term structural strength in there because of the way we run our products and the data volumes that we see, which is not something that most of our competitors can do or have. Now in terms of the adoption we see, we've been purposefully selective in the situation in use cases we saw with Watchdog today.
We see Watchdog being used by our customers in real situations, and they rely on it, and that's something that we keep building upon.
Bhavan Suri -- William Blair and Company -- Analyst
Got it. Got it. Thanks for the color. Congrats, and thanks for the commentary, everyone.
Operator
Our last question comes from the line of Andrew Nowinski with D.A. Davidson. Your line is now open
Andrew Nowinski -- D.A. Davidson -- Analyst
All right. Thank you for squeezing me in. Just a quick clarification on the billings. I understand the larger customers are growing at pre-pandemic levels and your COVID-impacted companies are slightly up.
So it sounds like the environment and the cloud usage significantly improved from Q2 to Q3. But I'm wondering, if you look at your billings on a sequential basis after -- even after normalizing, that is only up $6 million sequentially despite that significant improvement in the environment. So I'm wondering, is there any other factors there that we should consider given that the billings only went up $6 million?
David Obstler -- Chief Financial Officer
No. We said all along that billings has to do with when bills went out. The advice is to take the revenues for the quarter and then multiply that by 34%, 35% or something, and that's the -- and then times 12, and that's sort of the linearity. And that's what drives the business.
What we're doing with billings, despite the fact we don't run, is we're trying to clean away some of the noise of when a bill went out this quarter versus that quarter, which isn't germane to the top-line growth of the business. So I would say urging everyone back toward the ARR approximation and the top line, and we're just basically giving pro formas here, which all are sort of in the 50s percent and RPO, etc., which is more in line with revenue growth.
Andrew Nowinski -- D.A. Davidson -- Analyst
OK. And then I'm just wondering if just -- could you touch on the competitive landscape both for the APM space as well as log management? Thank you.
Olivier Pomel -- Founder and Chief Executive Officer
Yes. What would you like to know on the competitive space? I mean, it's very much the same as it used to be, fortunately, or unfortunately, a little bit boring. So any particular question on the competitive space?
Andrew Nowinski -- D.A. Davidson -- Analyst
Well, have you seen any sort of win rate improvement now that your cloud usage is certainly getting better? I'm just wondering if your win rates have improved versus competitors like Splunk and Elastic in the log management space or Dynatrace and New Relic because they have different pricing changes.
Olivier Pomel -- Founder and Chief Executive Officer
Most of our business is not replacements. Right? Most of our business is net new. So we do see some replacements from time to time, but that's a small minority of the accounts will end. The world is moving to the cloud.
Most companies are new to the cloud. Most companies are new to this environment. And they need observability, and they don't have anything yet in their cloud environment even if they have on-prem, and they start using us for that. I don't have a win rate improvement to report, but I'm also not unhappy about win rates.
Actually, I don't even look that often at win rates because that's not what drives most of the acquisition for us.
Andrew Nowinski -- D.A. Davidson -- Analyst
OK. Thanks.
Operator
That concludes today's question-and-answer session. I'd like to turn the call back to Olivier Pomel for closing remarks.
Olivier Pomel -- Founder and Chief Executive Officer
Thank you. One second. My apologies. I have a one year old who was just barging in.
That's what you do -- what you get from working from home. In any case, in closing, I'd like to reiterate that we are very pleased with our performance in the third quarter. I'm very proud of our execution, and I want to thank our employees for the strong productivity that they've shown during the quarter. We recently celebrated our 10 years anniversary this summer, and I want to say I'm incredibly proud of the culture we created, incredibly proud of the work we have completion and the value we deliver to our customers.
But I'm even more excited about our future, about the strength of our team, and about the magnitude of opportunity. So in other words, the message you should get from this call is that we're just getting started, and we're also very excited about it. Thank you all for attending.
David Obstler -- Chief Financial Officer
Thanks.
Operator
[Operator signoff]
Duration: 67 minutes
Call participants:
A.J. Ljubich -- Director of Investor Relations
Olivier Pomel -- Founder and Chief Executive Officer
David Obstler -- Chief Financial Officer
Sanjit Singh -- Morgan Stanley -- Analyst
Sterling Auty -- J.P. Morgan -- Analyst
Chris Merwin -- Goldman Sachs -- Analyst
Brad Zelnick -- Credit Suisse -- Analyst
Raimo Lenschow -- Barclays -- Analyst
Matt Hedberg -- RBC Capital Markets -- Analyst
Brent Thill -- Jefferies -- Analyst
Robert Majek -- Raymond James -- Analyst
Brad Reback -- Stifel Financial Corp. -- Analayst
Jack Andrews -- Needham and Company -- Analyst
Ittai Kidron -- Oppenheimer and Company -- Analyst
Bhavan Suri -- William Blair and Company -- Analyst
Andrew Nowinski -- D.A. Davidson -- 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.
Motley Fool Transcribing has no position in any of the stocks mentioned. The Motley Fool owns shares of 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 Inc (NASDAQ: DDOG) Q3 2020 Earnings Call Nov 10, 2020, 5:00 p.m. Davidson -- Analyst More DDOG analysis All earnings call transcripts This article is a transcript of this conference call produced for The Motley Fool. During this call, we will make statements related to our business that are forward-looking under federal securities laws and made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements related to our future financial performance, including our outlook for the fourth quarter and for the full-year 2020, our strategy, potential benefits of our products, partnerships, and investments, anticipated hiring, our ability to capitalize on our market opportunity and the impact of the COVID-19 pandemic to our customers using our platform, and industry trends as well as our ability to benefit from these trends.
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Datadog Inc (NASDAQ: DDOG) Q3 2020 Earnings Call Nov 10, 2020, 5:00 p.m. Davidson -- Analyst More DDOG analysis All earnings call transcripts This article is a transcript of this conference call produced for The Motley Fool. During this call, we will make statements related to our business that are forward-looking under federal securities laws and made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements related to our future financial performance, including our outlook for the fourth quarter and for the full-year 2020, our strategy, potential benefits of our products, partnerships, and investments, anticipated hiring, our ability to capitalize on our market opportunity and the impact of the COVID-19 pandemic to our customers using our platform, and industry trends as well as our ability to benefit from these trends.
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Datadog Inc (NASDAQ: DDOG) Q3 2020 Earnings Call Nov 10, 2020, 5:00 p.m. Davidson -- Analyst More DDOG analysis All earnings call transcripts This article is a transcript of this conference call produced for The Motley Fool. During this call, we will make statements related to our business that are forward-looking under federal securities laws and made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements related to our future financial performance, including our outlook for the fourth quarter and for the full-year 2020, our strategy, potential benefits of our products, partnerships, and investments, anticipated hiring, our ability to capitalize on our market opportunity and the impact of the COVID-19 pandemic to our customers using our platform, and industry trends as well as our ability to benefit from these trends.
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Datadog Inc (NASDAQ: DDOG) Q3 2020 Earnings Call Nov 10, 2020, 5:00 p.m. Davidson -- Analyst More DDOG analysis All earnings call transcripts This article is a transcript of this conference call produced for The Motley Fool. Next, in the third quarter, we saw continued strength in our platform strategy, with over 70% of our customers using two or more products and about 20% of our customers now using four or more products, up from only 7% a year ago.
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2020-11-11 00:00:00 UTC
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Noteworthy Wednesday Option Activity: FPRX, DDOG, CORT
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https://www.nasdaq.com/articles/noteworthy-wednesday-option-activity%3A-fprx-ddog-cort-2020-11-11
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Looking at options trading activity among components of the Russell 3000 index, there is noteworthy activity today in Five Prime Therapeutics, Inc (Symbol: FPRX), where a total volume of 64,807 contracts has been traded thus far today, a contract volume which is representative of approximately 6.5 million underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 1040.9% of FPRX's average daily trading volume over the past month, of 622,585 shares. Especially high volume was seen for the $7.50 strike put option expiring November 20, 2020, with 39,824 contracts trading so far today, representing approximately 4.0 million underlying shares of FPRX. Below is a chart showing FPRX's trailing twelve month trading history, with the $7.50 strike highlighted in orange:
Datadog Inc (Symbol: DDOG) options are showing a volume of 123,217 contracts thus far today. That number of contracts represents approximately 12.3 million underlying shares, working out to a sizeable 376.8% of DDOG's average daily trading volume over the past month, of 3.3 million shares. Particularly high volume was seen for the $70 strike put option expiring November 20, 2020, with 22,213 contracts trading so far today, representing approximately 2.2 million underlying shares of DDOG. Below is a chart showing DDOG's trailing twelve month trading history, with the $70 strike highlighted in orange:
And Corcept Therapeutics Inc (Symbol: CORT) options are showing a volume of 15,750 contracts thus far today. That number of contracts represents approximately 1.6 million underlying shares, working out to a sizeable 193.8% of CORT's average daily trading volume over the past month, of 812,635 shares. Especially high volume was seen for the $13 strike put option expiring November 20, 2020, with 12,748 contracts trading so far today, representing approximately 1.3 million underlying shares of CORT. Below is a chart showing CORT's trailing twelve month trading history, with the $13 strike highlighted in orange:
For the various different available expirations for FPRX options, DDOG options, or CORT 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 $70 strike put option expiring November 20, 2020, with 22,213 contracts trading so far today, representing approximately 2.2 million underlying shares of DDOG. Below is a chart showing FPRX's trailing twelve month trading history, with the $7.50 strike highlighted in orange: Datadog Inc (Symbol: DDOG) options are showing a volume of 123,217 contracts thus far today. That number of contracts represents approximately 12.3 million underlying shares, working out to a sizeable 376.8% of DDOG's average daily trading volume over the past month, of 3.3 million shares.
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Below is a chart showing FPRX's trailing twelve month trading history, with the $7.50 strike highlighted in orange: Datadog Inc (Symbol: DDOG) options are showing a volume of 123,217 contracts thus far today. That number of contracts represents approximately 12.3 million underlying shares, working out to a sizeable 376.8% of DDOG's average daily trading volume over the past month, of 3.3 million shares. Below is a chart showing DDOG's trailing twelve month trading history, with the $70 strike highlighted in orange: And Corcept Therapeutics Inc (Symbol: CORT) options are showing a volume of 15,750 contracts thus far today.
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Below is a chart showing FPRX's trailing twelve month trading history, with the $7.50 strike highlighted in orange: Datadog Inc (Symbol: DDOG) options are showing a volume of 123,217 contracts thus far today. That number of contracts represents approximately 12.3 million underlying shares, working out to a sizeable 376.8% of DDOG's average daily trading volume over the past month, of 3.3 million shares. Particularly high volume was seen for the $70 strike put option expiring November 20, 2020, with 22,213 contracts trading so far today, representing approximately 2.2 million underlying shares of DDOG.
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Below is a chart showing CORT's trailing twelve month trading history, with the $13 strike highlighted in orange: For the various different available expirations for FPRX options, DDOG options, or CORT options, visit StockOptionsChannel.com. Below is a chart showing FPRX's trailing twelve month trading history, with the $7.50 strike highlighted in orange: Datadog Inc (Symbol: DDOG) options are showing a volume of 123,217 contracts thus far today. That number of contracts represents approximately 12.3 million underlying shares, working out to a sizeable 376.8% of DDOG's average daily trading volume over the past month, of 3.3 million shares.
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2020-11-11 00:00:00 UTC
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How the Nasdaq Dominated the Stock Market Wednesday
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DDOG
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https://www.nasdaq.com/articles/how-the-nasdaq-dominated-the-stock-market-wednesday-2020-11-11
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After so many months of absolutely crushing the rest of the stock market, the recent underperformance from the Nasdaq Composite (NASDAQINDEX: ^IXIC) has raised some eyebrows. Even though the Nasdaq was closest to setting new record highs as the stock market surged last week, it has hung back even as other market benchmarks moved more sharply higher.
At least for today, though, the Nasdaq decided it had had enough. Wednesday featured a return to the strong gains that Nasdaq investors have grown accustomed to seeing, even as the rest of the market took a pause. Here's why the Nasdaq is doing so well on Wednesday and what it means for the rest of 2020 and beyond.
Image source: Getty Images.
Investors hedge their bets
A big part of the pessimism among Nasdaq investors in recent days has been the assumption that much of the index's gains have been attributable to growth stocks that capitalized on new opportunities brought on by the COVID-19 pandemic. Specifically, stay-at-home tech stocks have been huge winners in 2020, and investors seemed ready to take profits as soon as news of a possible coronavirus vaccine came out earlier this week.
Yet today, investors look like they're taking a more realistic view of the situation. Even if a vaccine proves to be effective, it'll still take months to navigate accelerated approval procedures and get it distributed to the public at large. During that time, public health officials are worried that a massive surge in COVID-19 cases could prompt a return to shutdowns and other more extreme measures to control the spread of the disease.
More than just stay-at-home stocks
More importantly, the assumption that Nasdaq strength has come only from stay-at-home trends is incorrect. The trend toward corporate adoption of technological advances was already well established long before the coronavirus crisis began, and the end of COVID-19 won't halt those digital adoption efforts.
Just looking at top stocks in the Nasdaq-100 Index, it's hard to argue that the prospects for Apple, Microsoft, and Facebook hinge on what happens with the coronavirus. Even e-commerce giant Amazon.com will have plenty of opportunities to grow even once shoppers everywhere can feel safe returning to malls and other stores.
Be ready for volatility
Nevertheless, with such high expectations for many stocks, investors have to be ready for big drops. That's what happened with data analytics company Datadog (NASDAQ: DDOG), as a solid quarterly report featuring greater than 60% revenue growth year over year and a much better adjusted profit than expected still met with disappointment from shareholders. Datadog was down as much as 14% on Wednesday before recovering some of its lost ground.
In the long run, these violent stock-price fluctuations give way to smoother moves based more heavily on fundamental business performance. That can be almost impossible to see on a day-to-day basis, but if you can be patient, the longer-term trends will assert themselves in time.
The Nasdaq may have dominated the rest of the stock market on Wednesday, but that doesn't mean investors have decided once and for all that tech stocks are the place for high-growth investors to be right now. The lesson to learn today is that what happens one day in the stock market can reverse the next and then move back in the original direction after that. Having a consistent strategy will keep you from getting whipsawed amid all the bumps in the road.
10 stocks we like better than Datadog
When investing geniuses David and Tom Gardner have 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.*
David and Tom 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 October 20, 2020
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft 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 its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors. Dan Caplinger owns shares of Apple. The Motley Fool owns shares of and recommends Amazon, Apple, Datadog, Facebook, and Microsoft and recommends the following options: long January 2021 $85 calls on Microsoft, short January 2021 $115 calls on Microsoft, short January 2022 $1940 calls on Amazon, and long January 2022 $1920 calls on Amazon. 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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That's what happened with data analytics company Datadog (NASDAQ: DDOG), as a solid quarterly report featuring greater than 60% revenue growth year over year and a much better adjusted profit than expected still met with disappointment from shareholders. After so many months of absolutely crushing the rest of the stock market, the recent underperformance from the Nasdaq Composite (NASDAQINDEX: ^IXIC) has raised some eyebrows. Specifically, stay-at-home tech stocks have been huge winners in 2020, and investors seemed ready to take profits as soon as news of a possible coronavirus vaccine came out earlier this week.
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That's what happened with data analytics company Datadog (NASDAQ: DDOG), as a solid quarterly report featuring greater than 60% revenue growth year over year and a much better adjusted profit than expected still met with disappointment from shareholders. See the 10 stocks *Stock Advisor returns as of October 20, 2020 John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool's board of directors.
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That's what happened with data analytics company Datadog (NASDAQ: DDOG), as a solid quarterly report featuring greater than 60% revenue growth year over year and a much better adjusted profit than expected still met with disappointment from shareholders. The Nasdaq may have dominated the rest of the stock market on Wednesday, but that doesn't mean investors have decided once and for all that tech stocks are the place for high-growth investors to be right now. See the 10 stocks *Stock Advisor returns as of October 20, 2020 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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That's what happened with data analytics company Datadog (NASDAQ: DDOG), as a solid quarterly report featuring greater than 60% revenue growth year over year and a much better adjusted profit than expected still met with disappointment from shareholders. Here's why the Nasdaq is doing so well on Wednesday and what it means for the rest of 2020 and beyond. The Nasdaq may have dominated the rest of the stock market on Wednesday, but that doesn't mean investors have decided once and for all that tech stocks are the place for high-growth investors to be right now.
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2020-11-11 00:00:00 UTC
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Why Datadog Shares Crashed on Wednesday
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https://www.nasdaq.com/articles/why-datadog-shares-crashed-on-wednesday-2020-11-11
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What happened
Shares of Datadog (NASDAQ: DDOG) cratered on Wednesday, following the company's third-quarter earnings report. The maker of monitoring tools for cloud computing systems crushed Wall Street's estimates, but some investors felt that the surprise just wasn't big enough. Share prices fell as much as 13.9% on Wednesday morning, recovering somewhat to a drop of 11% by 11:30 a.m. EST.
So what
Datadog's sales rose 62% year over year to $155 million. The bottom line moved from breakeven to adjusted earnings of $0.05 per share. Your average analyst would have settled for earnings near $0.01 per share on roughly $144 million in revenue. The company also offered fourth-quarter earnings guidance in line with the current Street view, and management's revenue target for the next quarter exceeded the analyst consensus by $8 million.
Here's what's next for Datadog's shareholders. Image source: Getty Images.
Now what
A handful of analysts downgraded the stock after the report, arguing that it looks overvalued in the light of decelerating revenue growth.
You can't really blame Datadog investors for taking some profits off the table today. The stock is still up by 145% in 2020 and 176% over the last 52 weeks, and that's after Wednesday's sharp correction. That being said, the company is delivering on all its promises and continues to set bullish guidance targets for the next report. The underlying business is in a great position to continue crushing the market for years to come. Selling the stock today looks like a big mistake in the long run.
"Companies globally and across all industries are prioritizing digital operations like never before, and the cloud is a clear strategic winner to enable greater agility and innovation," CEO Olivier Pomel said in the earnings call. "We continue to believe Datadog is a primary beneficiary of this trend and that we remain very well-positioned to win in the market."
I agree with that assessment and would consider buying Datadog at a generous but temporary discount today.
10 stocks we like better than Datadog
When investing geniuses David and Tom Gardner have 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.*
David and Tom 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 October 20, 2020
Anders Bylund has no position in any of the stocks mentioned. The Motley Fool owns shares of 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) cratered on Wednesday, following the company's third-quarter earnings report. The maker of monitoring tools for cloud computing systems crushed Wall Street's estimates, but some investors felt that the surprise just wasn't big enough. The company also offered fourth-quarter earnings guidance in line with the current Street view, and management's revenue target for the next quarter exceeded the analyst consensus by $8 million.
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What happened Shares of Datadog (NASDAQ: DDOG) cratered on Wednesday, following the company's third-quarter earnings report. The company also offered fourth-quarter earnings guidance in line with the current Street view, and management's revenue target for the next quarter exceeded the analyst consensus by $8 million. The underlying business is in a great position to continue crushing the market for years to come.
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What happened Shares of Datadog (NASDAQ: DDOG) cratered on Wednesday, following the company's third-quarter earnings report. 10 stocks we like better than Datadog When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. See the 10 stocks *Stock Advisor returns as of October 20, 2020 Anders Bylund has no position in any of the stocks mentioned.
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What happened Shares of Datadog (NASDAQ: DDOG) cratered on Wednesday, following the company's third-quarter earnings report. The company also offered fourth-quarter earnings guidance in line with the current Street view, and management's revenue target for the next quarter exceeded the analyst consensus by $8 million. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.
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2020-11-11 00:00:00 UTC
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3 Top Cloud Computing Stocks To Watch Now That Joe Biden Is The President-Elect
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https://www.nasdaq.com/articles/3-top-cloud-computing-stocks-to-watch-now-that-joe-biden-is-the-president-elect-2020-11-11
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Are These The Top Cloud Stocks For Q4 2020?
Cloud stocks have had an amazing year so far in the stock market. Furthermore, the results of the U.S. Presidential Election shook the world last weekend. The stock market has seen massive rallies not only from this piece of news but also from the news of a promising Pfizer (PFE Stock Report) vaccine. As more details arise about the efficacy of the vaccine, top tech stocks that fell are beginning to recover. Investors may be realizing that a vaccine is still rather far off. More importantly, the focus has shifted towards what a Biden administration could spell for big tech stocks.
The current president-elect has made promises to go hard on big tech companies. This includes holding Facebook (FB Stock Report) accountable for not doing enough to limit misinformation. Additionally, it also involves the repeal of Section 230 of the Communications Decency Act. This internet policy essentially acts as a legal liability shield for tech companies. With a transition team packed with tech executives, his intentions on this matter are clear. The team includes executives from Amazon (AMZN Stock Report), LinkedIn, and Google (GOOGL Stock Report).
With this shift to the left on tech policy, top cloud computing stocks are back onto investors’ radar. In light of this possible change in industry policies, large tech companies will rely on cloud computing more than ever. Cloud computing provides a viable means of storing and managing the massive amounts of information handled by these companies. In essence, cloud computing companies could provide a crucial service to Big Tech when the time comes. In addition to that, the cloud industry is estimated to have a compound annual growth rate (CAGR) of 17.5% (up to $832.1 billion) by 2025 according to a report published by Research and Markets. Could the possible legal battles ahead add to the present tailwind for top cloud computing stocks?
Read More
Top Cyclical Stocks To Watch With Further Gains Ahead After Promising Vaccine News
Leisure Stocks Jump On Pfizer’s Positive Vaccine News; 3 Names To Watch
Top Cloud Stocks For Q4 2020: Datadog Inc
Datadog (DDOG Stock Report) is an American cloud computing stock that was founded in 2010. It is most well-known for providing monitoring services for cloud-scale applications. The company also monitors servers, databases, tools, and services, through a Software as a service (SaaS) based data analytics platform. Unsurprisingly, it has seen a 181% rise in share prices since the March stock market slide.
Datadog announced its third-quarter on Tuesday after the closing bells. The company reported a 61% year-over-year increase in revenue. This is likely due to the increase of larger customers ($100,000+ Annual Recurring Revenue) from 727 to 1,107 year-over-year. Datadog also announced strategic partnerships with the likes of Microsoft (MSFT Stock Report) and Google. Apart from beating top-line expectations, the company even presents strong guidance going into the fourth quarter. Despite its amazing performance in the last quarter, investors are still not convinced. This is evident as the stock fell more than 10% as of 12.26 pm ET. It appears that strong performance and solid guidance are not enough to sell investors on this cloud computing stock. This, however, could present investors with a nice setup to buy on the dip.
From its recent news, Datadog announced the extension of its European Google Cloud data center. The partnership began in 2019 and will now extend services to include new regions. This will make it easier for organizations to access and implement Datadog’s monitoring and security platform. Moving forward Datadog could prove to be a valuable asset in Google’s internet policy battles. With DDOG stock continuing to spiral downwards in recent weeks, should investors scoop up its shares when there’s blood on the street?
Top Cloud Stocks For Q4 2020: CrowdStrike Holdings Inc
Next up is CrowdStrike Holdings (CRWD Stock Report). CrowdStrike is undoubtedly an industry darling when it comes to cybersecurity and cloud computing. It provides endpoint security, threat intelligence, and cyber-attack response services. The company has been involved in several high-profile cyberattacks. It is obviously no newcomer in the field of cloud computing security. As is in the business of security, the more people can trust you, the more likely they are to invest in your services. This is especially important in a time where most companies have shifted their overall infrastructures towards cloud platforms.
The company has undeniably had a good year with current year-to-date growth of 162%. It reported an 84% year-over-year increase in revenue for fiscal second-quarter 2021. The 89% increase in subscription revenue most likely played a big part in this. Furthermore, the company reported an 87% increase in Annual Recurring Revenue (ARR) year-over-year. The pandemic and work from home measures have definitely been a driving force towards CrowdStrike’s explosive growth this year.
Recently, the company made a key acquisition in the form of Preempt Security for $96 million in cash and stock. Preempt Security is a leading provider of Zero Trust and conditional access technology for real-time access control and threat prevention. This is likely a move by CrowdStrike to further fortify its portfolio of threat prevention services in anticipation of future customer base growth. This collaboration will fundamentally enhance its platform with identity security capabilities. CrowdStrike could be a source of security and assurance for tech companies in the months to come. With that in mind, would you include CRWD stock on your list of top cloud computing stocks to buy?
[Read More] Should Investors Buy These E-Commerce Stocks Amid The Recent Sell-Off?
Top Cloud Stocks For Q4 2020: Salesforce.com, Inc
The last cloud computing stock on this list would be Salesforce.com (CRM Stock Report). This cloud-based software company is based in California and was founded in 1999. It is reportedly holding the largest cloud-based customer relationship management (CRM) software platform in the world. This adds up to a staggering 18.4% of the market. Additionally, the company provides cloud-based e-commerce, marketing, and analytical services as well. All of these services have one key aspect in common. That is, they all integrate “Einstein”. Einstein is the company’s artificial intelligence service that runs the numbers from Salesforce’s services and makes predictions about a company’s customer base.
Salesforce has seen tremendous gains since the stock market slide in March. The company boasts a 104% increase in its share price since the March lows. This is no surprise as demands for this service have likely gone up since the start of the year. It reported a 29% year-over-year increase in revenue in its second-quarter fiscal. In light of the successful quarter, the company raised its fiscal year 2021 revenue guidance by 21% year-over-year.
In recent news, Salesforce is making moves beyond its $15.7 billion acquisition of Tableau Software. Salesforce’s Einstein Analytics will reportedly be rebranded. The analytical prowess of Einstein will be consolidated with Tableau’s current offerings. Tableau chief product officer Francois Ajenstat explains that this collaboration will “enable no-code data science for as many organizations as possible”. In short, this new branch of Salesforce could prove to be a vital operating medium for tech companies facing federal investigations in a Biden administration. Having said all this, could CRM stock be a top cloud stock to watch this quarter?
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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Read More Top Cyclical Stocks To Watch With Further Gains Ahead After Promising Vaccine News Leisure Stocks Jump On Pfizer’s Positive Vaccine News; 3 Names To Watch Top Cloud Stocks For Q4 2020: Datadog Inc Datadog (DDOG Stock Report) is an American cloud computing stock that was founded in 2010. With DDOG stock continuing to spiral downwards in recent weeks, should investors scoop up its shares when there’s blood on the street? In addition to that, the cloud industry is estimated to have a compound annual growth rate (CAGR) of 17.5% (up to $832.1 billion) by 2025 according to a report published by Research and Markets.
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Read More Top Cyclical Stocks To Watch With Further Gains Ahead After Promising Vaccine News Leisure Stocks Jump On Pfizer’s Positive Vaccine News; 3 Names To Watch Top Cloud Stocks For Q4 2020: Datadog Inc Datadog (DDOG Stock Report) is an American cloud computing stock that was founded in 2010. With DDOG stock continuing to spiral downwards in recent weeks, should investors scoop up its shares when there’s blood on the street? Could the possible legal battles ahead add to the present tailwind for top cloud computing stocks?
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Read More Top Cyclical Stocks To Watch With Further Gains Ahead After Promising Vaccine News Leisure Stocks Jump On Pfizer’s Positive Vaccine News; 3 Names To Watch Top Cloud Stocks For Q4 2020: Datadog Inc Datadog (DDOG Stock Report) is an American cloud computing stock that was founded in 2010. With DDOG stock continuing to spiral downwards in recent weeks, should investors scoop up its shares when there’s blood on the street? Top Cloud Stocks For Q4 2020: CrowdStrike Holdings Inc Next up is CrowdStrike Holdings (CRWD Stock Report).
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Read More Top Cyclical Stocks To Watch With Further Gains Ahead After Promising Vaccine News Leisure Stocks Jump On Pfizer’s Positive Vaccine News; 3 Names To Watch Top Cloud Stocks For Q4 2020: Datadog Inc Datadog (DDOG Stock Report) is an American cloud computing stock that was founded in 2010. With DDOG stock continuing to spiral downwards in recent weeks, should investors scoop up its shares when there’s blood on the street? Cloud stocks have had an amazing year so far in the stock market.
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2020-11-10 00:00:00 UTC
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After-Hours Earnings Report for November 10, 2020 : ALC, DDOG, FICO, LYFT, TXG, DOX, TME, ADPT, ASH, BRKS, GO, PRSP
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DDOG
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https://www.nasdaq.com/articles/after-hours-earnings-report-for-november-10-2020-%3A-alc-ddog-fico-lyft-txg-dox-tme-adpt-ash
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The following companies are expected to report earnings after hours on 11/10/2020. Visit our Earnings Calendar for a full list of expected earnings releases.
Alcon Inc. (ALC) is reporting for the quarter ending September 30, 2020. The medical instruments company's consensus earnings per share forecast from the 6 analysts that follow the stock is $0.18. This value represents a 60.87% decrease compared to the same quarter last year. Zacks Investment Research reports that the 2020 Price to Earnings ratio for ALC is 75.44 vs. an industry ratio of 59.90, implying that they will have a higher earnings growth than their competitors in the same industry.
Datadog, Inc. (DDOG) is reporting for the quarter ending September 30, 2020. The internet software company's consensus earnings per share forecast from the 7 analysts that follow the stock is $-0.01. This value represents a 75.00% increase compared to the same quarter last year. In the past year DDOG has beat the expectations every quarter. The highest one was in the 2nd calendar quarter where they beat the consensus by 150%. Zacks Investment Research reports that the Price to Earnings ratio for DDOG is 0.00 vs. an industry ratio of 285.90.
Fair Isaac Corporation (FICO) is reporting for the quarter ending September 30, 2020. The information technology services company's consensus earnings per share forecast from the 3 analysts that follow the stock is $1.47. This value represents a 18.33% decrease compared to the same quarter last year. In the past year FICO has beat the expectations every quarter. The highest one was in the 2nd calendar quarter where they beat the consensus by 51.15%. Zacks Investment Research reports that the 2020 Price to Earnings ratio for FICO is 75.26 vs. an industry ratio of 6.30, implying that they will have a higher earnings growth than their competitors in the same industry.
Lyft, Inc. (LYFT) is reporting for the quarter ending September 30, 2020. The internet services company's consensus earnings per share forecast from the 5 analysts that follow the stock is $-1.33. This value represents a 24.30% decrease compared to the same quarter last year. In the past year LYFT has beat the expectations every quarter. The highest one was in the 2nd calendar quarter where they beat the consensus by 10.76%. Zacks Investment Research reports that the 2020 Price to Earnings ratio for LYFT is -8.30 vs. an industry ratio of 91.30.
10x Genomics, Inc. (TXG) is reporting for the quarter ending September 30, 2020. The medical information systems company's consensus earnings per share forecast from the 3 analysts that follow the stock is $-0.33. This value represents a no change for the same quarter last year. Zacks Investment Research reports that the 2020 Price to Earnings ratio for TXG is -127.77 vs. an industry ratio of -20.60.
Amdocs Limited (DOX) is reporting for the quarter ending September 30, 2020. The information technology services company's consensus earnings per share forecast from the 3 analysts that follow the stock is $1.12. This value represents a 8.74% increase compared to the same quarter last year. In the past year DOX has met analyst expectations once and beat the expectations the other three quarters. Zacks Investment Research reports that the 2020 Price to Earnings ratio for DOX is 14.71 vs. an industry ratio of 6.30, implying that they will have a higher earnings growth than their competitors in the same industry.
Tencent Music Entertainment Group (TME) is reporting for the quarter ending September 30, 2020. The internet content company's consensus earnings per share forecast from the 4 analysts that follow the stock is $0.09. This value represents a no change for the same quarter last year. In the past year TME has met analyst expectations once and beat the expectations the other three quarters. Zacks Investment Research reports that the 2020 Price to Earnings ratio for TME is 43.20 vs. an industry ratio of 68.30.
Adaptive Biotechnologies Corporation (ADPT) is reporting for the quarter ending September 30, 2020. The biomedical (gene) company's consensus earnings per share forecast from the 4 analysts that follow the stock is $-0.28. This value represents a 154.55% decrease compared to the same quarter last year. Zacks Investment Research reports that the 2020 Price to Earnings ratio for ADPT is -44.93 vs. an industry ratio of -30.20.
Ashland Global Holdings Inc. (ASH) is reporting for the quarter ending September 30, 2020. The chemical company's consensus earnings per share forecast from the 4 analysts that follow the stock is $0.79. This value represents a 2.60% increase compared to the same quarter last year. Zacks Investment Research reports that the 2020 Price to Earnings ratio for ASH is 31.03 vs. an industry ratio of -18.30, implying that they will have a higher earnings growth than their competitors in the same industry.
Brooks Automation, Inc. (BRKS) is reporting for the quarter ending September 30, 2020. The electrical manufacturing company's consensus earnings per share forecast from the 2 analysts that follow the stock is $0.36. This value represents a 50.00% increase compared to the same quarter last year. In the past year BRKS has met analyst expectations once and beat the expectations the other three quarters. Zacks Investment Research reports that the 2020 Price to Earnings ratio for BRKS is 52.79 vs. an industry ratio of 36.40, implying that they will have a higher earnings growth than their competitors in the same industry.
Grocery Outlet Holding Corp. (GO) is reporting for the quarter ending September 30, 2020. The consumer company's consensus earnings per share forecast from the 7 analysts that follow the stock is $0.23. This value represents a 4.55% increase compared to the same quarter last year. In the past year GO has beat the expectations every quarter. The highest one was in the 2nd calendar quarter where they beat the consensus by 82.61%. The "days to cover" for this stock exceeds 11 days. Zacks Investment Research reports that the 2020 Price to Earnings ratio for GO is 43.38 vs. an industry ratio of 19.10, implying that they will have a higher earnings growth than their competitors in the same industry.
Perspecta Inc. (PRSP) is reporting for the quarter ending September 30, 2020. The information technology services company's consensus earnings per share forecast from the 3 analysts that follow the stock is $0.47. This value represents a 2.08% decrease compared to the same quarter last year. PRSP missed the consensus earnings per share in the 3rd calendar quarter of 2019 by -5.88%. Zacks Investment Research reports that the 2021 Price to Earnings ratio for PRSP is 11.80 vs. an industry ratio of 6.30, implying that they will have a higher earnings growth than their competitors in the same industry.
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, Inc. (DDOG) is reporting for the quarter ending September 30, 2020. In the past year DDOG has beat the expectations every quarter. Zacks Investment Research reports that the Price to Earnings ratio for DDOG is 0.00 vs. an industry ratio of 285.90.
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Datadog, Inc. (DDOG) is reporting for the quarter ending September 30, 2020. In the past year DDOG has beat the expectations every quarter. Zacks Investment Research reports that the Price to Earnings ratio for DDOG is 0.00 vs. an industry ratio of 285.90.
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Datadog, Inc. (DDOG) is reporting for the quarter ending September 30, 2020. In the past year DDOG has beat the expectations every quarter. Zacks Investment Research reports that the Price to Earnings ratio for DDOG is 0.00 vs. an industry ratio of 285.90.
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In the past year DDOG has beat the expectations every quarter. Datadog, Inc. (DDOG) is reporting for the quarter ending September 30, 2020. Zacks Investment Research reports that the Price to Earnings ratio for DDOG is 0.00 vs. an industry ratio of 285.90.
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718956.0
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2020-11-10 00:00:00 UTC
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3 of the Fastest-Growing Stocks Robinhood Investors Should Buy
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DDOG
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https://www.nasdaq.com/articles/3-of-the-fastest-growing-stocks-robinhood-investors-should-buy-2020-11-10
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This year has tested the resolve of investors like few before it. The unprecedented nature of the coronavirus disease 2019 (COVID-19) pandemic led to historic levels of uncertainty during the first quarter and ultimately wiped away more than a third of the S&P 500's value in under five weeks.
Thankfully, volatility has a way of opening doors for long-term investors. Since bull market rallies inevitably put every stock market crash or correction in the rearview mirror, notable dips in equities are opportunities to put money to work. Investors who bought a basket of innovative companies during the February/March meltdown are likely up on those positions today.
Image source: Getty Images.
However, volatility doesn't always bring out the best in investors. Online investing app Robinhood, which is known for offering commission-free trades and gifting free shares of stock to new members, has gained millions of new users in 2020. Unfortunately, many of these millennial and novice "investors" have chosen to chase Wall Street's flavor of the week or downright awful companies. In other words, most Robinhood investors lack the long-term mindset needed to increase their odds of building significant wealth.
The good news is that there's a solution. Robinhood investors are attracted to volatility. Investing in some of the fastest-growing stocks could satiate that desire, while also giving them a chance to build significant wealth over the long term.
Here are three of the fastest-growing stocks Robinhood investors should consider buying now.
Image source: Getty Images.
Datadog
The coronavirus pandemic has transformed the traditional office environment as we knew it. With businesses pushing online and into the cloud at an accelerated rate due to COVID-19, software-as-a-service (SaaS) stock Datadog's (NASDAQ: DDOG) solutions will be in high demand. Datadog's cloud-based SaaS solutions help businesses monitor application performance, better understand user behaviors, and improve knowledge of key business metrics.
Datadog, which is set to release its third-quarter operating results after the closing bell later today (Nov. 10), recorded 68% sales growth in the second quarter. The number of customers generating over $100,000 in annual recurring revenue jumped to 1,015 from 594 in the year-ago period.
Datadog delivered exceptional growth during the weakest quarter for the U.S. economy in decades. It's also seeing its existing clients spend more as they grow. Datadog's solutions are built to expand with its clients, which should yield improved margins over time.
Unlike a number of other fast-growing cloud-based SaaS stocks, Datadog has also pushed to recurring profitability. Even with the company making acquisitions and spending freely on innovation, there's no concern about full-year losses.
Between 2019 and 2023, Wall Street expects Datadog to grow sales from $363 million to about $1.4 billion, which works out to a compound annual growth rate of 40% a year. That's the type of growth Robinhood investors should chase.
Image source: Getty Images.
Innovative Industrial Properties
Marijuana stocks have been the talk of Wall Street over the past week, primarily because of the cannabis industry's green sweep post-Election Day. Unfortunately, Robinhood investors aren't allowed to buy into many of the fastest-growing names in the industry because the Robinhood platform doesn't let members buy over-the-counter-listed stocks. Thankfully, there is still one high-growth pot stock that offers exceptional growth prospects: Innovative Industrial Properties (NYSE: IIPR).
Innovative Industrial Properties, or IIP, is a cannabis-focused real estate investment trust (REIT). It acquires medical marijuana cultivation and processing sites and then leases these assets out for long periods, usually 10 to 20 years. IIP makes its living by collecting rental income, acquiring new assets, and passing along annual rental increases to its tenants.
Innovative Industrial's acquisitions are primarily driving its growth. Having begun 2019 with just 11 properties owned, IIP ended the previous week with 63 properties spanning 5 million square feet across 16 states. The best part is that more than 99% of this square footage is currently leased, with a weighted-average remaining lease length of 16.2 years. Investors can expect highly transparent and predictable cash flow for a long time to come.
IIP also benefits from its sale-leaseback arrangements. With access to traditional banking services limited for multistate operators, Innovative Industrial acquires properties from cannabis operators with cash and immediately leases these properties back to the seller. These arrangements allow IIP to acquire long-term tenants, while pot companies land much-needed cash.
Though success largely depends on IIP's acquisition activity moving forward, Wall Street expects the company's annual revenue to top $280 million by 2023. For context, it generated just $44.7 million in revenue in 2019.
Image source: Getty Images.
Sea Limited
A final fast-growing stock that Robinhood investors can sink their teeth into is Singapore's Sea Limited (NYSE: SE). Sea has a three-part business fully capable of delivering sustainable double-digit or triple-digit growth.
The company's digital entertainment segment is currently responsible for most of its revenue and the bulk of its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA). Sea is the company behind the hit mobile game Free Fire, which attracted more than 100 million peak daily users during the second quarter. More importantly, its gaming arena has nearly 500 million active users, 10% of whom are paying (up from 8.4% in Q2 2019).
However, the real excitement stems from e-commerce platform Shopee, which targets a number of Southeast Asian countries. This region's rising middle class is quickly becoming accustomed to making purchases online. In the second quarter, gross merchandise volume bought on the Shopee platform jumped about 110% to $8 billion from the prior-year period, with gross orders jumping 150%. This segment could see lasting triple-digit growth even once an effective COVID-19 vaccine is approved.
Lastly, Sea Limited has ventured into digital financial services. At the end of June, the company had more than 15 million paying mobile wallet users. Though this segment is a relatively small revenue generator for now, it could prove quite lucrative in an underbanked region of the world.
Wall Street is looking for Sea's sales to catapult from $2.9 billion in 2019 to $10.3 billion by 2023, which works out to a compound annual growth rate of 37.3%.
10 stocks we like better than Sea Limited
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Sean Williams has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Datadog, Innovative Industrial Properties, and Sea Limited. 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 businesses pushing online and into the cloud at an accelerated rate due to COVID-19, software-as-a-service (SaaS) stock Datadog's (NASDAQ: DDOG) solutions will be in high demand. Online investing app Robinhood, which is known for offering commission-free trades and gifting free shares of stock to new members, has gained millions of new users in 2020. Though success largely depends on IIP's acquisition activity moving forward, Wall Street expects the company's annual revenue to top $280 million by 2023.
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With businesses pushing online and into the cloud at an accelerated rate due to COVID-19, software-as-a-service (SaaS) stock Datadog's (NASDAQ: DDOG) solutions will be in high demand. Between 2019 and 2023, Wall Street expects Datadog to grow sales from $363 million to about $1.4 billion, which works out to a compound annual growth rate of 40% a year. Thankfully, there is still one high-growth pot stock that offers exceptional growth prospects: Innovative Industrial Properties (NYSE: IIPR).
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With businesses pushing online and into the cloud at an accelerated rate due to COVID-19, software-as-a-service (SaaS) stock Datadog's (NASDAQ: DDOG) solutions will be in high demand. Between 2019 and 2023, Wall Street expects Datadog to grow sales from $363 million to about $1.4 billion, which works out to a compound annual growth rate of 40% a year. Unfortunately, Robinhood investors aren't allowed to buy into many of the fastest-growing names in the industry because the Robinhood platform doesn't let members buy over-the-counter-listed stocks.
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With businesses pushing online and into the cloud at an accelerated rate due to COVID-19, software-as-a-service (SaaS) stock Datadog's (NASDAQ: DDOG) solutions will be in high demand. Here are three of the fastest-growing stocks Robinhood investors should consider buying now. Datadog's solutions are built to expand with its clients, which should yield improved margins over time.
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2020-11-06 00:00:00 UTC
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7 Data-Driven Stocks for a Wave of Innovation
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DDOG
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https://www.nasdaq.com/articles/7-data-driven-stocks-for-a-wave-of-innovation-2020-11-06
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Everyone is thinking of e-commerce, social media engagement, the 5G revolution — you name it. There are a lot of cool and inspiring trends in tech, and they happen so fast that it becomes very exciting. But shouldn’t we stop to recognize the data stocks in all of this?
Data is now being created at an exponential rate. Text messages, direct messages, photos, comments, shopping habits, even the routes we take on the road or in a store generate data.
But here’s the problem: All of that data is worthless without a way to organize it.
Imagine having a computer program that tracks millions of data points and generates billions of pieces of information. As humans, we could never organize that into anything of meaning or substance.
But that’s where data stocks come in. These companies can help make sense of the unintelligible. They can connect the dots when there is seemingly no correlation at all. Best of all, this dot connecting creates a wealth of information, helping to drive sales, profits and most of all, efficiencies.
7 Unicorn Startups to Watch Into 2021
Let’s look at seven data stocks to watch going forward.
Salesforce (NYSE:CRM)
Snowflake (NYSE:SNOW)
Alteryx (NYSE:AYX)
Datadog (NASDAQ:DDOG)
Invitae (NYSE:NVTA)
Splunk (NASDAQ:SPLK)
MongoDB (NASDAQ:MDB)
Data Stocks to Buy: Salesforce (CRM)
CRM) sticker." width="300" height="169">Source: Bjorn Bakstad / Shutterstock.com
Leading off our list of top data-driven stocks is Salesforce. Even before we consider the data angle of Salesforce, this stock is a force to be reckoned with.
Commanding a market capitalization of more than $200 billion, Salesforce is coming off a robust quarter. Although the stock has been met with sellers over the past few months, let’s not forget Salesforce rallied 26% in a single day from all-time highs on better-than-expected earnings.
It’s an obvious dominator in the cloud and CRM space, but with its acquisition of Tableau Data, Salesforce is expanding its domination.
Its ability to cross-sell and optimize its businesses is clear. With Tableau, the company can now expand it to the world of Big Data, a market set to continue its explosive growth. Plus, Salesforce has a nice investment stake in the next company.
Snowflake (SNOW)
SNOW) IPO on the NYSE" width="300" height="169">Source: rblfmr / Shutterstock.com
Snowflake will be a turnoff for some investors for a few reasons. First, it’s fresh off a big IPO, having gone public just over a month ago. After aggressively hiking its IPO price up to $120 a share, the stock opened for trading at $245. It traded as high as $319 before settling down.
As if the gunslinger action of this new issue isn’t enough, the valuation is through the roof. Trading near $265 a share, Snowflake commands a near-$75 billion market cap.
That’s not that much smaller than Salesforce, which took years to build its business with plenty of skepticism from short sellers. Interestingly enough, Salesforce and Berkshire Hathaway (NYSE:BRK.A, NYSE:BRK.B) both took a stake in this company ahead of the IPO.
For Snowflake, sales rang in at about $96 million in fiscal 2019. In fiscal 2020, revenue ballooned to $252 million. This year, forecasts call for sales of about $565 million.
SNOW stock trades at 277 times trailing revenue and more than 120 times current sales. On a forward basis, the stock trades at about 65 times next year’s revenue estimates and roughly 40 times estimates for fiscal 2023, which call for $1.75 billion in sales.
Granted, the valuation is rich but the growth is evident. It highlights just how big of a market Big Data is set to become.
Data Stocks to Buy: Alteryx (AYX)
AYX) logo is displayed on a smartphone screen." width="300" height="169">Source: rafapress / Shutterstock.com
A company really taking the fight to Big Data? Alteryx.
This volatile growth juggernaut has seen its share of ups and downs. When the company reported earnings in early August, disappointing guidance caused the stock to plunge. Then in early October, a CEO change and a guidance hike (above the prior consensus estimates) caused shares to soar.
However, the stock has not yet recovered from the post-earnings dip, despite eradicating its biggest issue. That could leave an opportunity for investors. From the company:
“Companies of all sizes recognize the tremendous potential for data, but many struggle to turn it into actionable insights that improve business results. The legacy approach to analytics slows organizations down, requires costly software and too many specific tools used by too many uniquely skilled people.
The Alteryx APA Platform unifies analytics, data science and business process automation in one easy-to-use platform to accelerate digital transformation.”
Alteryx leverages machine learning and artificial intelligence to make sense of the unintelligible. In that, there is value and it’s why the company has found a way to grow so fast.
Datadog (DDOG)
DDOG) logo displayed on a laptop screen." width="300" height="169">Source: Karol Ciesluk / Shutterstock.com
Datadog has been running hard. From the March low to the recent high, shares were up just over 300%.
This name has been on fire and quite frankly, it makes sense. Consensus expectations call for revenue growth of 57% this year, followed by 35% growth next year. Is it possible that these estimates are conservative?
In October, Datadog shares ripped higher on news that it’s working with Microsoft (NASDAQ:MSFT). Under the new deal, Datadog will be available on the company’s Azure platform as a first-class service. In other words, Datadog setup will be automatic, which is huge for this company.
Azure is one of the most popular cloud platforms in the world. So teaming up with it is going to pay huge dividends going forward. Even better, Datadog doesn’t have any debt and is free cash flow positive.
Data Stocks to Buy: Invitae (NVTA)
Source: Shutterstock
Let’s change it up a bit. This name is a little more speculative than many of the other holdings on this list. However, Invitae is not as speculative as it used to be.
Believe it or not, this stock may present a better opportunity to investors here in the $40 range than it did below $10. Granted, the potential reward will be less, but so is the risk.
This company is carving out its role in the genomics business.
Invitae has struggled with its cash burn over the years, as it chews through capital building out its business. That caused volatility in its stock price, but investors proved too bearish as the stock has risen more than 640% from the lows to the recent high.
From Invitae: “By harnessing the power of genetics and technology, we can make medical genetics affordable and accessible for everyone, improving healthcare for billions of people.”
The company is leveraging machine learning and Big Data to help in its healthcare fight. Its story is too much to fit in this one column, but investors who take the time to research this name will find it has a much larger role in Big Data than what meets the eye.
Splunk (SPLK)
Source: Michael Vi / Shutterstock.com
Dare we say that Splunk is a legacy Big Data company? Founded almost 20 years ago, Splunk is a well-known firm with a $32 billion market cap. From the company’s description:
“Splunk is the world’s first Data-to-Everything Platform designed to remove the barriers between data and action, so that everyone thrives in the Data Age.”
However, this company is not without flaws. Remember Alteryx, which cut its guidance when it reported earnings in August? That wasn’t a company-specific issue, it’s an industry-wide one. Splunk missed on revenue estimates and reported disappointing sales guidance.
We’ll see if management gives investors a better update on guidance like Alteryx did, but either way, the reality is clear: Companies were pulling back on Big-Data spending when uncertainty was screaming higher earlier this year.
For now, consensus estimates call for a rebound in the next fiscal year. Analysts expect revenue to grow 25% and for earnings to grow more than 300%. At 11 times forward sales, Splunk is actually one of the cheaper Big Data stocks out there.
Data Stocks to Buy: MongoDB (MDB)
Source: Michael Vi / Shutterstock.com
The last company on our list has a higher valuation than Splunk, but it also has a higher growth rate. Investors had a very short window to buy MongoDB under $100.
Shortly after, it blew through its prior double-high near $185, ultimately topping out near $270. What a great move for a great company.
Consensus estimates call for sales growth of 31% this year and 28% next year. That said, it’s a bit more expensive, with its $14.7 billion market cap, shares trade at roughly 27 times this year’s revenue estimate.
The company “is the leading modern, general purpose database platform, designed to unleash the power of software and data for developers and the applications they build.”
With various businesses spanning the software and cloud industries, MongoDB is in the right places for secular growth. As data continues to grow exponentially and become more complex, large companies will become increasingly dependent on firms like MongoDB.
5G, social media, artificial intelligence, e-commerce and increasing use of technology will continue to drive data. MongoDB and the other data stocks on this list should continue to see solid growth for years to come.
On the date of publication, Bret Kenwell held a long position in AYX and NVTA.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell.
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The post 7 Data-Driven Stocks for a Wave of Innovation 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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Salesforce (NYSE:CRM) Snowflake (NYSE:SNOW) Alteryx (NYSE:AYX) Datadog (NASDAQ:DDOG) Invitae (NYSE:NVTA) Splunk (NASDAQ:SPLK) MongoDB (NASDAQ:MDB) Data Stocks to Buy: Salesforce (CRM) CRM) sticker." Datadog (DDOG) DDOG) logo displayed on a laptop screen." Although the stock has been met with sellers over the past few months, let’s not forget Salesforce rallied 26% in a single day from all-time highs on better-than-expected earnings.
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Salesforce (NYSE:CRM) Snowflake (NYSE:SNOW) Alteryx (NYSE:AYX) Datadog (NASDAQ:DDOG) Invitae (NYSE:NVTA) Splunk (NASDAQ:SPLK) MongoDB (NASDAQ:MDB) Data Stocks to Buy: Salesforce (CRM) CRM) sticker." Datadog (DDOG) DDOG) logo displayed on a laptop screen." On a forward basis, the stock trades at about 65 times next year’s revenue estimates and roughly 40 times estimates for fiscal 2023, which call for $1.75 billion in sales.
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Salesforce (NYSE:CRM) Snowflake (NYSE:SNOW) Alteryx (NYSE:AYX) Datadog (NASDAQ:DDOG) Invitae (NYSE:NVTA) Splunk (NASDAQ:SPLK) MongoDB (NASDAQ:MDB) Data Stocks to Buy: Salesforce (CRM) CRM) sticker." Datadog (DDOG) DDOG) logo displayed on a laptop screen." From the company’s description: “Splunk is the world’s first Data-to-Everything Platform designed to remove the barriers between data and action, so that everyone thrives in the Data Age.” However, this company is not without flaws.
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Salesforce (NYSE:CRM) Snowflake (NYSE:SNOW) Alteryx (NYSE:AYX) Datadog (NASDAQ:DDOG) Invitae (NYSE:NVTA) Splunk (NASDAQ:SPLK) MongoDB (NASDAQ:MDB) Data Stocks to Buy: Salesforce (CRM) CRM) sticker." Datadog (DDOG) DDOG) logo displayed on a laptop screen." But that’s where data stocks come in.
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2020-11-06 00:00:00 UTC
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Why Datadog Stock Fell 11.2% in October
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DDOG
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https://www.nasdaq.com/articles/why-datadog-stock-fell-11.2-in-october-2020-11-06
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nan
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What happened
Shares of Datadog (NASDAQ: DDOG) slumped 11.2% in October, according to data from S&P Global Market Intelligence. The sell-off for the stock occurred in conjunction with a pullback for the broader market and followed a 22% increase for the company's share price in September.
DDOG data by YCharts
Datadog stock set a new all-time in October thanks to strong momentum for its services and a new partnership with Microsoft. However, a surge in new confirmed coronavirus cases prompted increased economic uncertainty and pushed the company's share price down double digits in the month.
Image source: Getty Images.
So what
Datadog and Microsoft announced their new partnership on Sept. 30. The deal resulted in Datadog's software being available as a first-class service on Microsoft's Azure cloud computing platform, making it easy for Azure users to implement and set up the former company's cloud monitoring and security services. Datadog stock saw significant positive momentum following the partnership, but shares subsequently gave up ground as sell-offs rocked the market in the month's second half.
Now what
Datadog stock has bounced from its sell-off last month. The stock is up roughly 14% amid momentum for the broader market early in November's trading.
DDOG data by YCharts
Datadog is set to report third-quarter earnings after the market closes on Nov. 10. The company is guiding for Q3 revenue to be between $143 million and $145 million, an increase of roughly 50% year over year at the midpoint of the target. Revenue for the full-year period is projected to come in between $566 million and $572 million, good for growth of roughly 57% at the midpoint.
Datadog has a market capitalization of roughly $30.6 billion and is valued at approximately 53.6 times this year's expected sales.
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*Stock Advisor returns as of October 20, 2020
Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Keith Noonan has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Datadog and Microsoft and recommends the following options: long January 2021 $85 calls on Microsoft and short January 2021 $115 calls on 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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DDOG data by YCharts Datadog stock set a new all-time in October thanks to strong momentum for its services and a new partnership with Microsoft. What happened Shares of Datadog (NASDAQ: DDOG) slumped 11.2% in October, according to data from S&P Global Market Intelligence. DDOG data by YCharts Datadog is set to report third-quarter earnings after the market closes on Nov. 10.
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DDOG data by YCharts Datadog stock set a new all-time in October thanks to strong momentum for its services and a new partnership with Microsoft. What happened Shares of Datadog (NASDAQ: DDOG) slumped 11.2% in October, according to data from S&P Global Market Intelligence. DDOG data by YCharts Datadog is set to report third-quarter earnings after the market closes on Nov. 10.
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DDOG data by YCharts Datadog stock set a new all-time in October thanks to strong momentum for its services and a new partnership with Microsoft. What happened Shares of Datadog (NASDAQ: DDOG) slumped 11.2% in October, according to data from S&P Global Market Intelligence. DDOG data by YCharts Datadog is set to report third-quarter earnings after the market closes on Nov. 10.
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DDOG data by YCharts Datadog stock set a new all-time in October thanks to strong momentum for its services and a new partnership with Microsoft. What happened Shares of Datadog (NASDAQ: DDOG) slumped 11.2% in October, according to data from S&P Global Market Intelligence. DDOG data by YCharts Datadog is set to report third-quarter earnings after the market closes on Nov. 10.
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a5f97a3a-1954-43b2-91d1-c79d0cf6ea38
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718959.0
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2020-11-05 00:00:00 UTC
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Why I Just Purchased Shares of AI Cloud Observability Company Dynatrace
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DDOG
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https://www.nasdaq.com/articles/why-i-just-purchased-shares-of-ai-cloud-observability-company-dynatrace-2020-11-05
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nan
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nan
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The COVID-19 pandemic is creating rapid change among organizations around the globe. Technology projects to update operations -- especially in cloud computing -- can no longer be delayed, but rather are critical to the long-term health of many businesses.
As a result, cloud observability software outfit Dynatrace (NYSE: DT) says its total addressable market has surged in the last 18 months from $20 billion a year to $32 billion a year. I was intrigued, and after catching up with CEO John Van Siclen to learn more about the company, I decided to start a position.
Cloud computing ushers in a new digital era
I've been a happy Splunk (NASDAQ: SPLK) shareholder for years. The longtime leader in digital data parsing and analytics has had a bumpy ride as of late as it makes its transition to a cloud-first operation, but it's clearly pulling off its transformation and benefiting from a growing market as demand for its software continues to rise.
Image source: Getty Images.
Nevertheless, Splunk's core competencies (as well as those of peer New Relic (NYSE: NEWR) and others) spring from an era that pre-dates the cloud, and the door has been left open for upstarts like Datadog (NASDAQ: DDOG) and Elastic (NYSE: ESTC) to make some headway in this high-growth industry.
Enter Dynatrace, which had its IPO over the summer of 2019 and has seen its stock price rise about 50% since then. What separates Dynatrace from the rest of the pack?
For one, it got an early start reshuffling its business to focus on automated cloud observability after being acquired (as part of Compuware) by private equity firm Thoma Bravo in 2014. Its system enables automated orchestration of applications across an organization's operations; runs real-time AI analytics across the data and predicts failures or underperformance; and provides actionable insights to help customers remediate problems with their workflows. This is a proficiency Splunk has recognized too with its recent "Observability Suite" announcement.
Van Siclen thinks Dynatrace's purpose-built platform for the massive and complex scale of modern cloud-based operations sets it apart from its competitors. During the company's lastearnings call he highlighted how organizations have moved beyond the need to simply gather up data from various software tools into a user interface, but rather are in need of a more complex "observability" platform that can also automate remediation when an app isn't performing as intended.
When reorganizing itself prior to going public, this future need was the company's vision. It's paying off as IT departments around the globe are strapped for time and resources and are realizing the various tools they've cobbled together in-house (or the legacy software suites they've been relying on in the past) aren't getting the job done anymore.
A quick look at the numbers
The new Dynatrace derives nearly all of its income from recurring subscription revenue, so no cloud transformation needed here. And even though many of its customers (Dynatrace targets the world's largest 15,000 global enterprises, versus peer Datadog which has carved out a niche among mostly small- and mid-sized companies) have been deeply affected by the pandemic, it is making good headway. Total annual recurring revenue (ARR) grew 35% during the last quarter to $638 million, and the dollar-based net expansion rate was over 120% for the 10th quarter in a row during the company's fiscal second quarter (implying existing customers spent over 20% more with Dynatrace than a year ago).
METRIC
SIX MONTHS ENDED
SEPT. 30, 2020
SIX MONTHS ENDED
SEPT. 30, 2019
CHANGE
Total revenue
$324 million
$252 million
29%
Gross profit margin
81.7%
72.6%
9.1 pp
Net income (loss)
$30.3 million
($466 million)
N/A
Free cash flow
$54.3 million
($229 million)
N/A
Pp = percentage point. Data source: Dynatrace.
A new market landscape
Also of note is that Dynatrace is profitable by all metrics. It's certainly refreshing to find a software firm that is able to balance rapid growth and positive bottom-line return. However, it should be pointed out that Dynatrace's biggest challenge right now is hiring enough sales force to go after its large and growing market. Van Siclen told me they've been in touch with about only half of its targeted potential customers, but has a more than 70% deal win rate with those enterprises they do initiate a conversation with. That explains the stated goal to grow the sales team by 20% to 25% this year.
But with a myriad of names competing in the space, it may appear the data analytics software industry is a crowded one. But Van Siclen points out that combining the revenue from all its peers still represents a small percentage of the tens of billions being spent each year on data analytics and log management software -- and spending is increasing by some 30% at the moment. This is a large and growing pie, and there's plenty of room for multiple players.
Data by YCharts.
For now, it's all about carving up the available market share, but my attention is on the future of this industry when these various firms start to rub shoulders more frequently. What will it look like? According to Van Siclen, a "full-closed loop" of cloud observability that also senses real-time changes in operations. The cloud is huge, it can't be fully mapped out. But AI is essential to keep it running smoothly. Van Siclen told me:
The world will wake up in a year to two years and realize that observability data gathering is a commodity. It's all about the analytics. And the talk track will start to change from observability to understandability, predictability, actionability.
If that's the way the digital economy is headed -- and I think it is -- Dynatrace could be ahead of the curve and poised to benefit with its fully unified platform enhanced with real-time automation. And at 16 times trailing 12-month sales and generating ample bottom-line return to fund its growth, shares look reasonably priced given the opportunity. I therefore am adding Dynatrace to my cloud software portfolio.
10 stocks we like better than Dynatrace Holdings LLC
When investing geniuses David and Tom Gardner have 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.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Dynatrace Holdings LLC 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 October 20, 2020
Nicholas Rossolillo owns shares of Dynatrace Holdings LLC and Splunk. His clients may own shares of the companies mentioned. The Motley Fool owns shares of and recommends Datadog, Elastic, New Relic, and Splunk. 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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Nevertheless, Splunk's core competencies (as well as those of peer New Relic (NYSE: NEWR) and others) spring from an era that pre-dates the cloud, and the door has been left open for upstarts like Datadog (NASDAQ: DDOG) and Elastic (NYSE: ESTC) to make some headway in this high-growth industry. The longtime leader in digital data parsing and analytics has had a bumpy ride as of late as it makes its transition to a cloud-first operation, but it's clearly pulling off its transformation and benefiting from a growing market as demand for its software continues to rise. Its system enables automated orchestration of applications across an organization's operations; runs real-time AI analytics across the data and predicts failures or underperformance; and provides actionable insights to help customers remediate problems with their workflows.
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Nevertheless, Splunk's core competencies (as well as those of peer New Relic (NYSE: NEWR) and others) spring from an era that pre-dates the cloud, and the door has been left open for upstarts like Datadog (NASDAQ: DDOG) and Elastic (NYSE: ESTC) to make some headway in this high-growth industry. Its system enables automated orchestration of applications across an organization's operations; runs real-time AI analytics across the data and predicts failures or underperformance; and provides actionable insights to help customers remediate problems with their workflows. Total revenue $324 million $252 million 29% Gross profit margin 81.7% 72.6% 9.1 pp Net income (loss) $30.3 million ($466 million)
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Nevertheless, Splunk's core competencies (as well as those of peer New Relic (NYSE: NEWR) and others) spring from an era that pre-dates the cloud, and the door has been left open for upstarts like Datadog (NASDAQ: DDOG) and Elastic (NYSE: ESTC) to make some headway in this high-growth industry. As a result, cloud observability software outfit Dynatrace (NYSE: DT) says its total addressable market has surged in the last 18 months from $20 billion a year to $32 billion a year. Total annual recurring revenue (ARR) grew 35% during the last quarter to $638 million, and the dollar-based net expansion rate was over 120% for the 10th quarter in a row during the company's fiscal second quarter (implying existing customers spent over 20% more with Dynatrace than a year ago).
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Nevertheless, Splunk's core competencies (as well as those of peer New Relic (NYSE: NEWR) and others) spring from an era that pre-dates the cloud, and the door has been left open for upstarts like Datadog (NASDAQ: DDOG) and Elastic (NYSE: ESTC) to make some headway in this high-growth industry. Total revenue $324 million $252 million 29% Gross profit margin 81.7% 72.6% 9.1 pp Net income (loss) $30.3 million ($466 million) Van Siclen told me: The world will wake up in a year to two years and realize that observability data gathering is a commodity.
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976d3a00-a12d-4751-877e-0fd6f30c63c8
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718960.0
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2020-11-04 00:00:00 UTC
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Why Datadog, MongoDB, and HubSpot Stocks Soared Today
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DDOG
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https://www.nasdaq.com/articles/why-datadog-mongodb-and-hubspot-stocks-soared-today-2020-11-04
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nan
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nan
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What happened
Shares of monitoring and analytics platform provider Datadog (NASDAQ: DDOG), database specialist MongoDB (NASDAQ: MDB), and cloud-based marketing solutions company HubSpot (NYSE: HUBS) all jumped sharply on Wednesday. As of 1 p.m. EST, all three stocks were up about 8%.
The three stocks' gains are likely primarily fueled by a bullish day in the overall market as the Street digests a tight race for the U.S. presidential election. At the time of this writing, the S&P 500 was up 3.1%.
Many tech stocks, however, are gaining even more rapidly than the overall market. This is captured by the tech-heavy Nasdaq Composite's 4.1% gain at the time of this writing. Meanwhile, lots of tech growth stocks like Datadog, MongoDB, and HubSpot are rising even more sharply on Wednesday.
This broader-market momentum explains these three stocks' big gains today.
Image source: Getty Images.
So what
These stocks' gains come amid the heat of the earnings season, when many tech stocks will be reporting their quarterly results. In fact, HubSpot is set to report its third-quarter results after market close tomorrow. Of these three stocks, Datadog is next in line after HubSpot to report its quarterly earnings, scheduled to report third-quarter results after market close on Tuesday, Nov. 10. Though MongoDB hasn't put a date to its next earnings report, it usually posts it sometime in the first half of December.
While these three stocks' momentum could continue, investors shouldn't count on it. As the market digests election news, there could be significant volatility ahead in either direction. Moreover, Datadog's earnings report tomorrow could easily send the stock sharply higher or lower.
Now what
All three of these companies are growing rapidly, putting them squarely in the camp of other hot growth stocks. Datadog, HubSpot, and MongoDB grew their revenue by 68%, 25%, and 39% year over year, respectively, in their most recent quarters. Each of these companies is benefiting from the secular tailwind of accelerating digital transformations -- a catalyst that was strong before the coronavirus pandemic but has picked up momentum as people are spending more time at home.
As HubSpot CEO Brian Halligan noted in the company's second-quarter earnings release, "The world is evolving this year -- from offline to online, from old to new -- at a far greater pace than anyone could have expected."
Analysts are expecting more strong growth from all three companies during the second half of the year.
Find out why HubSpot is one of the 10 best stocks to buy now
Motley Fool co-founders Tom and David Gardner have 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.*
Tom and David just revealed their ten top stock picks for investors to buy right now. HubSpot 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 October 20, 2020
Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool owns shares of 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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What happened Shares of monitoring and analytics platform provider Datadog (NASDAQ: DDOG), database specialist MongoDB (NASDAQ: MDB), and cloud-based marketing solutions company HubSpot (NYSE: HUBS) all jumped sharply on Wednesday. Each of these companies is benefiting from the secular tailwind of accelerating digital transformations -- a catalyst that was strong before the coronavirus pandemic but has picked up momentum as people are spending more time at home. As HubSpot CEO Brian Halligan noted in the company's second-quarter earnings release, "The world is evolving this year -- from offline to online, from old to new -- at a far greater pace than anyone could have expected."
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What happened Shares of monitoring and analytics platform provider Datadog (NASDAQ: DDOG), database specialist MongoDB (NASDAQ: MDB), and cloud-based marketing solutions company HubSpot (NYSE: HUBS) all jumped sharply on Wednesday. Meanwhile, lots of tech growth stocks like Datadog, MongoDB, and HubSpot are rising even more sharply on Wednesday. In fact, HubSpot is set to report its third-quarter results after market close tomorrow.
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What happened Shares of monitoring and analytics platform provider Datadog (NASDAQ: DDOG), database specialist MongoDB (NASDAQ: MDB), and cloud-based marketing solutions company HubSpot (NYSE: HUBS) all jumped sharply on Wednesday. So what These stocks' gains come amid the heat of the earnings season, when many tech stocks will be reporting their quarterly results. Of these three stocks, Datadog is next in line after HubSpot to report its quarterly earnings, scheduled to report third-quarter results after market close on Tuesday, Nov. 10.
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What happened Shares of monitoring and analytics platform provider Datadog (NASDAQ: DDOG), database specialist MongoDB (NASDAQ: MDB), and cloud-based marketing solutions company HubSpot (NYSE: HUBS) all jumped sharply on Wednesday. Many tech stocks, however, are gaining even more rapidly than the overall market. Meanwhile, lots of tech growth stocks like Datadog, MongoDB, and HubSpot are rising even more sharply on Wednesday.
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7a7983a8-0d96-49c6-b763-dbf40118a6aa
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718961.0
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2020-10-26 00:00:00 UTC
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3 Healthcare Stocks to Watch
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DDOG
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https://www.nasdaq.com/articles/3-healthcare-stocks-to-watch-2020-10-26
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nan
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nan
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In this episode of Industry Focus: Wildcard, Dylan Lewis is joined by Motley Fool contributor Brian Feroldi to discuss three healthcare stocks with great upside potential. Learn about their business models, product offerings, financials, what gives them an edge in the space, and their risk factors. They also talk about how to spot stocks with 10X potential, the opportunities ahead for these three particular stocks, and why you should have them on your watch list.
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.
10 stocks we like better than Trupanion
When investing geniuses David and Tom Gardner have 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.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now… and Trupanion 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 October 20, 2020
This video was recorded on October 21, 2020.
Dylan Lewis: It's Wednesday, October 21st, and we're pitching a few 10X healthcare stocks. I'm your host Dylan Lewis, and I'm joined by Fool.com's, Brian Feroldi.
Brian, I know that you had some elaborate name for me here, but admittedly, I was switching tabs between our outline as I was reading the intro, and unfortunately I didn't get it in time, I'll do it now though, just to humor you, because I know you put some time into this. Fool.com's timely tracer of tremendous trailing 10X talent, Brian Feroldi. There we go.
Brian Feroldi: Okay, Dylan, I was a little concerned [laughs] for a couple of seconds there, that we're all of a sudden working off of different documents. Yes, I put a lot of time into those titles; still haven't tripped you up, got more work to do.
Lewis: You got me last week as we were wrapping up, because I got cocky and I did it twice, this time, though, I've learned my lesson, I'm not going to try to hit it again at the end of the show, particularly because I think you threw eight Ts into that one, and I don't think I can hit that one twice. [laughs]
Feroldi: Yeah. You know, I've noticed that you are slowing down even more so in the intro than [laughs] usual because I've damaged your brain, apparently, to make you want to go extremely slow when we start.
Lewis: [laughs] It's a fun game, and a fun way to kick things off, it's kind of a nice little broadcaster exercise. And it means, if I can get through that, we can get through the whole show. Hopefully, I didn't just jinx us. Brian, you're on today because we are talking in our Wildcard episode about 10X stocks, specifically, healthcare stocks. You're one of my favorite people to talk about 10X stocks with, you're one of my favorite people to talk about healthcare stocks with, it only made sense for you to be on today's show.
Feroldi: Yeah, this is a topic that I absolutely love, healthcare is a great place to go looking for these stocks, because innovations come along all the time that just did not exist before and have tremendous potential to change the face of healthcare. And companies that can do that successfully, definitely have the potential to provide 10X results for investors, so this sector, just like the technology sector, I think is packed with companies that have 10X potential.
Lewis: Before we get into some of the signs of a 10X stock, I think it's, kind of, worth double-clicking on that industry profile for a second, because a huge part of the healthcare industry is what could happen. And we see it in the hardware space, we see it in the biotech space, in particular, where if certain things come to fruition, the story for a business gets really big, really fast, but you kind of have to discount probabilities. And so, you wind up with these small businesses that could become massive businesses if things go right.
Feroldi: Yeah, it's very common for, say, smaller companies, and let's just call smaller companies those below $1 billion, to raise a lot of funding from investors as they develop their product. It takes a long time to develop these innovative technologies, let alone bring them to market. So, it's common for companies to come public when they are still, you know, in the $500 million or less range. Some of these companies are pre-revenue, and boy! Can that be risky to invest in. However, it does give us, as investors, the chance to get in, in the first inning. And if the technology proves itself out, the percentage returns for investors could be spectacular.
Lewis: Yeah, the upside and downside is a little bit different in this industry, particularly with the biotech stocks, but also with, I think, some health and med-tech companies as well. They are probably a little bit closer to the binary outcomes that you'll see in some spaces. And that's really not something that's super-familiar to people that are normally investing in consumer goods or retail. You know, if Chipotle has a bad quarter, they're still selling some burritos; if a drug doesn't get approved, you're not really making any money on that drug or that therapy.
Feroldi: Yeah, that is a big risk. That's why, when I typically invest in these companies, it's after they've been significantly de-risked, after they've gotten FDA approval and set up in insurance and getting some healthcare providers or more. I normally like to see some traction in the marketplace before I'm willing to put my capital behind it. I do make exceptions in one of the companies that we're going to talk about today. It is still pre-revenue with their product, but if you can invest at that point and you're right, the gains can be huge.
Lewis: And I think that's the right way to go. You know, you're reducing your upside a little bit with that, but you're also dramatically increasing your certainty. And you know, everyone has their own risk-adjusted comfort level with those kinds of things, but you got to be able to sleep at night with the stocks that you're buying.
Feroldi: Totally. And there's no reason that you can't invest in risky companies too. If you are a low-risk investor but you still want a little bit of skin in the game in these companies, I see nothing wrong with taking a tiny piece of your portfolio and putting it into these companies, especially if you're willing to diversify and buy five, 10 or even 20 of them. Just knowing full well in the beginning, a lot of these are going to flame out and go against you, but if you're right on just one or two of them, it'll carry the entire portfolio forward.
Lewis: Let's talk a little bit about some of the characteristics for a typical 10X business. We've done this, I think, with a tech lens before, and a lot of the rules are going to be, kind of, the same here, but it's worth reemphasizing them.
Feroldi: So, mostly, when I think about 10X stocks, I think small, I generally screen for companies that are below a $5 billion market cap. At that size, the company can 10X and still be below $50 billion. $50 billion is a really big company, but if a technology comes along and it's successful, it can get there. So, that's my first screen. It is just the market cap of the company. I also want to see that the company is doing something special, especially in healthcare. It's not hard to find companies that are taking an innovative approach to the market, so I want to see something that either improves greatly upon what's already existing or is inventing a whole new market for itself.
The other thing we look for is huge revenue growth. If there's no established history, we have to believe that revenue growth can grow at, say, 20% or 30% for at least the next +5 years, to do that, they have to have a massive untapped market opportunity ahead of them and they can't have already captured too big percentage of that.
Finally, I like to look for operating leverage ahead of the company. Operating leverage is just a fancy way of saying, as the business scales, profits can grow faster than revenue. If the company isn't profitable, [laughs] operating leverage is ahead of you. But I like to look for that, because if a business is already fully at scale, its profits will only grow as fast as revenue, and I want to see profits grow faster.
Lewis: Yeah, that's generally what we're looking for here, right, Brian? [laughs] And I think what a lot of those elements highlight is a business that maybe isn't being fully realized with its valuation or has a very large valuation it could grow into. And very often, when we hear "value investing" we tend to think of, you know, the cigar butt style of looking at low P/E stocks and trying to see what value can be eked out of those businesses. But I think there's a really good case to be made that you can look at value investing as taking companies whose full present value and, certainly, their future value, is not being fully realized by the market. We aren't able to really think about how dynamic they are, how innovative they are, how big the market could be and how many adjacent markets they might have with some of their products. And a lot of the things that you laid out there touch on those types of business strengths.
Feroldi: I always like to think that my biggest edge, our biggest edge as investors is just the willingness and ability to buy and hold for a long period of time. The market is a discounting machine, always looking forward. Typically, the typical Wall Street trader is looking forward at most a year. With some of these companies, the thesis that I love best are, this thing, that already exists and is already working, is just going to be much bigger in 10 years, if that's true, I'm perfectly comfortable paying $2 today for $1 in value so long as that $2 grows into $10 in the next, say, 10 years. We have that luxury, because we can be patient. So, value investors like to look for something that's worth $1 today and only pay $0.70. There's different styles, no style is right for everybody.
Lewis: All right, Brian, with all of that, why don't we talk about the three stocks we're going to be discussing today? The first one is one that is probably familiar to folks that have been watching Motley Fool Live, our members-only livestream, and that is Trupanion (NASDAQ: TRUP), ticker TRUP. I'm guessing Emily Flippen has also probably talked about this on the Tuesday show, because she has been following the pets trend for a while. But do you want to give a quick rundown of what this business does?
Feroldi: I think most people are familiar or at least heard the name Trupanion before, especially if you are a pet owner. This is a leader in the pet insurance market. Anyone with pets knows that you take them to the vet regularly, and occasionally, you get a huge [laughs] bill thrown your way. I mean, I have plenty of friends that have dogs or cats that have cancer or diabetes or they eat something they shouldn't have. We used to have a dog and my dog swallowed a sock and had to be surgically removed from the stomach, that was a surprise $600 bill. That wasn't that bad [laughs] compared to other bills that come your way.
Trupanion's business model is to -- it's an insurance company. They collect premiums from their owners, from dog and cat owners, and that they cost about, say, $20 to $60 per month, depending on the level of coverage. And it protects you from having a huge, huge surprise vet bill. So, you are trading a subscription revenue fee essentially for lowering your risk down the road that you're going to have some massive bill.
They have been extremely successful with capturing pet owners to-date, and the company's revenue has been consistently growing up and to the right. They have a wonderful chart on their investor presentation that just shows every single quarter they add new pets to their platform and grow consistently. No surprise, this has also been a homerun stock for investors.
Lewis: Yeah. And I'm sure that a lot of people have started putting this one on their watchlist, because so many pets have been adopted, so many families have gotten pets during the pandemic as people have been staying at home. I have, I think, four or five friends at this point [laughs] that have adopted dogs, and in talking with them all, yeah, I grew up with dogs, one of the first things they say is, we didn't get ready for all the vet visits, [laughs] we didn't get ready for all of the, you know, crazy things that dogs do because they are dogs.
My mom has a story about how one of our dogs decided to eat an avocado pit, which, you know, she didn't see happen, and all of a sudden that became the $500 avocado, [laughs] because there was nothing wrong with the dog, but still had to go to the pet and go through and get imaging done and all that kind of stuff. So, you know, you can't anticipate these kinds of things, especially with animals. And what's fascinating about this space, what's fascinating about this business is how early on we are, really, in the United States, in particular, with the penetration of pet insurance, because for all the benefits it may seem to offer, it's not really something a lot of people have.
Feroldi: It's really not, it's very similar to almost the way our -- Trupanion likes to say, it's very similar to the way that dental insurance used to work, people didn't used to have dental insurance, they would just show up to the dentist. Gradually, over time, they became insured and that helped to, kind of, take the bite out of really big surprise bills. They hope that the pet insurance market is going to be going the same way.
If you just look at penetration rates, the reason that I think this stock can 10X potentially in time, is that in the United States only about 1% of pets are covered by pet insurance. Now, if we didn't have another market to compare it to, you would think, well, that's going to be stuck there forever. However, if you look at Sweden, 40% of pet owners have insurance for their pet. In the U.K., it's 25%. In Norway, it's 14%. Those markets can't be all that different from the U.S. So, if companies like Trupanion, and Trupanion is the market leader here, can eventually grow that penetration rate anywhere close to those foreign markets, this company has massive upside potential.
Lewis: I think one of the reasons that Trupanion probably is a market leader here is they've taken a very simplistic approach to pet insurance. If you are a new pet owner, it doesn't matter what insurance you're looking at, insurance is complicated, whether it's home insurance, whether it's medical insurance, you're immediately hit with a bunch of terms that you probably don't know, you probably don't understand, Trupanion is really trying to make their coverage and their plans as simple as possible, which I imagine is very appealing to new pet owners.
Feroldi: Yes. That is one of the things that they tout is, there's no one-size-fit-all, they will write a policy based on your specific budgetary needs. You can go on there and say that I want 50% of my vet bills covered for the life of my pet, and probably pay some bill that's $20/month or $30/month, that increases from there, all the way up to people that say, I don't want any surprise vet bills, and Trupanion pays 100% of the cost. That is more along the lines of $50, $60 or even $70/month or up from there depending on the health of the pet and the age and those kinds of factors.
But again, taking a surprise huge bill down the road and turning it into a monthly recurring predictable payment is something that's very attractive to a lot of people.
Lewis: Very attractive. And with low penetration rates, a huge opportunity -- I think what's, kind of, nice about this business is, while there's a compelling growth story, and we've talked about that a little bit, the financials, in and of themselves, don't look too bad right now. You know, you're not betting the farm on what this business could become, it's a business that's already in decent shape as is.
Feroldi: Yeah, revenue has grown between 20% and 30% for the last 10 years since this company offered its products to the market. More recently, it started generating free cash flow and it's very close to achieving non-GAAP profitability. Its balance sheet is packed with cash, very little debt, and it has a very low churn rate. Its monthly churn rate is about 1% to 1.5%, in some markets the company naturally gets more referrals than actually it's churn rate and the company is trying to increase that over time. So, recurring revenue business, generating cash flow, huge opportunity ahead. There's a reason I picked this stock first, Dylan. [laughs]
Lewis: [laughs] Are we going in descending order, is that what's happening here, Brian? [laughs]
Feroldi: Yeah, I wanted to start off with what I think is the lowest risk business of the three. I mean, this company has been operating for such a long time, it is the market leader. To me, the biggest risks here is that the penetration rate stays where it is, and for whatever reason, North American consumers reject the whole idea of pet insurance. If that happens and the penetration rate gets stuck at 1%, this is going to be a terrible investment. However, I think that the odds of that going higher are very high, because people clearly love their pets and people clearly do not like [laughs] huge surprise bills, it's just a matter of time, I think, that that penetration rate is going to go higher.
Lewis: Yeah. And this is not the only business that is benefiting from, you can call it a couple of different things, the personification of pets, the humidification of pets, I mentioned before, Emily has talked about this plenty on the Tuesday show, but we are seeing higher levels of pet ownership and we're seeing people spend more money on pets. That's the thesis with a company like Chewy, which has done very well during the pandemic. And I imagine that with that spending, it's going to become the awareness that, you know, there are probably ways to spend a little bit less on healthcare and provide some protection. I think a lot of people are going to be very happy about that, particularly some of the newer pet owners, maybe more of that millennial market, a little bit more web savvy, and people that are looking for protection and not having to, you know, pay a huge vet bill.
Feroldi: And let's not forget, pet insurance benefits the veterinarians too. If a customer has insurance, it's a lot easier for them to sell the idea of having a surgery or paying for some medication. People are much more willing to consume things when they know that at least a big part of the cost is covered by insurance. By contrast, today, I'm sure there are lots of procedures that are recommended to people, and people just say no, because they don't want to get that huge bill. So, I could also see this being attractive to consumers and the vets themselves.
Lewis: Do you see the risk here with some of the bigger players, more established players in traditional insurance spaces hopping in here and trying to get a piece of this pie if we start seeing that, you know, 3%, 4%, 10% of pet owners wind up with insurance?
Feroldi: That I think is a risk. They point out that since day one they've been competing against 20 other insurance companies, and Trupanion's advantage is that it is the brand leader. The other thing that this business has done to protect itself that I really like, is that it's built its software directly integrated into vet offices themselves. That allows claims to be processed in seconds. A vet can submit a claim and have the money in their account literally within a couple of seconds, which makes the reimbursement process painless.
Other insurance companies, the pet owner pays the bill upfront and then later submits for reimbursement, which adds friction. And you can also say that Trupanion has the brand name, it is the No. 1 market share leader by far, as well as the data to price its policies more accurately. I do think there are some competitive advantages at play here, but, to me, the No. 1 risk definitely is competition.
Lewis: I imagine we should also probably touch on valuation here, because given that there are some big growth expectations priced into this business, it is a relatively highly valued insurance business.
Feroldi: Yes. Currently trading at about 23X book value. That is a traditional metric that you can use for insurance companies, although this isn't exactly a pureplay [laughs] insurance company, nor is it a pureplay tech company. So, 23X book value, trading at about 7.5X sales. If that's all you knew, and you're used to investing in SaaS stocks, you're like, wow! This thing is incredibly cheap. However, the margins profile for this company are dramatically different than they are for a company like, say, Datadog, so not a perfect metric. I don't think there really is a great metric for judging the value of this company right now, every metric has something wrong with it, other than to say, if the company is successful and can continue growing at a 20% to 30% rate for the next 10 years, the business will be bigger in time.
Lewis: [laughs] And for folks that really want to spend more time understanding the way the insurance industry works and some of the specific metrics there, I highly recommend checking out some of the work from Matt Frankel. He and Jason Moser talk about insurance companies a lot on the Monday show, but Matt also does a lot of writing for Fool.com and has done a lot of primers on that space. So, just definitely someone, if this is interesting to you and we just threw a lot of words out there that you don't know, that's a great place to start.
Brian, anything else on Trupanion before we switch to stock No. 2?
Feroldi: No, this is a business that really interests me, and I'm glad we dug into it a little bit more, it's a fascinating company.
Lewis: Are you a shareholder?
Feroldi: Not yet.
Lewis: Not yet. [laughs] The intrigue. All right. Our stock No. 2 is DermTech (NASDAQ: DMTK), and this is ticker DMTK. Trupanion was a $3 billion company, this one is a bit smaller, Brian.
Feroldi: A bit smaller is one way of putting it, Dylan. Yeah, DermTech, this is a $230 million market cap company, and the size difference is really seen by the risk profile here. I would say that Trupanion is a lower risk 10-bagger potential, this one is as high risk as it gets. So, DermTech is focused on noninvasive skin disease diagnostics, particularly, skin cancer. So, I think most listeners know, the key to fighting cancer is detecting it early. With skin cancer, the five-year survival rate for people that are diagnosed with skin cancer is about 98% when it's caught in its early stage. That drops to 23% when it's in its advanced stage. So, early diagnosis is key.
Now, the current standard of care for diagnosing skin cancer is to take a biopsy. So, a surgical biopsy of the lesion is chopped and then sent off to a lab for diagnosis. As you can imagine, that's a pretty invasive thing, if you've ever had that done. Not to mention that only about 1% of the lesion is actually checked, and it's done by an expert looking at it. There's some other diagnosis, but there are big problems with this, it's low accuracy, it's expensive, but the big thing for patients is, it leaves them a scar.
DermTech is pioneering a brand-new way to do that. Picture a small circle that's clear, kind of like a band-aid, the idea is you take this band-aid, you put it on top of the lesion and it picks up RNA and DNA from the entire lesion, That's then peeled off and then sent off to DermTech's lab who then does genetic analysis on it, that's far more accurate than the current standard of care, and then a report is sent off to the doctor within a couple of days. The big benefit for the patients here is, no scarring, completely noninvasive. This technology was just recently approved and they are literally launching this to market this quarter, hence why it's so high-risk, but the potential here is huge.
Lewis: When I see the pitch for this business, Brian, I see it checking a lot of boxes for success in healthcare. You have, generally, a better patient experience using this product than the alternatives, you have better processing and you have lower costs. I think everyone along the value chain of using this product is probably happier that it's being used.
Feroldi: Yeah. As you said, it checks, really, all the boxes that could make this a blockbuster diagnostic product when compared to the current standard of care. If I was a patient, and I've actually had lesions checked out myself, rather than go through that process, I'd just say, just take it off, and I have scars on my back from moles that were taken out.
By contrast, if I could go to the doctor and they put a little band-aid on me, [laughs] take the band-aid off and then send it to the lab and then I know for certain whether or not that could be cancerous or not, wow! Is that attractive. And they say that by using RNA and DNA and their technology, they greatly increase the accuracy rate. And the key thing that you highlighted, Dylan, is this is actually lower cost. The current cost to test per lesion is about $1,000 by using the current standard of care treatment; the cost for this test is going to be about $760. So, still not dirt cheap, but a cost saving nonetheless. And when you combine that with the patient ease-of-use and the accuracy gains, I could see this technology really taking off.
Lewis: I think it's also important beyond just the individual cost of processing that test, to think about all of the tack-on benefits and likely cost savings that come from making that kind of testing easier. You know, you talked about it before, but survival rates go up dramatically when patients get that testing. So, just from a pure healthcare perspective and wellness perspective, that's going to be better. But also, if you have early detection, that might put you in a spot where you can go through treatment that is far less costly. And that is something that is hard to capture with some of the numbers that we're throwing out there, but another major benefit if this winds up panning out.
Feroldi: Yeah. And this company, I think, rightly points out that a number of other diagnostics companies have followed the same playbook to success. One company that they point to is a company called EXACT Sciences which created a revolutionary way to diagnose colon cancer. A little box is sent to your house with a product called Cologuard, you put a stool sample in there, you send it off to the lab and you get an accurate reading. DermTech is essentially trying to do that exact same thing with skincare. And importantly, they also recently got a commercial code from Medicare to reimburse for this technology. The fact that they got that so quickly really says that Medicare is interested in getting this product to its patients. And it's for the exact reason that you said, not only could they potentially diagnose these diseases much earlier, but it's going to save them money [laughs] over the current cost of care, that's really compelling.
Lewis: Brian, when I hear about different innovations in the healthcare space and companies that are investing in different treatments, different therapies, as someone who doesn't follows this space as closely, it's very easy for me to be like, well, that sounds awesome, [laughs] I don't know if they can do it. How do you suss-out the contenders and the pretenders when you're looking at these types of businesses?
Feroldi: I allocate accordingly, Dylan, I mean, that is the strategy. Whenever you look at a company like this, especially their management presentation, it's easy to come away and say, wow! This just makes so much sense. However, when it comes to healthcare, the details really, really matter. It's possible that this technology might turn off doctors that deal with skin cancer for some reason that I can't detect right now. If I was interested in investing in this technology, I would treat it the exact same way I treat a company like Nano-X, which is, I invest a little bit upfront, and then I wait and I see what is the market reception to this, is revenue growing substantially or is the company outperforming, is the company turning this idea into revenue? That's the real thing that we want to see. And importantly, along the way, what's margins looking like? So, I think this company has tremendous potential right now, but the way that I would say this for real is just to watch the financials.
Lewis: Yeah. And on the note of potential, I mean, there are certain therapies, treatments, conditions that immediately, your brain goes, OK, that's going to be a big figure. You know, if it's anything related to cancer, if it's anything related to diabetes, you know that those are going to be big sticker figure markets. So, just thinking about the potential of this business, knowing that this is something that is squarely focused on skin cancer, there's a pretty decent patient population that they could apply this technology to if it winds up being everything that we expect it to be.
Feroldi: Yeah. They say that one out of every five Americans will develop some type of skin cancer at some point in their lives. There are millions of diagnoses every year and about 20,000 people die from cancer. You add all that up, and based on their current approvals, they believe that their opportunity in the U.S. is about $2.5 billion. I think that might be actually underselling the opportunity, because I could very easily see a patient walking into a doctor's office and saying, maybe I should have this mole checked out, maybe I shouldn't, but I don't want my skin to get cut to get a biopsy here. By comparison, if it's just, again, putting a band-aid on something, I could see the entire market for diagnosis grow substantially.
The other thing that's exciting about this is, they believe that it has at-home potential. So, imagine that you're doing a telehealth visit with somebody and then this kit gets sent to your house. The doctor can walk you through how to use the kit right over the phone and you can mail it back right from the comfort of your own home. If they can get that product to work, I can really see that expanding the market.
Lewis: We talked before, when you first introduced this business about how it is a much smaller company than Trupanion. [laughs] And I think that there are, you know, the risks that are just, kind of, boilerplate risks when you're investing in businesses of this size, outside of the fact that this is a small company, there's still lot to be proven, what else do you see as a risk for them?
Feroldi: To me, that is the risk. I mean, right now this is basically an idea that sounds great on paper, but we don't yet have proof that there's product market fit, while we wait for that to happen, the company is burning through capital, because it's in commercialization realm right now, they are hiring sales rep, they are establishing reimbursement, they're hiring their lab, etc., etc. All those things cost money, how long is it going to take them to ramp up sales fast enough and margins fast enough to kind of offset that, will investors get diluted along the way, we don't know the answers to a lot of these questions right now, hence why it's incredibly risky. To me, if the idea works, wow! Is there a lot of upside. What are the chances of that? It's really hard to say at this point.
Lewis: We're going to stay in the small cap space for stock No. 3. Our third stock for this discussion is going to be Semler Scientific (OTC: SMLR), and this is ticker SMLR. We probably need to make a specific note about the ticker and where this company trades before we even get into what they do.
Feroldi: Yes, this company is not listed on any major exchanges, it trades over-the-counter. So, it is extremely illiquid, only a few thousand or maybe a few tens of thousands of shares trade every day. Just know that going into this, that this does not trade on a major exchange, which raises the risk profile.
Lewis: And what exactly do they do, Brian?
Feroldi: I've highlighted this company on the show before, because I think this is a tremendously exciting business. So, Semler is focused on making diagnostics products for people that are at risk of developing a heart attack or a stroke. The product that they launched in the last couple of years helps to diagnose people with Peripheral Artery Disease, PAD, and that's when your arteries in your arms and legs narrow due to the progressive buildup of fat. People that have PAD are much more likely to die of a heart attack or of a stroke. So, diagnosing PAD is really, really critical. However, if you have PAD there's a 75% [laughs] chance that you don't know it. The company estimates that about 12 million Americans have it and about 75% of those cases are undiagnosed. And the reason is, there's no symptoms. If you have this disease and your arteries are getting narrow, there's no way for you to tell until you have a stroke. And the current standard of care for diagnosis is to use a blood pressure cuff to measure blood pressure, which takes up a lot of doctor time, it's an expensive thing and it has to be done by a vascular technician.
Semler's innovation was to essentially create a small little clip that looks like an oxygen sensor and it goes on your fingers and your toes. And within five minutes this sensor quickly measures the amount of blood that is flowing to your extremities. If it detects an anomaly, it produces a report that gets sent to the physician, and within five minutes, somebody that has never been -- that doesn't need to be trained on anything, you can quickly tell whether or not one of your patients has PAD. If you do, you can start to take action with drugs or even surgery to prevent heart attacks or strokes.
Lewis: Is the right way to think about this, basically counting cars on the highway, you know, [laughs] kind of a simplification of the technology, basically just having sensors that are watching the flow and counting the flow?
Feroldi: Yes, that's a great analogy you did there. So, blood pressure detects how much pressure there is, this is detecting flow, how much blood is actually getting to your extremities. And if there's some kind, if the flow is slowed, that would be a sign that PAD is actually happening. But the big thing here is that it makes something that's invisible, visible. And importantly, it does so fast and noninvasively. Those two things have really helped this technology to take off.
Lewis: Yeah, we talked about the win-wins earlier and how that's a huge part of the healthcare market and really, really pushing adoption of some of these more innovative products. When you see that a test could take a third of the time, that's something that healthcare providers are going to be very happy about.
Feroldi: Definitely. Now, the reason that I brought this company to attention again was because the technology itself is really interesting. And Semler is the only company that's commercializing this kind of technology in this space. But what really attracts me about this company is the business model, they're not selling the clips, what they're selling is the software, the software that actually produces the report. So, if I was a doctor's office that was interested in this technology, I would pay a recurring monthly fee to Semler for unlimited tests or I would pay a small fee each time a test is performed, selling the software is a much better business than selling the hardware. So, this is a company with 90% gross margin. Incredible.
Lewis: For any of our usual Friday listeners that were worried that Brian was straying from his SaaS tendencies, [laughs] fear not, he finds a way to work it in.
Feroldi: That's right. SaaS + healthcare, I mean, you got to love it, right?
Lewis: [laughs] And that bears out in the margins. I mean, this company looks way more like a software business than it does a hardware provider or someone who's, you know, providing anything physical, really, to patients.
Feroldi: Yeah, if you want something that's really incredible about this company, it's already highly profitable. Now, these tests are performed in doctor's offices while a patient is there for a routine visit. As you can imagine, Q2, when everybody was staying at home and avoiding the doctor, results for this company weren't great, revenue fell 20% last quarter over the prior year, not exactly something you want to see from a growth company. However, even in their most challenging quarter they still produced a gross margin of 90% and made a net income of $1 million. Considering that was the worst operating environment of all-time, that shows you how strong this business is.
Lewis: Yeah. And another position of strength for them, look over at the balance sheet, $14 million in cash, no debt. That's the kind of thing that puts you in a spot where you can weather a 20% drop in revenue and continue operating just fine.
Feroldi: Yeah. And plus, the 90% gross margin helps to cover that too. But yeah, this company is also in growth mode right now. It's very small. This year they've hired a lot of sales people to really get the word out. And they believe that in the United States that about 300,000 doctor offices are potential customers of theirs. They don't disclose how many they have thus far, but it's got to be in the low-thousands at best. I mean, this is a company that's only doing about $30 million in revenue this year. If this technology takes off, there's a lot of room for that number to grow.
Lewis: Is it 300,000 doctors' offices?
Feroldi: 300,000 doctors' offices in the U.S. Correct.
Lewis: Okay. And the patient population is somewhere around 80 million, is that what they're saying?
Feroldi: Yes, they believe that as many as 80 million Americans should be screened using this technology each year. And again, if they're successful there, you know, that about 7 million people that currently have peripheral artery disease, could start to take action to prevent future heart attacks or strokes. It's again, it's investing a little bit of money upfront to potentially save a lot of money down the road. That plays right into the healthcare mega push toward health and wellness.
Lewis: So, a lot of the risks for this business are going to be relatively similar to the one that we just talked about, just simply based on size where they are in terms of getting the product into user hands and really collecting money for that, but there are also some kind of business specific risks here based on how they're currently set up.
Feroldi: Given the company's size, it has landed a couple of very large customers. And so, customer concentration is a huge issue here. I mean, its top three customers are almost two-thirds of revenue, and one customer alone is about half of revenue. So, if it was to lose that customer, it would be a major blow to the thesis. The good news is, while that is a big risk for investors to watch, these numbers should come down over time as Semler continues to grow and add more doctors' offices, but for now, I think that that customer concentration is the biggest risk that I'm watching.
Lewis: For folks that may follow you on Twitter, Brian, they might have seen this, you're @BrianFeroldi and you post a lot of really great content there. But you put up a graphic recently and it was looking at the size of a business and the importance of the leadership team over time. And when a company is this small, the leadership team is far more important.
Feroldi: Definitely. In the early stages of a business, the leadership team matters a tremendous amount because they are hiring the people, they're hiring engineers, they are developing products, they're creating the business model. There's tremendous pressure on them. Over time -- I mean, leadership is always important, but it's especially important in the early, early stages -- over time, once the business really starts to take hold and the business model gets put into place and the financials start to come through, the need for a tremendous leadership team diminishes slightly. Again, it's still important, even for a company like Apple and Amazon, however, leadership teams can have an even more outsized control over the returns of the company when the company is small.
Lewis: So, you mentioned that you talked about this before, and I think, going back into the archives, our conversation about this company was back in February of 2020, so it was before we saw that huge revenue dip due to COVID and all the complications from the pandemic. Looking at it now, about eight months later, is this something that you are more confident in, less confident in, the same, how has time treated this business for you?
Feroldi: Yeah, if anything, I'm more confident. I mean, this is one of the three that I am a shareholder of. And I was incredibly impressed that revenue only fell 20% last quarter. I mean, when you think about the [laughs] macro-operating environment and how many doctors' offices were closed, to still capture 80% of their previous revenue, that's pretty incredible. And again, importantly, they were still producing net income during this period. If they can survive that and have a clean balance sheet and produce net income, I'm more confident than I was seven months ago in this company's future.
Lewis: Makes sense to me. And the valuation isn't crazy, which I think is kind of interesting for a business that has the opportunity in front of it that it does.
Feroldi: Yeah, if you believe analysts' estimates, which you know, always take them with a grain of salt, but the company is estimated to only show about 1% revenue growth this year. Hey, I'll take it given it's 2020, but rebound that to 60% growth next year. And market watchers believe that the company is going to do about $1.86 in earnings per share. If that's anywhere close to accurate, then that means that the stock is trading at about 30X forward earnings. That is a [laughs] really compelling valuation, when considering the bottom-line there was earnings, not sales. [laughs]
Lewis: So, Brian, you own Semler, DermTech, and Trupanion, are these stocks that are in your portfolio, on your watchlist, you know, how are you categorizing them?
Feroldi: Of the three, Semler is the one that I own, and I've just owned for a long time. I could easily see myself becoming a shareholder of Trupanion and DermTech. DermTech is the highest risk of this group by far, because it's still pre-revenue, its product hasn't been proven out, but it also has the highest potential to get 10X returns from here if the technology works.
I think that Trupanion is a company that I have just overlooked, and everything I see about this company suggests it's a compounding machine. To get that 10X return in the stock could take 10 years or maybe a little more, so it's not going to 10X overnight, but I think it's a company that is a pretty low risk market beater.
Lewis: Yeah, and 10X over a decade is still a market-beating return; [laughs] that's still a very impressive return. And I think that's worth keeping in mind. When I look at these three, especially because we're talking about a space that I'm less familiar with, my general approach there is to focus a little bit more on certainty and a little bit less on speculation, just because I have a harder time wrapping my head around the, kind of, wellness, healthcare, and therapy space. And so, if I'm going to power rank these, I think it's probably, Trupanion, Semler, DermTech. Just because the picture is a little bit clear for those first two.
Feroldi: I think that that's completely fair; I would probably order them in a similar way. But again, this is more of an idea show. And if you want these companies in your portfolio and you just allocate them accordingly, I think there's a spot in even conservative investors' portfolios for companies like these.
Lewis: I think folks are always happy to have an idea show with you, Brian. You are so good at bringing stocks that may be aren't being talked about too much into the conversation. Thanks so much for joining me today.
Feroldi: Anytime, Dylan.
Lewis: Listeners, that's going to do it for this episode of Industry Focus. If you have any questions or you want to reach out and say "Hey!" shoot us an email at IndustryFocus@Fool.com, or tweet us @MFIndustryFocus. Brian is @BrianFeroldi, I'm @WilyLewis. If you're looking for more stuff, subscribe in iTunes or wherever you get your podcasts.
As always, people on the program may own companies discussed on the show, and The Motley Fool may have formal recommendations for or against stocks mentioned, so don't buy or sell anything based solely on what you hear.
Thanks to Tim Sparks for all his work behind the glass, and thank you for listening. Until next time, Fool on!
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Brian Feroldi owns shares of Amazon, Chipotle Mexican Grill, and Semler Scientific. Dylan Lewis owns shares of Amazon and Apple. The Motley Fool owns shares of and recommends Amazon, Apple, Chipotle Mexican Grill, Datadog, Trupanion, and Twitter and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. 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 episode of Industry Focus: Wildcard, Dylan Lewis is joined by Motley Fool contributor Brian Feroldi to discuss three healthcare stocks with great upside potential. And with low penetration rates, a huge opportunity -- I think what's, kind of, nice about this business is, while there's a compelling growth story, and we've talked about that a little bit, the financials, in and of themselves, don't look too bad right now. As always, people on the program may own companies discussed on the show, and The Motley Fool may have formal recommendations for or against stocks mentioned, so don't buy or sell anything based solely on what you hear.
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In this episode of Industry Focus: Wildcard, Dylan Lewis is joined by Motley Fool contributor Brian Feroldi to discuss three healthcare stocks with great upside potential. And again, if they're successful there, you know, that about 7 million people that currently have peripheral artery disease, could start to take action to prevent future heart attacks or strokes. The Motley Fool owns shares of and recommends Amazon, Apple, Chipotle Mexican Grill, Datadog, Trupanion, and Twitter and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon.
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That is a traditional metric that you can use for insurance companies, although this isn't exactly a pureplay [laughs] insurance company, nor is it a pureplay tech company. Lewis: Brian, when I hear about different innovations in the healthcare space and companies that are investing in different treatments, different therapies, as someone who doesn't follows this space as closely, it's very easy for me to be like, well, that sounds awesome, [laughs] I don't know if they can do it. If I was interested in investing in this technology, I would treat it the exact same way I treat a company like Nano-X, which is, I invest a little bit upfront, and then I wait and I see what is the market reception to this, is revenue growing substantially or is the company outperforming, is the company turning this idea into revenue?
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[laughs] Feroldi: Yeah. And so, you wind up with these small businesses that could become massive businesses if things go right. The other thing we look for is huge revenue growth.
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c5ab294d-e1a3-46dc-98bd-7d7f0ec9863b
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718962.0
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2020-10-26 00:00:00 UTC
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DDOG Crosses Above Average Analyst Target
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DDOG
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https://www.nasdaq.com/articles/ddog-crosses-above-average-analyst-target-2020-10-26
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nan
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nan
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In recent trading, shares of Datadog Inc (Symbol: DDOG) have crossed above the average analyst 12-month target price of $99.14, changing hands for $102.08/share. When a stock reaches the target an analyst has set, the analyst logically has two ways to react: downgrade on valuation, or, re-adjust their target price to a higher level. Analyst reaction may also depend on the fundamental business developments that may be responsible for driving the stock price higher — if things are looking up for the company, perhaps it is time for that target price to be raised.
There are 14 different analyst targets contributing to that average for Datadog Inc, but the average is just that — a mathematical average. There are analysts with lower targets than the average, including one looking for a price of $50.00. And then on the other side of the spectrum one analyst has a target as high as $126.00. The standard deviation is $19.622.
But the whole reason to look at the average DDOG price target in the first place is to tap into a "wisdom of crowds" effort, putting together the contributions of all the individual minds who contributed to the ultimate number, as opposed to what just one particular expert believes. And so with DDOG crossing above that average target price of $99.14/share, investors in DDOG have been given a good signal to spend fresh time assessing the company and deciding for themselves: is $99.14 just one stop on the way to an even higher target, or has the valuation gotten stretched to the point where it is time to think about taking some chips off the table? Below is a table showing the current thinking of the analysts that cover Datadog Inc:
RECENT DDOG ANALYST RATINGS BREAKDOWN
» Current 1 Month Ago 2 Month Ago 3 Month Ago
Strong buy ratings: 6 8 7 7
Buy ratings: 0 1 1 1
Hold ratings: 7 7 7 7
Sell ratings: 0 0 0 0
Strong sell ratings: 0 0 0 0
Average rating: 2.08 1.94 2.0 2.0
The average rating presented in the last row of the above table above is from 1 to 5 where 1 is Strong Buy and 5 is Strong Sell. This article used data provided by Zacks Investment Research via Quandl.com. Get the latest Zacks research report on DDOG — FREE.
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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In recent trading, shares of Datadog Inc (Symbol: DDOG) have crossed above the average analyst 12-month target price of $99.14, changing hands for $102.08/share. But the whole reason to look at the average DDOG price target in the first place is to tap into a "wisdom of crowds" effort, putting together the contributions of all the individual minds who contributed to the ultimate number, as opposed to what just one particular expert believes. And so with DDOG crossing above that average target price of $99.14/share, investors in DDOG have been given a good signal to spend fresh time assessing the company and deciding for themselves: is $99.14 just one stop on the way to an even higher target, or has the valuation gotten stretched to the point where it is time to think about taking some chips off the table?
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In recent trading, shares of Datadog Inc (Symbol: DDOG) have crossed above the average analyst 12-month target price of $99.14, changing hands for $102.08/share. But the whole reason to look at the average DDOG price target in the first place is to tap into a "wisdom of crowds" effort, putting together the contributions of all the individual minds who contributed to the ultimate number, as opposed to what just one particular expert believes. And so with DDOG crossing above that average target price of $99.14/share, investors in DDOG have been given a good signal to spend fresh time assessing the company and deciding for themselves: is $99.14 just one stop on the way to an even higher target, or has the valuation gotten stretched to the point where it is time to think about taking some chips off the table?
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And so with DDOG crossing above that average target price of $99.14/share, investors in DDOG have been given a good signal to spend fresh time assessing the company and deciding for themselves: is $99.14 just one stop on the way to an even higher target, or has the valuation gotten stretched to the point where it is time to think about taking some chips off the table? In recent trading, shares of Datadog Inc (Symbol: DDOG) have crossed above the average analyst 12-month target price of $99.14, changing hands for $102.08/share. But the whole reason to look at the average DDOG price target in the first place is to tap into a "wisdom of crowds" effort, putting together the contributions of all the individual minds who contributed to the ultimate number, as opposed to what just one particular expert believes.
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In recent trading, shares of Datadog Inc (Symbol: DDOG) have crossed above the average analyst 12-month target price of $99.14, changing hands for $102.08/share. But the whole reason to look at the average DDOG price target in the first place is to tap into a "wisdom of crowds" effort, putting together the contributions of all the individual minds who contributed to the ultimate number, as opposed to what just one particular expert believes. And so with DDOG crossing above that average target price of $99.14/share, investors in DDOG have been given a good signal to spend fresh time assessing the company and deciding for themselves: is $99.14 just one stop on the way to an even higher target, or has the valuation gotten stretched to the point where it is time to think about taking some chips off the table?
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9d78458e-0b1f-4ca8-8536-32057cec5f09
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718963.0
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2020-10-23 00:00:00 UTC
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Forget 5G: This Tech Stock Trend Is Generating Even Bigger Returns
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DDOG
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https://www.nasdaq.com/articles/forget-5g%3A-this-tech-stock-trend-is-generating-even-bigger-returns-2020-10-23
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nan
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nan
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Many tech investors consider 5G networks, which can be up to 100 times faster than 4G networks, to be the next secular growth story. A wide range of industries will benefit from those faster wireless connections, and myriad hardware and software companies will profit from that expansion.
I've covered plenty of 5G companies before, but many of them are mature tech giants that probably won't satisfy growth-oriented investors. So today, I'll highlight a hotter tech trend that could generate even bigger returns than 5G stocks: the rise of "silo-busting" software companies.
Image source: Getty Images.
What are silo-busting companies?
Many large companies store their data across multiple computing platforms and software services, which are often spread across various departments. That practice creates silos, which throttle a company's efficiency and discourage departments from freely exchanging knowledge, information, and ideas.
In a recent report, ResearchGate calls "silo mentality" the "greatest threat to organizational performance." The recognition of that threat is sparking intense demand for silo-busting cloud services that shatter those barriers and pull all a company's data to a centralized location.
A common theme in high-growth cloud companies
That's why it isn't surprising that many of the hottest tech IPOs over the past year cited the destruction of silos in their prospectuses.
Datadog (NASDAQ: DDOG), which went public last September, pulls a company's data from servers, cloud services, apps, software services, and other platforms onto a single dashboard. Its revenue rose 88% last year and 77% year over year in the first half of 2020.
Snowflake (NYSE: SNOW), which went public last month, pulls all of a company's data onto a cloud-based platform, where it can be analyzed and fed into third-party data visualization software. Snowflake's revenue surged 174% last year and jumped 133% in the first half of 2021.
JFrog (NASDAQ: FROG), which went public on the same day as Snowflake, lets companies store software updates on a universal platform that can be accessed by any type of computing architecture. Its revenue rose 65% last year and grew another 50% in the first half of 2020.
Similar strengths and weaknesses
Datadog, Snowflake, and JFrog all dazzled investors with their robust revenue growth rates. Since their IPOs, Datadog's stock has more than quadrupled, Snowflake's stock has more than doubled, and JFrog's has nearly doubled.
But all three stocks are trading at nosebleed valuations. Based on next year's sales forecasts, JFrog trades at 38 times sales, Datadog trades at 43 times sales, and Snowflake trades at a whopping 123 times sales -- making it one of the priciest tech stocks on the market.
It's also difficult for these companies to generate consistent profits, because of high cloud hosting costs, marketing expenses, and limited room for price increases in a competitive market. Snowflake and JFrog remain unprofitable, while Datadog squeezed out a slim profit in the first half of 2020.
Image source: Getty Images.
Another major issue is that many of these companies host their silo-busting services on big public cloud platforms such as Amazon.com's (NASDAQ: AMZN) Amazon Web Services (AWS) and Microsoft's (NASDAQ: MSFT) Azure.
Amazon and Microsoft are recognizing the disruptive potential of silo-busting services and now bundle similar solutions into their cloud platforms. For example, AWS's Redshift and CodeArtifact compete against Snowflake and JFrog, respectively.
The bears believe these smaller silo-busting companies could struggle against their larger rivals over the long term, but the bulls will note that these smaller players have already locked in a lot of major customers.
A secular trend that can't be ignored
It might be risky to chase these high-growth silo-busting companies at their current valuations, but investors can't ignore this secular trend that's driving many decisions across the tech sector.
The growth of unified collaboration platforms, such as Slack, Microsoft Teams, and Asana, reflect a desire to eliminate silo-based communications like emails and phone calls. Palantir, which went public last month, breaks down silos across government agencies and helps them collect personal data from disparate sources.
Investors should expect this trend to continue for the foreseeable future, but they should carefully weigh these companies' inherent weaknesses -- including their frothy valuations, poor profitability, and competitive threats -- against their disruptive strengths.
10 stocks we like better than Datadog
When investing geniuses David and Tom Gardner have 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.*
David and Tom 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 24, 2020
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool's board of directors. Leo Sun owns shares of Amazon and Palantir Technologies Inc. The Motley Fool owns shares of and recommends Amazon, Datadog, Microsoft, and Slack Technologies. The Motley Fool recommends Snowflake Inc and recommends the following options: long January 2022 $1920 calls on Amazon, short January 2021 $115 calls on Microsoft, long January 2021 $85 calls on Microsoft, and short January 2022 $1940 calls on Amazon. 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), which went public last September, pulls a company's data from servers, cloud services, apps, software services, and other platforms onto a single dashboard. A common theme in high-growth cloud companies That's why it isn't surprising that many of the hottest tech IPOs over the past year cited the destruction of silos in their prospectuses. JFrog (NASDAQ: FROG), which went public on the same day as Snowflake, lets companies store software updates on a universal platform that can be accessed by any type of computing architecture.
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Datadog (NASDAQ: DDOG), which went public last September, pulls a company's data from servers, cloud services, apps, software services, and other platforms onto a single dashboard. Based on next year's sales forecasts, JFrog trades at 38 times sales, Datadog trades at 43 times sales, and Snowflake trades at a whopping 123 times sales -- making it one of the priciest tech stocks on the market. Another major issue is that many of these companies host their silo-busting services on big public cloud platforms such as Amazon.com's (NASDAQ: AMZN) Amazon Web Services (AWS) and Microsoft's (NASDAQ: MSFT) Azure.
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Datadog (NASDAQ: DDOG), which went public last September, pulls a company's data from servers, cloud services, apps, software services, and other platforms onto a single dashboard. Based on next year's sales forecasts, JFrog trades at 38 times sales, Datadog trades at 43 times sales, and Snowflake trades at a whopping 123 times sales -- making it one of the priciest tech stocks on the market. Another major issue is that many of these companies host their silo-busting services on big public cloud platforms such as Amazon.com's (NASDAQ: AMZN) Amazon Web Services (AWS) and Microsoft's (NASDAQ: MSFT) Azure.
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Datadog (NASDAQ: DDOG), which went public last September, pulls a company's data from servers, cloud services, apps, software services, and other platforms onto a single dashboard. Similar strengths and weaknesses Datadog, Snowflake, and JFrog all dazzled investors with their robust revenue growth rates. A secular trend that can't be ignored It might be risky to chase these high-growth silo-busting companies at their current valuations, but investors can't ignore this secular trend that's driving many decisions across the tech sector.
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0e0a919e-ec9e-4fa2-bee1-142896e4bea3
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718964.0
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2020-10-22 00:00:00 UTC
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Adding $1,000 to These 3 Top Stocks Right Now Would Be Brilliant
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DDOG
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https://www.nasdaq.com/articles/adding-%241000-to-these-3-top-stocks-right-now-would-be-brilliant-2020-10-22
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nan
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nan
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The world is plagued with uncertainty, so it's understandable that people would want to hang on to most of their hard-earned cash. The pandemic is nowhere near contained as cases spike across the globe and unemployment in the U.S. is still near historic highs. Even in the face of these unprecedented challenges, however, it's important to remember that things will turn around, with plenty of reasons to invest for the future.
You don't need the riches of Warren Buffett or Bill Gates to get started. Even small sums invested regularly over time can generate long-term wealth, despite the present remaining mired in uncertainty. Stocking your portfolio with disruptive companies with significant market opportunities is one way to jump-start your way to an enviable nest egg.
If you have as little as $1,000 (or less) in cash that you don't need for immediate expenses or to augment your emergency fund, buying shares in these companies with impressive growth prospects could be sheer genius.
Image source: Getty Images.
Datadog: Take this dog for a walk
There's little doubt the information age is upon us, and much of the data that powers everyday business has taken up residence in the cloud. The pandemic accelerated a dynamic shift that was already in motion, as remote work highlighted the need for employees to have access to systems wherever they may be. It also became vitally important to monitor these employee and customer-facing systems and ensure they stay up and running. That's where Datadog (NASDAQ: DDOG) comes in.
The cloud-native platform-as-a-service provider offers a wide variety of monitoring services that reach across a customer's cloud assets, pulling the data into a single dashboard, and alerting developers when there's an anomaly that could result in crucial downtime. The system's ability to break down silos and integrate fragmented data makes it a top choice among developers.
But don't take my word for it. Gartner just revealed that Datadog was cited as the 2020 Customers' Choice among application performance monitoring systems. Even more telling, a whopping 91% of these customers and IT professional recommend Datadog products and services.
This loyal customer base and positive word-of-mouth have done wonders for Datadog's financial results. Last year, revenue grew 83% year over year, setting a high bar for performance. For the second quarter, Datadog still delivered revenue growth of 68%, eking out a profit for the second consecutive quarter -- a rare feat among young, high-flying companies.
It's the remaining opportunity that should have investors most excited. Datadog's revenue last year totaled a mere $363 million, and management estimates that its total addressable market clocks in at about $35 billion, showing that it's barely scratched the surface of a massive opportunity.
Image source: Getty Images.
NVIDIA: Your one-stop shop for gaming, cloud computing, AI, and more
Once upon a time, when investors bought NVIDIA (NASDAQ: NVDA), they were buying into the notion that the company provided best-in-class graphics processing units (GPUs) that were the first choice for serious gamers. While that is certainly still true, over the past several years, the company has expanded, establishing a beachhead into several large and lucrative markets.
Researchers found that parallel processing (the ability to run multiple complex mathematical calculations simultaneously), which allowed GPUs to render lifelike images in video games, worked equally well for the unique demands of artificial intelligence (AI). The accelerating shift to cloud computing made NVIDIA GPUs a staple in data centers, used by all the world's largest cloud providers.
This was clearly evident in the company's most recent quarterly results. NVIDIA generated record revenue that surged 50% year over year, driven by data center revenue that soared 167%. At the same time, adjusted net income jumped 79%.
NVIDIA recently announced it was buying mobile-chip designer Arm Holdings from SoftBank for $40 billion, further expanding the company's already sizable market opportunity.
Management now estimates that with the combination of gaming, cloud computing, and AI, NVIDIA is targeting an addressable market of $250 billion by 2023. Considering the company generated revenue of $11.7 billion during fiscal 2020, the road ahead is long.
Image source: Getty Images.
Zoom Video Communications: The next best thing to being there
It wasn't long ago that very few people were acquainted with Zoom Video Communications (NASDAQ: ZM). When the pandemic struck, however, the company went from relative obscurity to being a household name in just a few months. Its videoconferencing software has become so widespread, in fact, that it made the rare move to becoming a verb: "Let's Zoom."
Many investors initially assumed that once the world began to work through the pandemic and things returned to normal, demand would drop off, and Zoom would fade into the obscurity of corporate boardrooms. Additionally, there was a widespread belief that Zoom's free-to-use tier would fail to translate to paying users. Things haven't worked out quite the way many believed.
Zoom reported second-quarter revenue that grew 355% year over year, accelerating from 169% growth in the first quarter. The number of enterprise customers generating trailing-12-month revenue of $100,000 or more jumped by 112%, also accelerating from a 90% increase in Q1. The number of customers with more than 10 employees soared 458%, up from 354% growth sequentially.
This could be just the tip of the iceberg, however. Zoom said early last year that it was targeting a market opportunity of $43 billion by 2022. For context, total revenue last year was $623 million, an amount the company has already exceeded during the first six months of 2020.
It's worth noting that management's estimates merely addressed the enterprise market. The pandemic made clear that individual users were keeping in touch with family and friends, many across great distances, a factor that significantly increases Zoom's total addressable market.
Data by YCharts.
The fine print
It's worth noting that high-growth stocks like those above come with trade-offs. As with many similar highfliers, these companies have plenty of equally high expectations built in. NVIDIA, Datadog, and Zoom sport forward valuations of 21, 55, and 61, respectively, when a price-to-sales ratio between 1 and 2 is considered reasonable.
That said, I've always been a firm believer in the old saw, "You get what you pay for." The fact that each of these stocks has generated substantial revenue growth over the past year makes their high sticker price much more palatable.
Find out why NVIDIA is one of the 10 best stocks to buy now
Motley Fool co-founders Tom and David Gardner have 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.*
Tom and David just revealed their ten top stock picks for investors to buy right now. NVIDIA 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 October 20, 2020
Danny Vena owns shares of Datadog, NVIDIA, and Zoom Video Communications. The Motley Fool owns shares of and recommends Datadog, NVIDIA, and Zoom Video Communications. 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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That's where Datadog (NASDAQ: DDOG) comes in. The cloud-native platform-as-a-service provider offers a wide variety of monitoring services that reach across a customer's cloud assets, pulling the data into a single dashboard, and alerting developers when there's an anomaly that could result in crucial downtime. Researchers found that parallel processing (the ability to run multiple complex mathematical calculations simultaneously), which allowed GPUs to render lifelike images in video games, worked equally well for the unique demands of artificial intelligence (AI).
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That's where Datadog (NASDAQ: DDOG) comes in. Datadog's revenue last year totaled a mere $363 million, and management estimates that its total addressable market clocks in at about $35 billion, showing that it's barely scratched the surface of a massive opportunity. The accelerating shift to cloud computing made NVIDIA GPUs a staple in data centers, used by all the world's largest cloud providers.
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That's where Datadog (NASDAQ: DDOG) comes in. Datadog's revenue last year totaled a mere $363 million, and management estimates that its total addressable market clocks in at about $35 billion, showing that it's barely scratched the surface of a massive opportunity. NVIDIA: Your one-stop shop for gaming, cloud computing, AI, and more Once upon a time, when investors bought NVIDIA (NASDAQ: NVDA), they were buying into the notion that the company provided best-in-class graphics processing units (GPUs) that were the first choice for serious gamers.
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That's where Datadog (NASDAQ: DDOG) comes in. Things haven't worked out quite the way many believed. Zoom said early last year that it was targeting a market opportunity of $43 billion by 2022.
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5f7fe3fd-9ab6-4608-b237-f923b6599dab
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718965.0
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2020-10-22 00:00:00 UTC
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Why I Just Bought Fastly Stock
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DDOG
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https://www.nasdaq.com/articles/why-i-just-bought-fastly-stock-2020-10-22
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nan
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nan
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Shares of networking specialist Fastly (NYSE: FSLY) took a dramatic haircut last week, dulling the edge of a skyrocketing stock chart. I'd been watching Fastly for a while, but never pulled the trigger on buying the stock. This time, I took a good look at the content delivery network specialist's preliminary earnings report and at the negative market reaction that followed. I concluded it was time to pick up some Fastly shares -- no ifs, ands, or buts about it.
What's so exciting about Fastly?
Fastly is a fairly small company today. Trailing revenues stand at just $246 million, but the top-line sales are growing like gangbusters. I'm talking about both the company's long-term growth trend and the fact that Fastly's sales are skyrocketing in the COVID-19 era. The revenue chart is not only pointing skyward, but it's also rising even faster over time. That is, Fastly's growth is accelerating.
FSLY Revenue (TTM) data by YCharts
This company's business is a perfect fit for 2020's booming interest in digital services. Fastly's second-quarter sales rose by 61% year over year, driven by 29% higher spending per enterprise customer and an expanding customer list. Businesses of every stripe are attempting to set themselves apart from the competition by tailoring their software and services to meet their specific needs. Fastly's edge computing network can help in many instances.
Fastly's data delivery and edge computing services are downright essential to many of its clients, putting the company on the same elevated level as cloud systems monitoring expert Datadog (NASDAQ: DDOG) and online communications expert Twilio (NYSE: TWLO). These companies are building long-term relationships with their customers today, and they are not easily replaced. The contracts should only grow over time while the companies extend their market reach. The minnows you see today are tomorrow's industry giants.
Image source: Getty Images.
Why did the stock crash last week?
Fastly's largest customer is Chinese social media titan ByteDance's video-sharing service, TikTok. The Trump administration is on the verge of blocking TikTok from the American market unless ByteDance manages to sell its North American TikTok operations to a local business. Database software veteran Oracle (NYSE: ORCL) and retail giant Walmart (NYSE: WMT) have placed a joint bid for the business. Washington has rubber-stamped it, but the Chinese government might still demolish the deal.
As such, Fastly's management isn't counting on TikTok sales going forward. Last week, the company issued preliminary third-quarter sales guidance 5% below management's original prediction. The stock opened 30% lower the next day, which is where I placed my buy order. Market nerves are still raw, so Fastly's stock has drooped another 8% lower from that point. If you want to follow my lead, you're doing it from an even better entry point.
Sure, TikTok is an important customer and Fastly would love to keep that contract active. Even if TikTok evaporates, though, we're still looking at a high-octane growth stock in the early days of an exciting long-term business story. Fastly is a no-brainer buy at these sharply lower prices, and I just couldn't keep my fingers off the buy button any longer.
10 stocks we like better than Fastly
When investing geniuses David and Tom Gardner have 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.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Fastly 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 October 20, 2020
Anders Bylund owns shares of Fastly and Twilio. The Motley Fool owns shares of and recommends Datadog, Fastly, 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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Fastly's data delivery and edge computing services are downright essential to many of its clients, putting the company on the same elevated level as cloud systems monitoring expert Datadog (NASDAQ: DDOG) and online communications expert Twilio (NYSE: TWLO). Shares of networking specialist Fastly (NYSE: FSLY) took a dramatic haircut last week, dulling the edge of a skyrocketing stock chart. This time, I took a good look at the content delivery network specialist's preliminary earnings report and at the negative market reaction that followed.
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Fastly's data delivery and edge computing services are downright essential to many of its clients, putting the company on the same elevated level as cloud systems monitoring expert Datadog (NASDAQ: DDOG) and online communications expert Twilio (NYSE: TWLO). Shares of networking specialist Fastly (NYSE: FSLY) took a dramatic haircut last week, dulling the edge of a skyrocketing stock chart. The Motley Fool owns shares of and recommends Datadog, Fastly, and Twilio.
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Fastly's data delivery and edge computing services are downright essential to many of its clients, putting the company on the same elevated level as cloud systems monitoring expert Datadog (NASDAQ: DDOG) and online communications expert Twilio (NYSE: TWLO). Shares of networking specialist Fastly (NYSE: FSLY) took a dramatic haircut last week, dulling the edge of a skyrocketing stock chart. See the 10 stocks *Stock Advisor returns as of October 20, 2020 Anders Bylund owns shares of Fastly and Twilio.
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Fastly's data delivery and edge computing services are downright essential to many of its clients, putting the company on the same elevated level as cloud systems monitoring expert Datadog (NASDAQ: DDOG) and online communications expert Twilio (NYSE: TWLO). Shares of networking specialist Fastly (NYSE: FSLY) took a dramatic haircut last week, dulling the edge of a skyrocketing stock chart. Even if TikTok evaporates, though, we're still looking at a high-octane growth stock in the early days of an exciting long-term business story.
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f59f5bba-c834-4e99-9b86-f67b76b4201a
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718966.0
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2020-10-21 00:00:00 UTC
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How Splunk Is Using Acquisitions to Improve Its Cloud Computing Offerings
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DDOG
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https://www.nasdaq.com/articles/how-splunk-is-using-acquisitions-to-improve-its-cloud-computing-offerings-2020-10-21
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nan
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nan
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Digital data and analytics firm Splunk (NASDAQ: SPLK) recently announced a number of innovations and updates to its platform, including the launch of a new set of tools called the Observability Suite. In tandem with the new product offerings, the data monitoring leader announced two new acquisitions to add to its capabilities.
After taking a closer look at these announcements, this long-term shareholder is pleased with the company's progress as a new digital era dawns.
Leveraging past acquisitions with new ones
Booming data analytics demand, driven by the adoption of cloud computing over the last few years, has created a new dynamic in the industry. The field is awash with new firms like Datadog (NASDAQ: DDOG), Elastic (NYSE: ESTC), and others trying to capitalize on the opportunity. Even Splunk has had to make some adjustments. As it got its start in an era that predates modern computing technology, it too has been undergoing its own cloud-first evolution.
Image source: Getty Images.
But its new strategy prioritizing the cloud -- both with the updated tool kit it offers to customers and with billing for use of its software -- is well underway. The new Observability Suite stitches together its infrastructure, digital experience (the interaction between a user and an organization), application performance, and incident response and investigation monitoring tools into a singular platform. Many of its next-gen capabilities for cloud- and multi-cloud based operations were acquired from infrastructure software outfit SignalFX about a year ago, and build on Splunk's existing data parsing software.
Observability Suite is geared toward larger organizations in need of multiple data applications. And given the 50% year-over-year increase in annual recurring revenue (ARR) in Q2 -- driven by an 89% gain in cloud software ARR -- this bodes well for Splunk's continued momentum. And to bolster Observability Suite, two new acquisitions were announced: The first is Plumbr, an application and user monitoring outfit, and the takeover of the small software company is already complete. The second was the announced plan to acquire Rigor, a digital experience monitoring and optimization tool.
Both purchases were for undisclosed (and thus likely very small) sums, and are not nearly as dramatic as the $1.05 billion takeover of SignalFX last year. Plumbr and Rigor could nonetheless be big deals if they strengthen the Observability Suite against the myriad of competitors nipping at Splunk's heels.
The best value and an enduring growth story
Splunk stock is up over 40% in 2020 to-date and currently trades for over 14 times current-year expected revenue. This is a discount to some of its smaller peers though, a disparity that's likely the result of Splunk making operational changes for the new cloud era.
But it's a value I continue to purchase. Splunk's free cash flow burn (negative $157 million through the first half of the year) is bottoming out and will likely return to positive territory next year. And the company had $2.08 billion in cash and investments and $2.25 billion in convertible debt on the books as of the end of July. It isn't a squeaky-clean balance sheet, but the heavy spending and remaining ample liquidity have positioned Splunk to not only maintain its data analytics lead but also maintain its growth. As a reminder, management had previously forecast ARR to reach $4.6 billion by the calendar year 2022. The current ARR through the last quarter was just $1.9 billion.
It's a lofty bar the company has set for itself, but adding Plumbr and Rigor to its new cloud data suite of tools will do its part to help. I for one am happy to remain a stakeholder in Splunk's journey.
10 stocks we like better than Splunk
When investing geniuses David and Tom Gardner have 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.*
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See the 10 stocks
*Stock Advisor returns as of September 24, 2020
Nicholas Rossolillo owns shares of Splunk. His clients may own shares of the companies mentioned. The Motley Fool owns shares of and recommends Splunk. 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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The field is awash with new firms like Datadog (NASDAQ: DDOG), Elastic (NYSE: ESTC), and others trying to capitalize on the opportunity. Digital data and analytics firm Splunk (NASDAQ: SPLK) recently announced a number of innovations and updates to its platform, including the launch of a new set of tools called the Observability Suite. The new Observability Suite stitches together its infrastructure, digital experience (the interaction between a user and an organization), application performance, and incident response and investigation monitoring tools into a singular platform.
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The field is awash with new firms like Datadog (NASDAQ: DDOG), Elastic (NYSE: ESTC), and others trying to capitalize on the opportunity. Digital data and analytics firm Splunk (NASDAQ: SPLK) recently announced a number of innovations and updates to its platform, including the launch of a new set of tools called the Observability Suite. Many of its next-gen capabilities for cloud- and multi-cloud based operations were acquired from infrastructure software outfit SignalFX about a year ago, and build on Splunk's existing data parsing software.
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The field is awash with new firms like Datadog (NASDAQ: DDOG), Elastic (NYSE: ESTC), and others trying to capitalize on the opportunity. Digital data and analytics firm Splunk (NASDAQ: SPLK) recently announced a number of innovations and updates to its platform, including the launch of a new set of tools called the Observability Suite. Many of its next-gen capabilities for cloud- and multi-cloud based operations were acquired from infrastructure software outfit SignalFX about a year ago, and build on Splunk's existing data parsing software.
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The field is awash with new firms like Datadog (NASDAQ: DDOG), Elastic (NYSE: ESTC), and others trying to capitalize on the opportunity. Digital data and analytics firm Splunk (NASDAQ: SPLK) recently announced a number of innovations and updates to its platform, including the launch of a new set of tools called the Observability Suite. And to bolster Observability Suite, two new acquisitions were announced: The first is Plumbr, an application and user monitoring outfit, and the takeover of the small software company is already complete.
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14a260c4-7346-4555-8de4-a4ac527bb09e
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718967.0
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2020-10-09 00:00:00 UTC
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Why Datadog Stock Jumped on Friday
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DDOG
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https://www.nasdaq.com/articles/why-datadog-stock-jumped-on-friday-2020-10-09
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nan
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nan
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What happened
Shares of monitoring and analytics platform specialist Datadog (NASDAQ: DDOG) jumped higher on Friday, rising about 10% as of 2 p.m. EDT.
The stock's rise comes as one analyst boosted his price target for the stock. In addition, overall bullishness on the Street for tech stocks likely helped as well.
Image source: Getty Images.
So what
Barclays analyst Raimo Lenschow, who has an overweight rating (similar to a buy rating) on the growth stock, increased his 12-month price target for Datadog shares from $107 to $126. This updated price target represents about 12% upside from where the stock is trading at the time of this writing. It also reflects the analyst's expectation for upbeat news from U.S. enterprise-facing software companies when they report their latest quarterly results during earnings season. Lenschow says his industry channel checks point to an improving environment for information technology (IT) spending.
Also fueling the stock's gain on Friday is probably the strong momentum in the overall market -- particularly among tech stocks. As of this writing, the Nasdaq Composite was up 1.2%.
Now what
When Datadog reported its second-quarter results in early August, management guided for third-quarter revenue to come in between $143 million and $145 million. The midpoint of this guidance range implies 50% year-over-year revenue growth.
"COVID-19 has illuminated the need to be digital-first and agile, as well as the cloud as the IT architecture of choice to achieve these outcomes," said Datadog CEO Olivier Pomel in the company's second-quarter earnings release.
10 stocks we like better than Datadog
When investing geniuses David and Tom Gardner have 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.*
David and Tom 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 24, 2020
Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool owns shares of 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 monitoring and analytics platform specialist Datadog (NASDAQ: DDOG) jumped higher on Friday, rising about 10% as of 2 p.m. EDT. It also reflects the analyst's expectation for upbeat news from U.S. enterprise-facing software companies when they report their latest quarterly results during earnings season. "COVID-19 has illuminated the need to be digital-first and agile, as well as the cloud as the IT architecture of choice to achieve these outcomes," said Datadog CEO Olivier Pomel in the company's second-quarter earnings release.
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What happened Shares of monitoring and analytics platform specialist Datadog (NASDAQ: DDOG) jumped higher on Friday, rising about 10% as of 2 p.m. EDT. So what Barclays analyst Raimo Lenschow, who has an overweight rating (similar to a buy rating) on the growth stock, increased his 12-month price target for Datadog shares from $107 to $126. Now what When Datadog reported its second-quarter results in early August, management guided for third-quarter revenue to come in between $143 million and $145 million.
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What happened Shares of monitoring and analytics platform specialist Datadog (NASDAQ: DDOG) jumped higher on Friday, rising about 10% as of 2 p.m. EDT. So what Barclays analyst Raimo Lenschow, who has an overweight rating (similar to a buy rating) on the growth stock, increased his 12-month price target for Datadog shares from $107 to $126. 10 stocks we like better than Datadog When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen.
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What happened Shares of monitoring and analytics platform specialist Datadog (NASDAQ: DDOG) jumped higher on Friday, rising about 10% as of 2 p.m. EDT. It also reflects the analyst's expectation for upbeat news from U.S. enterprise-facing software companies when they report their latest quarterly results during earnings season. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.
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f150eb70-8b4a-47e5-8ac7-e3d05b6a3a35
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718968.0
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2020-10-09 00:00:00 UTC
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These 3 Stocks Are Absurdly Overvalued Right Now
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DDOG
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https://www.nasdaq.com/articles/these-3-stocks-are-absurdly-overvalued-right-now-2020-10-09
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nan
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nan
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The adoption of cloud computing should remain strong as the technology simplifies remote access to applications and allows on-demand scaling of computing resources. Tech outfits Datadog (NASDAQ: DDOG), Zoom Video Communications (NASDAQ: ZM), and Snowflake (NYSE: SNOW) have been taking advantage of that secular trend thanks to their innovative products and services. But the market may have become too optimistic as it is valuing these players for flawless execution over the long term.
1. Datadog
Enterprises must monitor the infrastructures and applications they have been moving to the cloud. Datadog was founded in 2010 to address that need while legacy players were slow to adapt their on-premises solutions.
Thanks to its easy-to-use products and expanding monitoring capabilities, the company has been generating strong results.
During the most recent quarter, revenue increased by 68% to $140 million. And full-year revenue is expected to grow 57% based on the midpoint of the company's guidance range. What's more, as Datadog is scaling, it is becoming profitable. Management anticipates turning last year's adjusted operating losses of $5.4 million into operating income in the range of $28 million to $34 million this year.
Given those spectacular results, Datadog's share price has jumped more than 180% since the beginning of the year, valuing the stock at 57 times the midpoint of the forecast for full-year revenue.
Granted, the company is poised to keep growing as the consumption of cloud-based solutions increases. In addition, it announced this week a strategic partnership with Microsoft, which should fuel its growth beyond the short term. But the competition will be intensifying as many monitoring specialists, including Splunk, Sumo Logic, and Elastic, have been enhancing their offerings with similar cloud-based monitoring and analytics capabilities.
Datadog's lofty valuation indicates the market assumes competition won't make a dent in the company's performance, which looks like an overly optimistic scenario.
Image source: Getty Images.
2. Zoom Video Communications
As shelter-in-place orders boosted the use of remote communication products, Zoom's performance dwarfed Datadog's over the past couple of quarters.
In the second quarter, revenue grew 355% to $663.5 million, and management significantly raised its full-year revenue guidance to between $2.37 billion and $2.39 billion, up from a range of $905 million to $915 million at the beginning of the year.
In addition, free cash flow jumped to $373.4 million in the quarter, up from $17.1 million in the year-ago period, representing an outstanding free cash flow margin of 56%. However, since Zoom collects cash from customers in advance of providing services, that free cash flow margin was boosted by the coronavirus-induced surge in consumption of Zoom's products, which isn't sustainable.
Given its phenomenal results, the company's stock price has jumped more than 600% since the beginning of the year, driving its market cap above $138 billion. In comparison, management last year estimated the company's total addressable market at $43 billion by 2022.
Zoom's valuation at 58 times its full-year revenue forecast suggests investors anticipate the company will dominate its market by a wide margin. Yet competitors aren't standing still. Microsoft, for instance, has been improving its Microsoft Teams platform to chase the attractive opportunity.
The coronavirus-induced surge in remote communications certainly increased Zoom's addressable market, but even if Zoom sustains impressive growth over the next many years, its stock price upside potential remains limited.
3. Snowflake
Zoom's valuation pales in comparison to Snowflake's price-to-sales (P/S) ratio, which reached 115, based on analysts' full-year revenue estimates of $575.5 million.
Berkshire Hathaway's investment in Snowflake probably boosted investors' confidence, but, more importantly, Snowflake generated phenomenal revenue growth of 121% to $133 million during the last quarter. And it is poised to keep growing as it offers an innovative cloud solution that facilitates the management and analysis of enterprises' growing volume of data. Management estimates the company's total addressable market at $81 billion.
Investing in Snowflake remains risky, though.
The company is generating significant losses as it invests in its growth. Last quarter, sales and marketing expenses represented 70% of revenue, which led to a loss of $77.6 million, compared to $93.4 million one year ago.
Also, Snowflake remains in a delicate position with public cloud vendors: It competes with their big data solutions and relies on their computing infrastructures to deal with its customers' data. In addition, competition is intensifying as legacy on-premises players such as Cloudera have been developing cloud big data offerings.
The company's lofty valuation suggests the market expects nothing less than an astonishing performance over the next several years, which is a risky proposition for investors.
Find out why Zoom Video Communications is one of the 10 best stocks to buy now
Motley Fool co-founders Tom and David Gardner have 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.*
Tom and David just revealed their ten top stock picks for investors to buy right now. Zoom Video Communications 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 September 24, 2020
Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool's board of directors. Herve Blandin has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Berkshire Hathaway (B shares), Datadog, Elastic, Microsoft, Splunk, and Zoom Video Communications. The Motley Fool recommends Snowflake Inc and recommends the following options: long January 2021 $200 calls on Berkshire Hathaway (B shares), short January 2021 $200 puts on Berkshire Hathaway (B shares), long January 2021 $85 calls on Microsoft, short January 2021 $115 calls on Microsoft, and short December 2020 $210 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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Tech outfits Datadog (NASDAQ: DDOG), Zoom Video Communications (NASDAQ: ZM), and Snowflake (NYSE: SNOW) have been taking advantage of that secular trend thanks to their innovative products and services. Given those spectacular results, Datadog's share price has jumped more than 180% since the beginning of the year, valuing the stock at 57 times the midpoint of the forecast for full-year revenue. Find out why Zoom Video Communications is one of the 10 best stocks to buy now Motley Fool co-founders Tom and David Gardner have spent more than a decade beating the market.
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Tech outfits Datadog (NASDAQ: DDOG), Zoom Video Communications (NASDAQ: ZM), and Snowflake (NYSE: SNOW) have been taking advantage of that secular trend thanks to their innovative products and services. However, since Zoom collects cash from customers in advance of providing services, that free cash flow margin was boosted by the coronavirus-induced surge in consumption of Zoom's products, which isn't sustainable. The Motley Fool owns shares of and recommends Berkshire Hathaway (B shares), Datadog, Elastic, Microsoft, Splunk, and Zoom Video Communications.
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Tech outfits Datadog (NASDAQ: DDOG), Zoom Video Communications (NASDAQ: ZM), and Snowflake (NYSE: SNOW) have been taking advantage of that secular trend thanks to their innovative products and services. In the second quarter, revenue grew 355% to $663.5 million, and management significantly raised its full-year revenue guidance to between $2.37 billion and $2.39 billion, up from a range of $905 million to $915 million at the beginning of the year. The coronavirus-induced surge in remote communications certainly increased Zoom's addressable market, but even if Zoom sustains impressive growth over the next many years, its stock price upside potential remains limited.
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Tech outfits Datadog (NASDAQ: DDOG), Zoom Video Communications (NASDAQ: ZM), and Snowflake (NYSE: SNOW) have been taking advantage of that secular trend thanks to their innovative products and services. In the second quarter, revenue grew 355% to $663.5 million, and management significantly raised its full-year revenue guidance to between $2.37 billion and $2.39 billion, up from a range of $905 million to $915 million at the beginning of the year. Also, Snowflake remains in a delicate position with public cloud vendors: It competes with their big data solutions and relies on their computing infrastructures to deal with its customers' data.
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73a96d27-b012-49e3-bcac-c6d83413861a
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718969.0
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2020-10-08 00:00:00 UTC
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Briefly Hot Snowflake Buyable on Deeper Pullback
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DDOG
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https://www.nasdaq.com/articles/briefly-hot-snowflake-buyable-on-deeper-pullback
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nan
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nan
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Cloud computing company Snowflake (NYSE:SNOW) is one of a bumper crop of highly anticipated initial public offerings (IPOs), but investors who missed out on the initial post-IPO ebullience should wait for more retrenchment in the stock before jumping in.
Source: Sundry Photography / Shutterstock.com
Much of that initial hoopla was derived via two factors: SNOW’s status as a cloud stock and Berkshire Hathaway (NYSE:BRK.B) backing the company. While Warren Buffett’s conglomerate warmed to technology stocks in recent years, Snowflake isn’t the typical Berkshire equity holding. Buffett is a famed value investor. Snowflake currently trades at 154x sales, the antithesis of a value name.
Rich valuations don’t mean a stock is doomed to extensive pullbacks or failure. History is littered with examples of market participants bidding up pricey growth stocks, making those names more expensive in the process. However, analysts and high-level investors often more closely scrutinize rich valuations on newer companies like Snowflake.
Just a handful of analysts cover the stock, most with tepid “hold” ratings or equivalent grades citing rich multiples.
With Time, SNOW Stock Can Allay Concerns
At the height of its post-IPO bliss, SNOW had a brief flirtation with a market capitalization of $90 billion. Trouble was that’s well in excess of the $81 billion total addressable market (TMA) the company forecast in a pre-IPO filing. In other words, Snowflake is still expensive relative to that TMA with market value of around $72 billion as of Oct. 6. The good news is that TMA can expand.
7 High-Growth Value Stocks for a Post-Pandemic Future
“The company provides a best-of-breed cloud-based data warehouse, serving a ~$20 billion market growing double digits,” said Bernstein analyst Zane Chrane in a recent client note. “Snowflake is taking share from on-prem vendors, competing successfully against cloud giants for new workloads, and expanding the TAM [total addressable market] by offering a differentiated platform that’s easier to develop/manage, higher performing, with more transparent pricing.”
Snowflake has another enviable feather in its cap: An impressive retention. At 158% at the time of its IPO, Snowflake’s client retention rate was the highest of any publicly trade cloud computing company, easily topping the likes of CrowdStrike (NASDAQ:CRWD), Datadog (NASDAQ:DDOG) and ZoomInfo (NASDAQ:ZI), just to name a few.
Additionally, the aforementioned valuation issues aren’t scaring off some big-name investors. For example, Dan Loeb’s Third Point hedge fund recently took a stake in the cloud company. This is relevant because Loeb has a lengthy track record of success with growth and technology stocks and his investment vehicle currently holds stakes in several cloud names.
Patience Could Be Rewarded
It’s tempting to jump into the shiny new object, particularly when that object resides in the scintillating cloud computing space, but investors would do well to exercise discretion with Snowflake.
With time, Snowflake can either expand its TMA, markets can reconcile the lofty multiples following a deeper pullback, or both. Each of those scenarios are important because Snowflake is far more expensive than rivals such as Datadog. In the hear and now, the sell-side community is piling on the valuation thesis and that’s a legitimate headwind for Snowflake.
Looking further out to December, Snowflake staffers will get their first chance to sell up 25% of the stock they own. That means a spate of selling is coming with some analysts forecasting as many as 50 million shares worth of new supply coming to market.
Bottom line: Interested investors would do well to sit on their hands with Snowflake and wait for the lockup selling to pass. Then put the stock on their post-holiday shopping lists because potential three-year upside with this name is considerable.
On the date of publication, Todd Shriber did not have (either directly or indirectly) any positions in any of the securities mentioned in this article.
Todd Shriber has been an InvestorPlace contributor since 2014.
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The post Briefly Hot Snowflake Buyable on Deeper Pullback 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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At 158% at the time of its IPO, Snowflake’s client retention rate was the highest of any publicly trade cloud computing company, easily topping the likes of CrowdStrike (NASDAQ:CRWD), Datadog (NASDAQ:DDOG) and ZoomInfo (NASDAQ:ZI), just to name a few. Source: Sundry Photography / Shutterstock.com Much of that initial hoopla was derived via two factors: SNOW’s status as a cloud stock and Berkshire Hathaway (NYSE:BRK.B) backing the company. 7 High-Growth Value Stocks for a Post-Pandemic Future “The company provides a best-of-breed cloud-based data warehouse, serving a ~$20 billion market growing double digits,” said Bernstein analyst Zane Chrane in a recent client note.
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At 158% at the time of its IPO, Snowflake’s client retention rate was the highest of any publicly trade cloud computing company, easily topping the likes of CrowdStrike (NASDAQ:CRWD), Datadog (NASDAQ:DDOG) and ZoomInfo (NASDAQ:ZI), just to name a few. InvestorPlace - Stock Market News, Stock Advice & Trading Tips Cloud computing company Snowflake (NYSE:SNOW) is one of a bumper crop of highly anticipated initial public offerings (IPOs), but investors who missed out on the initial post-IPO ebullience should wait for more retrenchment in the stock before jumping in. Trouble was that’s well in excess of the $81 billion total addressable market (TMA) the company forecast in a pre-IPO filing.
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At 158% at the time of its IPO, Snowflake’s client retention rate was the highest of any publicly trade cloud computing company, easily topping the likes of CrowdStrike (NASDAQ:CRWD), Datadog (NASDAQ:DDOG) and ZoomInfo (NASDAQ:ZI), just to name a few. InvestorPlace - Stock Market News, Stock Advice & Trading Tips Cloud computing company Snowflake (NYSE:SNOW) is one of a bumper crop of highly anticipated initial public offerings (IPOs), but investors who missed out on the initial post-IPO ebullience should wait for more retrenchment in the stock before jumping in. “Snowflake is taking share from on-prem vendors, competing successfully against cloud giants for new workloads, and expanding the TAM [total addressable market] by offering a differentiated platform that’s easier to develop/manage, higher performing, with more transparent pricing.” Snowflake has another enviable feather in its cap: An impressive retention.
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At 158% at the time of its IPO, Snowflake’s client retention rate was the highest of any publicly trade cloud computing company, easily topping the likes of CrowdStrike (NASDAQ:CRWD), Datadog (NASDAQ:DDOG) and ZoomInfo (NASDAQ:ZI), just to name a few. InvestorPlace - Stock Market News, Stock Advice & Trading Tips Cloud computing company Snowflake (NYSE:SNOW) is one of a bumper crop of highly anticipated initial public offerings (IPOs), but investors who missed out on the initial post-IPO ebullience should wait for more retrenchment in the stock before jumping in. However, analysts and high-level investors often more closely scrutinize rich valuations on newer companies like Snowflake.
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4642c46a-497c-4330-9325-8adcd2659e07
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718970.0
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2020-10-08 00:00:00 UTC
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Why Datadog Stock Jumped 22% in September
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DDOG
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https://www.nasdaq.com/articles/why-datadog-stock-jumped-22-in-september-2020-10-08
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nan
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nan
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What happened
Shares of Datadog (NASDAQ: DDOG), which operates a monitoring and security platform for cloud applications, surged 22.3% in September, according to data from S&P Global Market Intelligence. For context, the S&P 500 (including dividends) fell 3.8% last month.
(Datadog shares have gained 2.2% so far this month through Wednesday, Oct. 7. The broader market has returned 1.7% over this period.)
Datadog is a top dog among tech stocks in 2020. Shares are up 176% this year through Oct. 7. The S&P 500 has returned 7.4% over this period.
Image source: Datadog.
So what
We can attribute Datadog stock's strong September performance in part to a continuation of the upward momentum it's enjoyed for some time. Investors view the company as a long-term beneficiary of the COVID-19 pandemic, which "has illuminated the need to be digital-first," as Datadog CEO Olivier Pomel put it in his remarks in the company's second-quarter 2020 earnings release.
That said, there was also one specific catalyst last month that notably lifted the stock: a strategic partnership with a technology giant.
On Sept. 30, shares of Datadog popped 12.4% after the company announced a deal with Microsoft. As my colleague Dan Caplinger reported at the time, under the terms of the agreement, "Datadog will make its cloud monitoring and security platform available to users of the Microsoft Azure cloud computing console. ... Azure users will be able to implement the monitoring service into their own cloud infrastructure." This specific type of arrangement is a first, undoubtedly leaving Datadog investors particularly excited about the deal's potential to bring new customers into the company's fold.
Here's Datadog stock's year-to-date performance picture:
Data source: YCharts.
Now what
For full-year 2020, Datadog management guided for revenue between $566 million and $572 million, representing growth of 57% year over year at the midpoint of the outlook range. While this expected growth is still powerful, it would represent a slowdown of 2019's growth of 83% year over year.
Management also expects 2020 adjusted earnings per share between $0.11 and $0.13. That would be a big improvement from 2019, when the company posted an adjusted loss of $0.01.
10 stocks we like better than Datadog
When investing geniuses David and Tom Gardner have 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.*
David and Tom 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 24, 2020
Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool's board of directors. Beth McKenna has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Datadog and Microsoft and recommends the following options: long January 2021 $85 calls on Microsoft and short January 2021 $115 calls on 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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What happened Shares of Datadog (NASDAQ: DDOG), which operates a monitoring and security platform for cloud applications, surged 22.3% in September, according to data from S&P Global Market Intelligence. So what We can attribute Datadog stock's strong September performance in part to a continuation of the upward momentum it's enjoyed for some time. This specific type of arrangement is a first, undoubtedly leaving Datadog investors particularly excited about the deal's potential to bring new customers into the company's fold.
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What happened Shares of Datadog (NASDAQ: DDOG), which operates a monitoring and security platform for cloud applications, surged 22.3% in September, according to data from S&P Global Market Intelligence. As my colleague Dan Caplinger reported at the time, under the terms of the agreement, "Datadog will make its cloud monitoring and security platform available to users of the Microsoft Azure cloud computing console. Now what For full-year 2020, Datadog management guided for revenue between $566 million and $572 million, representing growth of 57% year over year at the midpoint of the outlook range.
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What happened Shares of Datadog (NASDAQ: DDOG), which operates a monitoring and security platform for cloud applications, surged 22.3% in September, according to data from S&P Global Market Intelligence. 10 stocks we like better than Datadog When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. See the 10 stocks *Stock Advisor returns as of September 24, 2020 Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool's board of directors.
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What happened Shares of Datadog (NASDAQ: DDOG), which operates a monitoring and security platform for cloud applications, surged 22.3% in September, according to data from S&P Global Market Intelligence. (Datadog shares have gained 2.2% so far this month through Wednesday, Oct. 7. Investors view the company as a long-term beneficiary of the COVID-19 pandemic, which "has illuminated the need to be digital-first," as Datadog CEO Olivier Pomel put it in his remarks in the company's second-quarter 2020 earnings release.
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718971.0
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2020-10-08 00:00:00 UTC
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Trump? Biden? It Doesn't Matter Who Wins If You're Invested in These Industries
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DDOG
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https://www.nasdaq.com/articles/trump-biden-it-doesnt-matter-who-wins-if-youre-invested-in-these-industries-2020-10-08
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nan
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nan
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The big day is now less than four weeks away. In 26 days, Americans across the country will head to the polls or mail in their ballots to determine who'll lead the country for the next four years. Though Democratic Party nominee Joe Biden has a tidy advantage in polling over incumbent Republican Donald Trump, we learned in 2016 that anything can happen come Election Day.
The big question likely on the minds of investors is, "What should I do if Trump wins a second term or Biden upends Trump?" While there are a lot of scenarios playing out before our eyes, there are a few high-growth industries that are going to prosper no matter who wins the presidency. Whether it's Donald Trump or Joe Biden being sworn in on Jan. 20, 2021, these three industries look like surefire winners.
Image source: Getty Images.
Cloud Computing
There arguably hasn't been a hotter industry in 2020 than cloud computing. With the coronavirus disease 2019 (COVID-19) completely disrupting the traditional office and pushing workers into remote environments, it's become more important than ever for businesses, big and small, to have a cloud-centric presence. That's not going to change anytime soon, and may even accelerate regardless of who wins the coming election.
Within cloud computing, the fastest-growing and most-coveted of all companies by investors tends to be the software-as-a-service (SaaS) providers. Two great examples of SaaS stocks that won't bat an eye this election season are salesforce.com (NYSE: CRM) and Datadog (NASDAQ: DDOG).
Salesforce.com is the preeminent name in customer relationship management (CRM) services. With businesses shifting online in droves during the pandemic, salesforce has capitalized. Sales rose 29% in the second quarter from the prior-year period, with the company having little issue signing up new customers and garnering higher revenue from existing clients.
The tale is the same for Datadog and its application performance monitoring solutions. The accelerated shift into the cloud sent Datadog's customer count with at least $100,000 in annual recurring revenue (ARR) rocketing higher from 594 in the year-ago quarter to 1,015 by the end of June 2020. Datadog has firmly pushed into adjusted profitability, and it isn't looking back.
Image source: Getty Images.
Cybersecurity
No discussion of surefire winners would be complete unless the cybersecurity industry receives a big nod of approval. Hackers and robots don't take time off, no matter how well or poorly the U.S. economy is performing, or how big or small a business happens to be. This means protecting in-house and cloud networks has become a basic-need service. Regardless of who wins come November, cybersecurity growth is going to remain robust.
One way to approach investing in cybersecurity is to purchase a broad-based solutions provider like Palo Alto Networks (NYSE: PANW). Even though Palo Alto provides physical firewall products, it's primarily transitioning its business to handle cloud protection on a subscription basis. That's good news, because subscription revenue offers better margins than physical firewall products, and it also helps to reduce customer churn. Between organic growth opportunities and a steady dose of bolt-on acquisitions, Palo Alto offers a consistent 15% growth rate.
Another idea would be to target the identity verification aspect of cybersecurity with Ping Identity (NYSE: PING). Ping Identity's enterprise solutions lean on artificial intelligence to become smarter at detecting outside threats over time. Although Ping has been disrupted by COVID-19 instability a bit more than its peers, the number of customers with at least $250,000 in ARR grew by low double digits in the second quarter, and the company continues to expand its identity solution offerings in popular cloud infrastructure settings.
Image source: Getty Images.
Marijuana
The U.S. marijuana industry is also expected to thrive no matter who finds their way into the Oval Office. Even though both candidates have shown little willingness to alter federal cannabis policy -- Joe Biden wants to decriminalize pot at the federal level, while Trump would leave the status quo in place -- state-level legalizations are providing more than enough growth potential for direct and ancillary players. Remember, two-thirds of all states have already waved the green flag on medical marijuana, with 11 also allowing adult-use consumption and/or retail sale.
One smart way investors can play the U.S. marijuana industry is with vertically integrated multistate operators (MSO). This long jumble of words simply means a company that controls its seed-to-sale process in multiple legalized U.S. states. Since weed is illicit at the federal level, it can't be transported across state lines. This mean cultivation and processing operations need to be established in many of the states where an MSO sells its products.
Among MSOs, Green Thumb Industries (OTC: GTBIF) should generate surprisingly strong growth and push into recurring profitability in 2021. Green Thumb has just shy of 50 operational dispensaries, with licenses to open as many as 96 locations in a dozen states. One thing that really sets this company apart is that roughly two-thirds of its sales are derived from high-margin derivatives, such as edibles, vapes, and beverages. Less reliance on dried flower is what'll power Green Thumb's margins higher.
If ancillary pot stocks are more your thing, Innovative Industrial Properties (NYSE: IIPR) has proved unstoppable. Innovative Industrial Properties is a real estate investment trust that acquires cultivation and processing sites, then leases these assets out for a long period of time (often 10 to 20 years). To date, IIP owns and leases 63 facilities in 16 states, with a weighted-average lease length of 16.2 years. As long as financing remains dicey for cannabis companies in the U.S., Innovative Industrial Properties' sale-leaseback program will allow the company to prosper.
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Sean Williams has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Datadog, Green Thumb Industries, Innovative Industrial Properties, Palo Alto Networks, and Salesforce.com. The Motley Fool owns shares of Ping Identity Holding. 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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Two great examples of SaaS stocks that won't bat an eye this election season are salesforce.com (NYSE: CRM) and Datadog (NASDAQ: DDOG). Though Democratic Party nominee Joe Biden has a tidy advantage in polling over incumbent Republican Donald Trump, we learned in 2016 that anything can happen come Election Day. Although Ping has been disrupted by COVID-19 instability a bit more than its peers, the number of customers with at least $250,000 in ARR grew by low double digits in the second quarter, and the company continues to expand its identity solution offerings in popular cloud infrastructure settings.
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Two great examples of SaaS stocks that won't bat an eye this election season are salesforce.com (NYSE: CRM) and Datadog (NASDAQ: DDOG). Even though Palo Alto provides physical firewall products, it's primarily transitioning its business to handle cloud protection on a subscription basis. If ancillary pot stocks are more your thing, Innovative Industrial Properties (NYSE: IIPR) has proved unstoppable.
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Two great examples of SaaS stocks that won't bat an eye this election season are salesforce.com (NYSE: CRM) and Datadog (NASDAQ: DDOG). Cloud Computing There arguably hasn't been a hotter industry in 2020 than cloud computing. Although Ping has been disrupted by COVID-19 instability a bit more than its peers, the number of customers with at least $250,000 in ARR grew by low double digits in the second quarter, and the company continues to expand its identity solution offerings in popular cloud infrastructure settings.
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Two great examples of SaaS stocks that won't bat an eye this election season are salesforce.com (NYSE: CRM) and Datadog (NASDAQ: DDOG). Although Ping has been disrupted by COVID-19 instability a bit more than its peers, the number of customers with at least $250,000 in ARR grew by low double digits in the second quarter, and the company continues to expand its identity solution offerings in popular cloud infrastructure settings. Innovative Industrial Properties is a real estate investment trust that acquires cultivation and processing sites, then leases these assets out for a long period of time (often 10 to 20 years).
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2020-10-07 00:00:00 UTC
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BUZZ-U.S. STOCKS ON THE MOVE-Workday, Stable Road Acquisition, RedHill Biopharma, Fox Corp, Disney
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DDOG
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https://www.nasdaq.com/articles/buzz-u.s.-stocks-on-the-move-workday-stable-road-acquisition-redhill-biopharma-fox-corp
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nan
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nan
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Eikon search string for individual stock moves: STXBZ
The Day Ahead newsletter: http://tmsnrt.rs/2ggOmBi
The Morning News Call newsletter: http://tmsnrt.rs/2fwPLTh
Wall Street's main indexes jumped on Wednesday on hopes of at least a partial deal on more fiscal stimulus after U.S. President Donald Trump abruptly called off negotiations on a comprehensive bill in the previous session. .N
At 13:37 ET, the Dow Jones Industrial Average .DJI was up 1.54% at 28,199.7. The S&P 500 .SPX was up 1.42% at 3,408.73 and the Nasdaq Composite .IXIC was up 1.73% at 11,347.239. The top three S&P 500 .PG.INX percentage gainers: ** Alexion Pharmaceuticals Inc ALXN.O, up 8.4% ** Freeport-McMoRan Inc FCX.N, up 6.4% ** Gap Inc GPS.N, up 6.3% The top three S&P 500 .PL.INX percentage losers: ** Everest Re Group Ltd RE.N, down 2.3% ** Hess Corp HES.N, down 2.3% ** Cincinnati Financial Corp CINF.O, down 1.7% The top three NYSE .PG.N percentage gainers: ** ReneSola Ltd SOL.N, up 28.8% ** Planet Green Holdings Corp PLAG.N, up 28.3% ** Natuzzi S.p.A. NTZ.N, up 15.1% The top three NYSE .PL.N percentage losers: ** China Green Agriculture Inc CGA.N, down 19.3% ** Hyliion Holdings Corp HYLN.N, down 9.7% ** Liberty Oilfield Services Inc LBRT.N, down 8.7% The top three Nasdaq .PG.O percentage gainers: ** American Resources Corp AREC.O, up 127% ** Peck Company Holdings Inc PECK.O, up 60.7% ** CVD Equipment Corp CVV.O, up 58% The top two Nasdaq .PL.O percentage losers: ** Electro-Sensors Inc ELSE.O, down 35.8% ** Forum Merger II Corp FMCIU.O, down 17.9% ** Levi Strauss & Co LEVI.N: up 6.1% BUZZ-Levi Strauss: Gains on upbeat results, retail push ** American Airlines Group Inc AAL.O: up 4.2% ** United Airlines Holdings Inc UAL.O: up 4.2% ** Delta Air Lines Inc DAL.N: up 3.1% ** JetBlue Airways Corp JBLU.O: up 5.7% BUZZ-U.S. airlines rebound as Trump pushes for $25 bln bailout plan ** CleanSpark Inc CLSK.O: down 10.8% BUZZ-Drops after discounted stock offering ** Sirius XM Holdings Inc SIRI.O: up 4.6% BUZZ-Gains after raising qtrly dividend ** Pluristem Therapeutics Inc PSTI.O: up 6.1% BUZZ-Shares up on nod for COVID-19 therapy trial in Israel ** Coty Inc COTY.N: up 7.1% BUZZ-Jefferies sees turnaround under new CEO, upgrades to 'buy' ** Datadog Inc DDOG.O: up 3.1% BUZZ-Berenberg starts coverage with 'hold' ** Perion Network Ltd PERI.O: up 12.6% BUZZ-Jumps after lifting H2 forecast ** Workday Inc WDAY.O: up 5.7% BUZZ-Rises as brokerage upgrades rating to "buy", hikes PT ** Netflix Inc NFLX.O: up 5.6% BUZZ-Pivotal raises PT to Street high on streaming domination ** DraftKings Inc DKNG.O: down 4.1% BUZZ-Slides on report of discounted equity offering ** Stable Road Acquisition Corp SRAC.O: up 1.8% BUZZ-Rises on merger with Momentus ** Bristol-Myers Squibb Co BMY.N: up 4.2% BUZZ-Rises after Opdivo combo meets main goal in late-stage study ** Sorrento Therapeutics Inc SRNE.O: up 5.8% BUZZ-Rises as unit posts strong Q3 sales ** Abbott Laboratories ABT.N: up 1.4% BUZZ-Wells Fargo hikes PT, Q3 estimates on demand recovery ** Aytu BioScience Inc AYTU.O: down 13.9% BUZZ-Drops after fourth-quarter loss ** TransEnterix Inc TRXC.A: up 14.7% BUZZ-Rises as Japan's hospital to use co's surgical system ** RAVE Restaurant Group Inc RAVE.O: up 105.3% BUZZ-Quadruples on new hiring to lead expansion ** Citius Pharmaceuticals Inc CTXR.O: up 5.9% BUZZ-Citius Pharma rises on licensing agreement for stem cell therapy ** AzurRx BioPharma Inc AZRX.O: flat BUZZ-Rises as CEO reassures on cash position ** Eli Lilly and Co LLY.N: up 2.7% BUZZ-Gains after applying for FDA emergency use for COVID-19 treatment ** Peck Company Holdings Inc PECK.O: up 60.7% BUZZ-Surges on contract for solar project in Rhode Island ** ARCA Biopharma Inc ABIO.O: down 6.7% BUZZ-Surges on FDA nod to begin potential COVID-19 drug trial ** Vaxart Inc VXRT.O: up 2.2% BUZZ-Up on expanding manufacturing deal for COVID-19 vaccine candidate ** Sunworks Inc SUNW.O: up 42.9% BUZZ-Surges on $10 mln commercial, agriculture projects ** Phunware Inc PHUN.O: up 16.6% BUZZ-Rises on Honeywell contracts ** Paychex Inc PAYX.O: up 1.8% BUZZ-Rises as Q1 results beat ** RPM International Inc RPM.N: up 2.2% BUZZ-Climbs on Q1 beat, bullish outlook ** Achieve Life Sciences Inc ACHV.O: up 7.2% BUZZ-Up on launch of late-stage trial of smoking cessation drug ** Ocular Therapeutix Inc OCUL.O: up 24.1% BUZZ-Rises on higher product sales in Q3 ** Element Solutions Inc ESI.N: up 3.6% BUZZ-Rises after announcing share buyback ** Silicon Motion Technology Corp SIMO.O: up 6.8% BUZZ-Up on upbeat preliminary Q3 results ** Gap Inc GPS.N: up 6.3% BUZZ-Gains as Barclays upgrades to 'overweight' ** RedHill Biopharma Ltd RDHL.O: up 1.7% BUZZ-Gains as COVID-19 drug study passes second safety review ** Eton Pharmaceuticals Inc ETON.O: up 4.7% BUZZ-Jumps on new drug application to treat seizures, migraine ** Landec Corp LNDC.O: down 4.8% BUZZ-Falls as first-quarter loss widens ** Alkermes Plc ALKS.O: up 4.8% BUZZ-Rises as FDA posts briefing documents ahead of expert panel meeting ** Crocs Inc CROX.O: flat BUZZ-Rises on tie-up with Justin Bieber ** Elanco Animal Health Inc ELAN.N: up 12.2% BUZZ-Rises as Sachem Head builds $1.2 bln stake in co ** Quanterix Corp QTRX.O: up 11.1% BUZZ-Jumps on contract to advance COVID-19 antigen test ** Clorox Co CLX.N: up 2.2% BUZZ-Rises on unveiling symptom-detecting device amid pandemic ** Vishay Intertechnology Inc VSH.N: up 6.2% BUZZ-Eyes best day in 5 months as Stifel raises to 'buy' ** JPMorgan Chase & Co JPM.N: up 0.9% ** Citigroup Inc C.N: up 0.7% ** Goldman Sachs Group Inc GS.N: up 0.4% ** Wells Fargo & Co WFC.N: up 1.9% ** Morgan Stanley MS.N: up 1.3% ** Bank of America Corp BAC.N: up 1.4% BUZZ-U.S. big banks follow gains on yields as risk sentiment rebounds ** Celanese Corp CE.N: up 3.9% BUZZ-Up after increasing acetate tow prices by 5% ** OrthoPediatrics Corp KIDS.O: up 6.8% BUZZ-Jumps after BTIG raises price target ** Taiwan Liposome Co Ltd TLC.O: up 27.7% BUZZ-Gains on Australia, Taiwan nod for COVID-19 therapy human trials ** Lightspeed POS Inc LSPD.N: up 6.8% BUZZ-Gains on deal with U.S. golf course operator ** American Resources Corp AREC.O: up 127.0% BUZZ-Considers strategic options for unit, shares surge ** Advanced Micro Devices Inc AMD.O: up 2.4% BUZZ-Gains after Jefferies hikes PT ** Lamb Weston Holdings Inc LW.N: up 2.5% BUZZ-French fry seller's stock heats up after upbeat report ** Pfizer Inc PFE.N: down 0.2% ** BioNTech SE BNTX.O: down 1.3% BUZZ-U.S. authorization for Pfizer, BioNTech COVID-19 vaccine unlikely before election ** Kontoor Brands KTB.N: up 8.1% BUZZ-Kontoor Brands: Gains as Barclays hikes PT, upgrades to 'overweight' ** PTC Therapeutics Inc PTCT.O: up 7.1% BUZZ-PTC Therapeutics: Rises after JP Morgan raises rating to overweight ** Haverty Furniture HVT.N: up 5.7% BUZZ-Haverty Furniture: Hits 17-month high on strong sales ** Castor Maritime Inc CTRM.O: up 6.4% BUZZ-Castor Maritime rises on securing charter agreement for new vessel ** Walt Disney Co DIS.N: up 1.7% BUZZ-Third Point's Loeb calls for redirecting dividend to fund content, shares rise ** HC2 Holdings Inc HCHC.N: down 7.1% BUZZ-Falls after commencing rights offering ** Steris Plc STE.N: up 1.7% BUZZ-Steris gains after brokerage raises price target ** Masimo Corp MASI.O: up 3.1% BUZZ-Rises on upbeat forecast; Needham points to elective procedure recovery ** Fox Corp FOXA.O: up 3.5% BUZZ-Rises as BofA hikes PT to Street high ** Tesla Inc TSLA.O: up 3.7% BUZZ-Musk moots idea of making half a million cars in 2020, shares rise
The 11 major S&P 500 sectors:
Communication Services
.SPLRCL
up 0.63%
Consumer Discretionary
.SPLRCD
up 2.15%
Consumer Staples
.SPLRCS
up 1.06%
Energy
.SPNY
up 0.45%
Financial
.SPSY
up 1.06%
Health
.SPXHC
up 1.51%
Industrial
.SPLRCI
up 1.72%
Information Technology
.SPLRCT
up 1.73%
Materials
.SPLRCM
up 2.10%
Real Estate
.SPLRCR
up 0.37%
Utilities
.SPLRCU
up 0.38%
(Compiled by C Nivedita in Bengaluru)
((c.nivedita@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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The top three S&P 500 .PG.INX percentage gainers: ** Alexion Pharmaceuticals Inc ALXN.O, up 8.4% ** Freeport-McMoRan Inc FCX.N, up 6.4% ** Gap Inc GPS.N, up 6.3% The top three S&P 500 .PL.INX percentage losers: ** Everest Re Group Ltd RE.N, down 2.3% ** Hess Corp HES.N, down 2.3% ** Cincinnati Financial Corp CINF.O, down 1.7% The top three NYSE .PG.N percentage gainers: ** ReneSola Ltd SOL.N, up 28.8% ** Planet Green Holdings Corp PLAG.N, up 28.3% ** Natuzzi S.p.A. NTZ.N, up 15.1% The top three NYSE .PL.N percentage losers: ** China Green Agriculture Inc CGA.N, down 19.3% ** Hyliion Holdings Corp HYLN.N, down 9.7% ** Liberty Oilfield Services Inc LBRT.N, down 8.7% The top three Nasdaq .PG.O percentage gainers: ** American Resources Corp AREC.O, up 127% ** Peck Company Holdings Inc PECK.O, up 60.7% ** CVD Equipment Corp CVV.O, up 58% The top two Nasdaq .PL.O percentage losers: ** Electro-Sensors Inc ELSE.O, down 35.8% ** Forum Merger II Corp FMCIU.O, down 17.9% ** Levi Strauss & Co LEVI.N: up 6.1% BUZZ-Levi Strauss: Gains on upbeat results, retail push ** American Airlines Group Inc AAL.O: up 4.2% ** United Airlines Holdings Inc UAL.O: up 4.2% ** Delta Air Lines Inc DAL.N: up 3.1% ** JetBlue Airways Corp JBLU.O: up 5.7% BUZZ-U.S. airlines rebound as Trump pushes for $25 bln bailout plan ** CleanSpark Inc CLSK.O: down 10.8% BUZZ-Drops after discounted stock offering ** Sirius XM Holdings Inc SIRI.O: up 4.6% BUZZ-Gains after raising qtrly dividend ** Pluristem Therapeutics Inc PSTI.O: up 6.1% BUZZ-Shares up on nod for COVID-19 therapy trial in Israel ** Coty Inc COTY.N: up 7.1% BUZZ-Jefferies sees turnaround under new CEO, upgrades to 'buy' ** Datadog Inc DDOG.O: up 3.1% BUZZ-Berenberg starts coverage with 'hold' ** Perion Network Ltd PERI.O: up 12.6% BUZZ-Jumps after lifting H2 forecast ** Workday Inc WDAY.O: up 5.7% BUZZ-Rises as brokerage upgrades rating to "buy", hikes PT ** Netflix Inc NFLX.O: up 5.6% BUZZ-Pivotal raises PT to Street high on streaming domination ** DraftKings Inc DKNG.O: down 4.1% BUZZ-Slides on report of discounted equity offering ** Stable Road Acquisition Corp SRAC.O: up 1.8% BUZZ-Rises on merger with Momentus ** Bristol-Myers Squibb Co BMY.N: up 4.2% BUZZ-Rises after Opdivo combo meets main goal in late-stage study ** Sorrento Therapeutics Inc SRNE.O: up 5.8% BUZZ-Rises as unit posts strong Q3 sales ** Abbott Laboratories ABT.N: up 1.4% BUZZ-Wells Fargo hikes PT, Q3 estimates on demand recovery ** Aytu BioScience Inc AYTU.O: down 13.9% BUZZ-Drops after fourth-quarter loss ** TransEnterix Inc TRXC.A: up 14.7% BUZZ-Rises as Japan's hospital to use co's surgical system ** RAVE Restaurant Group Inc RAVE.O: up 105.3% BUZZ-Quadruples on new hiring to lead expansion ** Citius Pharmaceuticals Inc CTXR.O: up 5.9% BUZZ-Citius Pharma rises on licensing agreement for stem cell therapy ** AzurRx BioPharma Inc AZRX.O: flat BUZZ-Rises as CEO reassures on cash position ** Eli Lilly and Co LLY.N: up 2.7% BUZZ-Gains after applying for FDA emergency use for COVID-19 treatment ** Peck Company Holdings Inc PECK.O: up 60.7% BUZZ-Surges on contract for solar project in Rhode Island ** ARCA Biopharma Inc ABIO.O: down 6.7% BUZZ-Surges on FDA nod to begin potential COVID-19 drug trial ** Vaxart Inc VXRT.O: up 2.2% BUZZ-Up on expanding manufacturing deal for COVID-19 vaccine candidate ** Sunworks Inc SUNW.O: up 42.9% BUZZ-Surges on $10 mln commercial, agriculture projects ** Phunware Inc PHUN.O: up 16.6% BUZZ-Rises on Honeywell contracts ** Paychex Inc PAYX.O: up 1.8% BUZZ-Rises as Q1 results beat ** RPM International Inc RPM.N: up 2.2% BUZZ-Climbs on Q1 beat, bullish outlook ** Achieve Life Sciences Inc ACHV.O: up 7.2% BUZZ-Up on launch of late-stage trial of smoking cessation drug ** Ocular Therapeutix Inc OCUL.O: up 24.1% BUZZ-Rises on higher product sales in Q3 ** Element Solutions Inc ESI.N: up 3.6% BUZZ-Rises after announcing share buyback ** Silicon Motion Technology Corp SIMO.O: up 6.8% BUZZ-Up on upbeat preliminary Q3 results ** Gap Inc GPS.N: up 6.3% BUZZ-Gains as Barclays upgrades to 'overweight' ** RedHill Biopharma Ltd RDHL.O: up 1.7% BUZZ-Gains as COVID-19 drug study passes second safety review ** Eton Pharmaceuticals Inc ETON.O: up 4.7% BUZZ-Jumps on new drug application to treat seizures, migraine ** Landec Corp LNDC.O: down 4.8% BUZZ-Falls as first-quarter loss widens ** Alkermes Plc ALKS.O: up 4.8% BUZZ-Rises as FDA posts briefing documents ahead of expert panel meeting ** Crocs Inc CROX.O: flat BUZZ-Rises on tie-up with Justin Bieber ** Elanco Animal Health Inc ELAN.N: up 12.2% BUZZ-Rises as Sachem Head builds $1.2 bln stake in co ** Quanterix Corp QTRX.O: up 11.1% BUZZ-Jumps on contract to advance COVID-19 antigen test ** Clorox Co CLX.N: up 2.2% BUZZ-Rises on unveiling symptom-detecting device amid pandemic ** Vishay Intertechnology Inc VSH.N: up 6.2% BUZZ-Eyes best day in 5 months as Stifel raises to 'buy' ** JPMorgan Chase & Co JPM.N: up 0.9% ** Citigroup Inc C.N: up 0.7% ** Goldman Sachs Group Inc GS.N: up 0.4% ** Wells Fargo & Co WFC.N: up 1.9% ** Morgan Stanley MS.N: up 1.3% ** Bank of America Corp BAC.N: up 1.4% BUZZ-U.S. big banks follow gains on yields as risk sentiment rebounds ** Celanese Corp CE.N: up 3.9% BUZZ-Up after increasing acetate tow prices by 5% ** OrthoPediatrics Corp KIDS.O: up 6.8% BUZZ-Jumps after BTIG raises price target ** Taiwan Liposome Co Ltd TLC.O: up 27.7% BUZZ-Gains on Australia, Taiwan nod for COVID-19 therapy human trials ** Lightspeed POS Inc LSPD.N: up 6.8% BUZZ-Gains on deal with U.S. golf course operator ** American Resources Corp AREC.O: up 127.0% BUZZ-Considers strategic options for unit, shares surge ** Advanced Micro Devices Inc AMD.O: up 2.4% BUZZ-Gains after Jefferies hikes PT ** Lamb Weston Holdings Inc LW.N: up 2.5% BUZZ-French fry seller's stock heats up after upbeat report ** Pfizer Inc PFE.N: down 0.2% ** BioNTech SE BNTX.O: down 1.3% BUZZ-U.S. authorization for Pfizer, BioNTech COVID-19 vaccine unlikely before election ** Kontoor Brands KTB.N: up 8.1% BUZZ-Kontoor Brands: Gains as Barclays hikes PT, upgrades to 'overweight' ** PTC Therapeutics Inc PTCT.O: up 7.1% BUZZ-PTC Therapeutics: Rises after JP Morgan raises rating to overweight ** Haverty Furniture HVT.N: up 5.7% BUZZ-Haverty Furniture: Hits 17-month high on strong sales ** Castor Maritime Inc CTRM.O: up 6.4% BUZZ-Castor Maritime rises on securing charter agreement for new vessel ** Walt Disney Co DIS.N: up 1.7% BUZZ-Third Point's Loeb calls for redirecting dividend to fund content, shares rise ** HC2 Holdings Inc HCHC.N: down 7.1% BUZZ-Falls after commencing rights offering ** Steris Plc STE.N: up 1.7% BUZZ-Steris gains after brokerage raises price target ** Masimo Corp MASI.O: up 3.1% BUZZ-Rises on upbeat forecast; Needham points to elective procedure recovery ** Fox Corp FOXA.O: up 3.5% BUZZ-Rises as BofA hikes PT to Street high ** Tesla Inc TSLA.O: up 3.7% BUZZ-Musk moots idea of making half a million cars in 2020, shares rise The 11 major S&P 500 sectors: Communication Services Eikon search string for individual stock moves: STXBZ The Day Ahead newsletter: http://tmsnrt.rs/2ggOmBi The Morning News Call newsletter: http://tmsnrt.rs/2fwPLTh Wall Street's main indexes jumped on Wednesday on hopes of at least a partial deal on more fiscal stimulus after U.S. President Donald Trump abruptly called off negotiations on a comprehensive bill in the previous session. up 0.38% (Compiled by C Nivedita in Bengaluru) ((c.nivedita@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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The top three S&P 500 .PG.INX percentage gainers: ** Alexion Pharmaceuticals Inc ALXN.O, up 8.4% ** Freeport-McMoRan Inc FCX.N, up 6.4% ** Gap Inc GPS.N, up 6.3% The top three S&P 500 .PL.INX percentage losers: ** Everest Re Group Ltd RE.N, down 2.3% ** Hess Corp HES.N, down 2.3% ** Cincinnati Financial Corp CINF.O, down 1.7% The top three NYSE .PG.N percentage gainers: ** ReneSola Ltd SOL.N, up 28.8% ** Planet Green Holdings Corp PLAG.N, up 28.3% ** Natuzzi S.p.A. NTZ.N, up 15.1% The top three NYSE .PL.N percentage losers: ** China Green Agriculture Inc CGA.N, down 19.3% ** Hyliion Holdings Corp HYLN.N, down 9.7% ** Liberty Oilfield Services Inc LBRT.N, down 8.7% The top three Nasdaq .PG.O percentage gainers: ** American Resources Corp AREC.O, up 127% ** Peck Company Holdings Inc PECK.O, up 60.7% ** CVD Equipment Corp CVV.O, up 58% The top two Nasdaq .PL.O percentage losers: ** Electro-Sensors Inc ELSE.O, down 35.8% ** Forum Merger II Corp FMCIU.O, down 17.9% ** Levi Strauss & Co LEVI.N: up 6.1% BUZZ-Levi Strauss: Gains on upbeat results, retail push ** American Airlines Group Inc AAL.O: up 4.2% ** United Airlines Holdings Inc UAL.O: up 4.2% ** Delta Air Lines Inc DAL.N: up 3.1% ** JetBlue Airways Corp JBLU.O: up 5.7% BUZZ-U.S. airlines rebound as Trump pushes for $25 bln bailout plan ** CleanSpark Inc CLSK.O: down 10.8% BUZZ-Drops after discounted stock offering ** Sirius XM Holdings Inc SIRI.O: up 4.6% BUZZ-Gains after raising qtrly dividend ** Pluristem Therapeutics Inc PSTI.O: up 6.1% BUZZ-Shares up on nod for COVID-19 therapy trial in Israel ** Coty Inc COTY.N: up 7.1% BUZZ-Jefferies sees turnaround under new CEO, upgrades to 'buy' ** Datadog Inc DDOG.O: up 3.1% BUZZ-Berenberg starts coverage with 'hold' ** Perion Network Ltd PERI.O: up 12.6% BUZZ-Jumps after lifting H2 forecast ** Workday Inc WDAY.O: up 5.7% BUZZ-Rises as brokerage upgrades rating to "buy", hikes PT ** Netflix Inc NFLX.O: up 5.6% BUZZ-Pivotal raises PT to Street high on streaming domination ** DraftKings Inc DKNG.O: down 4.1% BUZZ-Slides on report of discounted equity offering ** Stable Road Acquisition Corp SRAC.O: up 1.8% BUZZ-Rises on merger with Momentus ** Bristol-Myers Squibb Co BMY.N: up 4.2% BUZZ-Rises after Opdivo combo meets main goal in late-stage study ** Sorrento Therapeutics Inc SRNE.O: up 5.8% BUZZ-Rises as unit posts strong Q3 sales ** Abbott Laboratories ABT.N: up 1.4% BUZZ-Wells Fargo hikes PT, Q3 estimates on demand recovery ** Aytu BioScience Inc AYTU.O: down 13.9% BUZZ-Drops after fourth-quarter loss ** TransEnterix Inc TRXC.A: up 14.7% BUZZ-Rises as Japan's hospital to use co's surgical system ** RAVE Restaurant Group Inc RAVE.O: up 105.3% BUZZ-Quadruples on new hiring to lead expansion ** Citius Pharmaceuticals Inc CTXR.O: up 5.9% BUZZ-Citius Pharma rises on licensing agreement for stem cell therapy ** AzurRx BioPharma Inc AZRX.O: flat BUZZ-Rises as CEO reassures on cash position ** Eli Lilly and Co LLY.N: up 2.7% BUZZ-Gains after applying for FDA emergency use for COVID-19 treatment ** Peck Company Holdings Inc PECK.O: up 60.7% BUZZ-Surges on contract for solar project in Rhode Island ** ARCA Biopharma Inc ABIO.O: down 6.7% BUZZ-Surges on FDA nod to begin potential COVID-19 drug trial ** Vaxart Inc VXRT.O: up 2.2% BUZZ-Up on expanding manufacturing deal for COVID-19 vaccine candidate ** Sunworks Inc SUNW.O: up 42.9% BUZZ-Surges on $10 mln commercial, agriculture projects ** Phunware Inc PHUN.O: up 16.6% BUZZ-Rises on Honeywell contracts ** Paychex Inc PAYX.O: up 1.8% BUZZ-Rises as Q1 results beat ** RPM International Inc RPM.N: up 2.2% BUZZ-Climbs on Q1 beat, bullish outlook ** Achieve Life Sciences Inc ACHV.O: up 7.2% BUZZ-Up on launch of late-stage trial of smoking cessation drug ** Ocular Therapeutix Inc OCUL.O: up 24.1% BUZZ-Rises on higher product sales in Q3 ** Element Solutions Inc ESI.N: up 3.6% BUZZ-Rises after announcing share buyback ** Silicon Motion Technology Corp SIMO.O: up 6.8% BUZZ-Up on upbeat preliminary Q3 results ** Gap Inc GPS.N: up 6.3% BUZZ-Gains as Barclays upgrades to 'overweight' ** RedHill Biopharma Ltd RDHL.O: up 1.7% BUZZ-Gains as COVID-19 drug study passes second safety review ** Eton Pharmaceuticals Inc ETON.O: up 4.7% BUZZ-Jumps on new drug application to treat seizures, migraine ** Landec Corp LNDC.O: down 4.8% BUZZ-Falls as first-quarter loss widens ** Alkermes Plc ALKS.O: up 4.8% BUZZ-Rises as FDA posts briefing documents ahead of expert panel meeting ** Crocs Inc CROX.O: flat BUZZ-Rises on tie-up with Justin Bieber ** Elanco Animal Health Inc ELAN.N: up 12.2% BUZZ-Rises as Sachem Head builds $1.2 bln stake in co ** Quanterix Corp QTRX.O: up 11.1% BUZZ-Jumps on contract to advance COVID-19 antigen test ** Clorox Co CLX.N: up 2.2% BUZZ-Rises on unveiling symptom-detecting device amid pandemic ** Vishay Intertechnology Inc VSH.N: up 6.2% BUZZ-Eyes best day in 5 months as Stifel raises to 'buy' ** JPMorgan Chase & Co JPM.N: up 0.9% ** Citigroup Inc C.N: up 0.7% ** Goldman Sachs Group Inc GS.N: up 0.4% ** Wells Fargo & Co WFC.N: up 1.9% ** Morgan Stanley MS.N: up 1.3% ** Bank of America Corp BAC.N: up 1.4% BUZZ-U.S. big banks follow gains on yields as risk sentiment rebounds ** Celanese Corp CE.N: up 3.9% BUZZ-Up after increasing acetate tow prices by 5% ** OrthoPediatrics Corp KIDS.O: up 6.8% BUZZ-Jumps after BTIG raises price target ** Taiwan Liposome Co Ltd TLC.O: up 27.7% BUZZ-Gains on Australia, Taiwan nod for COVID-19 therapy human trials ** Lightspeed POS Inc LSPD.N: up 6.8% BUZZ-Gains on deal with U.S. golf course operator ** American Resources Corp AREC.O: up 127.0% BUZZ-Considers strategic options for unit, shares surge ** Advanced Micro Devices Inc AMD.O: up 2.4% BUZZ-Gains after Jefferies hikes PT ** Lamb Weston Holdings Inc LW.N: up 2.5% BUZZ-French fry seller's stock heats up after upbeat report ** Pfizer Inc PFE.N: down 0.2% ** BioNTech SE BNTX.O: down 1.3% BUZZ-U.S. authorization for Pfizer, BioNTech COVID-19 vaccine unlikely before election ** Kontoor Brands KTB.N: up 8.1% BUZZ-Kontoor Brands: Gains as Barclays hikes PT, upgrades to 'overweight' ** PTC Therapeutics Inc PTCT.O: up 7.1% BUZZ-PTC Therapeutics: Rises after JP Morgan raises rating to overweight ** Haverty Furniture HVT.N: up 5.7% BUZZ-Haverty Furniture: Hits 17-month high on strong sales ** Castor Maritime Inc CTRM.O: up 6.4% BUZZ-Castor Maritime rises on securing charter agreement for new vessel ** Walt Disney Co DIS.N: up 1.7% BUZZ-Third Point's Loeb calls for redirecting dividend to fund content, shares rise ** HC2 Holdings Inc HCHC.N: down 7.1% BUZZ-Falls after commencing rights offering ** Steris Plc STE.N: up 1.7% BUZZ-Steris gains after brokerage raises price target ** Masimo Corp MASI.O: up 3.1% BUZZ-Rises on upbeat forecast; Needham points to elective procedure recovery ** Fox Corp FOXA.O: up 3.5% BUZZ-Rises as BofA hikes PT to Street high ** Tesla Inc TSLA.O: up 3.7% BUZZ-Musk moots idea of making half a million cars in 2020, shares rise The 11 major S&P 500 sectors: Communication Services Eikon search string for individual stock moves: STXBZ The Day Ahead newsletter: http://tmsnrt.rs/2ggOmBi The Morning News Call newsletter: http://tmsnrt.rs/2fwPLTh Wall Street's main indexes jumped on Wednesday on hopes of at least a partial deal on more fiscal stimulus after U.S. President Donald Trump abruptly called off negotiations on a comprehensive bill in the previous session. up 0.38% (Compiled by C Nivedita in Bengaluru) ((c.nivedita@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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The top three S&P 500 .PG.INX percentage gainers: ** Alexion Pharmaceuticals Inc ALXN.O, up 8.4% ** Freeport-McMoRan Inc FCX.N, up 6.4% ** Gap Inc GPS.N, up 6.3% The top three S&P 500 .PL.INX percentage losers: ** Everest Re Group Ltd RE.N, down 2.3% ** Hess Corp HES.N, down 2.3% ** Cincinnati Financial Corp CINF.O, down 1.7% The top three NYSE .PG.N percentage gainers: ** ReneSola Ltd SOL.N, up 28.8% ** Planet Green Holdings Corp PLAG.N, up 28.3% ** Natuzzi S.p.A. NTZ.N, up 15.1% The top three NYSE .PL.N percentage losers: ** China Green Agriculture Inc CGA.N, down 19.3% ** Hyliion Holdings Corp HYLN.N, down 9.7% ** Liberty Oilfield Services Inc LBRT.N, down 8.7% The top three Nasdaq .PG.O percentage gainers: ** American Resources Corp AREC.O, up 127% ** Peck Company Holdings Inc PECK.O, up 60.7% ** CVD Equipment Corp CVV.O, up 58% The top two Nasdaq .PL.O percentage losers: ** Electro-Sensors Inc ELSE.O, down 35.8% ** Forum Merger II Corp FMCIU.O, down 17.9% ** Levi Strauss & Co LEVI.N: up 6.1% BUZZ-Levi Strauss: Gains on upbeat results, retail push ** American Airlines Group Inc AAL.O: up 4.2% ** United Airlines Holdings Inc UAL.O: up 4.2% ** Delta Air Lines Inc DAL.N: up 3.1% ** JetBlue Airways Corp JBLU.O: up 5.7% BUZZ-U.S. airlines rebound as Trump pushes for $25 bln bailout plan ** CleanSpark Inc CLSK.O: down 10.8% BUZZ-Drops after discounted stock offering ** Sirius XM Holdings Inc SIRI.O: up 4.6% BUZZ-Gains after raising qtrly dividend ** Pluristem Therapeutics Inc PSTI.O: up 6.1% BUZZ-Shares up on nod for COVID-19 therapy trial in Israel ** Coty Inc COTY.N: up 7.1% BUZZ-Jefferies sees turnaround under new CEO, upgrades to 'buy' ** Datadog Inc DDOG.O: up 3.1% BUZZ-Berenberg starts coverage with 'hold' ** Perion Network Ltd PERI.O: up 12.6% BUZZ-Jumps after lifting H2 forecast ** Workday Inc WDAY.O: up 5.7% BUZZ-Rises as brokerage upgrades rating to "buy", hikes PT ** Netflix Inc NFLX.O: up 5.6% BUZZ-Pivotal raises PT to Street high on streaming domination ** DraftKings Inc DKNG.O: down 4.1% BUZZ-Slides on report of discounted equity offering ** Stable Road Acquisition Corp SRAC.O: up 1.8% BUZZ-Rises on merger with Momentus ** Bristol-Myers Squibb Co BMY.N: up 4.2% BUZZ-Rises after Opdivo combo meets main goal in late-stage study ** Sorrento Therapeutics Inc SRNE.O: up 5.8% BUZZ-Rises as unit posts strong Q3 sales ** Abbott Laboratories ABT.N: up 1.4% BUZZ-Wells Fargo hikes PT, Q3 estimates on demand recovery ** Aytu BioScience Inc AYTU.O: down 13.9% BUZZ-Drops after fourth-quarter loss ** TransEnterix Inc TRXC.A: up 14.7% BUZZ-Rises as Japan's hospital to use co's surgical system ** RAVE Restaurant Group Inc RAVE.O: up 105.3% BUZZ-Quadruples on new hiring to lead expansion ** Citius Pharmaceuticals Inc CTXR.O: up 5.9% BUZZ-Citius Pharma rises on licensing agreement for stem cell therapy ** AzurRx BioPharma Inc AZRX.O: flat BUZZ-Rises as CEO reassures on cash position ** Eli Lilly and Co LLY.N: up 2.7% BUZZ-Gains after applying for FDA emergency use for COVID-19 treatment ** Peck Company Holdings Inc PECK.O: up 60.7% BUZZ-Surges on contract for solar project in Rhode Island ** ARCA Biopharma Inc ABIO.O: down 6.7% BUZZ-Surges on FDA nod to begin potential COVID-19 drug trial ** Vaxart Inc VXRT.O: up 2.2% BUZZ-Up on expanding manufacturing deal for COVID-19 vaccine candidate ** Sunworks Inc SUNW.O: up 42.9% BUZZ-Surges on $10 mln commercial, agriculture projects ** Phunware Inc PHUN.O: up 16.6% BUZZ-Rises on Honeywell contracts ** Paychex Inc PAYX.O: up 1.8% BUZZ-Rises as Q1 results beat ** RPM International Inc RPM.N: up 2.2% BUZZ-Climbs on Q1 beat, bullish outlook ** Achieve Life Sciences Inc ACHV.O: up 7.2% BUZZ-Up on launch of late-stage trial of smoking cessation drug ** Ocular Therapeutix Inc OCUL.O: up 24.1% BUZZ-Rises on higher product sales in Q3 ** Element Solutions Inc ESI.N: up 3.6% BUZZ-Rises after announcing share buyback ** Silicon Motion Technology Corp SIMO.O: up 6.8% BUZZ-Up on upbeat preliminary Q3 results ** Gap Inc GPS.N: up 6.3% BUZZ-Gains as Barclays upgrades to 'overweight' ** RedHill Biopharma Ltd RDHL.O: up 1.7% BUZZ-Gains as COVID-19 drug study passes second safety review ** Eton Pharmaceuticals Inc ETON.O: up 4.7% BUZZ-Jumps on new drug application to treat seizures, migraine ** Landec Corp LNDC.O: down 4.8% BUZZ-Falls as first-quarter loss widens ** Alkermes Plc ALKS.O: up 4.8% BUZZ-Rises as FDA posts briefing documents ahead of expert panel meeting ** Crocs Inc CROX.O: flat BUZZ-Rises on tie-up with Justin Bieber ** Elanco Animal Health Inc ELAN.N: up 12.2% BUZZ-Rises as Sachem Head builds $1.2 bln stake in co ** Quanterix Corp QTRX.O: up 11.1% BUZZ-Jumps on contract to advance COVID-19 antigen test ** Clorox Co CLX.N: up 2.2% BUZZ-Rises on unveiling symptom-detecting device amid pandemic ** Vishay Intertechnology Inc VSH.N: up 6.2% BUZZ-Eyes best day in 5 months as Stifel raises to 'buy' ** JPMorgan Chase & Co JPM.N: up 0.9% ** Citigroup Inc C.N: up 0.7% ** Goldman Sachs Group Inc GS.N: up 0.4% ** Wells Fargo & Co WFC.N: up 1.9% ** Morgan Stanley MS.N: up 1.3% ** Bank of America Corp BAC.N: up 1.4% BUZZ-U.S. big banks follow gains on yields as risk sentiment rebounds ** Celanese Corp CE.N: up 3.9% BUZZ-Up after increasing acetate tow prices by 5% ** OrthoPediatrics Corp KIDS.O: up 6.8% BUZZ-Jumps after BTIG raises price target ** Taiwan Liposome Co Ltd TLC.O: up 27.7% BUZZ-Gains on Australia, Taiwan nod for COVID-19 therapy human trials ** Lightspeed POS Inc LSPD.N: up 6.8% BUZZ-Gains on deal with U.S. golf course operator ** American Resources Corp AREC.O: up 127.0% BUZZ-Considers strategic options for unit, shares surge ** Advanced Micro Devices Inc AMD.O: up 2.4% BUZZ-Gains after Jefferies hikes PT ** Lamb Weston Holdings Inc LW.N: up 2.5% BUZZ-French fry seller's stock heats up after upbeat report ** Pfizer Inc PFE.N: down 0.2% ** BioNTech SE BNTX.O: down 1.3% BUZZ-U.S. authorization for Pfizer, BioNTech COVID-19 vaccine unlikely before election ** Kontoor Brands KTB.N: up 8.1% BUZZ-Kontoor Brands: Gains as Barclays hikes PT, upgrades to 'overweight' ** PTC Therapeutics Inc PTCT.O: up 7.1% BUZZ-PTC Therapeutics: Rises after JP Morgan raises rating to overweight ** Haverty Furniture HVT.N: up 5.7% BUZZ-Haverty Furniture: Hits 17-month high on strong sales ** Castor Maritime Inc CTRM.O: up 6.4% BUZZ-Castor Maritime rises on securing charter agreement for new vessel ** Walt Disney Co DIS.N: up 1.7% BUZZ-Third Point's Loeb calls for redirecting dividend to fund content, shares rise ** HC2 Holdings Inc HCHC.N: down 7.1% BUZZ-Falls after commencing rights offering ** Steris Plc STE.N: up 1.7% BUZZ-Steris gains after brokerage raises price target ** Masimo Corp MASI.O: up 3.1% BUZZ-Rises on upbeat forecast; Needham points to elective procedure recovery ** Fox Corp FOXA.O: up 3.5% BUZZ-Rises as BofA hikes PT to Street high ** Tesla Inc TSLA.O: up 3.7% BUZZ-Musk moots idea of making half a million cars in 2020, shares rise The 11 major S&P 500 sectors: Communication Services .N At 13:37 ET, the Dow Jones Industrial Average .DJI was up 1.54% at 28,199.7. up 0.63% Consumer Discretionary
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The top three S&P 500 .PG.INX percentage gainers: ** Alexion Pharmaceuticals Inc ALXN.O, up 8.4% ** Freeport-McMoRan Inc FCX.N, up 6.4% ** Gap Inc GPS.N, up 6.3% The top three S&P 500 .PL.INX percentage losers: ** Everest Re Group Ltd RE.N, down 2.3% ** Hess Corp HES.N, down 2.3% ** Cincinnati Financial Corp CINF.O, down 1.7% The top three NYSE .PG.N percentage gainers: ** ReneSola Ltd SOL.N, up 28.8% ** Planet Green Holdings Corp PLAG.N, up 28.3% ** Natuzzi S.p.A. NTZ.N, up 15.1% The top three NYSE .PL.N percentage losers: ** China Green Agriculture Inc CGA.N, down 19.3% ** Hyliion Holdings Corp HYLN.N, down 9.7% ** Liberty Oilfield Services Inc LBRT.N, down 8.7% The top three Nasdaq .PG.O percentage gainers: ** American Resources Corp AREC.O, up 127% ** Peck Company Holdings Inc PECK.O, up 60.7% ** CVD Equipment Corp CVV.O, up 58% The top two Nasdaq .PL.O percentage losers: ** Electro-Sensors Inc ELSE.O, down 35.8% ** Forum Merger II Corp FMCIU.O, down 17.9% ** Levi Strauss & Co LEVI.N: up 6.1% BUZZ-Levi Strauss: Gains on upbeat results, retail push ** American Airlines Group Inc AAL.O: up 4.2% ** United Airlines Holdings Inc UAL.O: up 4.2% ** Delta Air Lines Inc DAL.N: up 3.1% ** JetBlue Airways Corp JBLU.O: up 5.7% BUZZ-U.S. airlines rebound as Trump pushes for $25 bln bailout plan ** CleanSpark Inc CLSK.O: down 10.8% BUZZ-Drops after discounted stock offering ** Sirius XM Holdings Inc SIRI.O: up 4.6% BUZZ-Gains after raising qtrly dividend ** Pluristem Therapeutics Inc PSTI.O: up 6.1% BUZZ-Shares up on nod for COVID-19 therapy trial in Israel ** Coty Inc COTY.N: up 7.1% BUZZ-Jefferies sees turnaround under new CEO, upgrades to 'buy' ** Datadog Inc DDOG.O: up 3.1% BUZZ-Berenberg starts coverage with 'hold' ** Perion Network Ltd PERI.O: up 12.6% BUZZ-Jumps after lifting H2 forecast ** Workday Inc WDAY.O: up 5.7% BUZZ-Rises as brokerage upgrades rating to "buy", hikes PT ** Netflix Inc NFLX.O: up 5.6% BUZZ-Pivotal raises PT to Street high on streaming domination ** DraftKings Inc DKNG.O: down 4.1% BUZZ-Slides on report of discounted equity offering ** Stable Road Acquisition Corp SRAC.O: up 1.8% BUZZ-Rises on merger with Momentus ** Bristol-Myers Squibb Co BMY.N: up 4.2% BUZZ-Rises after Opdivo combo meets main goal in late-stage study ** Sorrento Therapeutics Inc SRNE.O: up 5.8% BUZZ-Rises as unit posts strong Q3 sales ** Abbott Laboratories ABT.N: up 1.4% BUZZ-Wells Fargo hikes PT, Q3 estimates on demand recovery ** Aytu BioScience Inc AYTU.O: down 13.9% BUZZ-Drops after fourth-quarter loss ** TransEnterix Inc TRXC.A: up 14.7% BUZZ-Rises as Japan's hospital to use co's surgical system ** RAVE Restaurant Group Inc RAVE.O: up 105.3% BUZZ-Quadruples on new hiring to lead expansion ** Citius Pharmaceuticals Inc CTXR.O: up 5.9% BUZZ-Citius Pharma rises on licensing agreement for stem cell therapy ** AzurRx BioPharma Inc AZRX.O: flat BUZZ-Rises as CEO reassures on cash position ** Eli Lilly and Co LLY.N: up 2.7% BUZZ-Gains after applying for FDA emergency use for COVID-19 treatment ** Peck Company Holdings Inc PECK.O: up 60.7% BUZZ-Surges on contract for solar project in Rhode Island ** ARCA Biopharma Inc ABIO.O: down 6.7% BUZZ-Surges on FDA nod to begin potential COVID-19 drug trial ** Vaxart Inc VXRT.O: up 2.2% BUZZ-Up on expanding manufacturing deal for COVID-19 vaccine candidate ** Sunworks Inc SUNW.O: up 42.9% BUZZ-Surges on $10 mln commercial, agriculture projects ** Phunware Inc PHUN.O: up 16.6% BUZZ-Rises on Honeywell contracts ** Paychex Inc PAYX.O: up 1.8% BUZZ-Rises as Q1 results beat ** RPM International Inc RPM.N: up 2.2% BUZZ-Climbs on Q1 beat, bullish outlook ** Achieve Life Sciences Inc ACHV.O: up 7.2% BUZZ-Up on launch of late-stage trial of smoking cessation drug ** Ocular Therapeutix Inc OCUL.O: up 24.1% BUZZ-Rises on higher product sales in Q3 ** Element Solutions Inc ESI.N: up 3.6% BUZZ-Rises after announcing share buyback ** Silicon Motion Technology Corp SIMO.O: up 6.8% BUZZ-Up on upbeat preliminary Q3 results ** Gap Inc GPS.N: up 6.3% BUZZ-Gains as Barclays upgrades to 'overweight' ** RedHill Biopharma Ltd RDHL.O: up 1.7% BUZZ-Gains as COVID-19 drug study passes second safety review ** Eton Pharmaceuticals Inc ETON.O: up 4.7% BUZZ-Jumps on new drug application to treat seizures, migraine ** Landec Corp LNDC.O: down 4.8% BUZZ-Falls as first-quarter loss widens ** Alkermes Plc ALKS.O: up 4.8% BUZZ-Rises as FDA posts briefing documents ahead of expert panel meeting ** Crocs Inc CROX.O: flat BUZZ-Rises on tie-up with Justin Bieber ** Elanco Animal Health Inc ELAN.N: up 12.2% BUZZ-Rises as Sachem Head builds $1.2 bln stake in co ** Quanterix Corp QTRX.O: up 11.1% BUZZ-Jumps on contract to advance COVID-19 antigen test ** Clorox Co CLX.N: up 2.2% BUZZ-Rises on unveiling symptom-detecting device amid pandemic ** Vishay Intertechnology Inc VSH.N: up 6.2% BUZZ-Eyes best day in 5 months as Stifel raises to 'buy' ** JPMorgan Chase & Co JPM.N: up 0.9% ** Citigroup Inc C.N: up 0.7% ** Goldman Sachs Group Inc GS.N: up 0.4% ** Wells Fargo & Co WFC.N: up 1.9% ** Morgan Stanley MS.N: up 1.3% ** Bank of America Corp BAC.N: up 1.4% BUZZ-U.S. big banks follow gains on yields as risk sentiment rebounds ** Celanese Corp CE.N: up 3.9% BUZZ-Up after increasing acetate tow prices by 5% ** OrthoPediatrics Corp KIDS.O: up 6.8% BUZZ-Jumps after BTIG raises price target ** Taiwan Liposome Co Ltd TLC.O: up 27.7% BUZZ-Gains on Australia, Taiwan nod for COVID-19 therapy human trials ** Lightspeed POS Inc LSPD.N: up 6.8% BUZZ-Gains on deal with U.S. golf course operator ** American Resources Corp AREC.O: up 127.0% BUZZ-Considers strategic options for unit, shares surge ** Advanced Micro Devices Inc AMD.O: up 2.4% BUZZ-Gains after Jefferies hikes PT ** Lamb Weston Holdings Inc LW.N: up 2.5% BUZZ-French fry seller's stock heats up after upbeat report ** Pfizer Inc PFE.N: down 0.2% ** BioNTech SE BNTX.O: down 1.3% BUZZ-U.S. authorization for Pfizer, BioNTech COVID-19 vaccine unlikely before election ** Kontoor Brands KTB.N: up 8.1% BUZZ-Kontoor Brands: Gains as Barclays hikes PT, upgrades to 'overweight' ** PTC Therapeutics Inc PTCT.O: up 7.1% BUZZ-PTC Therapeutics: Rises after JP Morgan raises rating to overweight ** Haverty Furniture HVT.N: up 5.7% BUZZ-Haverty Furniture: Hits 17-month high on strong sales ** Castor Maritime Inc CTRM.O: up 6.4% BUZZ-Castor Maritime rises on securing charter agreement for new vessel ** Walt Disney Co DIS.N: up 1.7% BUZZ-Third Point's Loeb calls for redirecting dividend to fund content, shares rise ** HC2 Holdings Inc HCHC.N: down 7.1% BUZZ-Falls after commencing rights offering ** Steris Plc STE.N: up 1.7% BUZZ-Steris gains after brokerage raises price target ** Masimo Corp MASI.O: up 3.1% BUZZ-Rises on upbeat forecast; Needham points to elective procedure recovery ** Fox Corp FOXA.O: up 3.5% BUZZ-Rises as BofA hikes PT to Street high ** Tesla Inc TSLA.O: up 3.7% BUZZ-Musk moots idea of making half a million cars in 2020, shares rise The 11 major S&P 500 sectors: Communication Services Eikon search string for individual stock moves: STXBZ The Day Ahead newsletter: http://tmsnrt.rs/2ggOmBi The Morning News Call newsletter: http://tmsnrt.rs/2fwPLTh Wall Street's main indexes jumped on Wednesday on hopes of at least a partial deal on more fiscal stimulus after U.S. President Donald Trump abruptly called off negotiations on a comprehensive bill in the previous session. .N At 13:37 ET, the Dow Jones Industrial Average .DJI was up 1.54% at 28,199.7.
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28df90d1-d2f0-4608-bfc2-9f40f50d445b
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718973.0
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2020-10-07 00:00:00 UTC
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Why Datadog Stock Rose Today
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DDOG
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https://www.nasdaq.com/articles/why-datadog-stock-rose-today-2020-10-07
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nan
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nan
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What happened
Shares of Datadog (NASDAQ: DDOG) rose today, up by 3% as of 1:40 p.m. EDT, after analysts at financial firm Berenberg initiated coverage of the tech company with a hold rating. Despite that lukewarm rating, the research note included some positive comments. The stock had been up by as much as 5% in morning trading.
So what
Analyst Kingsley Crane started Datadog at hold alongside a price target of $103, which is slightly below Tuesday's closing price. The tech company is a leader in cloud monitoring, and should be able to keep growing its market share in cybersecurity, according to Berenberg.
Image source: Datadog.
Datadog had 1,015 customers with over $100,000 in annualized revenue run-rate at the end of the second quarter, up from just 594 a year prior.
Now what
There's a broad shift underway in the cybersecurity market: IT teams are pivoting from a preference for monitoring services toward those focused on observability, which includes the active exploration of new patterns, according to Crane. Datadog offers both monitoring and observability services.
Investors also cheered a major partnership with Microsoft that was announced last week. That deal will integrate Datadog's observability platform into Microsoft's Azure cloud.
"Observability is a key capability for any successful cloud migration," Datadog Chief Product Officer Amit Agarwal said at the time. "Through our new partnership with Microsoft Azure, customers will now have access to the Datadog platform directly in the Azure console, enabling them to migrate, optimize and secure new and migrated workloads."
10 stocks we like better than Microsoft
When investing geniuses David and Tom Gardner have 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.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Microsoft 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 24, 2020
Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool's board of directors. Evan Niu, CFA has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Datadog and Microsoft and recommends the following options: long January 2021 $85 calls on Microsoft and short January 2021 $115 calls on 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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What happened Shares of Datadog (NASDAQ: DDOG) rose today, up by 3% as of 1:40 p.m. EDT, after analysts at financial firm Berenberg initiated coverage of the tech company with a hold rating. Now what There's a broad shift underway in the cybersecurity market: IT teams are pivoting from a preference for monitoring services toward those focused on observability, which includes the active exploration of new patterns, according to Crane. "Observability is a key capability for any successful cloud migration," Datadog Chief Product Officer Amit Agarwal said at the time.
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What happened Shares of Datadog (NASDAQ: DDOG) rose today, up by 3% as of 1:40 p.m. EDT, after analysts at financial firm Berenberg initiated coverage of the tech company with a hold rating. That deal will integrate Datadog's observability platform into Microsoft's Azure cloud. "Through our new partnership with Microsoft Azure, customers will now have access to the Datadog platform directly in the Azure console, enabling them to migrate, optimize and secure new and migrated workloads."
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What happened Shares of Datadog (NASDAQ: DDOG) rose today, up by 3% as of 1:40 p.m. EDT, after analysts at financial firm Berenberg initiated coverage of the tech company with a hold rating. "Through our new partnership with Microsoft Azure, customers will now have access to the Datadog platform directly in the Azure console, enabling them to migrate, optimize and secure new and migrated workloads." See the 10 stocks *Stock Advisor returns as of September 24, 2020 Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool's board of directors.
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What happened Shares of Datadog (NASDAQ: DDOG) rose today, up by 3% as of 1:40 p.m. EDT, after analysts at financial firm Berenberg initiated coverage of the tech company with a hold rating. * David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Microsoft wasn't one of them! That's right -- they think these 10 stocks are even better buys.
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5bef239f-7951-4be2-bde4-a158bc4663e8
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718974.0
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2020-10-07 00:00:00 UTC
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Palantir Stock Looks Attractive At $9, But There Are Two Key Concerns
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DDOG
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https://www.nasdaq.com/articles/palantir-stock-looks-attractive-at-%249-but-there-are-two-key-concerns-2020-10-07
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nan
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nan
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Palantir (NYSE: PLTR), the big data and analytics software company, debuted on the public markets last month and is currently valued at about $15 billion, or about $9 per share, trading at about 14.5x projected 2020 Revenues. This appears like an attractive valuation, considering that Palantir is on track to grow by about 40% this year and also accounting for the fact that software stocks have been in favor with investors this year. Does this make Palantir stock an attractive pick at current levels? What are the key risks & catalysts?
See our interactive analysis on Palantir Stock: Expensive Or Cheap? for a detailed breakdown of Palantir’s financials, valuation, and comparison with other high-growth software stocks. Parts of the analysis are outlined below.
Palantir Can’t Scale As Seamlessly As SaaS Stocks
Investors aren’t treating Palantir like a Software as a Service (SaaS) stock. SaaS companies incur upfront costs to develop and maintain their products, but they can scale-up seamlessly to a large number of users and have low customer acquisition costs. Palantir’s software, on the other hand, requires a lot of customization by Palantir engineers to adapt to the unique needs of customers. Its user base is also concentrated (125 users as of 2019, with 20 of them accounting for two-thirds of Revenue). This adds significantly to the company’s costs. For instance, Sales and Marketing Expenses stood at 61% of total Revenue in 2019, with General & Administrative costs standing at over 43% of Revenue. This significantly impacts the company’s bottom line, with Net Margins standing at -78% in 2019. In comparison, Datadog, a SaaS player that provides solutions to monitor cloud applications, had Net Margins of -5% during its most recent fiscal year. However, with Revenues likely to pick up this year, Palantir’s Net Margins should also rise. Over H1 2020, Net Margins stood at -34%.
Palantir’s Increasing Exposure To Government
While Palantir’s Revenues expanded by about 24% in 2019, growth is likely to pick-up to levels of over 40% in 2020 as Covid-19 related disruptions increased demand for the company’s services. Much of this growth will likely come from the Government space. Over H1 2020, Government Revenue expanded about 76% year-over-year, while its Commercial Revenue grew by just 26%. The higher government exposure – particularly in areas related to surveillance and national security – comes with transparency and perception issues – which could put off software investors. That said, Palantir still has a lot of scope to grow in the Commercial space, with its total addressable market standing at about $56 billion. Investors could re-think Palantir’s valuation if they see more proof points indicating progress in the commercial sector, via high profile deals or stronger Revenue growth.
What if you’re looking for a more balanced portfolio instead? Here’s a high-quality portfolio to beat the market, with over 100% return since 2016, versus 50% for the S&P 500. Comprised of companies with strong revenue growth, healthy profits, lots of cash, and low risk, it has outperformed the broader market year after year, consistently.
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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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Palantir (NYSE: PLTR), the big data and analytics software company, debuted on the public markets last month and is currently valued at about $15 billion, or about $9 per share, trading at about 14.5x projected 2020 Revenues. The higher government exposure – particularly in areas related to surveillance and national security – comes with transparency and perception issues – which could put off software investors. Investors could re-think Palantir’s valuation if they see more proof points indicating progress in the commercial sector, via high profile deals or stronger Revenue growth.
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Palantir Can’t Scale As Seamlessly As SaaS Stocks Investors aren’t treating Palantir like a Software as a Service (SaaS) stock. Palantir’s Increasing Exposure To Government While Palantir’s Revenues expanded by about 24% in 2019, growth is likely to pick-up to levels of over 40% in 2020 as Covid-19 related disruptions increased demand for the company’s services. That said, Palantir still has a lot of scope to grow in the Commercial space, with its total addressable market standing at about $56 billion.
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Palantir Can’t Scale As Seamlessly As SaaS Stocks Investors aren’t treating Palantir like a Software as a Service (SaaS) stock. Palantir’s Increasing Exposure To Government While Palantir’s Revenues expanded by about 24% in 2019, growth is likely to pick-up to levels of over 40% in 2020 as Covid-19 related disruptions increased demand for the company’s services. Comprised of companies with strong revenue growth, healthy profits, lots of cash, and low risk, it has outperformed the broader market year after year, consistently.
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This appears like an attractive valuation, considering that Palantir is on track to grow by about 40% this year and also accounting for the fact that software stocks have been in favor with investors this year. Palantir Can’t Scale As Seamlessly As SaaS Stocks Investors aren’t treating Palantir like a Software as a Service (SaaS) stock. SaaS companies incur upfront costs to develop and maintain their products, but they can scale-up seamlessly to a large number of users and have low customer acquisition costs.
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2020-10-07 00:00:00 UTC
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BUZZ-U.S. STOCKS ON THE MOVE-United Airlines, CleanSpark, Netflix, TransEnterix, Peck Company
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DDOG
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https://www.nasdaq.com/articles/buzz-u.s.-stocks-on-the-move-united-airlines-cleanspark-netflix-transenterix-peck-company
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Eikon search string for individual stock moves: STXBZ
The Day Ahead newsletter: http://tmsnrt.rs/2ggOmBi
The Morning News Call newsletter: http://tmsnrt.rs/2fwPLTh
Wall Street's main indexes jumped on Wednesday, recouping losses from the previous session triggered by President Donald Trump's abrupt call to end stimulus talks, while Levi Strauss hit a four-month high after posting a surprise quarterly profit. .N
At 9:47 a.m. ET, the Dow Jones Industrial Average .DJI was up 1.20% at 28,107.28. The S&P 500 .SPX was up 1.17% at 3,400.32 and the Nasdaq Composite .IXIC was up 1.25% at 11,294.553. The top three S&P 500 .PG.INX percentage gainers: ** United Airlines Holdings Inc UAL.O, up 6% ** Gap Inc GPS.N, up 5.7% ** Freeport-McMoRan Inc FCX.N, up 4.6% The top three S&P 500 .PL.INX percentage losers: ** NiSource Inc NI.N, down 1% ** Cboe Global Markets, Inc CBOE.Z, down 1% ** SBA Communications Corp SBAC.O, down 0.7% The top three NYSE .PG.N percentage gainers: ** ReneSola Ltd SOL.N, up 26.9% ** Navios Maritime Partners L.P. NM_ph.N, up 14.5% ** American Well Corp AMWL.N, up 12.2% The top NYSE .PL.N percentage losers: ** China Green Agriculture Inc CGA.N, down 18.9% ** Liberty Oilfield Services Inc LBRT.N, down 7.7% The top three Nasdaq .PG.O percentage gainers: ** American Resources Corp AREC.O, up 152.1% ** Peck Company Holdings Inc PECK.O, up 67.8% ** Sunworks Inc SUNW.O, up 52.9% The top Nasdaq .PL.O percentage losers: ** Electro-Sensors Inc ELSE.O, down 33.3% ** CleanSpark Inc CLSK.O, down 15.3% ** Levi Strauss & Co LEVI.N: up 9.6% BUZZ-Levi Strauss: Gains on upbeat results, retail push ** American Airlines Group Inc AAL.O: up 4.0% ** United Airlines Holdings Inc UAL.O: up 6.0% ** Delta Air Lines Inc DAL.N: up 3.4% ** JetBlue Airways Corp JBLU.O: up 7.0% BUZZ-U.S. airlines rebound as Trump pushes for $25 bln bailout plan ** CleanSpark Inc CLSK.O: down 15.3% BUZZ-Drops after discounted stock offering ** Sirius XM Holdings Inc SIRI.O: up 4.7% BUZZ-Gains after raising qtrly dividend ** Pluristem Therapeutics Inc PSTI.O: up 5.4% BUZZ-Shares up on nod for COVID-19 therapy trial in Israel ** Coty Inc COTY.N: up 8.9% BUZZ-Jefferies sees turnaround under new CEO, upgrades to 'buy' ** Datadog Inc DDOG.O: up 2.7% BUZZ-Berenberg starts coverage with 'hold' ** Perion Network Ltd PERI.O: up 12.7% BUZZ-Jumps after lifting H2 forecast ** Workday Inc WDAY.O: up 5.3% BUZZ-Rises as brokerage upgrades rating to "buy", hikes PT ** Netflix Inc NFLX.O: up 3.8% BUZZ-Pivotal raises PT to Street high on streaming domination ** DraftKings Inc DKNG.O: down 5.0% BUZZ-Slides on report of discounted equity offering ** Bristol-Myers Squibb Co BMY.N: up 1.1% BUZZ-Rises after Opdivo combo meets main goal in late-stage study ** Sorrento Therapeutics Inc SRNE.O: up 2.1% BUZZ-Rises as unit posts strong Q3 sales ** Abbott Laboratories ABT.N: up 1.0% BUZZ-Wells Fargo hikes PT, Q3 estimates on demand recovery ** AnPac Bio-Medical Science Co Ltd ANPC.O: up 1.2% BUZZ-Jumps on securing $8 mln funding in China ** Aytu BioScience Inc AYTU.O: down 11.3% BUZZ-Drops after fourth-quarter loss ** TransEnterix Inc TRXC.A: up 18.6% BUZZ-Rises as Japan's hospital to use co's surgical system ** RAVE Restaurant Group Inc RAVE.O: up 190.9% BUZZ-Quadruples on new hiring to lead expansion ** Citius Pharmaceuticals Inc CTXR.O: up 5.9% BUZZ-Citius Pharma rises on licensing agreement for stem cell therapy ** AzurRx BioPharma Inc AZRX.O: up 0.7% BUZZ-Rises as CEO reassures on cash position ** Eli Lilly and Co LLY.N: up 2.2% BUZZ-Gains after applying for FDA emergency use for COVID-19 treatment ** Peck Company Holdings Inc PECK.O: up 67.8% BUZZ-Surges on contract for solar project in Rhode Island ** Vaxart Inc VXRT.O: up 3.3% BUZZ-Up on expanding manufacturing deal for COVID-19 vaccine candidate ** Sunworks Inc SUNW.O: up 52.9% BUZZ-Surges on $10 mln commercial, agriculture projects ** Phunware Inc PHUN.O: up 26.0% BUZZ-Rises on Honeywell contracts ** Paychex Inc PAYX.O: up 1.4% BUZZ-Rises as Q1 results beat
The 11 major S&P 500 sectors:
Communication Services
.SPLRCL
up 0.59%
Consumer Discretionary
.SPLRCD
up 1.66%
Consumer Staples
.SPLRCS
up 0.45%
Energy
.SPNY
up 0.53%
Financial
.SPSY
up 1.79%
Health
.SPXHC
up 0.92%
Industrial
.SPLRCI
up 1.75%
Information Technology
.SPLRCT
up 1.27%
Materials
.SPLRCM
up 2.01%
Real Estate
.SPLRCR
up 0.35%
Utilities
.SPLRCU
up 0.17%
(Compiled by C Nivedita in Bengaluru)
((c.nivedita@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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The top three S&P 500 .PG.INX percentage gainers: ** United Airlines Holdings Inc UAL.O, up 6% ** Gap Inc GPS.N, up 5.7% ** Freeport-McMoRan Inc FCX.N, up 4.6% The top three S&P 500 .PL.INX percentage losers: ** NiSource Inc NI.N, down 1% ** Cboe Global Markets, Inc CBOE.Z, down 1% ** SBA Communications Corp SBAC.O, down 0.7% The top three NYSE .PG.N percentage gainers: ** ReneSola Ltd SOL.N, up 26.9% ** Navios Maritime Partners L.P. NM_ph.N, up 14.5% ** American Well Corp AMWL.N, up 12.2% The top NYSE .PL.N percentage losers: ** China Green Agriculture Inc CGA.N, down 18.9% ** Liberty Oilfield Services Inc LBRT.N, down 7.7% The top three Nasdaq .PG.O percentage gainers: ** American Resources Corp AREC.O, up 152.1% ** Peck Company Holdings Inc PECK.O, up 67.8% ** Sunworks Inc SUNW.O, up 52.9% The top Nasdaq .PL.O percentage losers: ** Electro-Sensors Inc ELSE.O, down 33.3% ** CleanSpark Inc CLSK.O, down 15.3% ** Levi Strauss & Co LEVI.N: up 9.6% BUZZ-Levi Strauss: Gains on upbeat results, retail push ** American Airlines Group Inc AAL.O: up 4.0% ** United Airlines Holdings Inc UAL.O: up 6.0% ** Delta Air Lines Inc DAL.N: up 3.4% ** JetBlue Airways Corp JBLU.O: up 7.0% BUZZ-U.S. airlines rebound as Trump pushes for $25 bln bailout plan ** CleanSpark Inc CLSK.O: down 15.3% BUZZ-Drops after discounted stock offering ** Sirius XM Holdings Inc SIRI.O: up 4.7% BUZZ-Gains after raising qtrly dividend ** Pluristem Therapeutics Inc PSTI.O: up 5.4% BUZZ-Shares up on nod for COVID-19 therapy trial in Israel ** Coty Inc COTY.N: up 8.9% BUZZ-Jefferies sees turnaround under new CEO, upgrades to 'buy' ** Datadog Inc DDOG.O: up 2.7% BUZZ-Berenberg starts coverage with 'hold' ** Perion Network Ltd PERI.O: up 12.7% BUZZ-Jumps after lifting H2 forecast ** Workday Inc WDAY.O: up 5.3% BUZZ-Rises as brokerage upgrades rating to "buy", hikes PT ** Netflix Inc NFLX.O: up 3.8% BUZZ-Pivotal raises PT to Street high on streaming domination ** DraftKings Inc DKNG.O: down 5.0% BUZZ-Slides on report of discounted equity offering ** Bristol-Myers Squibb Co BMY.N: up 1.1% BUZZ-Rises after Opdivo combo meets main goal in late-stage study ** Sorrento Therapeutics Inc SRNE.O: up 2.1% BUZZ-Rises as unit posts strong Q3 sales ** Abbott Laboratories ABT.N: up 1.0% BUZZ-Wells Fargo hikes PT, Q3 estimates on demand recovery ** AnPac Bio-Medical Science Co Ltd ANPC.O: up 1.2% BUZZ-Jumps on securing $8 mln funding in China ** Aytu BioScience Inc AYTU.O: down 11.3% BUZZ-Drops after fourth-quarter loss ** TransEnterix Inc TRXC.A: up 18.6% BUZZ-Rises as Japan's hospital to use co's surgical system ** RAVE Restaurant Group Inc RAVE.O: up 190.9% BUZZ-Quadruples on new hiring to lead expansion ** Citius Pharmaceuticals Inc CTXR.O: up 5.9% BUZZ-Citius Pharma rises on licensing agreement for stem cell therapy ** AzurRx BioPharma Inc AZRX.O: up 0.7% BUZZ-Rises as CEO reassures on cash position ** Eli Lilly and Co LLY.N: up 2.2% BUZZ-Gains after applying for FDA emergency use for COVID-19 treatment ** Peck Company Holdings Inc PECK.O: up 67.8% BUZZ-Surges on contract for solar project in Rhode Island ** Vaxart Inc VXRT.O: up 3.3% BUZZ-Up on expanding manufacturing deal for COVID-19 vaccine candidate ** Sunworks Inc SUNW.O: up 52.9% BUZZ-Surges on $10 mln commercial, agriculture projects ** Phunware Inc PHUN.O: up 26.0% BUZZ-Rises on Honeywell contracts ** Paychex Inc PAYX.O: up 1.4% BUZZ-Rises as Q1 results beat The 11 major S&P 500 sectors: Communication Services Eikon search string for individual stock moves: STXBZ The Day Ahead newsletter: http://tmsnrt.rs/2ggOmBi The Morning News Call newsletter: http://tmsnrt.rs/2fwPLTh Wall Street's main indexes jumped on Wednesday, recouping losses from the previous session triggered by President Donald Trump's abrupt call to end stimulus talks, while Levi Strauss hit a four-month high after posting a surprise quarterly profit. up 0.17% (Compiled by C Nivedita in Bengaluru) ((c.nivedita@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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The top three S&P 500 .PG.INX percentage gainers: ** United Airlines Holdings Inc UAL.O, up 6% ** Gap Inc GPS.N, up 5.7% ** Freeport-McMoRan Inc FCX.N, up 4.6% The top three S&P 500 .PL.INX percentage losers: ** NiSource Inc NI.N, down 1% ** Cboe Global Markets, Inc CBOE.Z, down 1% ** SBA Communications Corp SBAC.O, down 0.7% The top three NYSE .PG.N percentage gainers: ** ReneSola Ltd SOL.N, up 26.9% ** Navios Maritime Partners L.P. NM_ph.N, up 14.5% ** American Well Corp AMWL.N, up 12.2% The top NYSE .PL.N percentage losers: ** China Green Agriculture Inc CGA.N, down 18.9% ** Liberty Oilfield Services Inc LBRT.N, down 7.7% The top three Nasdaq .PG.O percentage gainers: ** American Resources Corp AREC.O, up 152.1% ** Peck Company Holdings Inc PECK.O, up 67.8% ** Sunworks Inc SUNW.O, up 52.9% The top Nasdaq .PL.O percentage losers: ** Electro-Sensors Inc ELSE.O, down 33.3% ** CleanSpark Inc CLSK.O, down 15.3% ** Levi Strauss & Co LEVI.N: up 9.6% BUZZ-Levi Strauss: Gains on upbeat results, retail push ** American Airlines Group Inc AAL.O: up 4.0% ** United Airlines Holdings Inc UAL.O: up 6.0% ** Delta Air Lines Inc DAL.N: up 3.4% ** JetBlue Airways Corp JBLU.O: up 7.0% BUZZ-U.S. airlines rebound as Trump pushes for $25 bln bailout plan ** CleanSpark Inc CLSK.O: down 15.3% BUZZ-Drops after discounted stock offering ** Sirius XM Holdings Inc SIRI.O: up 4.7% BUZZ-Gains after raising qtrly dividend ** Pluristem Therapeutics Inc PSTI.O: up 5.4% BUZZ-Shares up on nod for COVID-19 therapy trial in Israel ** Coty Inc COTY.N: up 8.9% BUZZ-Jefferies sees turnaround under new CEO, upgrades to 'buy' ** Datadog Inc DDOG.O: up 2.7% BUZZ-Berenberg starts coverage with 'hold' ** Perion Network Ltd PERI.O: up 12.7% BUZZ-Jumps after lifting H2 forecast ** Workday Inc WDAY.O: up 5.3% BUZZ-Rises as brokerage upgrades rating to "buy", hikes PT ** Netflix Inc NFLX.O: up 3.8% BUZZ-Pivotal raises PT to Street high on streaming domination ** DraftKings Inc DKNG.O: down 5.0% BUZZ-Slides on report of discounted equity offering ** Bristol-Myers Squibb Co BMY.N: up 1.1% BUZZ-Rises after Opdivo combo meets main goal in late-stage study ** Sorrento Therapeutics Inc SRNE.O: up 2.1% BUZZ-Rises as unit posts strong Q3 sales ** Abbott Laboratories ABT.N: up 1.0% BUZZ-Wells Fargo hikes PT, Q3 estimates on demand recovery ** AnPac Bio-Medical Science Co Ltd ANPC.O: up 1.2% BUZZ-Jumps on securing $8 mln funding in China ** Aytu BioScience Inc AYTU.O: down 11.3% BUZZ-Drops after fourth-quarter loss ** TransEnterix Inc TRXC.A: up 18.6% BUZZ-Rises as Japan's hospital to use co's surgical system ** RAVE Restaurant Group Inc RAVE.O: up 190.9% BUZZ-Quadruples on new hiring to lead expansion ** Citius Pharmaceuticals Inc CTXR.O: up 5.9% BUZZ-Citius Pharma rises on licensing agreement for stem cell therapy ** AzurRx BioPharma Inc AZRX.O: up 0.7% BUZZ-Rises as CEO reassures on cash position ** Eli Lilly and Co LLY.N: up 2.2% BUZZ-Gains after applying for FDA emergency use for COVID-19 treatment ** Peck Company Holdings Inc PECK.O: up 67.8% BUZZ-Surges on contract for solar project in Rhode Island ** Vaxart Inc VXRT.O: up 3.3% BUZZ-Up on expanding manufacturing deal for COVID-19 vaccine candidate ** Sunworks Inc SUNW.O: up 52.9% BUZZ-Surges on $10 mln commercial, agriculture projects ** Phunware Inc PHUN.O: up 26.0% BUZZ-Rises on Honeywell contracts ** Paychex Inc PAYX.O: up 1.4% BUZZ-Rises as Q1 results beat The 11 major S&P 500 sectors: Communication Services Eikon search string for individual stock moves: STXBZ The Day Ahead newsletter: http://tmsnrt.rs/2ggOmBi The Morning News Call newsletter: http://tmsnrt.rs/2fwPLTh Wall Street's main indexes jumped on Wednesday, recouping losses from the previous session triggered by President Donald Trump's abrupt call to end stimulus talks, while Levi Strauss hit a four-month high after posting a surprise quarterly profit. up 0.17% (Compiled by C Nivedita in Bengaluru) ((c.nivedita@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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The top three S&P 500 .PG.INX percentage gainers: ** United Airlines Holdings Inc UAL.O, up 6% ** Gap Inc GPS.N, up 5.7% ** Freeport-McMoRan Inc FCX.N, up 4.6% The top three S&P 500 .PL.INX percentage losers: ** NiSource Inc NI.N, down 1% ** Cboe Global Markets, Inc CBOE.Z, down 1% ** SBA Communications Corp SBAC.O, down 0.7% The top three NYSE .PG.N percentage gainers: ** ReneSola Ltd SOL.N, up 26.9% ** Navios Maritime Partners L.P. NM_ph.N, up 14.5% ** American Well Corp AMWL.N, up 12.2% The top NYSE .PL.N percentage losers: ** China Green Agriculture Inc CGA.N, down 18.9% ** Liberty Oilfield Services Inc LBRT.N, down 7.7% The top three Nasdaq .PG.O percentage gainers: ** American Resources Corp AREC.O, up 152.1% ** Peck Company Holdings Inc PECK.O, up 67.8% ** Sunworks Inc SUNW.O, up 52.9% The top Nasdaq .PL.O percentage losers: ** Electro-Sensors Inc ELSE.O, down 33.3% ** CleanSpark Inc CLSK.O, down 15.3% ** Levi Strauss & Co LEVI.N: up 9.6% BUZZ-Levi Strauss: Gains on upbeat results, retail push ** American Airlines Group Inc AAL.O: up 4.0% ** United Airlines Holdings Inc UAL.O: up 6.0% ** Delta Air Lines Inc DAL.N: up 3.4% ** JetBlue Airways Corp JBLU.O: up 7.0% BUZZ-U.S. airlines rebound as Trump pushes for $25 bln bailout plan ** CleanSpark Inc CLSK.O: down 15.3% BUZZ-Drops after discounted stock offering ** Sirius XM Holdings Inc SIRI.O: up 4.7% BUZZ-Gains after raising qtrly dividend ** Pluristem Therapeutics Inc PSTI.O: up 5.4% BUZZ-Shares up on nod for COVID-19 therapy trial in Israel ** Coty Inc COTY.N: up 8.9% BUZZ-Jefferies sees turnaround under new CEO, upgrades to 'buy' ** Datadog Inc DDOG.O: up 2.7% BUZZ-Berenberg starts coverage with 'hold' ** Perion Network Ltd PERI.O: up 12.7% BUZZ-Jumps after lifting H2 forecast ** Workday Inc WDAY.O: up 5.3% BUZZ-Rises as brokerage upgrades rating to "buy", hikes PT ** Netflix Inc NFLX.O: up 3.8% BUZZ-Pivotal raises PT to Street high on streaming domination ** DraftKings Inc DKNG.O: down 5.0% BUZZ-Slides on report of discounted equity offering ** Bristol-Myers Squibb Co BMY.N: up 1.1% BUZZ-Rises after Opdivo combo meets main goal in late-stage study ** Sorrento Therapeutics Inc SRNE.O: up 2.1% BUZZ-Rises as unit posts strong Q3 sales ** Abbott Laboratories ABT.N: up 1.0% BUZZ-Wells Fargo hikes PT, Q3 estimates on demand recovery ** AnPac Bio-Medical Science Co Ltd ANPC.O: up 1.2% BUZZ-Jumps on securing $8 mln funding in China ** Aytu BioScience Inc AYTU.O: down 11.3% BUZZ-Drops after fourth-quarter loss ** TransEnterix Inc TRXC.A: up 18.6% BUZZ-Rises as Japan's hospital to use co's surgical system ** RAVE Restaurant Group Inc RAVE.O: up 190.9% BUZZ-Quadruples on new hiring to lead expansion ** Citius Pharmaceuticals Inc CTXR.O: up 5.9% BUZZ-Citius Pharma rises on licensing agreement for stem cell therapy ** AzurRx BioPharma Inc AZRX.O: up 0.7% BUZZ-Rises as CEO reassures on cash position ** Eli Lilly and Co LLY.N: up 2.2% BUZZ-Gains after applying for FDA emergency use for COVID-19 treatment ** Peck Company Holdings Inc PECK.O: up 67.8% BUZZ-Surges on contract for solar project in Rhode Island ** Vaxart Inc VXRT.O: up 3.3% BUZZ-Up on expanding manufacturing deal for COVID-19 vaccine candidate ** Sunworks Inc SUNW.O: up 52.9% BUZZ-Surges on $10 mln commercial, agriculture projects ** Phunware Inc PHUN.O: up 26.0% BUZZ-Rises on Honeywell contracts ** Paychex Inc PAYX.O: up 1.4% BUZZ-Rises as Q1 results beat The 11 major S&P 500 sectors: Communication Services ET, the Dow Jones Industrial Average .DJI was up 1.20% at 28,107.28. up 0.59% Consumer Discretionary
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The top three S&P 500 .PG.INX percentage gainers: ** United Airlines Holdings Inc UAL.O, up 6% ** Gap Inc GPS.N, up 5.7% ** Freeport-McMoRan Inc FCX.N, up 4.6% The top three S&P 500 .PL.INX percentage losers: ** NiSource Inc NI.N, down 1% ** Cboe Global Markets, Inc CBOE.Z, down 1% ** SBA Communications Corp SBAC.O, down 0.7% The top three NYSE .PG.N percentage gainers: ** ReneSola Ltd SOL.N, up 26.9% ** Navios Maritime Partners L.P. NM_ph.N, up 14.5% ** American Well Corp AMWL.N, up 12.2% The top NYSE .PL.N percentage losers: ** China Green Agriculture Inc CGA.N, down 18.9% ** Liberty Oilfield Services Inc LBRT.N, down 7.7% The top three Nasdaq .PG.O percentage gainers: ** American Resources Corp AREC.O, up 152.1% ** Peck Company Holdings Inc PECK.O, up 67.8% ** Sunworks Inc SUNW.O, up 52.9% The top Nasdaq .PL.O percentage losers: ** Electro-Sensors Inc ELSE.O, down 33.3% ** CleanSpark Inc CLSK.O, down 15.3% ** Levi Strauss & Co LEVI.N: up 9.6% BUZZ-Levi Strauss: Gains on upbeat results, retail push ** American Airlines Group Inc AAL.O: up 4.0% ** United Airlines Holdings Inc UAL.O: up 6.0% ** Delta Air Lines Inc DAL.N: up 3.4% ** JetBlue Airways Corp JBLU.O: up 7.0% BUZZ-U.S. airlines rebound as Trump pushes for $25 bln bailout plan ** CleanSpark Inc CLSK.O: down 15.3% BUZZ-Drops after discounted stock offering ** Sirius XM Holdings Inc SIRI.O: up 4.7% BUZZ-Gains after raising qtrly dividend ** Pluristem Therapeutics Inc PSTI.O: up 5.4% BUZZ-Shares up on nod for COVID-19 therapy trial in Israel ** Coty Inc COTY.N: up 8.9% BUZZ-Jefferies sees turnaround under new CEO, upgrades to 'buy' ** Datadog Inc DDOG.O: up 2.7% BUZZ-Berenberg starts coverage with 'hold' ** Perion Network Ltd PERI.O: up 12.7% BUZZ-Jumps after lifting H2 forecast ** Workday Inc WDAY.O: up 5.3% BUZZ-Rises as brokerage upgrades rating to "buy", hikes PT ** Netflix Inc NFLX.O: up 3.8% BUZZ-Pivotal raises PT to Street high on streaming domination ** DraftKings Inc DKNG.O: down 5.0% BUZZ-Slides on report of discounted equity offering ** Bristol-Myers Squibb Co BMY.N: up 1.1% BUZZ-Rises after Opdivo combo meets main goal in late-stage study ** Sorrento Therapeutics Inc SRNE.O: up 2.1% BUZZ-Rises as unit posts strong Q3 sales ** Abbott Laboratories ABT.N: up 1.0% BUZZ-Wells Fargo hikes PT, Q3 estimates on demand recovery ** AnPac Bio-Medical Science Co Ltd ANPC.O: up 1.2% BUZZ-Jumps on securing $8 mln funding in China ** Aytu BioScience Inc AYTU.O: down 11.3% BUZZ-Drops after fourth-quarter loss ** TransEnterix Inc TRXC.A: up 18.6% BUZZ-Rises as Japan's hospital to use co's surgical system ** RAVE Restaurant Group Inc RAVE.O: up 190.9% BUZZ-Quadruples on new hiring to lead expansion ** Citius Pharmaceuticals Inc CTXR.O: up 5.9% BUZZ-Citius Pharma rises on licensing agreement for stem cell therapy ** AzurRx BioPharma Inc AZRX.O: up 0.7% BUZZ-Rises as CEO reassures on cash position ** Eli Lilly and Co LLY.N: up 2.2% BUZZ-Gains after applying for FDA emergency use for COVID-19 treatment ** Peck Company Holdings Inc PECK.O: up 67.8% BUZZ-Surges on contract for solar project in Rhode Island ** Vaxart Inc VXRT.O: up 3.3% BUZZ-Up on expanding manufacturing deal for COVID-19 vaccine candidate ** Sunworks Inc SUNW.O: up 52.9% BUZZ-Surges on $10 mln commercial, agriculture projects ** Phunware Inc PHUN.O: up 26.0% BUZZ-Rises on Honeywell contracts ** Paychex Inc PAYX.O: up 1.4% BUZZ-Rises as Q1 results beat The 11 major S&P 500 sectors: Communication Services Eikon search string for individual stock moves: STXBZ The Day Ahead newsletter: http://tmsnrt.rs/2ggOmBi The Morning News Call newsletter: http://tmsnrt.rs/2fwPLTh Wall Street's main indexes jumped on Wednesday, recouping losses from the previous session triggered by President Donald Trump's abrupt call to end stimulus talks, while Levi Strauss hit a four-month high after posting a surprise quarterly profit. ET, the Dow Jones Industrial Average .DJI was up 1.20% at 28,107.28.
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44bb9523-5b15-4357-abdf-261055e1aeff
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718976.0
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2020-10-05 00:00:00 UTC
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Snowflake Due to Settle Down Any Day Now
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DDOG
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https://www.nasdaq.com/articles/snowflake-due-to-settle-down-any-day-now-2020-10-05
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nan
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nan
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Snowflake (NYSE:SNOW) is one of many initial public offerings this year that fared well. This software application firm arguably performed the best from a valuation and market capitalization perspective. Despite falling 28.8% from its 52-week high after the IPO, the company is still worth $62.2 billion.
Source: rblfmr / Shutterstock.com
When investors learned that Berkshire Hathaway (NYSE:BRK.B) backed Snowflake, it helped generate euphoric buying that sent the stock to over $270. Berkshire disclosed that it added to its position and owned 2.15% of the company, or 6.12 million shares.
If the technology sector is amid a light correction, when should investors buy this stock?
SNOW Stock Initial Catalyst May Fade
Berkshire’s investment in Snowflake is a near-term catalyst that ensured the stock’s IPO success out of the gate. But investors should not assume the great Warren Buffett authorized the investment. Charlie Munger may not have, either. Ted Weschler or Todd Combs manages a portion of Berkshire and might have decided on the investment. Once markets realize this, the stock may fade from here and trade on fundamentals.
Snowflake is a data management solution for the cloud. It built a cloud data warehouse in 2014, offered a cloud data platform for workload and user expansion in 2019, and is a data cloud provider for content vector and network effects in 2020. In the second quarter, revenue grew by 121%. Net retention topped 158% as it ended the quarter with 3,117 customers.
7 Maturing Growth Stocks to Buy You Can Rely On
$133 million in revenue in Q2/2021 caps its 121% year-over-year growth. Despite this strength, net loss topped $178 million for the fiscal year ended Jan. 31, 2019. That followed with a $348.5 million loss for the year ended Jan. 31, 2020.
The increasing losses suggest that as its business gets larger, losses mount. Yet Snowflake operates on customer credits. This is cashed in if a customer uses resources. Customers may choose from four editions: Standard, Enterprise, Business Critical, and Virtual Private.
Opportunity
Increasing customer growth suggests that the company’s revenue will keep increasing in the triple-digit percent range. Its Cloud Data Platform gives it an addressable market of $81 billion (per SEC filing). According to IDC, its Analytics Data Management and Integration Platforms and Business Intelligence and Analytics Tools have a combined value of $56 billion this year. By 2023, the market value is $84 billion.
Snowflake hinted it will continue losing money as it invests significantly to grow both its domestic and international markets. Its research and development, sales and marketing, and partner ecosystem investments will drive its growth. As its platform advances, the company’s appeal to customers will grow.
At its current valuation of 154 times sales, markets are betting that newly acquired customers will drive its growth. Furthermore, its existing customer base will increase its usage of its Data Cloud. Expanding its global footprint and data sharing will accelerate user activity. After the stock dips to a $62.2 billion market cap, the stock may not seem so expensive.
Related Investments
Investors may consider Datadog (NASDAQ:DDOG) instead. It trades at half the market capitalization even though the stock soared by 14% in the last week. Datadog launched Error Tracker in August. Its Continuous Profile product is a low-overhead app code profiler. Compliance Monitoring, which it launched on Aug. 11, is a tool that facilitates compliance of a production environment. It also automates “audit evidence collection, and catch misconfigurations that leave your organization vulnerable to attacks.”
Salesforce (NYSE:CRM), which always trades at unfavorable valuations, is valued at a $220.7 billion market capitalization. The stock is off 12.9% from 52-week highs. The company has a 9.9% passive stake (4.25 million shares) in Snowflake.
Snowflake is a post-IPO stock whose volatility may increase as buyers and sellers decide on its price. Once that settles, technology investors should take a look at this software company.
On the date of publication, Chris Lau did not have (either directly or indirectly) any positions in the securities mentioned in this article.
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The post Snowflake Due to Settle Down Any Day Now 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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Related Investments Investors may consider Datadog (NASDAQ:DDOG) instead. Source: rblfmr / Shutterstock.com When investors learned that Berkshire Hathaway (NYSE:BRK.B) backed Snowflake, it helped generate euphoric buying that sent the stock to over $270. Snowflake hinted it will continue losing money as it invests significantly to grow both its domestic and international markets.
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Related Investments Investors may consider Datadog (NASDAQ:DDOG) instead. InvestorPlace - Stock Market News, Stock Advice & Trading Tips Snowflake (NYSE:SNOW) is one of many initial public offerings this year that fared well. SNOW Stock Initial Catalyst May Fade Berkshire’s investment in Snowflake is a near-term catalyst that ensured the stock’s IPO success out of the gate.
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Related Investments Investors may consider Datadog (NASDAQ:DDOG) instead. InvestorPlace - Stock Market News, Stock Advice & Trading Tips Snowflake (NYSE:SNOW) is one of many initial public offerings this year that fared well. SNOW Stock Initial Catalyst May Fade Berkshire’s investment in Snowflake is a near-term catalyst that ensured the stock’s IPO success out of the gate.
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Related Investments Investors may consider Datadog (NASDAQ:DDOG) instead. InvestorPlace - Stock Market News, Stock Advice & Trading Tips Snowflake (NYSE:SNOW) is one of many initial public offerings this year that fared well. 7 Maturing Growth Stocks to Buy You Can Rely On $133 million in revenue in Q2/2021 caps its 121% year-over-year growth.
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00d00006-ce7f-4de0-a4c7-b1b988d8404b
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718977.0
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2020-10-05 00:00:00 UTC
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Datadog Stock: Is It a Buy at All-Time Highs?
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DDOG
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https://www.nasdaq.com/articles/datadog-stock%3A-is-it-a-buy-at-all-time-highs-2020-10-05
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nan
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nan
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Datadog's (NASDAQ: DDOG) stock recently hit an all-time high after the company announced a strategic partnership with Microsoft (NASDAQ: MSFT).
Microsoft will integrate Datadog's dashboard, which helps companies analyze their full infrastructure, into its cloud platform Azure as a "first-class service." This means companies can set up Datadog automatically on Azure instead of manually migrating their data.
This certainly sounds like another big win for Datadog, which has nearly quadrupled in value since its IPO last September. But is its stock still worth buying at these levels?
Image source: Getty Images.
What does Datadog do?
Many large companies host their data across a wide range of servers, cloud services, apps, and software services. Monitoring all that data simultaneously can be difficult, so Datadog's platform breaks down the silos and pulls the fragmented data onto a single dashboard.
Over 400 platforms, including Cisco's Meraki, Amazon's (NASDAQ: AMZN) cloud-based tools, and Microsoft's Active Directory, already support Datadog's software "out of the box" -- which means they're ready to feed data to its dashboard.
How fast is Datadog growing?
Datadog's revenue rose 83% to $362.8 million in 2019, but its net loss widened from $10.8 million to $16.7 million. In the first half of 2020, its revenue rose 77% year-over-year to $271.3 million, and it squeezed out a GAAP profit of $6.8 million, compared to a loss of $13.4 million a year earlier. On a non-GAAP basis, it posted a profit of $36.5 million, compared to a loss of $12.3 million a year ago.
Datadog's newfound profitability is impressive, since other silo-busting software companies like Snowflake and JFrog -- which both recently went public -- remain unprofitable.
Datadog expects its revenue to rise 56%-58% for the full year, and to post non-GAAP earnings of $0.11-$0.13 per share, compared to a loss of $0.01 per share in 2018. Analysts expect its revenue and non-GAAP earnings to rise 35% and 25%, respectively, next year.
How could Microsoft help Datadog?
Datadog's total number of customers with annual recurring revenue of at least $100,000 grew 71% year-over-year to 594 at the end of the second quarter. It also recently added one-click integration to Amazon Web Services (AWS), the world's largest cloud infrastructure platform.
Image source: Getty Images.
Locking in Microsoft's Azure, the world's second-largest cloud platform clearly complements Datadog's integration with AWS and other cloud services. It also reduces the threat of direct competition from Microsoft and Amazon's own cloud infrastructure monitoring tools.
By strengthening its ties to Azure and AWS, Datadog can widen its moat against other high-growth rivals like Splunk and Elastic, as well as diversified tech giants like Cisco and IBM.
Corey Sanders, Azure's corporate VP, declared Azure was the "first cloud to enable a seamless configuration and management experience for customers to use partner solutions like Datadog." However, that statement also suggests Microsoft is leaving the door open for similar deals with Datadog's rivals -- so investors shouldn't mistake this "strategic partnership" for an exclusive deal.
Beware the expectations and valuations
Datadog's stock has generated impressive returns over the past year, but it's now valued at over 40 times next year's sales. That frothy valuation, which bakes in decades of robust growth, could limit the stock's upside potential.
That being said, Datadog's streamlined approach to monitoring data, its expanding customer base, and its tight integration into the world's top cloud platforms could all justify that premium valuation. I personally believe Datadog's stock is still worth nibbling on at these levels, and that its deal with Microsoft highlights the growing market demand for unified data silo-busting services.
10 stocks we like better than Datadog
When investing geniuses David and Tom Gardner have 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.*
David and Tom 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
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*Stock Advisor returns as of September 24, 2020
Â
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool's board of directors. Leo Sun owns shares of Amazon and Cisco Systems. The Motley Fool owns shares of and recommends Amazon, Datadog, Elastic N V, Microsoft, and Splunk. The Motley Fool recommends Snowflake Inc and recommends the following options: long January 2021 $85 calls on Microsoft, short January 2021 $115 calls on Microsoft, short January 2022 $1940 calls on Amazon, and long January 2022 $1920 calls on Amazon. 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 recently hit an all-time high after the company announced a strategic partnership with Microsoft (NASDAQ: MSFT). Over 400 platforms, including Cisco's Meraki, Amazon's (NASDAQ: AMZN) cloud-based tools, and Microsoft's Active Directory, already support Datadog's software "out of the box" -- which means they're ready to feed data to its dashboard. That being said, Datadog's streamlined approach to monitoring data, its expanding customer base, and its tight integration into the world's top cloud platforms could all justify that premium valuation.
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Datadog's (NASDAQ: DDOG) stock recently hit an all-time high after the company announced a strategic partnership with Microsoft (NASDAQ: MSFT). Datadog expects its revenue to rise 56%-58% for the full year, and to post non-GAAP earnings of $0.11-$0.13 per share, compared to a loss of $0.01 per share in 2018. The Motley Fool owns shares of and recommends Amazon, Datadog, Elastic N V, Microsoft, and Splunk.
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Datadog's (NASDAQ: DDOG) stock recently hit an all-time high after the company announced a strategic partnership with Microsoft (NASDAQ: MSFT). Locking in Microsoft's Azure, the world's second-largest cloud platform clearly complements Datadog's integration with AWS and other cloud services. I personally believe Datadog's stock is still worth nibbling on at these levels, and that its deal with Microsoft highlights the growing market demand for unified data silo-busting services.
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Datadog's (NASDAQ: DDOG) stock recently hit an all-time high after the company announced a strategic partnership with Microsoft (NASDAQ: MSFT). How could Microsoft help Datadog? See the 10 stocks
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ce8e28be-5892-4cb3-9e5a-f59bee61f33c
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718978.0
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2020-10-02 00:00:00 UTC
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Ignore Tesla: Here Are 3 Better Stocks
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DDOG
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https://www.nasdaq.com/articles/ignore-tesla%3A-here-are-3-better-stocks-2020-10-02
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nan
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nan
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This year has been a wild ride for Tesla (NASDAQ: TSLA) shareholders. The company hit its much-anticipated fourth consecutive quarter of profitability and announced a much-ballyhooed 5-for-1 stock split. Shares have gained more than 400% so far this year, but a look under the hood suggests there's still a long drive ahead.
Revenue of $6.04 billion in the second quarter of 2020 declined 5% year over year, and it was sales of government-issued energy credits for producing zero-emission vehicles -- which amounted to $428 million -- that provided all the profits for the second quarter.Â
Don't get me wrong: I'm a happy Tesla shareholder, but I also recognize that the risky company -- along with its outspoken founder, Elon Musk -- might not be everyone's cup of tea. Given the relatively low bar set by its financial performance, there are plenty of other stocks out there with revenue that is growing much faster than the electric-vehicle maker's, while also offering fantastic long-term opportunities. Here are three worth considering.
Image source: Getty Images.
1. Teladoc Health: Disrupting medical care as we know it
With the pandemic as a backdrop, it's easy to understand why patients would be turning in droves to telemedicine options, which lets them see a healthcare professional via a secure videoconferencing app without ever leaving their home. The industry was already emerging at a brisk pace, but fears of contracting the coronavirus shifted that growth into overdrive. As the global leader in virtual care, Teladoc Health (NYSE: TDOC) was well-positioned to benefit from the trend.
For 2019, Teladoc's revenue grew to $553 million, up 32% year over year, while its losses improved. At the same time, its total patient visits jumped 57% to 4.1 million.Â
Fast-forward to 2020, and its business has grown exponentially. Just in the first six months of this year, revenue grew 63% to $422 million, and Teladoc continues to edge closer to profitability. Even more impressive was its number of total patient visits, which soared 144% to 4.8 million -- more than all of last year.Â
Once patients have experienced the ease and convenience of a telehealth visit, they'll likely stick with it. A recent survey of 1,800 patients polled by Doctor.com found that half of the respondents had used telehealth over the past three months, and 71% said they would use it today. In addition, 83% of the patients said they would continue to use telehealth even after the pandemic fades.Â
Image source: Getty Images.
2. Square: Creating a digital payments empire
When investors think of Square (NYSE: SQ), they no doubt picture the company's namesake payments dongle that plugged into mobile devices, enabling a whole generation of small businesses. That pocket-sized device provided the foundation for what has grown into a fast-growing payments empire.
Cash App, the company's peer-to-peer payment app, is a small but growing part of Square's business, eliciting no fewer than 70 mentions in the company's second-quarter shareholder letter. Cash App registered more than 30 million monthly users, with 7 million using the optional Cash Card in June, double the amount in the previous-year period.
This is important because the app acts as a gateway to the full range of Square's portfolio of products and services, which includes Cash App, Cash Card, Boost, direct deposit, and even bitcoin investing. Customers that use two or more products have a higher lifetime value, generating two to three times as much revenue as those that merely stick with the Cash App.Â
The stickiness of its ecosystem is working. Second-quarter revenue of $1.92 billion jumped 64% year over year. While its gross payment volume (GPV) slipped 15% due to the pandemic, Cash App was the headliner, delivering revenue of $1.2 billion, soaring 361% year over year, while gross profit of $281 million increased 167%. Customer transactions increased to 15 per month, on average, an increase of nearly 50%.
The combination of accelerating customer acquisition, expanding product adoption, and growing frequency of use all point to Cash App driving Square's business for years to come.
Image source: Getty Images.
3. Datadog: Monitoring the cloud and more
Similar to the greater adoption of digital payment apps and telehealth solutions, cloud computing -- which was already experiencing robust growth prior to the pandemic -- shifted into overdrive this year. With more and more business being conducted in the cloud, a company's ongoing success often depends on the smooth operation of its websites and apps.
That's where Datadog (NASDAQ: DDOG) comes in. The software-as-a-service (SaaS) company provides real-time analytics and monitoring services that help ensure companies are putting their best foot forward, digitally speaking, and that their cloud-based operations continue without a hitch.
That's not all. In addition to monitoring servers, databases, tools, and services, the artificial intelligence algorithms can spot anomalies and predict failures, and notify customers before they go critical, resulting in costly outages.
Customers are clamoring for the security Datadog provides. In the second quarter, revenue grew 68% year over year to $140 million and the company also generated its second consecutive quarterly profit, a rarity among high-tech companies that are only about a year old.Â
Datadog's rapidly growing customer base is a key component of its success, up 37% year over year. Even more impressive was the increase of enterprise customers contributing in excess of $100,000, which grew to 1,015, up 71%. At the same time, existing customers are spending significantly more, as evidenced by its dollar-based retention rate of 130% -- meaning existing clients are spending 30% more now than they did a year ago.
The company was already thriving prior to the pandemic, but accelerating adoption of the cloud has kicked that into overdrive.
Data by YCharts
You get what you pay for
These companies all share a common trait: they are high-risk, high-reward investments, similar to Tesla. Thus, it isn't surprising that they don't necessarily come cheap. Datadog, Teladoc, and Square are selling at 54, 18, and 10 times forward sales, respectively -- when a good price-to-sales (P/S) ratio is between 1 and 2.
Additionally, only Datadog is profitable. Each of these highfliers is spending heavily to increase its market share, as the lifetime value of each new customer easily outstrips the current cost of acquisition.
That said, with solid top-line growth rates and fantastic long-term opportunities, each of these companies would be a good choice if Tesla isn't right for you -- or even if it is.
10 stocks we like better than Teladoc Health
When investing geniuses David and Tom Gardner have 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.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Teladoc Health wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
Â
*Stock Advisor returns as of September 24, 2020
Â
Danny Vena owns shares of Datadog, Square, Teladoc Health, and Tesla. The Motley Fool owns shares of and recommends Datadog, Square, Teladoc Health, and Tesla. 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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That's where Datadog (NASDAQ: DDOG) comes in. Given the relatively low bar set by its financial performance, there are plenty of other stocks out there with revenue that is growing much faster than the electric-vehicle maker's, while also offering fantastic long-term opportunities. Teladoc Health: Disrupting medical care as we know it With the pandemic as a backdrop, it's easy to understand why patients would be turning in droves to telemedicine options, which lets them see a healthcare professional via a secure videoconferencing app without ever leaving their home.
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That's where Datadog (NASDAQ: DDOG) comes in. While its gross payment volume (GPV) slipped 15% due to the pandemic, Cash App was the headliner, delivering revenue of $1.2 billion, soaring 361% year over year, while gross profit of $281 million increased 167%. In the second quarter, revenue grew 68% year over year to $140 million and the company also generated its second consecutive quarterly profit, a rarity among high-tech companies that are only about a year old. Datadog's rapidly growing customer base is a key component of its success, up 37% year over year.
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That's where Datadog (NASDAQ: DDOG) comes in. Revenue of $6.04 billion in the second quarter of 2020 declined 5% year over year, and it was sales of government-issued energy credits for producing zero-emission vehicles -- which amounted to $428 million -- that provided all the profits for the second quarter. Don't get me wrong: I'm a happy Tesla shareholder, but I also recognize that the risky company -- along with its outspoken founder, Elon Musk -- might not be everyone's cup of tea. While its gross payment volume (GPV) slipped 15% due to the pandemic, Cash App was the headliner, delivering revenue of $1.2 billion, soaring 361% year over year, while gross profit of $281 million increased 167%.
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That's where Datadog (NASDAQ: DDOG) comes in. In addition, 83% of the patients said they would continue to use telehealth even after the pandemic fades. Image source: Getty Images. The combination of accelerating customer acquisition, expanding product adoption, and growing frequency of use all point to Cash App driving Square's business for years to come.
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13173616-8a89-4224-8962-093a170376e4
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718979.0
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2020-10-01 00:00:00 UTC
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How Does the Nasdaq Keep Crushing the Stock Market?
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DDOG
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https://www.nasdaq.com/articles/how-does-the-nasdaq-keep-crushing-the-stock-market-2020-10-01
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nan
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nan
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Investors in the Nasdaq Composite (NASDAQINDEX: ^IXIC) were flying high again on Thursday. The index of stocks on the Nasdaq Stock Market once again dramatically outpaced the rest of the market, rising almost 1.5% compared to just a 0.1% gain for the Dow Jones Industrials.
From day to day, of course, anything can happen. But this has been a consistent theme throughout 2020. So far this year, the Nasdaq is up a stunning 26%. The Dow's actually down 2% on the year.
So what is it that's lifting the Nasdaq to such unprecedented heights? There's a combination of factors at play to give the Nasdaq its day in the sun.
Image source: Getty Images.
The old guard is pulling its weight
One key element of the Nasdaq's success has been how well some of its biggest components have done. Like most market benchmarks, the Nasdaq Composite is weighted by market capitalization. That gives the top stocks far greater influence over the overall index than their smaller peers.
Ordinarily, when companies get big, they stop growing as fast. That's because most big businesses have already tapped into their most obvious growth opportunities, and their addressable markets have started to mature.
Yet on Thursday, investors once again saw huge outperformance from some of the biggest companies on the exchange. Netflix (NASDAQ: NFLX) weighed in with a 5% rise, while Tesla (NASDAQ: TSLA) picked up 4%.
That's been the case all year long. Tesla's up a whopping 434% on the year. Amazon.com (NASDAQ: AMZN) has added 74%, while Netflix is higher by 63%, and Apple (NASDAQ: AAPL) is up 59%.
What those big stocks do has a huge effect on the overall Nasdaq. But there's a greater paradigm shift going on that's making even those giant tech companies look up and pay attention.
COVID-19 has made cutting-edge tech more important than ever
Even if big stocks have the most mathematical impact on the Nasdaq, small companies arguably have more of a positive psychological effect. In particular, the way in which high-growth tech start-ups not only defied the coronavirus bear market but thrived during it shows the value of resilient business models.
Consider how these upstarts have done:
Zoom Video Communications (NASDAQ: ZM) has become the single most essential tool for businesses and ordinary consumers alike in the COVID-19 world. Its stock is up more than 600% in 2020.
Cybersecurity specialist CrowdStrike Holdings (NASDAQ: CRWD) has transformed the way people think about protecting digital assets from external attacks, and businesses and investors alike have recognized the demand for that protection. CrowdStrike is up 186% this year.
This week, data analytics and monitoring-platform provider Datadog (NASDAQ: DDOG) announced a huge new collaboration with Microsoft (NASDAQ: MSFT), sending shares higher. Datadog's return for 2020? 175%.
Moreover, the performance of these companies is restoring investor confidence in the overall stock market. Even as big-name businesses have had trouble during the coronavirus crisis, these aggressive players in fast-growing industries have shown that you can find individual companies with strong prospects. Moreover, their share prices can and will go up as they find success.
The Nasdaq has become the focal point of attention for growth investors looking for great stocks. That's not to say you can't find good investments elsewhere, but at least in 2020, the Nasdaq's been the place to be.
Find out why Zoom Video Communications is one of the 10 best stocks to buy now
Motley Fool co-founders Tom and David Gardner have 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.*
Tom and David just revealed their ten top stock picks for investors to buy right now. Zoom Video Communications is on the list -- but there are nine others you may be overlooking.
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*Stock Advisor returns as of September 24, 2020
Â
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool's board of directors. Dan Caplinger owns shares of Apple. The Motley Fool owns shares of and recommends Amazon, Apple, CrowdStrike Holdings, Inc., Datadog, Microsoft, Netflix, Tesla, and Zoom Video Communications and recommends the following options: long January 2021 $85 calls on Microsoft, short January 2021 $115 calls on Microsoft, short January 2022 $1940 calls on Amazon, and long January 2022 $1920 calls on Amazon. 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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This week, data analytics and monitoring-platform provider Datadog (NASDAQ: DDOG) announced a huge new collaboration with Microsoft (NASDAQ: MSFT), sending shares higher. COVID-19 has made cutting-edge tech more important than ever Even if big stocks have the most mathematical impact on the Nasdaq, small companies arguably have more of a positive psychological effect. Even as big-name businesses have had trouble during the coronavirus crisis, these aggressive players in fast-growing industries have shown that you can find individual companies with strong prospects.
|
This week, data analytics and monitoring-platform provider Datadog (NASDAQ: DDOG) announced a huge new collaboration with Microsoft (NASDAQ: MSFT), sending shares higher. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool's board of directors.
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This week, data analytics and monitoring-platform provider Datadog (NASDAQ: DDOG) announced a huge new collaboration with Microsoft (NASDAQ: MSFT), sending shares higher. The index of stocks on the Nasdaq Stock Market once again dramatically outpaced the rest of the market, rising almost 1.5% compared to just a 0.1% gain for the Dow Jones Industrials. The Motley Fool owns shares of and recommends Amazon, Apple, CrowdStrike Holdings, Inc., Datadog, Microsoft, Netflix, Tesla, and Zoom Video Communications and recommends the following options: long January 2021 $85 calls on Microsoft, short January 2021 $115 calls on Microsoft, short January 2022 $1940 calls on Amazon, and long January 2022 $1920 calls on Amazon.
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This week, data analytics and monitoring-platform provider Datadog (NASDAQ: DDOG) announced a huge new collaboration with Microsoft (NASDAQ: MSFT), sending shares higher. What those big stocks do has a huge effect on the overall Nasdaq. Its stock is up more than 600% in 2020.
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3674ed50-39fb-495e-b859-8b2ae1143a5a
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718980.0
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2020-10-01 00:00:00 UTC
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BUZZ-U.S. STOCKS ON THE MOVE-XPO Logistics, VerifyMe, Workday, LogicBio Therapeutics
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DDOG
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https://www.nasdaq.com/articles/buzz-u.s.-stocks-on-the-move-xpo-logistics-verifyme-workday-logicbio-therapeutics-2020-10
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nan
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nan
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Eikon search string for individual stock moves: STXBZ
The Day Ahead newsletter: http://tmsnrt.rs/2ggOmBi
The Morning News Call newsletter: http://tmsnrt.rs/2fwPLTh
Wall Street's main indexes rose on the first day of the fourth quarter on Thursday as investors bet in favor of more fiscal stimulus after data showed the pace of a domestic economic rebound was slowing..N
At 12:36 ET, the Dow Jones Industrial Average .DJI was up 0.40% at 27,893.64. The S&P 500 .SPX was up 0.44% at 3,377.82 and the Nasdaq Composite .IXIC was up 0.85% at 11,262.442. The top three S&P 500 .PG.INX percentage gainers: ** ETSY Inc ETSY.O, up 7.2% ** L Brands Inc LB.N, up 4.5% ** Gap Inc GPS.N, up 4.3% The top three S&P 500 .PL.INX percentage losers: ** Valero Energy Corp VLO.N, down 7.8% ** Halliburton Co HAL.N, down 6.5% ** Abiomed Inc ABMD.O, down 6.1% The top three NYSE .PG.N percentage gainers: ** Amer Eq Inv Life AEL.N, up 39% ** Container Store Group Inc TCS.N, up 16.3% ** SailPoint Technologies Holdings Inc SAIL.N, up 13.5% The top three NYSE .PL.N percentage losers: ** Bluegreen Vacations Holding Corp BVH.N, down 22.3% ** Ambow Education Holding Ltd AMBO.N, down 21.2% ** Boqii Holding Ltd BQ.N, down 14.9% The top three Nasdaq .PG.O percentage gainers: ** Solid Biosciences Inc SLDB.O, up 111.3% ** Pulmonx Corp LUNG.O, up 107.2% ** Thryv Holdings Inc THRY.O, up 81.4% The top three Nasdaq .PL.O percentage losers: ** LogicBio Therapeutics Inc LOGC.O, down 32% ** Benitec Biopharma Inc BNTC.O, down 25.9% ** Kismet Acquisition One Corp KSMTU.O, down 21.5% ** LogicBio Therapeutics Inc LOGC.O: down 32.0%
BUZZ-Slumps on deep-discounted stock offering
** XPO Logistics Inc XPO.N: up 1.4%
BUZZ-Up after co's app downloads doubles
** VerifyMe Inc VRME.O: up 2.6%
BUZZ-Jumps on reviewing potential acquisition opportunities
** Workday Inc WDAY.O: up 1.5%
BUZZ-Rises as Citigroup upgrades on growth opportunities
** Triton International Ltd TRTN.N: down 6.6%
BUZZ-Drops on secondary stock offering by selling shareholders
** PAR Technology Corp PAR.N: down 11.1%
BUZZ-Slides on equity offering
** Genfit SA GNFT.O: down 15.9%
BUZZ-Drops on workforce reduction, bigger loss
** Draftkings Inc DKNG.O: up 5.1%
BUZZ-Hits record high on sport betting deal with Philadelphia Eagles
** Wells Fargo & Co WFC.N: down 0.7%
** Citigroup Inc C.N: down 0.5%
** Goldman Sachs Group Inc GS.N: down 0.1%
** Morgan Stanley MS.N: down 0.5%
** Bank of America Corp BAC.N: down 0.1%
BUZZ-U.S. big banks fall as U.S. Fed to extend curbs on capital distribution
** Lixiang Education Holding Co Ltd LXEH.O: down 17.3%
BUZZ-Shares plunge nearly 25% in Nasdaq debut
** Exxon Mobil Corp XOM.N: down 3.4%
** Chevron Corp CVX.N: down 1.6%
** TechnipFMC PLC FTI.N: down 1.9%
** Halliburton Co HAL.N: down 6.5%
** Marathon Petroleum Corp MPC.N: down 5.4%
** Phillips 66 PSX.N: down 3.4%
** Diamondback Energy Inc FANG.O: down 4.5%
** Marathon Oil Corp MRO.N: down 3.7%
** ConocoPhillips COP.N: down 2.2%
** Apache Corp APA.O: down 4.1%
** Devon Energy Corp DVN.N: down 2.4%
** Occidental Petroleum Corp OXY.N: down 3.8%
** Patterson-UTI Energy Inc PTEN.O: down 6.7%
BUZZ-U.S. energy shares slide on 5% drop in U.S. crude
** Textron Inc TXT.N: down 2.3%
BUZZ-Falls as Cowen downgrades on bleak recovery prospects
** Datadog Inc DDOG.O: up 1.0%
BUZZ-Rises as brokerage hikes PT to Street high on Microsoft partnership
** AMAG Pharmaceuticals Inc AMAG.O: up 44.6%
BUZZ-Surges as Apollo-backed Covis to buy co for $647 mln
** CareDx Inc CDNA.O: up 6.6%
BUZZ-Reaches record high on Medicare coverage decision for AlloSure heart
** Amazon.com Inc AMZN.O: up 1.3%
BUZZ-Pivotal says ad business underappreciated, boosts PT to Street high
** Houghton Mifflin Harcourt Co HMHC.O: up 10.7%
BUZZ-Soars on restructuring plan; to slash 22% jobs
** Cyclerion Therapeutics Inc CYCN.O: up 4.4%
BUZZ-Up on sickle cell, nervous system disease study updates
** Skyworks Solutions Inc SWKS.O: up 1.8%
BUZZ-Cowen hikes PT as OEMs seek to fill Huawei void
** VAALCO Energy Inc EGY.N: up 11.4%
BUZZ-Jumps on Q3 production outlook
** Bed Bath & Beyond Inc BBBY.O: up 33.4%
BUZZ-Surges as co swings to quarterly profit
** Abbott Laboratories ABT.N: up 0.6%
BUZZ-Up after Air Canada says finalizing order for 25,000 COVID-19 tests
** Pennsylvania Real Estate Investment Trust: PEI.N: up 1.0%
BUZZ-Up on securing one-month extension to liquidity facility
** Advanced Emissions Solutions Inc ADES.O: up 25.4%
BUZZ-Surges on 15-year carbon supply contract
** Enlivex Therapeutics Ltd ENLV.O: up 45.8%
BUZZ-Surges on positive data from potential COVID-19 treatment
** Gridsum Holding Inc GSUM.O: up 35.5%
BUZZ-Soars on take-private offer
** American Equity Investment Life Holding Co AEL.N: up 38.9%
BUZZ-Jumps on report of Athene, MassMutual $3-bln-plus takeover bid
** Papa John's International Inc PZZA.O: up 2.4%
BUZZ-KeyBanc starts with 'overweight' rating
** Genworth Financial Inc GNW.N: down 3.4%
BUZZ-Drops on extension of merger agreement with Oceanwide
** Zillow Group Inc ZG.O: up 4.0%
BUZZ-Brokerages hike PTs on growth prospects
** Callon Petroleum Co CPE.N: up 2.7%
BUZZ-Jumps after signing asset monetization deals
** Solid Biosciences Inc SLDB.O: up 111.3%
BUZZ-Surges after FDA allows gene therapy trial to resumeUSN
** American Airlines Group Inc AAL.O: up 1.5%
** United Airlines Holdings Inc UAL.O: up 0.2%
** Delta Air Line Inc DAL.N: up 0.7%
** Southwest Airlines Co LUV.N: up 0.1%
** JetBlue Airways Corp JBLU.N: up 0.5%
BUZZ-U.S. airlines: Up on talks of federal aid extension
** Boeing Co BA.N: up 1.4%
BUZZ-Up after FAA conducts 737 MAX test flight
** ProPhase Labs Inc PRPH.O: up 9.8%
BUZZ-Up on plans to acquire CLIA certified labs for COVID-19 testing
** Lonestar Resources LONE.O: down 12.3%
BUZZ-Slumps after bankruptcy filing
** Tesla Inc TSLA.O: up 2.9%
BUZZ-Set to open at 1-1/2 week high, cuts China Model 3 price
** AMAG Pharmaceuticals Inc AMAG.O: up 44.6%
BUZZ-Surges on report of potential takeover deal
** PepsiCo Inc PEP.O: up 0.9%
BUZZ-Gains on Q3 results, upbeat outlook as at-home snacking jumps
** Alibaba Group Holding Ltd BABA.N: down 1.4%
BUZZ-Up as Needham hikes PT on growth prospects
** LogicBio Therapeutics Inc LOGC.O: down 32.0%
BUZZ-Slumps on proposed stock offering
** Mastercard Inc MA.N: up 1.5%
BUZZ-JPMorgan hikes PT and estimates on positive growth trends
** Selecta Biosciences Inc SELB.O: down 32.9%
BUZZ-Plunges as drug fails to meet trial main goal
The 11 major S&P 500 sectors:
Communication Services
.SPLRCL
up 1.18%
Consumer Discretionary
.SPLRCD
up 1.25%
Consumer Staples
.SPLRCS
up 0.57%
Energy
.SPNY
down 2.95%
Financial
.SPSY
up 0.36%
Health
.SPXHC
down 0.19%
Industrial
.SPLRCI
up 0.29%
Information Technology
.SPLRCT
up 0.68%
Materials
.SPLRCM
down 0.05%
Real Estate
.SPLRCR
up 0.92%
Utilities
.SPLRCU
up 1.06%
(Compiled by Niket Nishant in Bengaluru)
((Niket.Nishant@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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The top three S&P 500 .PG.INX percentage gainers: ** ETSY Inc ETSY.O, up 7.2% ** L Brands Inc LB.N, up 4.5% ** Gap Inc GPS.N, up 4.3% The top three S&P 500 .PL.INX percentage losers: ** Valero Energy Corp VLO.N, down 7.8% ** Halliburton Co HAL.N, down 6.5% ** Abiomed Inc ABMD.O, down 6.1% The top three NYSE .PG.N percentage gainers: ** Amer Eq Inv Life AEL.N, up 39% ** Container Store Group Inc TCS.N, up 16.3% ** SailPoint Technologies Holdings Inc SAIL.N, up 13.5% The top three NYSE .PL.N percentage losers: ** Bluegreen Vacations Holding Corp BVH.N, down 22.3% ** Ambow Education Holding Ltd AMBO.N, down 21.2% ** Boqii Holding Ltd BQ.N, down 14.9% The top three Nasdaq .PG.O percentage gainers: ** Solid Biosciences Inc SLDB.O, up 111.3% ** Pulmonx Corp LUNG.O, up 107.2% ** Thryv Holdings Inc THRY.O, up 81.4% The top three Nasdaq .PL.O percentage losers: ** LogicBio Therapeutics Inc LOGC.O, down 32% ** Benitec Biopharma Inc BNTC.O, down 25.9% ** Kismet Acquisition One Corp KSMTU.O, down 21.5% ** LogicBio Therapeutics Inc LOGC.O: down 32.0% BUZZ-Slumps on deep-discounted stock offering ** XPO Logistics Inc XPO.N: up 1.4% BUZZ-Up after co's app downloads doubles ** VerifyMe Inc VRME.O: up 2.6% BUZZ-Jumps on reviewing potential acquisition opportunities ** Workday Inc WDAY.O: up 1.5% BUZZ-Rises as Citigroup upgrades on growth opportunities ** Triton International Ltd TRTN.N: down 6.6% BUZZ-Drops on secondary stock offering by selling shareholders ** PAR Technology Corp PAR.N: down 11.1% BUZZ-Slides on equity offering ** Genfit SA GNFT.O: down 15.9% BUZZ-Drops on workforce reduction, bigger loss ** Draftkings Inc DKNG.O: up 5.1% BUZZ-Hits record high on sport betting deal with Philadelphia Eagles ** Wells Fargo & Co WFC.N: down 0.7% ** Citigroup Inc C.N: down 0.5% ** Goldman Sachs Group Inc GS.N: down 0.1% ** Morgan Stanley MS.N: down 0.5% ** Bank of America Corp BAC.N: down 0.1% BUZZ-U.S. big banks fall as U.S. Fed to extend curbs on capital distribution ** Lixiang Education Holding Co Ltd LXEH.O: down 17.3% BUZZ-Shares plunge nearly 25% in Nasdaq debut ** Exxon Mobil Corp XOM.N: down 3.4% ** Chevron Corp CVX.N: down 1.6% ** TechnipFMC PLC FTI.N: down 1.9% ** Halliburton Co HAL.N: down 6.5% ** Marathon Petroleum Corp MPC.N: down 5.4% ** Phillips 66 PSX.N: down 3.4% ** Diamondback Energy Inc FANG.O: down 4.5% ** Marathon Oil Corp MRO.N: down 3.7% ** ConocoPhillips COP.N: down 2.2% ** Apache Corp APA.O: down 4.1% ** Devon Energy Corp DVN.N: down 2.4% ** Occidental Petroleum Corp OXY.N: down 3.8% ** Patterson-UTI Energy Inc PTEN.O: down 6.7% BUZZ-U.S. energy shares slide on 5% drop in U.S. crude ** Textron Inc TXT.N: down 2.3% BUZZ-Falls as Cowen downgrades on bleak recovery prospects ** Datadog Inc DDOG.O: up 1.0% BUZZ-Rises as brokerage hikes PT to Street high on Microsoft partnership ** AMAG Pharmaceuticals Inc AMAG.O: up 44.6% BUZZ-Surges as Apollo-backed Covis to buy co for $647 mln ** CareDx Inc CDNA.O: up 6.6% BUZZ-Reaches record high on Medicare coverage decision for AlloSure heart ** Amazon.com Inc AMZN.O: up 1.3% BUZZ-Pivotal says ad business underappreciated, boosts PT to Street high ** Houghton Mifflin Harcourt Co HMHC.O: up 10.7% BUZZ-Soars on restructuring plan; to slash 22% jobs ** Cyclerion Therapeutics Inc CYCN.O: up 4.4% BUZZ-Up on sickle cell, nervous system disease study updates ** Skyworks Solutions Inc SWKS.O: up 1.8% BUZZ-Cowen hikes PT as OEMs seek to fill Huawei void ** VAALCO Energy Inc EGY.N: up 11.4% BUZZ-Jumps on Q3 production outlook ** Bed Bath & Beyond Inc BBBY.O: up 33.4% BUZZ-Surges as co swings to quarterly profit ** Abbott Laboratories ABT.N: up 0.6% BUZZ-Up after Air Canada says finalizing order for 25,000 COVID-19 tests ** Pennsylvania Real Estate Investment Trust: PEI.N: up 1.0% BUZZ-Up on securing one-month extension to liquidity facility ** Advanced Emissions Solutions Inc ADES.O: up 25.4% BUZZ-Surges on 15-year carbon supply contract ** Enlivex Therapeutics Ltd ENLV.O: up 45.8% BUZZ-Surges on positive data from potential COVID-19 treatment ** Gridsum Holding Inc GSUM.O: up 35.5% BUZZ-Soars on take-private offer ** American Equity Investment Life Holding Co AEL.N: up 38.9% BUZZ-Jumps on report of Athene, MassMutual $3-bln-plus takeover bid ** Papa John's International Inc PZZA.O: up 2.4% BUZZ-KeyBanc starts with 'overweight' rating ** Genworth Financial Inc GNW.N: down 3.4% BUZZ-Drops on extension of merger agreement with Oceanwide ** Zillow Group Inc ZG.O: up 4.0% BUZZ-Brokerages hike PTs on growth prospects ** Callon Petroleum Co CPE.N: up 2.7% BUZZ-Jumps after signing asset monetization deals ** Solid Biosciences Inc SLDB.O: up 111.3% BUZZ-Surges after FDA allows gene therapy trial to resumeUSN ** American Airlines Group Inc AAL.O: up 1.5% ** United Airlines Holdings Inc UAL.O: up 0.2% ** Delta Air Line Inc DAL.N: up 0.7% ** Southwest Airlines Co LUV.N: up 0.1% ** JetBlue Airways Corp JBLU.N: up 0.5% BUZZ-U.S. airlines: Up on talks of federal aid extension ** Boeing Co BA.N: up 1.4% BUZZ-Up after FAA conducts 737 MAX test flight ** ProPhase Labs Inc PRPH.O: up 9.8% BUZZ-Up on plans to acquire CLIA certified labs for COVID-19 testing ** Lonestar Resources LONE.O: down 12.3% BUZZ-Slumps after bankruptcy filing ** Tesla Inc TSLA.O: up 2.9% BUZZ-Set to open at 1-1/2 week high, cuts China Model 3 price ** AMAG Pharmaceuticals Inc AMAG.O: up 44.6% BUZZ-Surges on report of potential takeover deal ** PepsiCo Inc PEP.O: up 0.9% BUZZ-Gains on Q3 results, upbeat outlook as at-home snacking jumps ** Alibaba Group Holding Ltd BABA.N: down 1.4% BUZZ-Up as Needham hikes PT on growth prospects ** LogicBio Therapeutics Inc LOGC.O: down 32.0% BUZZ-Slumps on proposed stock offering ** Mastercard Inc MA.N: up 1.5% BUZZ-JPMorgan hikes PT and estimates on positive growth trends ** Selecta Biosciences Inc SELB.O: down 32.9% BUZZ-Plunges as drug fails to meet trial main goal The 11 major S&P 500 sectors: Communication Services Eikon search string for individual stock moves: STXBZ The Day Ahead newsletter: http://tmsnrt.rs/2ggOmBi The Morning News Call newsletter: http://tmsnrt.rs/2fwPLTh Wall Street's main indexes rose on the first day of the fourth quarter on Thursday as investors bet in favor of more fiscal stimulus after data showed the pace of a domestic economic rebound was slowing..N At 12:36 ET, the Dow Jones Industrial Average .DJI was up 0.40% at 27,893.64. up 1.06% (Compiled by Niket Nishant in Bengaluru) ((Niket.Nishant@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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The top three S&P 500 .PG.INX percentage gainers: ** ETSY Inc ETSY.O, up 7.2% ** L Brands Inc LB.N, up 4.5% ** Gap Inc GPS.N, up 4.3% The top three S&P 500 .PL.INX percentage losers: ** Valero Energy Corp VLO.N, down 7.8% ** Halliburton Co HAL.N, down 6.5% ** Abiomed Inc ABMD.O, down 6.1% The top three NYSE .PG.N percentage gainers: ** Amer Eq Inv Life AEL.N, up 39% ** Container Store Group Inc TCS.N, up 16.3% ** SailPoint Technologies Holdings Inc SAIL.N, up 13.5% The top three NYSE .PL.N percentage losers: ** Bluegreen Vacations Holding Corp BVH.N, down 22.3% ** Ambow Education Holding Ltd AMBO.N, down 21.2% ** Boqii Holding Ltd BQ.N, down 14.9% The top three Nasdaq .PG.O percentage gainers: ** Solid Biosciences Inc SLDB.O, up 111.3% ** Pulmonx Corp LUNG.O, up 107.2% ** Thryv Holdings Inc THRY.O, up 81.4% The top three Nasdaq .PL.O percentage losers: ** LogicBio Therapeutics Inc LOGC.O, down 32% ** Benitec Biopharma Inc BNTC.O, down 25.9% ** Kismet Acquisition One Corp KSMTU.O, down 21.5% ** LogicBio Therapeutics Inc LOGC.O: down 32.0% BUZZ-Slumps on deep-discounted stock offering ** XPO Logistics Inc XPO.N: up 1.4% BUZZ-Up after co's app downloads doubles ** VerifyMe Inc VRME.O: up 2.6% BUZZ-Jumps on reviewing potential acquisition opportunities ** Workday Inc WDAY.O: up 1.5% BUZZ-Rises as Citigroup upgrades on growth opportunities ** Triton International Ltd TRTN.N: down 6.6% BUZZ-Drops on secondary stock offering by selling shareholders ** PAR Technology Corp PAR.N: down 11.1% BUZZ-Slides on equity offering ** Genfit SA GNFT.O: down 15.9% BUZZ-Drops on workforce reduction, bigger loss ** Draftkings Inc DKNG.O: up 5.1% BUZZ-Hits record high on sport betting deal with Philadelphia Eagles ** Wells Fargo & Co WFC.N: down 0.7% ** Citigroup Inc C.N: down 0.5% ** Goldman Sachs Group Inc GS.N: down 0.1% ** Morgan Stanley MS.N: down 0.5% ** Bank of America Corp BAC.N: down 0.1% BUZZ-U.S. big banks fall as U.S. Fed to extend curbs on capital distribution ** Lixiang Education Holding Co Ltd LXEH.O: down 17.3% BUZZ-Shares plunge nearly 25% in Nasdaq debut ** Exxon Mobil Corp XOM.N: down 3.4% ** Chevron Corp CVX.N: down 1.6% ** TechnipFMC PLC FTI.N: down 1.9% ** Halliburton Co HAL.N: down 6.5% ** Marathon Petroleum Corp MPC.N: down 5.4% ** Phillips 66 PSX.N: down 3.4% ** Diamondback Energy Inc FANG.O: down 4.5% ** Marathon Oil Corp MRO.N: down 3.7% ** ConocoPhillips COP.N: down 2.2% ** Apache Corp APA.O: down 4.1% ** Devon Energy Corp DVN.N: down 2.4% ** Occidental Petroleum Corp OXY.N: down 3.8% ** Patterson-UTI Energy Inc PTEN.O: down 6.7% BUZZ-U.S. energy shares slide on 5% drop in U.S. crude ** Textron Inc TXT.N: down 2.3% BUZZ-Falls as Cowen downgrades on bleak recovery prospects ** Datadog Inc DDOG.O: up 1.0% BUZZ-Rises as brokerage hikes PT to Street high on Microsoft partnership ** AMAG Pharmaceuticals Inc AMAG.O: up 44.6% BUZZ-Surges as Apollo-backed Covis to buy co for $647 mln ** CareDx Inc CDNA.O: up 6.6% BUZZ-Reaches record high on Medicare coverage decision for AlloSure heart ** Amazon.com Inc AMZN.O: up 1.3% BUZZ-Pivotal says ad business underappreciated, boosts PT to Street high ** Houghton Mifflin Harcourt Co HMHC.O: up 10.7% BUZZ-Soars on restructuring plan; to slash 22% jobs ** Cyclerion Therapeutics Inc CYCN.O: up 4.4% BUZZ-Up on sickle cell, nervous system disease study updates ** Skyworks Solutions Inc SWKS.O: up 1.8% BUZZ-Cowen hikes PT as OEMs seek to fill Huawei void ** VAALCO Energy Inc EGY.N: up 11.4% BUZZ-Jumps on Q3 production outlook ** Bed Bath & Beyond Inc BBBY.O: up 33.4% BUZZ-Surges as co swings to quarterly profit ** Abbott Laboratories ABT.N: up 0.6% BUZZ-Up after Air Canada says finalizing order for 25,000 COVID-19 tests ** Pennsylvania Real Estate Investment Trust: PEI.N: up 1.0% BUZZ-Up on securing one-month extension to liquidity facility ** Advanced Emissions Solutions Inc ADES.O: up 25.4% BUZZ-Surges on 15-year carbon supply contract ** Enlivex Therapeutics Ltd ENLV.O: up 45.8% BUZZ-Surges on positive data from potential COVID-19 treatment ** Gridsum Holding Inc GSUM.O: up 35.5% BUZZ-Soars on take-private offer ** American Equity Investment Life Holding Co AEL.N: up 38.9% BUZZ-Jumps on report of Athene, MassMutual $3-bln-plus takeover bid ** Papa John's International Inc PZZA.O: up 2.4% BUZZ-KeyBanc starts with 'overweight' rating ** Genworth Financial Inc GNW.N: down 3.4% BUZZ-Drops on extension of merger agreement with Oceanwide ** Zillow Group Inc ZG.O: up 4.0% BUZZ-Brokerages hike PTs on growth prospects ** Callon Petroleum Co CPE.N: up 2.7% BUZZ-Jumps after signing asset monetization deals ** Solid Biosciences Inc SLDB.O: up 111.3% BUZZ-Surges after FDA allows gene therapy trial to resumeUSN ** American Airlines Group Inc AAL.O: up 1.5% ** United Airlines Holdings Inc UAL.O: up 0.2% ** Delta Air Line Inc DAL.N: up 0.7% ** Southwest Airlines Co LUV.N: up 0.1% ** JetBlue Airways Corp JBLU.N: up 0.5% BUZZ-U.S. airlines: Up on talks of federal aid extension ** Boeing Co BA.N: up 1.4% BUZZ-Up after FAA conducts 737 MAX test flight ** ProPhase Labs Inc PRPH.O: up 9.8% BUZZ-Up on plans to acquire CLIA certified labs for COVID-19 testing ** Lonestar Resources LONE.O: down 12.3% BUZZ-Slumps after bankruptcy filing ** Tesla Inc TSLA.O: up 2.9% BUZZ-Set to open at 1-1/2 week high, cuts China Model 3 price ** AMAG Pharmaceuticals Inc AMAG.O: up 44.6% BUZZ-Surges on report of potential takeover deal ** PepsiCo Inc PEP.O: up 0.9% BUZZ-Gains on Q3 results, upbeat outlook as at-home snacking jumps ** Alibaba Group Holding Ltd BABA.N: down 1.4% BUZZ-Up as Needham hikes PT on growth prospects ** LogicBio Therapeutics Inc LOGC.O: down 32.0% BUZZ-Slumps on proposed stock offering ** Mastercard Inc MA.N: up 1.5% BUZZ-JPMorgan hikes PT and estimates on positive growth trends ** Selecta Biosciences Inc SELB.O: down 32.9% BUZZ-Plunges as drug fails to meet trial main goal The 11 major S&P 500 sectors: Communication Services Eikon search string for individual stock moves: STXBZ The Day Ahead newsletter: http://tmsnrt.rs/2ggOmBi The Morning News Call newsletter: http://tmsnrt.rs/2fwPLTh Wall Street's main indexes rose on the first day of the fourth quarter on Thursday as investors bet in favor of more fiscal stimulus after data showed the pace of a domestic economic rebound was slowing..N At 12:36 ET, the Dow Jones Industrial Average .DJI was up 0.40% at 27,893.64. down 0.05% Real Estate
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The top three S&P 500 .PG.INX percentage gainers: ** ETSY Inc ETSY.O, up 7.2% ** L Brands Inc LB.N, up 4.5% ** Gap Inc GPS.N, up 4.3% The top three S&P 500 .PL.INX percentage losers: ** Valero Energy Corp VLO.N, down 7.8% ** Halliburton Co HAL.N, down 6.5% ** Abiomed Inc ABMD.O, down 6.1% The top three NYSE .PG.N percentage gainers: ** Amer Eq Inv Life AEL.N, up 39% ** Container Store Group Inc TCS.N, up 16.3% ** SailPoint Technologies Holdings Inc SAIL.N, up 13.5% The top three NYSE .PL.N percentage losers: ** Bluegreen Vacations Holding Corp BVH.N, down 22.3% ** Ambow Education Holding Ltd AMBO.N, down 21.2% ** Boqii Holding Ltd BQ.N, down 14.9% The top three Nasdaq .PG.O percentage gainers: ** Solid Biosciences Inc SLDB.O, up 111.3% ** Pulmonx Corp LUNG.O, up 107.2% ** Thryv Holdings Inc THRY.O, up 81.4% The top three Nasdaq .PL.O percentage losers: ** LogicBio Therapeutics Inc LOGC.O, down 32% ** Benitec Biopharma Inc BNTC.O, down 25.9% ** Kismet Acquisition One Corp KSMTU.O, down 21.5% ** LogicBio Therapeutics Inc LOGC.O: down 32.0% BUZZ-Slumps on deep-discounted stock offering ** XPO Logistics Inc XPO.N: up 1.4% BUZZ-Up after co's app downloads doubles ** VerifyMe Inc VRME.O: up 2.6% BUZZ-Jumps on reviewing potential acquisition opportunities ** Workday Inc WDAY.O: up 1.5% BUZZ-Rises as Citigroup upgrades on growth opportunities ** Triton International Ltd TRTN.N: down 6.6% BUZZ-Drops on secondary stock offering by selling shareholders ** PAR Technology Corp PAR.N: down 11.1% BUZZ-Slides on equity offering ** Genfit SA GNFT.O: down 15.9% BUZZ-Drops on workforce reduction, bigger loss ** Draftkings Inc DKNG.O: up 5.1% BUZZ-Hits record high on sport betting deal with Philadelphia Eagles ** Wells Fargo & Co WFC.N: down 0.7% ** Citigroup Inc C.N: down 0.5% ** Goldman Sachs Group Inc GS.N: down 0.1% ** Morgan Stanley MS.N: down 0.5% ** Bank of America Corp BAC.N: down 0.1% BUZZ-U.S. big banks fall as U.S. Fed to extend curbs on capital distribution ** Lixiang Education Holding Co Ltd LXEH.O: down 17.3% BUZZ-Shares plunge nearly 25% in Nasdaq debut ** Exxon Mobil Corp XOM.N: down 3.4% ** Chevron Corp CVX.N: down 1.6% ** TechnipFMC PLC FTI.N: down 1.9% ** Halliburton Co HAL.N: down 6.5% ** Marathon Petroleum Corp MPC.N: down 5.4% ** Phillips 66 PSX.N: down 3.4% ** Diamondback Energy Inc FANG.O: down 4.5% ** Marathon Oil Corp MRO.N: down 3.7% ** ConocoPhillips COP.N: down 2.2% ** Apache Corp APA.O: down 4.1% ** Devon Energy Corp DVN.N: down 2.4% ** Occidental Petroleum Corp OXY.N: down 3.8% ** Patterson-UTI Energy Inc PTEN.O: down 6.7% BUZZ-U.S. energy shares slide on 5% drop in U.S. crude ** Textron Inc TXT.N: down 2.3% BUZZ-Falls as Cowen downgrades on bleak recovery prospects ** Datadog Inc DDOG.O: up 1.0% BUZZ-Rises as brokerage hikes PT to Street high on Microsoft partnership ** AMAG Pharmaceuticals Inc AMAG.O: up 44.6% BUZZ-Surges as Apollo-backed Covis to buy co for $647 mln ** CareDx Inc CDNA.O: up 6.6% BUZZ-Reaches record high on Medicare coverage decision for AlloSure heart ** Amazon.com Inc AMZN.O: up 1.3% BUZZ-Pivotal says ad business underappreciated, boosts PT to Street high ** Houghton Mifflin Harcourt Co HMHC.O: up 10.7% BUZZ-Soars on restructuring plan; to slash 22% jobs ** Cyclerion Therapeutics Inc CYCN.O: up 4.4% BUZZ-Up on sickle cell, nervous system disease study updates ** Skyworks Solutions Inc SWKS.O: up 1.8% BUZZ-Cowen hikes PT as OEMs seek to fill Huawei void ** VAALCO Energy Inc EGY.N: up 11.4% BUZZ-Jumps on Q3 production outlook ** Bed Bath & Beyond Inc BBBY.O: up 33.4% BUZZ-Surges as co swings to quarterly profit ** Abbott Laboratories ABT.N: up 0.6% BUZZ-Up after Air Canada says finalizing order for 25,000 COVID-19 tests ** Pennsylvania Real Estate Investment Trust: PEI.N: up 1.0% BUZZ-Up on securing one-month extension to liquidity facility ** Advanced Emissions Solutions Inc ADES.O: up 25.4% BUZZ-Surges on 15-year carbon supply contract ** Enlivex Therapeutics Ltd ENLV.O: up 45.8% BUZZ-Surges on positive data from potential COVID-19 treatment ** Gridsum Holding Inc GSUM.O: up 35.5% BUZZ-Soars on take-private offer ** American Equity Investment Life Holding Co AEL.N: up 38.9% BUZZ-Jumps on report of Athene, MassMutual $3-bln-plus takeover bid ** Papa John's International Inc PZZA.O: up 2.4% BUZZ-KeyBanc starts with 'overweight' rating ** Genworth Financial Inc GNW.N: down 3.4% BUZZ-Drops on extension of merger agreement with Oceanwide ** Zillow Group Inc ZG.O: up 4.0% BUZZ-Brokerages hike PTs on growth prospects ** Callon Petroleum Co CPE.N: up 2.7% BUZZ-Jumps after signing asset monetization deals ** Solid Biosciences Inc SLDB.O: up 111.3% BUZZ-Surges after FDA allows gene therapy trial to resumeUSN ** American Airlines Group Inc AAL.O: up 1.5% ** United Airlines Holdings Inc UAL.O: up 0.2% ** Delta Air Line Inc DAL.N: up 0.7% ** Southwest Airlines Co LUV.N: up 0.1% ** JetBlue Airways Corp JBLU.N: up 0.5% BUZZ-U.S. airlines: Up on talks of federal aid extension ** Boeing Co BA.N: up 1.4% BUZZ-Up after FAA conducts 737 MAX test flight ** ProPhase Labs Inc PRPH.O: up 9.8% BUZZ-Up on plans to acquire CLIA certified labs for COVID-19 testing ** Lonestar Resources LONE.O: down 12.3% BUZZ-Slumps after bankruptcy filing ** Tesla Inc TSLA.O: up 2.9% BUZZ-Set to open at 1-1/2 week high, cuts China Model 3 price ** AMAG Pharmaceuticals Inc AMAG.O: up 44.6% BUZZ-Surges on report of potential takeover deal ** PepsiCo Inc PEP.O: up 0.9% BUZZ-Gains on Q3 results, upbeat outlook as at-home snacking jumps ** Alibaba Group Holding Ltd BABA.N: down 1.4% BUZZ-Up as Needham hikes PT on growth prospects ** LogicBio Therapeutics Inc LOGC.O: down 32.0% BUZZ-Slumps on proposed stock offering ** Mastercard Inc MA.N: up 1.5% BUZZ-JPMorgan hikes PT and estimates on positive growth trends ** Selecta Biosciences Inc SELB.O: down 32.9% BUZZ-Plunges as drug fails to meet trial main goal The 11 major S&P 500 sectors: Communication Services up 1.18% Consumer Discretionary up 1.25% Consumer Staples
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The top three S&P 500 .PG.INX percentage gainers: ** ETSY Inc ETSY.O, up 7.2% ** L Brands Inc LB.N, up 4.5% ** Gap Inc GPS.N, up 4.3% The top three S&P 500 .PL.INX percentage losers: ** Valero Energy Corp VLO.N, down 7.8% ** Halliburton Co HAL.N, down 6.5% ** Abiomed Inc ABMD.O, down 6.1% The top three NYSE .PG.N percentage gainers: ** Amer Eq Inv Life AEL.N, up 39% ** Container Store Group Inc TCS.N, up 16.3% ** SailPoint Technologies Holdings Inc SAIL.N, up 13.5% The top three NYSE .PL.N percentage losers: ** Bluegreen Vacations Holding Corp BVH.N, down 22.3% ** Ambow Education Holding Ltd AMBO.N, down 21.2% ** Boqii Holding Ltd BQ.N, down 14.9% The top three Nasdaq .PG.O percentage gainers: ** Solid Biosciences Inc SLDB.O, up 111.3% ** Pulmonx Corp LUNG.O, up 107.2% ** Thryv Holdings Inc THRY.O, up 81.4% The top three Nasdaq .PL.O percentage losers: ** LogicBio Therapeutics Inc LOGC.O, down 32% ** Benitec Biopharma Inc BNTC.O, down 25.9% ** Kismet Acquisition One Corp KSMTU.O, down 21.5% ** LogicBio Therapeutics Inc LOGC.O: down 32.0% BUZZ-Slumps on deep-discounted stock offering ** XPO Logistics Inc XPO.N: up 1.4% BUZZ-Up after co's app downloads doubles ** VerifyMe Inc VRME.O: up 2.6% BUZZ-Jumps on reviewing potential acquisition opportunities ** Workday Inc WDAY.O: up 1.5% BUZZ-Rises as Citigroup upgrades on growth opportunities ** Triton International Ltd TRTN.N: down 6.6% BUZZ-Drops on secondary stock offering by selling shareholders ** PAR Technology Corp PAR.N: down 11.1% BUZZ-Slides on equity offering ** Genfit SA GNFT.O: down 15.9% BUZZ-Drops on workforce reduction, bigger loss ** Draftkings Inc DKNG.O: up 5.1% BUZZ-Hits record high on sport betting deal with Philadelphia Eagles ** Wells Fargo & Co WFC.N: down 0.7% ** Citigroup Inc C.N: down 0.5% ** Goldman Sachs Group Inc GS.N: down 0.1% ** Morgan Stanley MS.N: down 0.5% ** Bank of America Corp BAC.N: down 0.1% BUZZ-U.S. big banks fall as U.S. Fed to extend curbs on capital distribution ** Lixiang Education Holding Co Ltd LXEH.O: down 17.3% BUZZ-Shares plunge nearly 25% in Nasdaq debut ** Exxon Mobil Corp XOM.N: down 3.4% ** Chevron Corp CVX.N: down 1.6% ** TechnipFMC PLC FTI.N: down 1.9% ** Halliburton Co HAL.N: down 6.5% ** Marathon Petroleum Corp MPC.N: down 5.4% ** Phillips 66 PSX.N: down 3.4% ** Diamondback Energy Inc FANG.O: down 4.5% ** Marathon Oil Corp MRO.N: down 3.7% ** ConocoPhillips COP.N: down 2.2% ** Apache Corp APA.O: down 4.1% ** Devon Energy Corp DVN.N: down 2.4% ** Occidental Petroleum Corp OXY.N: down 3.8% ** Patterson-UTI Energy Inc PTEN.O: down 6.7% BUZZ-U.S. energy shares slide on 5% drop in U.S. crude ** Textron Inc TXT.N: down 2.3% BUZZ-Falls as Cowen downgrades on bleak recovery prospects ** Datadog Inc DDOG.O: up 1.0% BUZZ-Rises as brokerage hikes PT to Street high on Microsoft partnership ** AMAG Pharmaceuticals Inc AMAG.O: up 44.6% BUZZ-Surges as Apollo-backed Covis to buy co for $647 mln ** CareDx Inc CDNA.O: up 6.6% BUZZ-Reaches record high on Medicare coverage decision for AlloSure heart ** Amazon.com Inc AMZN.O: up 1.3% BUZZ-Pivotal says ad business underappreciated, boosts PT to Street high ** Houghton Mifflin Harcourt Co HMHC.O: up 10.7% BUZZ-Soars on restructuring plan; to slash 22% jobs ** Cyclerion Therapeutics Inc CYCN.O: up 4.4% BUZZ-Up on sickle cell, nervous system disease study updates ** Skyworks Solutions Inc SWKS.O: up 1.8% BUZZ-Cowen hikes PT as OEMs seek to fill Huawei void ** VAALCO Energy Inc EGY.N: up 11.4% BUZZ-Jumps on Q3 production outlook ** Bed Bath & Beyond Inc BBBY.O: up 33.4% BUZZ-Surges as co swings to quarterly profit ** Abbott Laboratories ABT.N: up 0.6% BUZZ-Up after Air Canada says finalizing order for 25,000 COVID-19 tests ** Pennsylvania Real Estate Investment Trust: PEI.N: up 1.0% BUZZ-Up on securing one-month extension to liquidity facility ** Advanced Emissions Solutions Inc ADES.O: up 25.4% BUZZ-Surges on 15-year carbon supply contract ** Enlivex Therapeutics Ltd ENLV.O: up 45.8% BUZZ-Surges on positive data from potential COVID-19 treatment ** Gridsum Holding Inc GSUM.O: up 35.5% BUZZ-Soars on take-private offer ** American Equity Investment Life Holding Co AEL.N: up 38.9% BUZZ-Jumps on report of Athene, MassMutual $3-bln-plus takeover bid ** Papa John's International Inc PZZA.O: up 2.4% BUZZ-KeyBanc starts with 'overweight' rating ** Genworth Financial Inc GNW.N: down 3.4% BUZZ-Drops on extension of merger agreement with Oceanwide ** Zillow Group Inc ZG.O: up 4.0% BUZZ-Brokerages hike PTs on growth prospects ** Callon Petroleum Co CPE.N: up 2.7% BUZZ-Jumps after signing asset monetization deals ** Solid Biosciences Inc SLDB.O: up 111.3% BUZZ-Surges after FDA allows gene therapy trial to resumeUSN ** American Airlines Group Inc AAL.O: up 1.5% ** United Airlines Holdings Inc UAL.O: up 0.2% ** Delta Air Line Inc DAL.N: up 0.7% ** Southwest Airlines Co LUV.N: up 0.1% ** JetBlue Airways Corp JBLU.N: up 0.5% BUZZ-U.S. airlines: Up on talks of federal aid extension ** Boeing Co BA.N: up 1.4% BUZZ-Up after FAA conducts 737 MAX test flight ** ProPhase Labs Inc PRPH.O: up 9.8% BUZZ-Up on plans to acquire CLIA certified labs for COVID-19 testing ** Lonestar Resources LONE.O: down 12.3% BUZZ-Slumps after bankruptcy filing ** Tesla Inc TSLA.O: up 2.9% BUZZ-Set to open at 1-1/2 week high, cuts China Model 3 price ** AMAG Pharmaceuticals Inc AMAG.O: up 44.6% BUZZ-Surges on report of potential takeover deal ** PepsiCo Inc PEP.O: up 0.9% BUZZ-Gains on Q3 results, upbeat outlook as at-home snacking jumps ** Alibaba Group Holding Ltd BABA.N: down 1.4% BUZZ-Up as Needham hikes PT on growth prospects ** LogicBio Therapeutics Inc LOGC.O: down 32.0% BUZZ-Slumps on proposed stock offering ** Mastercard Inc MA.N: up 1.5% BUZZ-JPMorgan hikes PT and estimates on positive growth trends ** Selecta Biosciences Inc SELB.O: down 32.9% BUZZ-Plunges as drug fails to meet trial main goal The 11 major S&P 500 sectors: Communication Services Eikon search string for individual stock moves: STXBZ The Day Ahead newsletter: http://tmsnrt.rs/2ggOmBi The Morning News Call newsletter: http://tmsnrt.rs/2fwPLTh Wall Street's main indexes rose on the first day of the fourth quarter on Thursday as investors bet in favor of more fiscal stimulus after data showed the pace of a domestic economic rebound was slowing..N At 12:36 ET, the Dow Jones Industrial Average .DJI was up 0.40% at 27,893.64. The S&P 500 .SPX was up 0.44% at 3,377.82 and the Nasdaq Composite .IXIC was up 0.85% at 11,262.442.
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15a62729-8383-47ba-bc6f-22d02b86ab06
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718981.0
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2020-09-30 00:00:00 UTC
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Datadog Signs Cloud-Computing Partnership With Microsoft
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DDOG
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https://www.nasdaq.com/articles/datadog-signs-cloud-computing-partnership-with-microsoft-2020-09-30
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nan
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nan
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Cloud-computing security and systems-monitoring expert Datadog (NASDAQ: DDOG) just signed a strategic partnership with technology giant Microsoft (NASDAQ: MSFT). The deal makes Datadog's tools available to Microsoft Azure customers as a so-called first-class service. Datadog's Azure partnership will launch to the public in October and will be accepting a small number of preview customers in the meantime.
What's new?
Datadog's integration includes an automated setup process that makes it easy to deploy a monitoring service for cloud-computing workloads. Since the tools are presented as native products on the Azure platform, enterprise-class customers will find it easy to apply earmarked budgets and prepaid Azure assets to Datadog monitoring.
Azure users can now deploy Datadog to their cloud-based hosts and web applications in minutes. Log files and performance metrics can be sent to the Datadog platform in a couple of clicks. The system provides an easy-to-use control panel for granular control over what Azure assets Datadog should monitor. Many parts of the monitoring setup can be fully automated.
Through the Azure-based platform, the Datadog services can also monitor the health, security, and performance of assets running on different cloud-computing platforms, and the monitoring tools can work together with competing solutions, such as the open-source automation packages Puppet and Chef.
Image source: Getty Images.
The two companies will also align their sales and marketing efforts, cross-promoting Datadog services to other Azure clients and vice versa.
"Observability is a key capability for any successful cloud migration," Datadog's Chief Product Officer Amit Agarwal said in a prepared statement. "Through our new partnership with Microsoft Azure, customers will now have access to the Datadog platform directly in the Azure console."
Datadog's investors were quick to embrace this important partnership. The company's stock jumped more than 15% higher on Wednesday as a reaction to this announcement.
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Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool's board of directors. Anders Bylund has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Datadog and Microsoft and recommends the following options: long January 2021 $85 calls on Microsoft and short January 2021 $115 calls on 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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Cloud-computing security and systems-monitoring expert Datadog (NASDAQ: DDOG) just signed a strategic partnership with technology giant Microsoft (NASDAQ: MSFT). Datadog's Azure partnership will launch to the public in October and will be accepting a small number of preview customers in the meantime. Datadog's integration includes an automated setup process that makes it easy to deploy a monitoring service for cloud-computing workloads.
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Cloud-computing security and systems-monitoring expert Datadog (NASDAQ: DDOG) just signed a strategic partnership with technology giant Microsoft (NASDAQ: MSFT). The deal makes Datadog's tools available to Microsoft Azure customers as a so-called first-class service. Datadog's integration includes an automated setup process that makes it easy to deploy a monitoring service for cloud-computing workloads.
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Cloud-computing security and systems-monitoring expert Datadog (NASDAQ: DDOG) just signed a strategic partnership with technology giant Microsoft (NASDAQ: MSFT). Since the tools are presented as native products on the Azure platform, enterprise-class customers will find it easy to apply earmarked budgets and prepaid Azure assets to Datadog monitoring. Through the Azure-based platform, the Datadog services can also monitor the health, security, and performance of assets running on different cloud-computing platforms, and the monitoring tools can work together with competing solutions, such as the open-source automation packages Puppet and Chef.
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Cloud-computing security and systems-monitoring expert Datadog (NASDAQ: DDOG) just signed a strategic partnership with technology giant Microsoft (NASDAQ: MSFT). Since the tools are presented as native products on the Azure platform, enterprise-class customers will find it easy to apply earmarked budgets and prepaid Azure assets to Datadog monitoring. Through the Azure-based platform, the Datadog services can also monitor the health, security, and performance of assets running on different cloud-computing platforms, and the monitoring tools can work together with competing solutions, such as the open-source automation packages Puppet and Chef.
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3f26b146-e5ed-42b5-887f-ec8b5e1a12df
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718982.0
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2020-09-30 00:00:00 UTC
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Datadog Deal Lifts Nasdaq; Tesla Hopes for Record Deliveries
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DDOG
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https://www.nasdaq.com/articles/datadog-deal-lifts-nasdaq-tesla-hopes-for-record-deliveries-2020-09-30
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nan
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nan
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The stock market had a tough September, but it was able to finish the third quarter on a positive note. The Nasdaq Composite (NASDAQINDEX: ^IXIC) managed a gain of around 0.75%, bringing its gains for the past three months to about 11%.
Strategic moves have played an increasingly important role in driving the market higher lately, and instrumental to today's gains was a partnership between Datadog (NASDAQ: DDOG) and Microsoft (NASDAQ: MSFT). Meanwhile, Tesla (NASDAQ: TSLA) investors turned their attention to the usual end-of-quarter rush to deliver as many vehicles as possible.
A smart collaboration
Datadog launched higher by 12% after announcing its deal with Microsoft. The agreement not only gets a lucrative piece of business for the data analytics specialist but also potentially forestalls what might otherwise be a considerable competitor.
Image source: Datadog.
Under the terms of the strategic partnership, Datadog will make its cloud monitoring and security platform available to users of the Microsoft Azure cloud computing console. With so-called "first class service" status for Datadog, Azure users will be able to implement the monitoring service into their own cloud infrastructure with it being easy to configure.
Microsoft users will also be able to dedicate some of their required Azure spending on Datadog. That should help free up capital for Microsoft users who otherwise might not have the budget to pay for the service separately, leading to some new customers for Datadog that the cloud monitoring specialist might not have had sign on otherwise.
Datadog is the first third-party service to appear within Azure in this way. That's a big deal, and investors hope the arrangement will be lucrative for both tech companies.
Hoping for a new record from Tesla
Tesla shares were higher by 2% on Wednesday. As often happens as a quarter draws to a close, investors in the electric vehicle manufacturer were anxious to find out whether the company will meet its delivery targets and keep growing.
Coming into the end of the quarter, Tesla investors had reason for optimism. A leaked email from CEO Elon Musk suggested that the company would likely surpass the previous high of 112,000 vehicle deliveries in the fourth quarter of 2019.
However, some Tesla investors have had much higher expectations. That's in part because of Musk's own projections that the automaker would be able to deliver 500,000 vehicles over the course of 2020 as a whole. In order to get there, numbers in the 120,000 to 130,000 range would be a lot more comfortable than just a small bit above 112,000.
Ordinarily, investors might forgive Tesla if it failed to surpass its hoped-for delivery numbers, especially in the midst of the coronavirus pandemic and all the attendant impacts it has had on the global economy. However, Tesla's stock price has roared upward to unprecedented heights. That means that all eyes will be on the electric vehicle pioneer as it prepares to let shareholders know just how well things went between the beginning of July and the end of September.
10 stocks we like better than Tesla
When investing geniuses David and Tom Gardner have 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.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Tesla 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 24, 2020
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Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool's board of directors. Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Datadog, Microsoft, and Tesla and recommends the following options: long January 2021 $85 calls on Microsoft and short January 2021 $115 calls on 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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Strategic moves have played an increasingly important role in driving the market higher lately, and instrumental to today's gains was a partnership between Datadog (NASDAQ: DDOG) and Microsoft (NASDAQ: MSFT). That should help free up capital for Microsoft users who otherwise might not have the budget to pay for the service separately, leading to some new customers for Datadog that the cloud monitoring specialist might not have had sign on otherwise. As often happens as a quarter draws to a close, investors in the electric vehicle manufacturer were anxious to find out whether the company will meet its delivery targets and keep growing.
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Strategic moves have played an increasingly important role in driving the market higher lately, and instrumental to today's gains was a partnership between Datadog (NASDAQ: DDOG) and Microsoft (NASDAQ: MSFT). Hoping for a new record from Tesla Tesla shares were higher by 2% on Wednesday. The Motley Fool owns shares of and recommends Datadog, Microsoft, and Tesla and recommends the following options: long January 2021 $85 calls on Microsoft and short January 2021 $115 calls on Microsoft.
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Strategic moves have played an increasingly important role in driving the market higher lately, and instrumental to today's gains was a partnership between Datadog (NASDAQ: DDOG) and Microsoft (NASDAQ: MSFT). 10 stocks we like better than Tesla When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. The Motley Fool owns shares of and recommends Datadog, Microsoft, and Tesla and recommends the following options: long January 2021 $85 calls on Microsoft and short January 2021 $115 calls on Microsoft.
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Strategic moves have played an increasingly important role in driving the market higher lately, and instrumental to today's gains was a partnership between Datadog (NASDAQ: DDOG) and Microsoft (NASDAQ: MSFT). A leaked email from CEO Elon Musk suggested that the company would likely surpass the previous high of 112,000 vehicle deliveries in the fourth quarter of 2019. However, some Tesla investors have had much higher expectations.
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2020-09-30 00:00:00 UTC
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BUZZ-U.S. STOCKS ON THE MOVE-Scientific Games, Datadog, Exxon Mobil, Chevron
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DDOG
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https://www.nasdaq.com/articles/buzz-u.s.-stocks-on-the-move-scientific-games-datadog-exxon-mobil-chevron-2020-09-30
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nan
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nan
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Eikon search string for individual stock moves: STXBZ
The Day Ahead newsletter: http://tmsnrt.rs/2ggOmBi
The Morning News Call newsletter: http://tmsnrt.rs/2fwPLTh
Wall Street's main indexes jumped on Wednesday, with the S&P 500 on course for its best two-quarter gain since 2009, as investors rekindled bets on an imminent fiscal stimulus package, while upbeat data suggested a domestic economic recovery was on track..N
At 1:18 p.m. ET, the Dow Jones Industrial Average .DJI was up 1.65% at 27,905.34. The S&P 500 .SPX was up 1.21% at 3,375.68 and the Nasdaq Composite .IXIC was up 1.08% at 11,204.622. The top three S&P 500 .PG.INX percentage gainers: ** Duke Energy Corp , up 6.2% ** Universal Health Services Inc , up 5.2% ** Centene Corp , up 5% The top three S&P 500 .PL.INX percentage losers: ** Micron Technology Inc , down 6.3% ** Western Digital Corp , down 4.7% ** Zebra Technologies Corp , down 2.5% The top three NYSE .PG.N percentage gainers: ** CynergisTek Inc , up 97.2% ** Asana Inc , up 37.9% ** Lithium Americas Corp , up 17.7% The top three NYSE .PL.N percentage losers: ** Boqii Holding Ltd , down 31.6% ** Houston American Energy Corp , down 31.3% ** Glb X Msci Prtgl , down 9.4% The top three Nasdaq .PG.O percentage gainers: ** CTI Biopharma Corp , up 106.2% ** Sky Solar Holdings Ltd , up 38% ** Nano Dimension Ltd , up 37 % The top three Nasdaq .PL.O percentage losers: ** Aptorum Group Ltd , down 42.2% ** Oasis Midstream Partners LP , down 24.1% ** Adial Pharmaceuticals Inc , down 22.1% ** Scientific Games Corp SGMS.O: up 0.4%
BUZZ-Extends partnership with Hard Rock International
** Exxon Mobil Corp XOM.N: up 1.2%
** Chevron Corp CVX.N: up 0.7%
BUZZ-Oil majors eye steep losses
** Datadog Inc DDOG.O: up 14.1%
BUZZ-Moves higher on Microsoft partnership
** Perion Network Ltd PERI.O: up 9.2%
BUZZ-Gains as Oppenheimer assumes coverage with 'outperform'
** ConocoPhillips COP.N: up 2.3%
BUZZ-Climbs on Q3 outlook, plans to resume share buybacks
** AtriCure Inc ATRC.O: down 1.1%
BUZZ-Drops after Kerrisdale reveals short position
** BioHiTech Global Inc BHTG.O: up 6.5%
BUZZ-Soars after shipping disinfectant system to cruise company
** Nikola Corp NKLA.O: up 12.4%
BUZZ-Rebounds as co reassures investors of product roadmap
** Wanda Sports Group Co Ltd WSG.O: up 27.8%
BUZZ-Soars on take-private offer from parent
** Genetron Holdings Ltd GTH.O: up 24.5%
BUZZ-Rises as FDA grants liver cancer test breakthrough device status
** Peck Company Holdings Inc PECK.O: up 9.1%
BUZZ-Jumps on $2.4 mln contract in Maine
** Elanco Animal Health Inc ELAN.N: up 4.6%
BUZZ-To cut 900 jobs, shares rise
** Lululemon Athletica Inc LULU.O: up 2.5%
BUZZ-BofA sees growth in post-COVID environment, reinstates with 'buy'
** Enerpac Tool Group Corp EPAC.N: down 7.6%
BUZZ-Slumps after Q4 earnings misses estimates
** Boqii Holding Ltd BQ.N: down 31.0%
BUZZ-Falls in NYSE debut
** Canadian Solar Inc CSIQ.O: up 5.1%
BUZZ-Climbs on raising capital ahead of unit's China IPO
** American Airlines Group Inc AAL.O: up 2.7%
** United Airlines Holdings Inc UAL.O: up 3.2%
** Spirit Airlines Inc SAVE.N: up 2.9%
** Delta Air Lines Inc DAL.N: up 2.0%
** Southwest Airlines Co LUV.N: up 1.3%
** Alaska Air Group Inc ALK.N: up 2.2%
** JetBlue Airways Corp JBLU.O: up 2.4%
BUZZ-U.S. airlines: Up on hopes of federal aid extension
** Yalla Group Ltd YALA.N: up 2%
BUZZ-Jumps 30% in its NYSE debut
** Pacira BioSciences Inc PCRX.O: up 1.7%
BUZZ-Gains as Jefferies lifts PT on Exparel growth prospects
** Oceaneering International Inc OII.N: up 4.8%
BUZZ-Up on securing U.S. Navy contract
** PVH Corp PVH.N: up 3.3%
BUZZ-Gains as President Larsson to takeover as CEO
** Tesla Inc TSLA.O: up 2.2%
BUZZ-Rises after media report points to record deliveries
** Penn National Gaming Inc PENN.O: up 3.2%
BUZZ-Rises as JP Morgan sees higher value, hikes PT
** Synnex Corp SNX.N: up 7.3%
BUZZ-Jumps on upbeat forecast
** Iterum Therapeutics PLC ITRM.O: up 136.2%
BUZZ-Soars on positive FDA meeting for urinary tract infection drug
** Western Digital Corp WDC.O: down 4.7%
BUZZ-Slips as Micron flags profitability challenges in NAND market
** Starbucks Corp SBUX.O: up 1.7%
BUZZ-Gains after Cowen upgrades rating and raises PT to Street high
** Hasbro Inc HAS.O: up 2.8%
BUZZ-Rises as Stifel upgrades to 'buy' on holiday boost
** Shopify Inc SHOP.N: up 0.1%
BUZZ-Wedbush says e-commerce pull forward sustainable
** Target Hospitality Corp TH.O: up 2.5%
BUZZ-Rises as customer activity seen rising from Q2 lows
** L Brands Inc LB.N: up 4.6%
BUZZ-JPM boosts PT to highest on Wall Street
** Solaredge Technologies Inc SEDG.O: up 3.8%
BUZZ-Solar energy firms: JPM hikes PT on growth trends
** Vivint Solar Inc VSLR.N: up 6.4%
BUZZ-Solar energy firms: JPM hikes PT on growth trends
** Quest Diagnostics Inc DGX.N: up 1.1%
BUZZ-Rises on launch of three new COVID-19 tests
** Tuniu Corp TOUR.O: up 26.7%
BUZZ-Up on $10 mln share buyback plan
** Alnylam Pharmaceuticals Inc ALNY.O: up 0.8%
BUZZ-Gains on positive data from its kidney disorder drug
** Yunji Inc YJ.O: up 4.3%
BUZZ-Soars after first live streaming show on Douyin
** Alibaba Group Holding Ltd BABA.N: up 5.2%
BUZZ-Rises as co expects cloud unit to turn profitable next year
** Bionano Genomics Inc BNGO.O: up 8.1%
BUZZ-Jumps on adoption of co's genome mapping system in Australia and Slovenia
** Zynga Inc ZNGA.O: up 0.4%
BUZZ-MKM Partners starts with 'buy' on growth prospects[USNnL4N2GR35N]
** Micron Technology Inc MU.O: down 6.2%
BUZZ-Street View: Near-term challenges aplenty
** Fuelcell Energy Inc FCEL.O: down 15.6%
BUZZ-Down after co prices upsized equity offering
** CureVac NV CVAC.O: up 2.9%
BUZZ-Up as co begins mid-stage trial of COVID-19 vaccine candidate
** Duke Energy Corp DUK.N: up 6.2%
BUZZ-Climbs on report of takeover offer from NextEra
** Oasis Petroleum Inc OAS.O: down 38.7%
BUZZ-Slumps after Chapter 11 bankruptcy filing
** Moderna Inc MRNA.O: up 2.7%
BUZZ-Up after COVID-19 vaccine shows signs of working in older adults
** Walt Disney Co DIS.N: down 0.6%
BUZZ-Falls as co plans to lay off 28,000 park employees
** Caesars Entertainment Inc CZR.O: up 4.2%
BUZZ-Agrees to buy William Hill
** Eton Pharmaceuticals Inc ETON.O: up 0.5%
BUZZ-Up on U.S. approval for adrenal insufficiency treatment
The 11 major S&P 500 sectors:
Communication Services
.SPLRCL
up 0.47%
Consumer Discretionary
.SPLRCD
up 1.35%
Consumer Staples
.SPLRCS
up 1.38%
Energy
.SPNY
up 1.01%
Financial
.SPSY
up 1.76%
Health
.SPXHC
up 1.90%
Industrial
.SPLRCI
up 0.71%
Information Technology
.SPLRCT
up 1.10%
Materials
.SPLRCM
up 1.44%
Real Estate
.SPLRCR
up 0.52%
Utilities
.SPLRCU
up 0.74%
(Compiled by Niket Nishant in Bengaluru)
((Niket.Nishant@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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The top three S&P 500 .PG.INX percentage gainers: ** Duke Energy Corp , up 6.2% ** Universal Health Services Inc , up 5.2% ** Centene Corp , up 5% The top three S&P 500 .PL.INX percentage losers: ** Micron Technology Inc , down 6.3% ** Western Digital Corp , down 4.7% ** Zebra Technologies Corp , down 2.5% The top three NYSE .PG.N percentage gainers: ** CynergisTek Inc , up 97.2% ** Asana Inc , up 37.9% ** Lithium Americas Corp , up 17.7% The top three NYSE .PL.N percentage losers: ** Boqii Holding Ltd , down 31.6% ** Houston American Energy Corp , down 31.3% ** Glb X Msci Prtgl , down 9.4% The top three Nasdaq .PG.O percentage gainers: ** CTI Biopharma Corp , up 106.2% ** Sky Solar Holdings Ltd , up 38% ** Nano Dimension Ltd , up 37 % The top three Nasdaq .PL.O percentage losers: ** Aptorum Group Ltd , down 42.2% ** Oasis Midstream Partners LP , down 24.1% ** Adial Pharmaceuticals Inc , down 22.1% ** Scientific Games Corp SGMS.O: up 0.4% BUZZ-Extends partnership with Hard Rock International ** Exxon Mobil Corp XOM.N: up 1.2% ** Chevron Corp CVX.N: up 0.7% BUZZ-Oil majors eye steep losses ** Datadog Inc DDOG.O: up 14.1% BUZZ-Moves higher on Microsoft partnership ** Perion Network Ltd PERI.O: up 9.2% BUZZ-Gains as Oppenheimer assumes coverage with 'outperform' ** ConocoPhillips COP.N: up 2.3% BUZZ-Climbs on Q3 outlook, plans to resume share buybacks ** AtriCure Inc ATRC.O: down 1.1% BUZZ-Drops after Kerrisdale reveals short position ** BioHiTech Global Inc BHTG.O: up 6.5% BUZZ-Soars after shipping disinfectant system to cruise company ** Nikola Corp NKLA.O: up 12.4% BUZZ-Rebounds as co reassures investors of product roadmap ** Wanda Sports Group Co Ltd WSG.O: up 27.8% BUZZ-Soars on take-private offer from parent ** Genetron Holdings Ltd GTH.O: up 24.5% BUZZ-Rises as FDA grants liver cancer test breakthrough device status ** Peck Company Holdings Inc PECK.O: up 9.1% BUZZ-Jumps on $2.4 mln contract in Maine ** Elanco Animal Health Inc ELAN.N: up 4.6% BUZZ-To cut 900 jobs, shares rise ** Lululemon Athletica Inc LULU.O: up 2.5% BUZZ-BofA sees growth in post-COVID environment, reinstates with 'buy' ** Enerpac Tool Group Corp EPAC.N: down 7.6% BUZZ-Slumps after Q4 earnings misses estimates ** Boqii Holding Ltd BQ.N: down 31.0% BUZZ-Falls in NYSE debut ** Canadian Solar Inc CSIQ.O: up 5.1% BUZZ-Climbs on raising capital ahead of unit's China IPO ** American Airlines Group Inc AAL.O: up 2.7% ** United Airlines Holdings Inc UAL.O: up 3.2% ** Spirit Airlines Inc SAVE.N: up 2.9% ** Delta Air Lines Inc DAL.N: up 2.0% ** Southwest Airlines Co LUV.N: up 1.3% ** Alaska Air Group Inc ALK.N: up 2.2% ** JetBlue Airways Corp JBLU.O: up 2.4% BUZZ-U.S. airlines: Up on hopes of federal aid extension ** Yalla Group Ltd YALA.N: up 2% BUZZ-Jumps 30% in its NYSE debut ** Pacira BioSciences Inc PCRX.O: up 1.7% BUZZ-Gains as Jefferies lifts PT on Exparel growth prospects ** Oceaneering International Inc OII.N: up 4.8% BUZZ-Up on securing U.S. Navy contract ** PVH Corp PVH.N: up 3.3% BUZZ-Gains as President Larsson to takeover as CEO ** Tesla Inc TSLA.O: up 2.2% BUZZ-Rises after media report points to record deliveries ** Penn National Gaming Inc PENN.O: up 3.2% BUZZ-Rises as JP Morgan sees higher value, hikes PT ** Synnex Corp SNX.N: up 7.3% BUZZ-Jumps on upbeat forecast ** Iterum Therapeutics PLC ITRM.O: up 136.2% BUZZ-Soars on positive FDA meeting for urinary tract infection drug ** Western Digital Corp WDC.O: down 4.7% BUZZ-Slips as Micron flags profitability challenges in NAND market ** Starbucks Corp SBUX.O: up 1.7% BUZZ-Gains after Cowen upgrades rating and raises PT to Street high ** Hasbro Inc HAS.O: up 2.8% BUZZ-Rises as Stifel upgrades to 'buy' on holiday boost ** Shopify Inc SHOP.N: up 0.1% BUZZ-Wedbush says e-commerce pull forward sustainable ** Target Hospitality Corp TH.O: up 2.5% BUZZ-Rises as customer activity seen rising from Q2 lows ** L Brands Inc LB.N: up 4.6% BUZZ-JPM boosts PT to highest on Wall Street ** Solaredge Technologies Inc SEDG.O: up 3.8% BUZZ-Solar energy firms: JPM hikes PT on growth trends ** Vivint Solar Inc VSLR.N: up 6.4% BUZZ-Solar energy firms: JPM hikes PT on growth trends ** Quest Diagnostics Inc DGX.N: up 1.1% BUZZ-Rises on launch of three new COVID-19 tests ** Tuniu Corp TOUR.O: up 26.7% BUZZ-Up on $10 mln share buyback plan ** Alnylam Pharmaceuticals Inc ALNY.O: up 0.8% BUZZ-Gains on positive data from its kidney disorder drug ** Yunji Inc YJ.O: up 4.3% BUZZ-Soars after first live streaming show on Douyin ** Alibaba Group Holding Ltd BABA.N: up 5.2% BUZZ-Rises as co expects cloud unit to turn profitable next year ** Bionano Genomics Inc BNGO.O: up 8.1% BUZZ-Jumps on adoption of co's genome mapping system in Australia and Slovenia ** Zynga Inc ZNGA.O: up 0.4% BUZZ-MKM Partners starts with 'buy' on growth prospects[USNnL4N2GR35N] ** Micron Technology Inc MU.O: down 6.2% BUZZ-Street View: Near-term challenges aplenty ** Fuelcell Energy Inc FCEL.O: down 15.6% BUZZ-Down after co prices upsized equity offering ** CureVac NV CVAC.O: up 2.9% BUZZ-Up as co begins mid-stage trial of COVID-19 vaccine candidate ** Duke Energy Corp DUK.N: up 6.2% BUZZ-Climbs on report of takeover offer from NextEra ** Oasis Petroleum Inc OAS.O: down 38.7% BUZZ-Slumps after Chapter 11 bankruptcy filing ** Moderna Inc MRNA.O: up 2.7% BUZZ-Up after COVID-19 vaccine shows signs of working in older adults ** Walt Disney Co DIS.N: down 0.6% BUZZ-Falls as co plans to lay off 28,000 park employees ** Caesars Entertainment Inc CZR.O: up 4.2% BUZZ-Agrees to buy William Hill ** Eton Pharmaceuticals Inc ETON.O: up 0.5% BUZZ-Up on U.S. approval for adrenal insufficiency treatment The 11 major S&P 500 sectors: Communication Services Eikon search string for individual stock moves: STXBZ The Day Ahead newsletter: http://tmsnrt.rs/2ggOmBi The Morning News Call newsletter: http://tmsnrt.rs/2fwPLTh Wall Street's main indexes jumped on Wednesday, with the S&P 500 on course for its best two-quarter gain since 2009, as investors rekindled bets on an imminent fiscal stimulus package, while upbeat data suggested a domestic economic recovery was on track..N At 1:18 p.m. up 0.74% (Compiled by Niket Nishant in Bengaluru) ((Niket.Nishant@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.
|
The top three S&P 500 .PG.INX percentage gainers: ** Duke Energy Corp , up 6.2% ** Universal Health Services Inc , up 5.2% ** Centene Corp , up 5% The top three S&P 500 .PL.INX percentage losers: ** Micron Technology Inc , down 6.3% ** Western Digital Corp , down 4.7% ** Zebra Technologies Corp , down 2.5% The top three NYSE .PG.N percentage gainers: ** CynergisTek Inc , up 97.2% ** Asana Inc , up 37.9% ** Lithium Americas Corp , up 17.7% The top three NYSE .PL.N percentage losers: ** Boqii Holding Ltd , down 31.6% ** Houston American Energy Corp , down 31.3% ** Glb X Msci Prtgl , down 9.4% The top three Nasdaq .PG.O percentage gainers: ** CTI Biopharma Corp , up 106.2% ** Sky Solar Holdings Ltd , up 38% ** Nano Dimension Ltd , up 37 % The top three Nasdaq .PL.O percentage losers: ** Aptorum Group Ltd , down 42.2% ** Oasis Midstream Partners LP , down 24.1% ** Adial Pharmaceuticals Inc , down 22.1% ** Scientific Games Corp SGMS.O: up 0.4% BUZZ-Extends partnership with Hard Rock International ** Exxon Mobil Corp XOM.N: up 1.2% ** Chevron Corp CVX.N: up 0.7% BUZZ-Oil majors eye steep losses ** Datadog Inc DDOG.O: up 14.1% BUZZ-Moves higher on Microsoft partnership ** Perion Network Ltd PERI.O: up 9.2% BUZZ-Gains as Oppenheimer assumes coverage with 'outperform' ** ConocoPhillips COP.N: up 2.3% BUZZ-Climbs on Q3 outlook, plans to resume share buybacks ** AtriCure Inc ATRC.O: down 1.1% BUZZ-Drops after Kerrisdale reveals short position ** BioHiTech Global Inc BHTG.O: up 6.5% BUZZ-Soars after shipping disinfectant system to cruise company ** Nikola Corp NKLA.O: up 12.4% BUZZ-Rebounds as co reassures investors of product roadmap ** Wanda Sports Group Co Ltd WSG.O: up 27.8% BUZZ-Soars on take-private offer from parent ** Genetron Holdings Ltd GTH.O: up 24.5% BUZZ-Rises as FDA grants liver cancer test breakthrough device status ** Peck Company Holdings Inc PECK.O: up 9.1% BUZZ-Jumps on $2.4 mln contract in Maine ** Elanco Animal Health Inc ELAN.N: up 4.6% BUZZ-To cut 900 jobs, shares rise ** Lululemon Athletica Inc LULU.O: up 2.5% BUZZ-BofA sees growth in post-COVID environment, reinstates with 'buy' ** Enerpac Tool Group Corp EPAC.N: down 7.6% BUZZ-Slumps after Q4 earnings misses estimates ** Boqii Holding Ltd BQ.N: down 31.0% BUZZ-Falls in NYSE debut ** Canadian Solar Inc CSIQ.O: up 5.1% BUZZ-Climbs on raising capital ahead of unit's China IPO ** American Airlines Group Inc AAL.O: up 2.7% ** United Airlines Holdings Inc UAL.O: up 3.2% ** Spirit Airlines Inc SAVE.N: up 2.9% ** Delta Air Lines Inc DAL.N: up 2.0% ** Southwest Airlines Co LUV.N: up 1.3% ** Alaska Air Group Inc ALK.N: up 2.2% ** JetBlue Airways Corp JBLU.O: up 2.4% BUZZ-U.S. airlines: Up on hopes of federal aid extension ** Yalla Group Ltd YALA.N: up 2% BUZZ-Jumps 30% in its NYSE debut ** Pacira BioSciences Inc PCRX.O: up 1.7% BUZZ-Gains as Jefferies lifts PT on Exparel growth prospects ** Oceaneering International Inc OII.N: up 4.8% BUZZ-Up on securing U.S. Navy contract ** PVH Corp PVH.N: up 3.3% BUZZ-Gains as President Larsson to takeover as CEO ** Tesla Inc TSLA.O: up 2.2% BUZZ-Rises after media report points to record deliveries ** Penn National Gaming Inc PENN.O: up 3.2% BUZZ-Rises as JP Morgan sees higher value, hikes PT ** Synnex Corp SNX.N: up 7.3% BUZZ-Jumps on upbeat forecast ** Iterum Therapeutics PLC ITRM.O: up 136.2% BUZZ-Soars on positive FDA meeting for urinary tract infection drug ** Western Digital Corp WDC.O: down 4.7% BUZZ-Slips as Micron flags profitability challenges in NAND market ** Starbucks Corp SBUX.O: up 1.7% BUZZ-Gains after Cowen upgrades rating and raises PT to Street high ** Hasbro Inc HAS.O: up 2.8% BUZZ-Rises as Stifel upgrades to 'buy' on holiday boost ** Shopify Inc SHOP.N: up 0.1% BUZZ-Wedbush says e-commerce pull forward sustainable ** Target Hospitality Corp TH.O: up 2.5% BUZZ-Rises as customer activity seen rising from Q2 lows ** L Brands Inc LB.N: up 4.6% BUZZ-JPM boosts PT to highest on Wall Street ** Solaredge Technologies Inc SEDG.O: up 3.8% BUZZ-Solar energy firms: JPM hikes PT on growth trends ** Vivint Solar Inc VSLR.N: up 6.4% BUZZ-Solar energy firms: JPM hikes PT on growth trends ** Quest Diagnostics Inc DGX.N: up 1.1% BUZZ-Rises on launch of three new COVID-19 tests ** Tuniu Corp TOUR.O: up 26.7% BUZZ-Up on $10 mln share buyback plan ** Alnylam Pharmaceuticals Inc ALNY.O: up 0.8% BUZZ-Gains on positive data from its kidney disorder drug ** Yunji Inc YJ.O: up 4.3% BUZZ-Soars after first live streaming show on Douyin ** Alibaba Group Holding Ltd BABA.N: up 5.2% BUZZ-Rises as co expects cloud unit to turn profitable next year ** Bionano Genomics Inc BNGO.O: up 8.1% BUZZ-Jumps on adoption of co's genome mapping system in Australia and Slovenia ** Zynga Inc ZNGA.O: up 0.4% BUZZ-MKM Partners starts with 'buy' on growth prospects[USNnL4N2GR35N] ** Micron Technology Inc MU.O: down 6.2% BUZZ-Street View: Near-term challenges aplenty ** Fuelcell Energy Inc FCEL.O: down 15.6% BUZZ-Down after co prices upsized equity offering ** CureVac NV CVAC.O: up 2.9% BUZZ-Up as co begins mid-stage trial of COVID-19 vaccine candidate ** Duke Energy Corp DUK.N: up 6.2% BUZZ-Climbs on report of takeover offer from NextEra ** Oasis Petroleum Inc OAS.O: down 38.7% BUZZ-Slumps after Chapter 11 bankruptcy filing ** Moderna Inc MRNA.O: up 2.7% BUZZ-Up after COVID-19 vaccine shows signs of working in older adults ** Walt Disney Co DIS.N: down 0.6% BUZZ-Falls as co plans to lay off 28,000 park employees ** Caesars Entertainment Inc CZR.O: up 4.2% BUZZ-Agrees to buy William Hill ** Eton Pharmaceuticals Inc ETON.O: up 0.5% BUZZ-Up on U.S. approval for adrenal insufficiency treatment The 11 major S&P 500 sectors: Communication Services Eikon search string for individual stock moves: STXBZ The Day Ahead newsletter: http://tmsnrt.rs/2ggOmBi The Morning News Call newsletter: http://tmsnrt.rs/2fwPLTh Wall Street's main indexes jumped on Wednesday, with the S&P 500 on course for its best two-quarter gain since 2009, as investors rekindled bets on an imminent fiscal stimulus package, while upbeat data suggested a domestic economic recovery was on track..N At 1:18 p.m. up 0.74% (Compiled by Niket Nishant in Bengaluru) ((Niket.Nishant@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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The top three S&P 500 .PG.INX percentage gainers: ** Duke Energy Corp , up 6.2% ** Universal Health Services Inc , up 5.2% ** Centene Corp , up 5% The top three S&P 500 .PL.INX percentage losers: ** Micron Technology Inc , down 6.3% ** Western Digital Corp , down 4.7% ** Zebra Technologies Corp , down 2.5% The top three NYSE .PG.N percentage gainers: ** CynergisTek Inc , up 97.2% ** Asana Inc , up 37.9% ** Lithium Americas Corp , up 17.7% The top three NYSE .PL.N percentage losers: ** Boqii Holding Ltd , down 31.6% ** Houston American Energy Corp , down 31.3% ** Glb X Msci Prtgl , down 9.4% The top three Nasdaq .PG.O percentage gainers: ** CTI Biopharma Corp , up 106.2% ** Sky Solar Holdings Ltd , up 38% ** Nano Dimension Ltd , up 37 % The top three Nasdaq .PL.O percentage losers: ** Aptorum Group Ltd , down 42.2% ** Oasis Midstream Partners LP , down 24.1% ** Adial Pharmaceuticals Inc , down 22.1% ** Scientific Games Corp SGMS.O: up 0.4% BUZZ-Extends partnership with Hard Rock International ** Exxon Mobil Corp XOM.N: up 1.2% ** Chevron Corp CVX.N: up 0.7% BUZZ-Oil majors eye steep losses ** Datadog Inc DDOG.O: up 14.1% BUZZ-Moves higher on Microsoft partnership ** Perion Network Ltd PERI.O: up 9.2% BUZZ-Gains as Oppenheimer assumes coverage with 'outperform' ** ConocoPhillips COP.N: up 2.3% BUZZ-Climbs on Q3 outlook, plans to resume share buybacks ** AtriCure Inc ATRC.O: down 1.1% BUZZ-Drops after Kerrisdale reveals short position ** BioHiTech Global Inc BHTG.O: up 6.5% BUZZ-Soars after shipping disinfectant system to cruise company ** Nikola Corp NKLA.O: up 12.4% BUZZ-Rebounds as co reassures investors of product roadmap ** Wanda Sports Group Co Ltd WSG.O: up 27.8% BUZZ-Soars on take-private offer from parent ** Genetron Holdings Ltd GTH.O: up 24.5% BUZZ-Rises as FDA grants liver cancer test breakthrough device status ** Peck Company Holdings Inc PECK.O: up 9.1% BUZZ-Jumps on $2.4 mln contract in Maine ** Elanco Animal Health Inc ELAN.N: up 4.6% BUZZ-To cut 900 jobs, shares rise ** Lululemon Athletica Inc LULU.O: up 2.5% BUZZ-BofA sees growth in post-COVID environment, reinstates with 'buy' ** Enerpac Tool Group Corp EPAC.N: down 7.6% BUZZ-Slumps after Q4 earnings misses estimates ** Boqii Holding Ltd BQ.N: down 31.0% BUZZ-Falls in NYSE debut ** Canadian Solar Inc CSIQ.O: up 5.1% BUZZ-Climbs on raising capital ahead of unit's China IPO ** American Airlines Group Inc AAL.O: up 2.7% ** United Airlines Holdings Inc UAL.O: up 3.2% ** Spirit Airlines Inc SAVE.N: up 2.9% ** Delta Air Lines Inc DAL.N: up 2.0% ** Southwest Airlines Co LUV.N: up 1.3% ** Alaska Air Group Inc ALK.N: up 2.2% ** JetBlue Airways Corp JBLU.O: up 2.4% BUZZ-U.S. airlines: Up on hopes of federal aid extension ** Yalla Group Ltd YALA.N: up 2% BUZZ-Jumps 30% in its NYSE debut ** Pacira BioSciences Inc PCRX.O: up 1.7% BUZZ-Gains as Jefferies lifts PT on Exparel growth prospects ** Oceaneering International Inc OII.N: up 4.8% BUZZ-Up on securing U.S. Navy contract ** PVH Corp PVH.N: up 3.3% BUZZ-Gains as President Larsson to takeover as CEO ** Tesla Inc TSLA.O: up 2.2% BUZZ-Rises after media report points to record deliveries ** Penn National Gaming Inc PENN.O: up 3.2% BUZZ-Rises as JP Morgan sees higher value, hikes PT ** Synnex Corp SNX.N: up 7.3% BUZZ-Jumps on upbeat forecast ** Iterum Therapeutics PLC ITRM.O: up 136.2% BUZZ-Soars on positive FDA meeting for urinary tract infection drug ** Western Digital Corp WDC.O: down 4.7% BUZZ-Slips as Micron flags profitability challenges in NAND market ** Starbucks Corp SBUX.O: up 1.7% BUZZ-Gains after Cowen upgrades rating and raises PT to Street high ** Hasbro Inc HAS.O: up 2.8% BUZZ-Rises as Stifel upgrades to 'buy' on holiday boost ** Shopify Inc SHOP.N: up 0.1% BUZZ-Wedbush says e-commerce pull forward sustainable ** Target Hospitality Corp TH.O: up 2.5% BUZZ-Rises as customer activity seen rising from Q2 lows ** L Brands Inc LB.N: up 4.6% BUZZ-JPM boosts PT to highest on Wall Street ** Solaredge Technologies Inc SEDG.O: up 3.8% BUZZ-Solar energy firms: JPM hikes PT on growth trends ** Vivint Solar Inc VSLR.N: up 6.4% BUZZ-Solar energy firms: JPM hikes PT on growth trends ** Quest Diagnostics Inc DGX.N: up 1.1% BUZZ-Rises on launch of three new COVID-19 tests ** Tuniu Corp TOUR.O: up 26.7% BUZZ-Up on $10 mln share buyback plan ** Alnylam Pharmaceuticals Inc ALNY.O: up 0.8% BUZZ-Gains on positive data from its kidney disorder drug ** Yunji Inc YJ.O: up 4.3% BUZZ-Soars after first live streaming show on Douyin ** Alibaba Group Holding Ltd BABA.N: up 5.2% BUZZ-Rises as co expects cloud unit to turn profitable next year ** Bionano Genomics Inc BNGO.O: up 8.1% BUZZ-Jumps on adoption of co's genome mapping system in Australia and Slovenia ** Zynga Inc ZNGA.O: up 0.4% BUZZ-MKM Partners starts with 'buy' on growth prospects[USNnL4N2GR35N] ** Micron Technology Inc MU.O: down 6.2% BUZZ-Street View: Near-term challenges aplenty ** Fuelcell Energy Inc FCEL.O: down 15.6% BUZZ-Down after co prices upsized equity offering ** CureVac NV CVAC.O: up 2.9% BUZZ-Up as co begins mid-stage trial of COVID-19 vaccine candidate ** Duke Energy Corp DUK.N: up 6.2% BUZZ-Climbs on report of takeover offer from NextEra ** Oasis Petroleum Inc OAS.O: down 38.7% BUZZ-Slumps after Chapter 11 bankruptcy filing ** Moderna Inc MRNA.O: up 2.7% BUZZ-Up after COVID-19 vaccine shows signs of working in older adults ** Walt Disney Co DIS.N: down 0.6% BUZZ-Falls as co plans to lay off 28,000 park employees ** Caesars Entertainment Inc CZR.O: up 4.2% BUZZ-Agrees to buy William Hill ** Eton Pharmaceuticals Inc ETON.O: up 0.5% BUZZ-Up on U.S. approval for adrenal insufficiency treatment The 11 major S&P 500 sectors: Communication Services ET, the Dow Jones Industrial Average .DJI was up 1.65% at 27,905.34. up 0.47% Consumer Discretionary
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The top three S&P 500 .PG.INX percentage gainers: ** Duke Energy Corp , up 6.2% ** Universal Health Services Inc , up 5.2% ** Centene Corp , up 5% The top three S&P 500 .PL.INX percentage losers: ** Micron Technology Inc , down 6.3% ** Western Digital Corp , down 4.7% ** Zebra Technologies Corp , down 2.5% The top three NYSE .PG.N percentage gainers: ** CynergisTek Inc , up 97.2% ** Asana Inc , up 37.9% ** Lithium Americas Corp , up 17.7% The top three NYSE .PL.N percentage losers: ** Boqii Holding Ltd , down 31.6% ** Houston American Energy Corp , down 31.3% ** Glb X Msci Prtgl , down 9.4% The top three Nasdaq .PG.O percentage gainers: ** CTI Biopharma Corp , up 106.2% ** Sky Solar Holdings Ltd , up 38% ** Nano Dimension Ltd , up 37 % The top three Nasdaq .PL.O percentage losers: ** Aptorum Group Ltd , down 42.2% ** Oasis Midstream Partners LP , down 24.1% ** Adial Pharmaceuticals Inc , down 22.1% ** Scientific Games Corp SGMS.O: up 0.4% BUZZ-Extends partnership with Hard Rock International ** Exxon Mobil Corp XOM.N: up 1.2% ** Chevron Corp CVX.N: up 0.7% BUZZ-Oil majors eye steep losses ** Datadog Inc DDOG.O: up 14.1% BUZZ-Moves higher on Microsoft partnership ** Perion Network Ltd PERI.O: up 9.2% BUZZ-Gains as Oppenheimer assumes coverage with 'outperform' ** ConocoPhillips COP.N: up 2.3% BUZZ-Climbs on Q3 outlook, plans to resume share buybacks ** AtriCure Inc ATRC.O: down 1.1% BUZZ-Drops after Kerrisdale reveals short position ** BioHiTech Global Inc BHTG.O: up 6.5% BUZZ-Soars after shipping disinfectant system to cruise company ** Nikola Corp NKLA.O: up 12.4% BUZZ-Rebounds as co reassures investors of product roadmap ** Wanda Sports Group Co Ltd WSG.O: up 27.8% BUZZ-Soars on take-private offer from parent ** Genetron Holdings Ltd GTH.O: up 24.5% BUZZ-Rises as FDA grants liver cancer test breakthrough device status ** Peck Company Holdings Inc PECK.O: up 9.1% BUZZ-Jumps on $2.4 mln contract in Maine ** Elanco Animal Health Inc ELAN.N: up 4.6% BUZZ-To cut 900 jobs, shares rise ** Lululemon Athletica Inc LULU.O: up 2.5% BUZZ-BofA sees growth in post-COVID environment, reinstates with 'buy' ** Enerpac Tool Group Corp EPAC.N: down 7.6% BUZZ-Slumps after Q4 earnings misses estimates ** Boqii Holding Ltd BQ.N: down 31.0% BUZZ-Falls in NYSE debut ** Canadian Solar Inc CSIQ.O: up 5.1% BUZZ-Climbs on raising capital ahead of unit's China IPO ** American Airlines Group Inc AAL.O: up 2.7% ** United Airlines Holdings Inc UAL.O: up 3.2% ** Spirit Airlines Inc SAVE.N: up 2.9% ** Delta Air Lines Inc DAL.N: up 2.0% ** Southwest Airlines Co LUV.N: up 1.3% ** Alaska Air Group Inc ALK.N: up 2.2% ** JetBlue Airways Corp JBLU.O: up 2.4% BUZZ-U.S. airlines: Up on hopes of federal aid extension ** Yalla Group Ltd YALA.N: up 2% BUZZ-Jumps 30% in its NYSE debut ** Pacira BioSciences Inc PCRX.O: up 1.7% BUZZ-Gains as Jefferies lifts PT on Exparel growth prospects ** Oceaneering International Inc OII.N: up 4.8% BUZZ-Up on securing U.S. Navy contract ** PVH Corp PVH.N: up 3.3% BUZZ-Gains as President Larsson to takeover as CEO ** Tesla Inc TSLA.O: up 2.2% BUZZ-Rises after media report points to record deliveries ** Penn National Gaming Inc PENN.O: up 3.2% BUZZ-Rises as JP Morgan sees higher value, hikes PT ** Synnex Corp SNX.N: up 7.3% BUZZ-Jumps on upbeat forecast ** Iterum Therapeutics PLC ITRM.O: up 136.2% BUZZ-Soars on positive FDA meeting for urinary tract infection drug ** Western Digital Corp WDC.O: down 4.7% BUZZ-Slips as Micron flags profitability challenges in NAND market ** Starbucks Corp SBUX.O: up 1.7% BUZZ-Gains after Cowen upgrades rating and raises PT to Street high ** Hasbro Inc HAS.O: up 2.8% BUZZ-Rises as Stifel upgrades to 'buy' on holiday boost ** Shopify Inc SHOP.N: up 0.1% BUZZ-Wedbush says e-commerce pull forward sustainable ** Target Hospitality Corp TH.O: up 2.5% BUZZ-Rises as customer activity seen rising from Q2 lows ** L Brands Inc LB.N: up 4.6% BUZZ-JPM boosts PT to highest on Wall Street ** Solaredge Technologies Inc SEDG.O: up 3.8% BUZZ-Solar energy firms: JPM hikes PT on growth trends ** Vivint Solar Inc VSLR.N: up 6.4% BUZZ-Solar energy firms: JPM hikes PT on growth trends ** Quest Diagnostics Inc DGX.N: up 1.1% BUZZ-Rises on launch of three new COVID-19 tests ** Tuniu Corp TOUR.O: up 26.7% BUZZ-Up on $10 mln share buyback plan ** Alnylam Pharmaceuticals Inc ALNY.O: up 0.8% BUZZ-Gains on positive data from its kidney disorder drug ** Yunji Inc YJ.O: up 4.3% BUZZ-Soars after first live streaming show on Douyin ** Alibaba Group Holding Ltd BABA.N: up 5.2% BUZZ-Rises as co expects cloud unit to turn profitable next year ** Bionano Genomics Inc BNGO.O: up 8.1% BUZZ-Jumps on adoption of co's genome mapping system in Australia and Slovenia ** Zynga Inc ZNGA.O: up 0.4% BUZZ-MKM Partners starts with 'buy' on growth prospects[USNnL4N2GR35N] ** Micron Technology Inc MU.O: down 6.2% BUZZ-Street View: Near-term challenges aplenty ** Fuelcell Energy Inc FCEL.O: down 15.6% BUZZ-Down after co prices upsized equity offering ** CureVac NV CVAC.O: up 2.9% BUZZ-Up as co begins mid-stage trial of COVID-19 vaccine candidate ** Duke Energy Corp DUK.N: up 6.2% BUZZ-Climbs on report of takeover offer from NextEra ** Oasis Petroleum Inc OAS.O: down 38.7% BUZZ-Slumps after Chapter 11 bankruptcy filing ** Moderna Inc MRNA.O: up 2.7% BUZZ-Up after COVID-19 vaccine shows signs of working in older adults ** Walt Disney Co DIS.N: down 0.6% BUZZ-Falls as co plans to lay off 28,000 park employees ** Caesars Entertainment Inc CZR.O: up 4.2% BUZZ-Agrees to buy William Hill ** Eton Pharmaceuticals Inc ETON.O: up 0.5% BUZZ-Up on U.S. approval for adrenal insufficiency treatment The 11 major S&P 500 sectors: Communication Services Eikon search string for individual stock moves: STXBZ The Day Ahead newsletter: http://tmsnrt.rs/2ggOmBi The Morning News Call newsletter: http://tmsnrt.rs/2fwPLTh Wall Street's main indexes jumped on Wednesday, with the S&P 500 on course for its best two-quarter gain since 2009, as investors rekindled bets on an imminent fiscal stimulus package, while upbeat data suggested a domestic economic recovery was on track..N At 1:18 p.m. ET, the Dow Jones Industrial Average .DJI was up 1.65% at 27,905.34.
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1ce43ca8-3565-4ee9-bbf9-b208d08b5a50
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718984.0
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2020-09-30 00:00:00 UTC
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Why Datadog Stock Soared on Wednesday
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DDOG
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https://www.nasdaq.com/articles/why-datadog-stock-soared-on-wednesday-2020-09-30
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nan
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nan
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What happened
Datadog (NASDAQ: DDOG) was far from a dog of an investment on Wednesday. Shares of the cloud-computing analytics and monitoring specialist jumped more than 12% on the day due to a new tie-up with a mighty partner.
So what
That partner is none other than Microsoft (NASDAQ: MSFT); Datadog will now be featured in the console of Microsoft's Azure cloud platform as a "first class service."
As Datadog explained in a press release, "This means that Azure customers will be able to implement Datadog as a monitoring solution for their cloud workloads through new streamlined workflows that cover everything from procurement to configuration." Azure users, the company says, will be able to buy a Datadog plan through the console, and immediately begin receiving the metrics from it.
Datadog showed its pedigree on Wednesday. Image source: Getty Images.
According to Datadog, this is the first-ever integration of a third-party monitoring service into a public-facing cloud computing platform.
The Datadog integration in Microsoft Azure is currently in public preview; it will be widely available starting in October. Datadog did not provide more specific timing.
Now what
Datadog also has not provided any estimates as to how the partnership with the tech giant will impact its business. Given the size and scope of Azure, plus the highly complimentary nature of Datadog's offering and its convenience within the system, we can readily assume it'll be meaningful. Datadog remains a compelling play on the continued development and expanding popularity of cloud-based computing.
10 stocks we like better than Microsoft
When investing geniuses David and Tom Gardner have 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.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Microsoft wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
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*Stock Advisor returns as of September 24, 2020
Â
Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool's board of directors. Eric Volkman has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Datadog and Microsoft and recommends the following options: long January 2021 $85 calls on Microsoft and short January 2021 $115 calls on 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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What happened Datadog (NASDAQ: DDOG) was far from a dog of an investment on Wednesday. Shares of the cloud-computing analytics and monitoring specialist jumped more than 12% on the day due to a new tie-up with a mighty partner. Azure users, the company says, will be able to buy a Datadog plan through the console, and immediately begin receiving the metrics from it.
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What happened Datadog (NASDAQ: DDOG) was far from a dog of an investment on Wednesday. So what That partner is none other than Microsoft (NASDAQ: MSFT); Datadog will now be featured in the console of Microsoft's Azure cloud platform as a "first class service." 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 Datadog (NASDAQ: DDOG) was far from a dog of an investment on Wednesday. So what That partner is none other than Microsoft (NASDAQ: MSFT); Datadog will now be featured in the console of Microsoft's Azure cloud platform as a "first class service." As Datadog explained in a press release, "This means that Azure customers will be able to implement Datadog as a monitoring solution for their cloud workloads through new streamlined workflows that cover everything from procurement to configuration."
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What happened Datadog (NASDAQ: DDOG) was far from a dog of an investment on Wednesday. So what That partner is none other than Microsoft (NASDAQ: MSFT); Datadog will now be featured in the console of Microsoft's Azure cloud platform as a "first class service." That's right -- they think these 10 stocks are even better buys.
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84716aac-d6ec-4104-ac77-c8b7cd197f87
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718985.0
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2020-09-30 00:00:00 UTC
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3 Hot Stocks That Can Double Again in the Fourth Quarter
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DDOG
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https://www.nasdaq.com/articles/3-hot-stocks-that-can-double-again-in-the-fourth-quarter-2020-09-30
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nan
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nan
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It's been a surprisingly good year for most growth stock investors. Despite a pandemic, recession, and general market fatigue, we've seen more than 200 major exchange-listed stocks more than double in 2020.
Some of them could be working on an encore as we head into the final three months of the year. Peloton Interactive (NASDAQ: PTON), Datadog (NASDAQ: DDOG), and JD.com (NASDAQ: JD) have gained more than 100% through the first nine months of 2020. Let's go over why they have the catalysts to double again through the final three months of the year.Â
Image source: Getty Images.
Peloton
It's easy to dismiss Peloton as a pandemic play, but it's not fair or accurate. The company behind the high-end stationary bikes and treadmills may have just put up an insane 172% top-line surge in its latest quarter, but it was growing its reach even before the COVID-19 crisis. Revenue more than doubled in fiscal 2019 after soaring 99% the year before.
The popularity will also not fade once we're past the coronavirus disruption. Folks don't spring four figures for workout equipment only to walk away. Peloton now has 1.09 million subscribers paying $39 a month to connect to its fitness platform; the company expects to top 2 million subs a year from now.Â
The new normal may have created an environment that's conducive to Peloton's growth. Churn is at a four-year low, and the number of monthly workouts per connected fitness subscribers has never been higher. Gyms and spinning classes are starting to reopen, but we're not seeing Peloton lose traction. It's also broadening its product line at market-widening price points.
Datadog
Some of this year's biggest winners are cloud-based enterprise platforms that make businesses more efficient, like Datadog. Its offerings help companies do everything from monitor uptime to improve visitor experience through next-gen analytics.Â
Datadog's popularity is undeniable. Revenue surged 68% in its latest quarter, as its client count increased by 37% and the average existing customer spent 30% more than a year earlier. This isn't a fluke. Datadog's growth rate was actually higher in the past, and its dollar-based net retention rate has clocked in at 130% or higher for a dozen straight quarters.Â
Datadog is expanding its product offerings, and more of its customers are signing up for multiple platforms. Datadog has also routinely boosted its guidance, including coming through with another "beat and raise" in August. Momentum is on its side after weathering the COVID-19 storm, and the near future is ripe with opportunities for its expanding addressable market. Â Â
JD.com
China's largest online retailer in terms of revenue is booming again. The world's most populous nation is seeing the same online migration that we're experiencing here during the COVID-19 crisis. The trend has continued even though China is seemingly past the pandemic, given that its case counts peaked back in February.Â
JD.com's net revenue rose 25% last year. It retreated to 21% during the first quarter of this year before bouncing back with a 34% rebound in its latest quarter. JD.com isn't a household name to most stateside investors, but it's a juggernaut with 417.4 million active customer accounts and $22.7 billion in trailing free cash flow.Â
There are naturally some big risks when it comes to investing in Chinese stocks, but with so much momentum on its side, JD.com is worth it right now. It joins Peloton and Datadog among this year's biggest winners with the best chances of doubling again in the fourth quarter.
10 stocks we like better than JD.com
When investing geniuses David and Tom Gardner have 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.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and JD.com wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
Â
*Stock Advisor returns as of September 24, 2020
Â
Rick Munarriz owns shares of Datadog and Peloton Interactive. The Motley Fool owns shares of and recommends Datadog, JD.com, 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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Peloton Interactive (NASDAQ: PTON), Datadog (NASDAQ: DDOG), and JD.com (NASDAQ: JD) have gained more than 100% through the first nine months of 2020. The company behind the high-end stationary bikes and treadmills may have just put up an insane 172% top-line surge in its latest quarter, but it was growing its reach even before the COVID-19 crisis. The trend has continued even though China is seemingly past the pandemic, given that its case counts peaked back in February. JD.com's net revenue rose 25% last year.
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Peloton Interactive (NASDAQ: PTON), Datadog (NASDAQ: DDOG), and JD.com (NASDAQ: JD) have gained more than 100% through the first nine months of 2020. Peloton now has 1.09 million subscribers paying $39 a month to connect to its fitness platform; the company expects to top 2 million subs a year from now. The new normal may have created an environment that's conducive to Peloton's growth. Churn is at a four-year low, and the number of monthly workouts per connected fitness subscribers has never been higher.
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Peloton Interactive (NASDAQ: PTON), Datadog (NASDAQ: DDOG), and JD.com (NASDAQ: JD) have gained more than 100% through the first nine months of 2020. Peloton now has 1.09 million subscribers paying $39 a month to connect to its fitness platform; the company expects to top 2 million subs a year from now. The new normal may have created an environment that's conducive to Peloton's growth. Datadog's growth rate was actually higher in the past, and its dollar-based net retention rate has clocked in at 130% or higher for a dozen straight quarters. Datadog is expanding its product offerings, and more of its customers are signing up for multiple platforms.
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Peloton Interactive (NASDAQ: PTON), Datadog (NASDAQ: DDOG), and JD.com (NASDAQ: JD) have gained more than 100% through the first nine months of 2020. * David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and JD.com wasn't one of them! See the 10 stocks
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b339cfe8-9e39-4a76-94cf-a705ae982711
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718986.0
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2020-09-25 00:00:00 UTC
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Is Splunk Stock a Buy?
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DDOG
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https://www.nasdaq.com/articles/is-splunk-stock-a-buy-2020-09-25
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nan
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nan
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Cloud computing has been a bright spot in 2020 amid the global pandemic and ensuing recession. According to tech researcher Gartner, global public cloud spending is expected to increase 6% from 2019 to reach some $258 billion -- then return to double-digit percentage increases in 2021 and 2022, in which time Gartner sees global cloud spending topping $364 billion. Â
This is the trend that underpins the thesis to invest in data monitoring and analytics platform Splunk (NASDAQ: SPLK).Â
Image source: Getty Images.
An old dog learns new tricks
Splunk is an old player in the data monitoring and analytics industry. It's a crowded space that includes plenty of other old-timers as well as newcomers like Datadog (NASDAQ: DDOG) and Elastic (NYSE: ESTC). But while some of these newer data analytics firms like Datadog have caught up to Splunk as far as market cap goes, Splunk remains far and away the industry leader by revenue.Â
Data by YCharts.
In recent years, Splunk has had to update its data log and analytics software capabilities for use with cloud computing, and more recently has been transitioning to a customer billing model that better reflects modern needs. That has created some revenue recognition changes (cloud contract revenue is recognized over time versus an older term contract where revenue is recognized upfront). That is reflected in Splunk's 2% revenue decline through the first half of its 2021 fiscal year (six months ended July 31, 2020) to $926 million as the old term contracts get replaced with cloud contracts. Â
However, when using annual recurring revenue (ARR, new cloud plus old term contract sales), Splunk's total ARR at the end of the second quarter was up 50% from a year ago to $1.93 billion -- driven by an 89% increase in cloud ARR as more customers transition to the new billing model. And over the next two years, Splunk expects ARR to grow an average of 40% a year and reach $4.6 billion in fiscal 2023 (calendar year 2022), and generate operating cash flow of roughly $1 billion.
A reasonable price for an enduring growth story
Clearly Splunk's growth story remains intact, though the company's expectations for itself the next two years are higher than Gartner's projections for the industry overall -- specifically, for cloud application infrastructure, cloud system infrastructure, and security spending to increase 66%, 61%, and 25% from 2020 to 2022. Â
If Splunk is to more than double its revenue, the story the next two years will revolve around the company being able to scoop up more market share. Data analytics and cloud monitoring is a rising tide that will float many boats, but Splunk's large and still-expanding platform and tenure in the industry looks promising. And though its revenue isn't growing as fast as some of its peers at the moment (Datadog reported 68% year-over-year growth in the second quarter, and Elastic 44%), looking at the ARR picture and outlook for Splunk clears up some of the seemingly wide disparity.
As of this writing, Splunk stock has pulled back some 20% from all-time highs and trades for 12.1 times trailing 12-month sales. By comparison, some of its peers are going for far higher, like the more than 50 times trailing revenue valuation for Datadog. Besides the flat revenue performance this year during its cloud transition, part of the discount is also likely due to the $2.06 billion in cash and equivalents but $2.25 billion in debt on Splunk's balance sheet. Its smaller peers have net positive cash positions. Â
Nevertheless, Splunk is quickly returning to profitability as it updates its business model and is on a path to reaching operating profit margins of about 20%. Given the long-term positive outlook for the industry Splunk plays in, this stock remains a buy on my list and is a value compared to other data analytics stocks out there.
10 stocks we like better than Splunk
When investing geniuses David and Tom Gardner have 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.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Splunk wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
Â
*Stock Advisor returns as of August 1, 2020
Â
Nicholas Rossolillo owns shares of Splunk. His clients may own shares of the companies mentioned. The Motley Fool owns shares of and recommends Datadog, Elastic N V, and Splunk. 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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It's a crowded space that includes plenty of other old-timers as well as newcomers like Datadog (NASDAQ: DDOG) and Elastic (NYSE: ESTC). Data analytics and cloud monitoring is a rising tide that will float many boats, but Splunk's large and still-expanding platform and tenure in the industry looks promising. And though its revenue isn't growing as fast as some of its peers at the moment (Datadog reported 68% year-over-year growth in the second quarter, and Elastic 44%), looking at the ARR picture and outlook for Splunk clears up some of the seemingly wide disparity.
|
It's a crowded space that includes plenty of other old-timers as well as newcomers like Datadog (NASDAQ: DDOG) and Elastic (NYSE: ESTC).  This is the trend that underpins the thesis to invest in data monitoring and analytics platform Splunk (NASDAQ: SPLK). Image source: Getty Images. That has created some revenue recognition changes (cloud contract revenue is recognized over time versus an older term contract where revenue is recognized upfront).
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It's a crowded space that includes plenty of other old-timers as well as newcomers like Datadog (NASDAQ: DDOG) and Elastic (NYSE: ESTC). Â However, when using annual recurring revenue (ARR, new cloud plus old term contract sales), Splunk's total ARR at the end of the second quarter was up 50% from a year ago to $1.93 billion -- driven by an 89% increase in cloud ARR as more customers transition to the new billing model. A reasonable price for an enduring growth story Clearly Splunk's growth story remains intact, though the company's expectations for itself the next two years are higher than Gartner's projections for the industry overall -- specifically, for cloud application infrastructure, cloud system infrastructure, and security spending to increase 66%, 61%, and 25% from 2020 to 2022.
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It's a crowded space that includes plenty of other old-timers as well as newcomers like Datadog (NASDAQ: DDOG) and Elastic (NYSE: ESTC). Â However, when using annual recurring revenue (ARR, new cloud plus old term contract sales), Splunk's total ARR at the end of the second quarter was up 50% from a year ago to $1.93 billion -- driven by an 89% increase in cloud ARR as more customers transition to the new billing model. Given the long-term positive outlook for the industry Splunk plays in, this stock remains a buy on my list and is a value compared to other data analytics stocks out there.
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00cb5167-ab79-47b3-8833-70f7134d7504
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718987.0
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2020-09-25 00:00:00 UTC
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BUZZ-U.S. STOCKS ON THE MOVE-TAT Technologies Ltd, Boeing Co, Colony Capital Inc, Penn National Gaming Inc
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DDOG
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https://www.nasdaq.com/articles/buzz-u.s.-stocks-on-the-move-tat-technologies-ltd-boeing-co-colony-capital-inc-penn
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nan
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nan
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Eikon search string for individual stock moves: STXBZ
The Day Ahead newsletter: http://tmsnrt.rs/2ggOmBi
The Morning News Call newsletter: http://tmsnrt.rs/2fwPLTh
U.S. stock index futures fell on Friday as investors remained skeptical of more fiscal stimulus needed to shore up a domestic economy hammered by the pandemic-driven recession. .N
At 6:37 ET, Dow e-minis 1YMc1 were down 0.53% at 26,573. S&P 500 e-minis ESc1 were down 0.50% at 3,221.75, while Nasdaq 100 e-minis NQc1 were down 0.50% at 10,837.75. The top three NYSE percentage gainers premarket .PRPG.NQ: ** Colony Capital Inc , up 19.7% ** Hudbay Minerals Inc , up 8.4% ** Rite Aid Corp , up 5.5% The top three NYSE percentage losers premarket .PRPL.NQ: ** Just Energy Group Inc , down 96.5% ** Borr Drillng Ltd , down 8.1% ** Pacific Drilling SA , down 8% The top three Nasdaq percentage gainers premarket .PRPG.O: ** CBAK Energy Technology Inc , up 105.2% ** Great Elm Capital Group Inc , up 77.0% ** TAT Technologies Ltd , up 60.9% The top three Nasdaq percentage losers premarket .PRPL.O: ** SPI Energy Co Ltd , down 19% ** Immutep Ltd , down 13.6% ** Nano Dimension Ltd , down 11.2% ** Costco Wholesale Corp COST.O: down 2.9% premarket BUZZ-Street View: Remains 'best-in-class' retailer
** Colony Capital Inc CLNY.N: up 19.7% premarket BUZZ-Up on $2.8 bln deal to sell hospitality portfolios to Highgate
** Penn National Gaming Inc PENN.O: down 2% premarket BUZZ-Down after pricing equity offering
** Boeing Co BA.N: up 0.3% premarket BUZZ-Up after Europe regulator says 737 MAX ban could lift in November
** TAT Technologies Ltd TATT.O: up 60.9% premarket BUZZ-Soars on maintenance agreement with Honeywell
(Compiled by Niket Nishant in Bengaluru)
((Niket.Nishant@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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Eikon search string for individual stock moves: STXBZ The Day Ahead newsletter: http://tmsnrt.rs/2ggOmBi The Morning News Call newsletter: http://tmsnrt.rs/2fwPLTh U.S. stock index futures fell on Friday as investors remained skeptical of more fiscal stimulus needed to shore up a domestic economy hammered by the pandemic-driven recession. .N At 6:37 ET, Dow e-minis 1YMc1 were down 0.53% at 26,573. The top three NYSE percentage gainers premarket .PRPG.NQ: ** Colony Capital Inc , up 19.7% ** Hudbay Minerals Inc , up 8.4% ** Rite Aid Corp , up 5.5% The top three NYSE percentage losers premarket .PRPL.NQ: ** Just Energy Group Inc , down 96.5% ** Borr Drillng Ltd , down 8.1% ** Pacific Drilling SA , down 8% The top three Nasdaq percentage gainers premarket .PRPG.O: ** CBAK Energy Technology Inc , up 105.2% ** Great Elm Capital Group Inc , up 77.0% ** TAT Technologies Ltd , up 60.9% The top three Nasdaq percentage losers premarket .PRPL.O: ** SPI Energy Co Ltd , down 19% ** Immutep Ltd , down 13.6% ** Nano Dimension Ltd , down 11.2% ** Costco Wholesale Corp COST.O: down 2.9% premarket BUZZ-Street View: Remains 'best-in-class' retailer ** Colony Capital Inc CLNY.N: up 19.7% premarket BUZZ-Up on $2.8 bln deal to sell hospitality portfolios to Highgate ** Penn National Gaming Inc PENN.O: down 2% premarket BUZZ-Down after pricing equity offering ** Boeing Co BA.N: up 0.3% premarket BUZZ-Up after Europe regulator says 737 MAX ban could lift in November ** TAT Technologies Ltd TATT.O: up 60.9% premarket BUZZ-Soars on maintenance agreement with Honeywell (Compiled by Niket Nishant in Bengaluru) ((Niket.Nishant@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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Eikon search string for individual stock moves: STXBZ The Day Ahead newsletter: http://tmsnrt.rs/2ggOmBi The Morning News Call newsletter: http://tmsnrt.rs/2fwPLTh U.S. stock index futures fell on Friday as investors remained skeptical of more fiscal stimulus needed to shore up a domestic economy hammered by the pandemic-driven recession. S&P 500 e-minis ESc1 were down 0.50% at 3,221.75, while Nasdaq 100 e-minis NQc1 were down 0.50% at 10,837.75. The top three NYSE percentage gainers premarket .PRPG.NQ: ** Colony Capital Inc , up 19.7% ** Hudbay Minerals Inc , up 8.4% ** Rite Aid Corp , up 5.5% The top three NYSE percentage losers premarket .PRPL.NQ: ** Just Energy Group Inc , down 96.5% ** Borr Drillng Ltd , down 8.1% ** Pacific Drilling SA , down 8% The top three Nasdaq percentage gainers premarket .PRPG.O: ** CBAK Energy Technology Inc , up 105.2% ** Great Elm Capital Group Inc , up 77.0% ** TAT Technologies Ltd , up 60.9% The top three Nasdaq percentage losers premarket .PRPL.O: ** SPI Energy Co Ltd , down 19% ** Immutep Ltd , down 13.6% ** Nano Dimension Ltd , down 11.2% ** Costco Wholesale Corp COST.O: down 2.9% premarket BUZZ-Street View: Remains 'best-in-class' retailer ** Colony Capital Inc CLNY.N: up 19.7% premarket BUZZ-Up on $2.8 bln deal to sell hospitality portfolios to Highgate ** Penn National Gaming Inc PENN.O: down 2% premarket BUZZ-Down after pricing equity offering ** Boeing Co BA.N: up 0.3% premarket BUZZ-Up after Europe regulator says 737 MAX ban could lift in November ** TAT Technologies Ltd TATT.O: up 60.9% premarket BUZZ-Soars on maintenance agreement with Honeywell (Compiled by Niket Nishant in Bengaluru) ((Niket.Nishant@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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Eikon search string for individual stock moves: STXBZ The Day Ahead newsletter: http://tmsnrt.rs/2ggOmBi The Morning News Call newsletter: http://tmsnrt.rs/2fwPLTh U.S. stock index futures fell on Friday as investors remained skeptical of more fiscal stimulus needed to shore up a domestic economy hammered by the pandemic-driven recession. S&P 500 e-minis ESc1 were down 0.50% at 3,221.75, while Nasdaq 100 e-minis NQc1 were down 0.50% at 10,837.75. The top three NYSE percentage gainers premarket .PRPG.NQ: ** Colony Capital Inc , up 19.7% ** Hudbay Minerals Inc , up 8.4% ** Rite Aid Corp , up 5.5% The top three NYSE percentage losers premarket .PRPL.NQ: ** Just Energy Group Inc , down 96.5% ** Borr Drillng Ltd , down 8.1% ** Pacific Drilling SA , down 8% The top three Nasdaq percentage gainers premarket .PRPG.O: ** CBAK Energy Technology Inc , up 105.2% ** Great Elm Capital Group Inc , up 77.0% ** TAT Technologies Ltd , up 60.9% The top three Nasdaq percentage losers premarket .PRPL.O: ** SPI Energy Co Ltd , down 19% ** Immutep Ltd , down 13.6% ** Nano Dimension Ltd , down 11.2% ** Costco Wholesale Corp COST.O: down 2.9% premarket BUZZ-Street View: Remains 'best-in-class' retailer ** Colony Capital Inc CLNY.N: up 19.7% premarket BUZZ-Up on $2.8 bln deal to sell hospitality portfolios to Highgate ** Penn National Gaming Inc PENN.O: down 2% premarket BUZZ-Down after pricing equity offering ** Boeing Co BA.N: up 0.3% premarket BUZZ-Up after Europe regulator says 737 MAX ban could lift in November ** TAT Technologies Ltd TATT.O: up 60.9% premarket BUZZ-Soars on maintenance agreement with Honeywell (Compiled by Niket Nishant in Bengaluru) ((Niket.Nishant@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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Eikon search string for individual stock moves: STXBZ The Day Ahead newsletter: http://tmsnrt.rs/2ggOmBi The Morning News Call newsletter: http://tmsnrt.rs/2fwPLTh U.S. stock index futures fell on Friday as investors remained skeptical of more fiscal stimulus needed to shore up a domestic economy hammered by the pandemic-driven recession. .N At 6:37 ET, Dow e-minis 1YMc1 were down 0.53% at 26,573. S&P 500 e-minis ESc1 were down 0.50% at 3,221.75, while Nasdaq 100 e-minis NQc1 were down 0.50% at 10,837.75.
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4cbcd2f2-f139-4ae1-9701-8cfeec66fbc3
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718988.0
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2020-09-23 00:00:00 UTC
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What Happened When I Bought Snowflake on IPO Day
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DDOG
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https://www.nasdaq.com/articles/what-happened-when-i-bought-snowflake-on-ipo-day-2020-09-23
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nan
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nan
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Few companies have gone from almost complete anonymity among retail investors to huge buzz like Snowflake (NYSE: SNOW) has over the past couple of months. With the incredible run cloud computing stocks have had this year, interest in Snowflake exploded as investors chased the newest, shiniest investment opportunity in the cloud.
As a result, Snowflake shares rocketed higher when trading commenced at 12:38 p.m. EDT on Sept. 16. Even after Snowflake raised its IPO price twice in the days leading up to going public, moving it up from $75 per share to a final price of $120, its stock still shot up to $245 per share upon hitting the market. That was more than double the per-share price Snowflake got from investors in the IPO.
Image source: Getty Images.
I was one of the investors who bought early, deciding for the first time in my investing career to buy a company right at the IPO. Here's what happened when I made that decision.
The challenge of buying Snowflake early in trading
My plan to buy Snowflake had been in place for some time. The company provides an interesting and important role in the cloud space, helping enterprise customers use data they've warehoused in the cloud no matter which storage platform they use. This is a big differentiator. It has compelling value, as companies can use any -- or even multiple -- cloud storage services and count on Snowflake to help them utilize all that data to improve their businesses.
Based on the IPO price of $120 per share, and the massive interest in the company that had grown in the weeks leading up to the public offering, I expected shares to move sharply higher after trading started, but I was committed to buying that day.
Here's what happened
Since I expected shares to move higher, I decided to set up a limit order -- picking a price I was willing to pay -- for 10 shares of Snowflake at $140 per share. This was higher than the IPO price of $120 per share, which already worked out to an incredibly high 60 times trailing sales.
Paying 60 times sales for even a fast-growth cloud stock is an enormous premium. Here's how it compares to some of the more successful recent cloud stocks, including CrowdStrike Holdings (NASDAQ: CRWD), Datadog (NASDAQ: DDOG), and Fastly (NYSE: FSLY):
CRWD PS Ratio data by YCharts.
I was willing to pay more than 60 times sales to get some skin in the game on Snowflake.
Welp. Mr. Market had different ideas. Investors rushed through the gate, sending shares up more than double. I quickly realized my $140 limit order wasn't going to get filled, so I canceled it and bit the bullet on a market order.
A few moments after submitting that market order, it was filled at a nosebleed price of $276.22 per share.
Ouch.
The painful side of buying a hot IPO
So why "ouch"? Because at $276 per share, I paid about 150 times sales -- meaning it will take 150 years for Snowflake's trailing-12-month revenues to "buy" the company at that price. It's going to take an immense amount of growth to justify that sort of valuation.
Even with Snowflake's incredible 133% revenue growth rate over the two quarters before it went public, it trades for a nosebleed-level valuation looking forward. Snowflake trades for about 75 times forward sales; that's about double the valuation of another high-growth cloud business like Datadog, which trades for closer to 35 times forward sales estimates.
In other words, there's a very strong possibility that my $276 cost basis could mean Snowflake is a losing investment in my portfolio for an extended period of time. As of this writing, shares are trading just above $232 per share, down more than 15% from my purchase price.
Moreover, there are potential catalysts that could further weigh on the stock price in the months ahead. An IPO isn't just a way for a company to raise capital by selling stock to new investors; it's also an opportunity for early investors and employees to reap some of the rewards of taking the risk of investing in or working for it before it went public.
Employees, executives, and large pre-IPO investors typically are subject to "lock-up" agreements that keep them from selling shares for a few months after the IPO. These agreements let the company maximize the debut and prevent the market from getting flooded with shares on the first day of trading. Snowflake's lock-up period for most employees ends in December. There's a good chance that we could see a lot of those folks take full advantage of cashing in on their newfound -- and now liquid -- wealth later this year.
The biggest lesson: Following the business, not the stock
I bought Snowflake because of the company's incredible positioning in what could be the biggest, fastest-growth industry on earth over the next decade. Cloud data grows every day and companies need help making use of it no matter where it's stored; Snowflake is a big answer to those problems. I expect once it gets to critical mass, operating leverage will result in significant recurring profits.
So why pay what works out to a triple-digit sales multiple? As a starting point to get skin in the game. By establishing a starter position -- Snowflake represents about one-third of 1% of my portfolio value -- I'll pay more attention to the company and its competitors, and then act accordingly when I see opportunities to buy at a better price. And by starting small and focusing on the business performance going forward, I didn't risk more capital than I'm willing to lose if Snowflake doesn't turn into the growth monster I think it could be.
I probably paid too much buying Snowflake so quickly after the IPO. But going forward, I'll learn more about the business. If Mr. Market decides to give me the chance to buy more shares at a lower price, I'll be better able to identify those opportunities and act quickly to add to my position. I don't view short-term sell-offs as risk, and I didn't buy Snowflake for what its stock price will do over the next few months. I bought it because I expect it to become a dominant business in the cloud data business over the next decade.
Offer from The Motley Fool: The 10 best stocks to buy now
Motley Fool co-founders Tom and David Gardner have spent more than a decade beating the market. In fact, the newsletter they run, Motley Fool Stock Advisor, has tripled the S&P 500!*
Tom and David just revealed their ten top stock picks for investors to buy right now.
Click here to get access to the full list!
*Stock Advisor returns as of June 1, 2019
Jason Hall owns shares of Fastly and Snowflake Inc. The Motley Fool owns shares of and recommends CrowdStrike Holdings, Inc., Datadog, and Fastly. The Motley Fool recommends 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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Here's how it compares to some of the more successful recent cloud stocks, including CrowdStrike Holdings (NASDAQ: CRWD), Datadog (NASDAQ: DDOG), and Fastly (NYSE: FSLY): CRWD PS Ratio data by YCharts. It has compelling value, as companies can use any -- or even multiple -- cloud storage services and count on Snowflake to help them utilize all that data to improve their businesses. By establishing a starter position -- Snowflake represents about one-third of 1% of my portfolio value -- I'll pay more attention to the company and its competitors, and then act accordingly when I see opportunities to buy at a better price.
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Here's how it compares to some of the more successful recent cloud stocks, including CrowdStrike Holdings (NASDAQ: CRWD), Datadog (NASDAQ: DDOG), and Fastly (NYSE: FSLY): CRWD PS Ratio data by YCharts. Snowflake trades for about 75 times forward sales; that's about double the valuation of another high-growth cloud business like Datadog, which trades for closer to 35 times forward sales estimates. The Motley Fool owns shares of and recommends CrowdStrike Holdings, Inc., Datadog, and Fastly.
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Here's how it compares to some of the more successful recent cloud stocks, including CrowdStrike Holdings (NASDAQ: CRWD), Datadog (NASDAQ: DDOG), and Fastly (NYSE: FSLY): CRWD PS Ratio data by YCharts. Even after Snowflake raised its IPO price twice in the days leading up to going public, moving it up from $75 per share to a final price of $120, its stock still shot up to $245 per share upon hitting the market. Based on the IPO price of $120 per share, and the massive interest in the company that had grown in the weeks leading up to the public offering, I expected shares to move sharply higher after trading started, but I was committed to buying that day.
|
Here's how it compares to some of the more successful recent cloud stocks, including CrowdStrike Holdings (NASDAQ: CRWD), Datadog (NASDAQ: DDOG), and Fastly (NYSE: FSLY): CRWD PS Ratio data by YCharts. I was one of the investors who bought early, deciding for the first time in my investing career to buy a company right at the IPO. Here's what happened Since I expected shares to move higher, I decided to set up a limit order -- picking a price I was willing to pay -- for 10 shares of Snowflake at $140 per share.
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d2568e8e-e770-4b44-b41d-b9ce3ebf8c73
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718989.0
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2020-09-21 00:00:00 UTC
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Why I Don't Pay Attention to Stock Valuation at All
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DDOG
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https://www.nasdaq.com/articles/why-i-dont-pay-attention-to-stock-valuation-at-all-2020-09-21
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nan
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nan
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Imagine you're going to buy something new: a bike, a car, a house. No matter what it is, one question bound to cross your mind is, "How much will this cost me?"
For most investors (especially beginning investors), it's no different. Whether it's the actual price of a share, or a valuation metric like price to earnings (P/E) or price to sales (P/S), everyone has to consider valuation...right?
On the surface, it seems obvious. But the longer I've been investing, the less attention I give valuation. In fact, these days, I spend zero time on valuation. Below, I'll explain why that is, how I can still feel comfortable making good stock picks, and why I don't think my approach will lead to a dot-com-esque outcome.
Image source: Getty Images
First, the assumptions crucial to this approach
Few books have affected my thinking -- in investing and life -- more than Nassim Taleb's Antifragile: Things That Gain From Disorder. It lays bare a simple truth that few seem willing to accept: that the future is completely unknowable.
We often take present circumstances and create a narrative projecting into the future. But that's just an illusion. The emergence of the coronavirus is a golden example. (Where in your New Year's resolutions did you talk about the virus?)
Once we accept that any narrative we attach to a company is illusory, we can change our approach to investing. Accepting this and choosing a different approach has helped my family's investments more than quadruple the market over the past decade. It can be broken into three broad categories I look at before making any investment:
The barbell approach: Here, I want companies that have one line of business that's relatively stable and has a wide moat. But I also want companies exploring new ways to give people what they need, in pursuit of a holistic mission. This means the downside is limited (wide moat), but there's unlimited upside -- or what I call "optionality."
Financial fortitude: If a company has lots of cash and little debt, it can actually get stronger during a crisis: buying back shares on the cheap, underpricing the competition to gain market share, or buying start-ups at a discount.
Skin in the game: The "softest" of all three variables, I want those leading the company to create long-term value. I do this by seeing if the founders are involved, if executives own lots of the stock, and if front-line employees are happy using tools like Glassdoor.
You'll notice that there's absolutely nothing in there about valuation. But here's the rub: There are many companies scoring very poorly on these three variables that are also "expensive" in the traditional sense. Those stocks never land on my radar because they aren't "anti-fragile." Believe it or not, that eliminates most companies out there.
A track record to prove it
Over the past five years, I've twice written about why I would not own a stock on valuation grounds alone. Both stocks -- IPG Photonics and Zoom Video Communications -- scored well on my framework. I just thought they were too expensive. Both times, I was very, very wrong.
And if I go back and look at my most successful investments, almost all of them were initiated when conventional wisdom would say "These stocks are too expensive." To add some perspective, the S&P 500 has historically traded for about 15 times earnings (P/E) and 1.5 times sales (P/S).
Here's a look at my top 10 holdings and how they've done, despite those "expensive" price tags:
COMPANY ORIGINAL PURCHASE P/E AT THE TIME P/S AT THE TIME TOTAL RETURN
Shopify February 2017 N/A 14.0 1,340%
Amazon March 2010 65 2.4 2,140%
MercadoLibre October 2012 43 11.2 1,020%
Alphabet March 2010 27 7.6 420%
Veeva January 2014 412 21.2 720%
CrowdStrike September 2019 N/A 32.3 120%
Axon Enterprise March 2017 71 4.5 250%
Okta October 2019 N/A 24.4 70%
MongoDB October 2018 N/A 14.3 220%
DataDog November 2019 N/A 11.4 140%
Data source: Author's records, YCharts. Absolute and relative returns rounded to the nearest tens. N/A = Not applicable due to lack of earnings.
The P/E column shows that half of the time, these companies hadn't produced a profit on paper. In absolutely no cases had the stock been trading for below the historical P/E or P/S averages for the S&P 500. And yet every single one has absolutely crushed the market.
What we can learn from this
I would argue that the reason each of these stocks have done well, despite being so expensive, is because they are so anti-fragile. Or maybe the converse is more accurate: These stocks have been expensive because they're anti-fragile.
Some might say: "Look at the dot-com bust. You might end up like that." It's true that tech investments made in 2000 played out very poorly. But it's also true that almost none of the tech companies in 2000 would have qualified as anti-fragile. There were few visible moats and very little cash flows. I think focusing on the businesses -- and not the stock prices -- would have helped me avoid the worst investments.
The bottom line is this: In my investing life, valuation has been much more noise than signal. By focusing on moats, optionality, balance sheets, cash flows, and the softer variables, I've isolated the variables that matter to me. They may not matter to you, and that's OK: Everyone needs to find a system that fits their personality.
All too often, we don't offer up examples that eschew value in favor of other variables. I hope by putting this out there, some investors might see there's a way to make money investing without getting hung up on valuation.
10 stocks we like better than Walmart
When investing geniuses David and Tom Gardner have an investing 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.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now… and Walmart 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 2/1/20
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. Brian Stoffel owns shares of Alphabet (A shares), Alphabet (C shares), Amazon, Axon Enterprise, CrowdStrike Holdings, Inc., Datadog, MercadoLibre, MongoDB, Okta, Shopify, Veeva Systems, and Zoom Video Communications. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Axon Enterprise, CrowdStrike Holdings, Inc., Datadog, IPG Photonics, MercadoLibre, MongoDB, Okta, Shopify, Veeva Systems, and Zoom Video Communications and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. 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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Below, I'll explain why that is, how I can still feel comfortable making good stock picks, and why I don't think my approach will lead to a dot-com-esque outcome. It can be broken into three broad categories I look at before making any investment: The barbell approach: Here, I want companies that have one line of business that's relatively stable and has a wide moat. I do this by seeing if the founders are involved, if executives own lots of the stock, and if front-line employees are happy using tools like Glassdoor.
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Shopify February 2017 N/A 14.0 1,340% Amazon March 2010 65 2.4 2,140% MercadoLibre October 2012 43 11.2 1,020% Alphabet March 2010 27 7.6 420% Veeva January 2014 412 21.2 720% CrowdStrike September 2019 N/A 32.3 120% Axon Enterprise March 2017 71 4.5 250% Okta October 2019 N/A 24.4 70% MongoDB October 2018 N/A 14.3 220% DataDog November 2019 N/A 11.4 140% Data source: Author's records, YCharts. Brian Stoffel owns shares of Alphabet (A shares), Alphabet (C shares), Amazon, Axon Enterprise, CrowdStrike Holdings, Inc., Datadog, MercadoLibre, MongoDB, Okta, Shopify, Veeva Systems, and Zoom Video Communications. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Axon Enterprise, CrowdStrike Holdings, Inc., Datadog, IPG Photonics, MercadoLibre, MongoDB, Okta, Shopify, Veeva Systems, and Zoom Video Communications and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon.
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See the 10 stocks Stock Advisor returns as of 2/1/20 John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Brian Stoffel owns shares of Alphabet (A shares), Alphabet (C shares), Amazon, Axon Enterprise, CrowdStrike Holdings, Inc., Datadog, MercadoLibre, MongoDB, Okta, Shopify, Veeva Systems, and Zoom Video Communications. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Axon Enterprise, CrowdStrike Holdings, Inc., Datadog, IPG Photonics, MercadoLibre, MongoDB, Okta, Shopify, Veeva Systems, and Zoom Video Communications and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon.
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It can be broken into three broad categories I look at before making any investment: The barbell approach: Here, I want companies that have one line of business that's relatively stable and has a wide moat. But here's the rub: There are many companies scoring very poorly on these three variables that are also "expensive" in the traditional sense. * David and Tom just revealed what they believe are the ten best stocks for investors to buy right now… and Walmart wasn't one of them!
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48742391-df2f-4b98-a89d-cf9f8dc6879e
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718990.0
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2020-09-18 00:00:00 UTC
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Before You Buy Snowflake, Take a Look at These Cloud Software Companies
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DDOG
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https://www.nasdaq.com/articles/before-you-buy-snowflake-take-a-look-at-these-cloud-software-companies-2020-09-18
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nan
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nan
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With a lot of hype surrounding new IPO Snowflake, some investors may be wondering if they should buy the stock soon, even though Snowflake has already doubled over its IPO price. But are there other opportunities that would give you similar access to the cloud and big data market?
Snowflake definitely appears to be one of the highest-quality cloud software stocks around. It's growing really fast, has a large addressable market, and is well-managed. However, it's not alone in these qualities by any means. After the recent technology sector pullback, many quality SaaS companies have been marked down. Going into the fall, are there better alternatives for your investment dollars?
How does Snowflake compare to other SaaS vendors? Image source: Getty Images.
Close peers to Snowflake
Snowflake is a data warehouse provider that operates purely in the public cloud. The public cloud is one of the biggest technology revolutions of this century; it's completely transformed the way major corporations conduct business.
A number of cloud-focused software stocks have gone public in recent years, with many going onto be multi-baggers and trouncing the overall market's returns. Typically, these companies trade at high valuations, but their high-growth, recurring-revenue models in the sticky sector of enterprise IT have at least somewhat justified their rise.
Even by the standards of the most expensive software companies out there, Snowflake is pricey, though it's also recording some of the best growth. Here's how Snowflake stacks up next to a sampling of 10 other popular SaaS leaders:
COMPANY
TTM REVENUE
Q2 REVENUE GROWTH
TTM OPERATING MARGINS
PRICE-TO-SALES RATIO
Anaplan (NYSE: PLAN)
$398.0
26%
(36.5%)
19.7
Atlassian (NASDAQ: TEAM)
$1,610
28.7%
0.9%
26.0
Datadog (NASDAQ: DDOG)
$480.8
68.2%
(0.3%)
44.3
DocuSign (NASDAQ: DOCU)
$1,160
45.2%
(16.1%)
32.2
HubSpot (NYSE: HUBS)
$762.4
24.7%
(6.5%)
15.7
MongoDB (NASDAQ: MDB)
$501.6
39.2%
(34.2%)
24.0
Okta (NASDAQ: OKTA)
$703.7
42.7%
(26.7%)
34.6
Slack (NYSE: WORK)
$768.1
48.9%
(38.5%)
18.5
Twilio (NYSE: TWLO)
$1,390
45.7%
(26.4%)
22.8
Zoom Video Communications (NASDAQ: ZM)
$1,350
355%
17.1%
83.8
Snowflake (NYSE: SNOW)
$402.7
120.7%
(86.8%)
155.6
Data source: Yahoo! Finance and Snowflake Form 424B8. All dollar figures are in millions. Table by author. TTM = Trailing 12 month
As you can see, Snowflake is by far the most expensive stock of the bunch, and it's also generating the biggest losses as well, as it invests for growth.
Yet to Snowflake's credit, it is the smallest of the above companies in terms of revenue except Anaplan, which means there is likely more growth potential in Snowflake compared to the others.
The question is how much. At its current nosebleed valuation, Snowflake even makes the high-flying Zoom Video Communications look cheap. After its huge run this year thanks to mass pandemic-fueled adoption, Zoom is growing three times as fast as Snowflake, but trades at "only" 84 times sales, or roughly half of Snowflake's price-to-sales ratio. Zoom is also profitable, whereas Snowflake most definitely isn't. Meanwhile, Snowflake is over three times more expensive than the next-most-expensive SaaS company in Datadog.
Image source: Getty Images.
Some other numbers Snowflake investors should consider
Of course, although all of the above companies are software-as-a-service companies, it's not as if they all play in exactly the same market. Snowflake's market is thought to be bigger than most other niche software applications, and therefore it may have a bigger opportunity. In the regulatory filing, Snowflake claimed its total addressable market was around $81 billion.
As of market close Thursday, Snowflake's market capitalization was around $62.6 billion, or almost as big as its entire addressable market. Of course, it's entirely possible for a company's market capitalization to exceed its addressable market, provided it gains a lot of market share and makes good margins; however, we aren't yet sure about Snowflake's ultimate margin potential, and it's certainly not alone in this market. Snowflake not only competes with legacy data warehouse companies such as Oracle (NYSE: ORCL), but also with data offerings from the very cloud infrastructure giants with which it partners.
Plenty of fish in the sea
I'm not saying that investors shouldn't invest in Snowflake. The company is extremely well-run and has a compelling product; however, since the company has already doubled over its IPO price, it may be time to look at Snowflake compared with the other software companies that trade at (much) lower valuations.
If Snowflake's opportunity still seems more compelling after you've looked at these alternatives, by all means invest. However, the other companies above also have a long growth runway ahead. In terms of allocating your precious investment dollars, make sure you're choosing the right risk-reward for your own investing situation.
10 stocks we like better than Snowflake Inc.
When investing geniuses David and Tom Gardner have 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.*
David and Tom 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 1, 2020
Billy Duberstein owns shares of MongoDB and has the following options: short December 2020 $115 puts on DocuSign. His clients may own shares of the companies mentioned. The Motley Fool owns shares of and recommends Anaplan Inc, Atlassian, Datadog, DocuSign, HubSpot, MongoDB, Okta, Slack Technologies, Twilio, and Zoom Video Communications. 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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Anaplan (NYSE: PLAN) $398.0 26% (36.5%) 19.7 Atlassian (NASDAQ: TEAM) $1,610 28.7% 0.9% 26.0 Datadog (NASDAQ: DDOG) $480.8 68.2% (0.3%) 44.3 DocuSign (NASDAQ: DOCU) $1,160 45.2% (16.1%) 32.2 HubSpot (NYSE: HUBS) $762.4 24.7% (6.5%) 15.7 MongoDB (NASDAQ: MDB) $501.6 39.2% (34.2%) 24.0 Okta (NASDAQ: OKTA) $703.7 42.7% (26.7%) 34.6 Slack (NYSE: WORK) $768.1 48.9% (38.5%) 18.5 Twilio (NYSE: TWLO) $1,390 45.7% (26.4%) 22.8 Zoom Video Communications (NASDAQ: ZM) $1,350 355% 17.1% 83.8 Snowflake (NYSE: SNOW) $402.7 120.7% (86.8%) 155.6 Data source: Yahoo! Typically, these companies trade at high valuations, but their high-growth, recurring-revenue models in the sticky sector of enterprise IT have at least somewhat justified their rise. TTM = Trailing 12 month As you can see, Snowflake is by far the most expensive stock of the bunch, and it's also generating the biggest losses as well, as it invests for growth.
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Anaplan (NYSE: PLAN) $398.0 26% (36.5%) 19.7 Atlassian (NASDAQ: TEAM) $1,610 28.7% 0.9% 26.0 Datadog (NASDAQ: DDOG) $480.8 68.2% (0.3%) 44.3 DocuSign (NASDAQ: DOCU) $1,160 45.2% (16.1%) 32.2 HubSpot (NYSE: HUBS) $762.4 24.7% (6.5%) 15.7 MongoDB (NASDAQ: MDB) $501.6 39.2% (34.2%) 24.0 Okta (NASDAQ: OKTA) $703.7 42.7% (26.7%) 34.6 Slack (NYSE: WORK) $768.1 48.9% (38.5%) 18.5 Twilio (NYSE: TWLO) $1,390 45.7% (26.4%) 22.8 Zoom Video Communications (NASDAQ: ZM) $1,350 355% 17.1% 83.8 Snowflake (NYSE: SNOW) $402.7 120.7% (86.8%) 155.6 Data source: Yahoo! Of course, it's entirely possible for a company's market capitalization to exceed its addressable market, provided it gains a lot of market share and makes good margins; however, we aren't yet sure about Snowflake's ultimate margin potential, and it's certainly not alone in this market. The Motley Fool owns shares of and recommends Anaplan Inc, Atlassian, Datadog, DocuSign, HubSpot, MongoDB, Okta, Slack Technologies, Twilio, and Zoom Video Communications.
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Anaplan (NYSE: PLAN) $398.0 26% (36.5%) 19.7 Atlassian (NASDAQ: TEAM) $1,610 28.7% 0.9% 26.0 Datadog (NASDAQ: DDOG) $480.8 68.2% (0.3%) 44.3 DocuSign (NASDAQ: DOCU) $1,160 45.2% (16.1%) 32.2 HubSpot (NYSE: HUBS) $762.4 24.7% (6.5%) 15.7 MongoDB (NASDAQ: MDB) $501.6 39.2% (34.2%) 24.0 Okta (NASDAQ: OKTA) $703.7 42.7% (26.7%) 34.6 Slack (NYSE: WORK) $768.1 48.9% (38.5%) 18.5 Twilio (NYSE: TWLO) $1,390 45.7% (26.4%) 22.8 Zoom Video Communications (NASDAQ: ZM) $1,350 355% 17.1% 83.8 Snowflake (NYSE: SNOW) $402.7 120.7% (86.8%) 155.6 Data source: Yahoo! Yet to Snowflake's credit, it is the smallest of the above companies in terms of revenue except Anaplan, which means there is likely more growth potential in Snowflake compared to the others. Of course, it's entirely possible for a company's market capitalization to exceed its addressable market, provided it gains a lot of market share and makes good margins; however, we aren't yet sure about Snowflake's ultimate margin potential, and it's certainly not alone in this market.
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Anaplan (NYSE: PLAN) $398.0 26% (36.5%) 19.7 Atlassian (NASDAQ: TEAM) $1,610 28.7% 0.9% 26.0 Datadog (NASDAQ: DDOG) $480.8 68.2% (0.3%) 44.3 DocuSign (NASDAQ: DOCU) $1,160 45.2% (16.1%) 32.2 HubSpot (NYSE: HUBS) $762.4 24.7% (6.5%) 15.7 MongoDB (NASDAQ: MDB) $501.6 39.2% (34.2%) 24.0 Okta (NASDAQ: OKTA) $703.7 42.7% (26.7%) 34.6 Slack (NYSE: WORK) $768.1 48.9% (38.5%) 18.5 Twilio (NYSE: TWLO) $1,390 45.7% (26.4%) 22.8 Zoom Video Communications (NASDAQ: ZM) $1,350 355% 17.1% 83.8 Snowflake (NYSE: SNOW) $402.7 120.7% (86.8%) 155.6 Data source: Yahoo! Meanwhile, Snowflake is over three times more expensive than the next-most-expensive SaaS company in Datadog. The company is extremely well-run and has a compelling product; however, since the company has already doubled over its IPO price, it may be time to look at Snowflake compared with the other software companies that trade at (much) lower valuations.
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2020-09-11 00:00:00 UTC
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7 Nasdaq Stocks You Need To Buy Before They Bounce Back Up
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DDOG
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https://www.nasdaq.com/articles/7-nasdaq-stocks-you-need-to-buy-before-they-bounce-back-up-2020-09-11
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Well, that was quite the exciting turn of events. After months of steady gains, stocks have finally gone down. Last Thursday and Friday, the markets saw considerable profit-taking. The Nasdaq Composite in particular got whacked, with that tech-heavy index falling as much as 9% from peak to bottom last week.
For all we know, the selling will continue in the days to come. In any case, this is the time for traders to start loading up their watchlists with Nasdaq stocks to buy.
Why focus on Nasdaq stocks? Because that’s where the action has been ever since the novel coronavirus outbreak began shutting down the world. With people stuck at home, created an unprecedented move to put many things onto the internet. Healthcare, education and other essential services that remained largely in-person until now are rapidly migrating to virtual settings.
7 Sin Stocks to Buy Now as America Reopens
With the sector finally in a correction, it’s time to start loading up on these seven Nasdaq stocks to buy:
Avalara (NASDAQ:AVLR)
Duck Creek Technologies (NASDAQ:DCT)
ZoomInfo (NASDAQ:ZI)
Cisco (NASDAQ:CSCO)
Datadog (NASDAQ:DDOG)
Costco (NASDAQ:COST)
Nasdaq (NASDAQ:NDAQ)
While there will be some slowdown in this trend as the economy continues to reopen, 2020 has been a pivotal year for the tech industry.
7 Nasdaq Stocks You Need To Buy: Avalara (AVLR)
Source: Pavel Kapysh / Shutterstock.com
Avalara might not be a household name just yet, but given how things are going, it will be soon. Avalara offers tax compliance software for e-commerce, with an emphasis on smaller businesses.
One of the biggest headaches for online merchants is selling products across state and international lines, as each jurisdiction has different rules about what is taxed or tax-exempt, and how much to levy on each product. Avalara is designed to solve that problem. It also addresses corner cases such as beer and liquor sales, where a whole different set of tax rules apply.
For many quarters, Avalara was riding a 2018 Supreme Court decision that made it far easier for states to collect taxes online. Businesses had to spend on software to get their systems ready before states started penalizing firms that didn’t comply.
However, things have accelerated to a whole new level in 2020. As you probably know, companies like Shopify (NYSE:SHOP) and Etsy (NASDAQ:ETSY) have exploded in popularity this year. With folks stuck at home, all sorts of new businesses are emerging in various e-commerce niches. And those new entrepreneurs end up having to pay sales tax, just like everyone else.
Avalara is built right into Shopify, and thus is positioned to ride along as Shopify soars. AVLR stock is up nicely this year, but it’s not up anywhere as much as Etsy or Shopify … yet.
Duck Creek Technologies (DCT)
Source: Shutterstock
Take that same basic idea as Avalara, but apply it to insurance instead of sales tax, and voila! You now have Duck Creek Technologies.
The company is probably unfamiliar to most readers, as it just launched its initial public offering (IPO) last month. However, with more than $200 million in annual revenue, Duck Creek is already a decent-size business.
Now, Duck Creek Technologies isn’t a screaming value stock at this price, I’ll grant you that. 22 times sales isn’t a great multiple by any means. However, revenue growth is in the mid-20 percent range and has been accelerating nicely in recent quarters.
The company is transitioning from one-time sales to subscription revenues; that’s a tried and true method to strong earnings growth in the software space. And the company is already solidly cash flow positive, and not far from achieving profitability either.
Additionally, shares have come down nicely since the recent tech sell-off. In fact, DCT stock hit its lowest point in its brief trading history last Friday, as shares dipped to $37, well off the recent $44 peak. The stock IPO’d at $27, so it’s not all that far above the original offer price, either.
7 Sin Stocks to Buy Now as America Reopens
I love these software-as-a-service stocks with big niches and long growth runways. Global insurance is a huge market, and one where a software company should be able to build a large moat to keep out the competition.
ZoomInfo (ZI)
Source: Shutterstock
ZoomInfo is an enterprise software-as-a-service company targeting the information and marketing verticals. I covered the stock back in June, saying it offered significant promise. However, as is usually the case around fresh IPOs, there were concerns about the valuation.
In this case, it’s well worth revisiting ZI stock now. Shares are down 50% from their post-IPO peak, and just hit their lowest levels ever in last week’s tech sell-off. If you thought ZoomInfo was interesting at $50, it could be quite the steal down here at $33.
That’s because while the market will always be volatile day-to-day, the demand for key data isn’t going anywhere. As marketing goes digital, ZoomInfo’s databases of sales and contact information will only become more valuable to advertisers and sales representatives. The company demonstrated that in its most recent quarterly results, with revenues up 62%.
The tech sell-off is creating a big opportunity to enter stocks like ZoomInfo at their lowest levels of the summer. If you’re bullish on the tech space into 2021, these sorts of plays should pay off nicely in coming months.
Cisco (CSCO)
CSCO) logo on an office building" width="300" height="169">
Source: Ken Wolter / Shutterstock.com
While there are a few expensive stocks on this list, Cisco should appeal to value fans. That’s right, even in 2020, there are some cheap Nasdaq stocks to buy out there. CSCO is selling at just 13x forward earnings. It’s also one of the few tech names selling closer to 52-week lows than 52-week highs.
Some of that pessimism may be justified. A lot of networking gear orders that would have happened this year have been delayed into 2021 thanks to the pandemic slashing budgets. Hardware sales have suffered in comparison to cloud services that can often be sold without in-person contact.
Still, the long-term need for new and upgraded networking equipment isn’t going anywhere. Meanwhile Cisco’s transition toward subscriptions and recurring revenues continues at a respectable speed.
We’ve seen plenty of other tech stocks blast off once the market realizes that the quality of revenues has gone up. If and when Cisco demonstrates a similar move to a stickier sales model, it could enjoy a similar boost.
7 Sin Stocks to Buy Now as America Reopens
In the meantime, CSCO stock is cheap and offers a juicy 3.5% dividend yield.
Datadog (DDOG)
Source: Shutterstock
Cisco was a player in our next pick as well. When Datadog was launching its IPO last year, Cisco reportedly offered $7 billion to acquire the company. Instead, the data and security monitoring company chose to go it alone, in a decision that has been exceedingly profitable for its shareholders. The pandemic has only intensified the secular trend toward storing everything in the cloud, and thus, intensified the need for robust security and monitoring of said infrastructure.
Datadog has fetched a huge multiple from the market, as it now trades for around 50 times revenue. The market cap is now up to $24 billion, leaving Cisco’s offer in the dust.
Still, for investors that are taking the long view toward cloud stocks, there’s a play in DDOG stock here. Since July, shares have slid 20%, making the price more palatable. While Datadog is still highly valued, it may well be worth the sticker price given the 68% revenue growth rate and 106% earnings growth.
Costco (COST)
Source: ilzesgimene / Shutterstock.com
While the Nasdaq is known for technology companies, you can find a variety of other attractive businesses on the exchange as well. Take Costco, for example.
Even before the novel coronavirus, Costco was on a roll. And this year, it’s gone on to even greater heights.
You probably don’t need me to tell you, but the pandemic has obviously boosted Costco’s standing in the world of retail. With so many businesses shut down, essential stores became a lifeline for worried consumers looking to stockpile before hunkering down at home. Costco’s no-frills, buy-in-bulk approach perfectly met the needs of the crisis. Going forward, the company’s already higher membership renewal rates should move up even more.
The obvious gripe with COST stock is that it’s expensive, as it currently sells at 36 times earnings. But I would be remiss if I didn’t tell you that analysts may be missing the inflection point here.
Consider this: Over the past five years, Costco grew earnings at 11% per year. Now, going forward, analysts only see 6% annual growth over the next five years.
7 Sin Stocks to Buy Now as America Reopens
But does it really seem likely that Costco’s earnings growth will slump after it proved itself so adept during the recent crisis? I’d bet that analysts will have to raise their price targets and earnings outlook as Costco’s dominance of big box retail only further consolidates.
Nasdaq (NDAQ)
Source: Shutterstock
An obvious choice to round out a list of Nasdaq stocks to buy is the Nasdaq stock exchange itself. If you’re bullish on innovative companies such as those listed above, then it only makes sense to own shares in the company facilitating all this trading.
The Nasdaq is riding several powerful waves right now. Higher share prices and trading volumes push up the amount of fees and revenues that the exchange can bring in. Its data sales division — which is an increasingly important part of the overall mix — also benefits from a rising tide. More hedge funds and traders are willing to pay for proprietary information in a volatile fast-moving market like this one.
There are also corporate actions as well. The Nasdaq earns money every time a new company launches an IPO, a secondary stock offering or other such corporate actions. It also offers services and software that serve to aid its other lines of business. All-in-all, NDAQ stock has many ways to grow, and most of them benefit from the current bull market for tech stocks.
Meanwhile, Nasdaq is selling at just 22 times forward earnings. That’s pretty incredible for a business that has grown earnings at 14%/year in recent years. In Nasdaq, you can benefit from the hyper-growth in the digital economy without paying a nosebleed price.
On the date of publication, Ian Bezek held long positions in NDAQ, AVLR stock.
Ian Bezek has written more than 1,000 articles for InvestorPlace.com and Seeking Alpha. He also worked as a Junior Analyst for Kerrisdale Capital, a $300 million New York City-based hedge fund. You can reach him on Twitter at @irbezek.
The post 7 Nasdaq Stocks You Need To Buy Before They Bounce Back Up 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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7 Sin Stocks to Buy Now as America Reopens With the sector finally in a correction, it’s time to start loading up on these seven Nasdaq stocks to buy: Avalara (NASDAQ:AVLR) Duck Creek Technologies (NASDAQ:DCT) ZoomInfo (NASDAQ:ZI) Cisco (NASDAQ:CSCO) Datadog (NASDAQ:DDOG) Costco (NASDAQ:COST) Nasdaq (NASDAQ:NDAQ) While there will be some slowdown in this trend as the economy continues to reopen, 2020 has been a pivotal year for the tech industry. Datadog (DDOG) Source: Shutterstock Cisco was a player in our next pick as well. Still, for investors that are taking the long view toward cloud stocks, there’s a play in DDOG stock here.
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7 Sin Stocks to Buy Now as America Reopens With the sector finally in a correction, it’s time to start loading up on these seven Nasdaq stocks to buy: Avalara (NASDAQ:AVLR) Duck Creek Technologies (NASDAQ:DCT) ZoomInfo (NASDAQ:ZI) Cisco (NASDAQ:CSCO) Datadog (NASDAQ:DDOG) Costco (NASDAQ:COST) Nasdaq (NASDAQ:NDAQ) While there will be some slowdown in this trend as the economy continues to reopen, 2020 has been a pivotal year for the tech industry. Datadog (DDOG) Source: Shutterstock Cisco was a player in our next pick as well. Still, for investors that are taking the long view toward cloud stocks, there’s a play in DDOG stock here.
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7 Sin Stocks to Buy Now as America Reopens With the sector finally in a correction, it’s time to start loading up on these seven Nasdaq stocks to buy: Avalara (NASDAQ:AVLR) Duck Creek Technologies (NASDAQ:DCT) ZoomInfo (NASDAQ:ZI) Cisco (NASDAQ:CSCO) Datadog (NASDAQ:DDOG) Costco (NASDAQ:COST) Nasdaq (NASDAQ:NDAQ) While there will be some slowdown in this trend as the economy continues to reopen, 2020 has been a pivotal year for the tech industry. Datadog (DDOG) Source: Shutterstock Cisco was a player in our next pick as well. Still, for investors that are taking the long view toward cloud stocks, there’s a play in DDOG stock here.
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7 Sin Stocks to Buy Now as America Reopens With the sector finally in a correction, it’s time to start loading up on these seven Nasdaq stocks to buy: Avalara (NASDAQ:AVLR) Duck Creek Technologies (NASDAQ:DCT) ZoomInfo (NASDAQ:ZI) Cisco (NASDAQ:CSCO) Datadog (NASDAQ:DDOG) Costco (NASDAQ:COST) Nasdaq (NASDAQ:NDAQ) While there will be some slowdown in this trend as the economy continues to reopen, 2020 has been a pivotal year for the tech industry. Datadog (DDOG) Source: Shutterstock Cisco was a player in our next pick as well. Still, for investors that are taking the long view toward cloud stocks, there’s a play in DDOG stock here.
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2020-09-10 00:00:00 UTC
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2 Stocks I Just Bought -- and 1 That I Sold
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DDOG
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https://www.nasdaq.com/articles/2-stocks-i-just-bought-and-1-that-i-sold-2020-09-10
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To say that the stock market has been interesting in recent months would be a major understatement. New and exciting IPOs are hitting the market with increasing frequency, tech stocks have been soaring higher at breathtaking paces, and some of the largest stocks in the market decided to split their shares.
Over the past month or so, I've made three major moves in my stock portfolio. I bought shares of recent IPO Lemonade (NYSE: LMND) and cloud analytics company Datadog (NASDAQ: DDOG), and decided to sell a large chunk of my Apple (NASDAQ: AAPL) position. Here's why.
Image source: Getty Images.
The future of insurance?
One stock that I've been watching since its IPO and recently decided to pull the trigger on is Lemonade, an insurance technology company. Lemonade aims to leverage artificial intelligence (AI) technology to create the most user-friendly, fastest, and most cost-effective insurance buying experience. Lemonade primarily sells renters and homeowners insurance, but plans to expand to other forms in the future.
Perhaps the most interesting quality to me as a long-term investor is that Lemonade is targeting first-time insurance customers, and so far has been very successful. Most Lemonade customers -- 90% -- say they didn't switch from other insurance carriers, and 70% are under 35. Virtually everyone needs or should have renters or homeowners insurance, so the customers Lemonade is bringing into its ecosystem could remain clients for decades to come.
Insurance is a $5 trillion market in the U.S. alone, and Lemonade has a big first-mover advantage. Because Lemonade is a recent IPO and volatile stock, I opened a rather small position, but I may add to it over time.
Taking advantage of the tech pullback
I've had my eye on several tech stocks, but valuation has been an obstacle. Simply put, tech stocks have performed incredibly well over the past few months. However, they've pulled back a bit recently, and I decided to add shares of cloud analytics company Datadog to my portfolio.
If you aren't familiar, Datadog provides a platform for developers and IT departments to analyze data and perform many other functions. My colleague Danny Vena recently wrote a great article on Datadog, if you want to learn more about the company and how it's doing.
In a nutshell, Datadog's growth has been extremely impressive, with 37% year-over-year growth in its customer count and a dollar-based net retention rate of 130%. These qualities essentially mean that Datadog's customers are spending more and more as time passes. While this certainly isn't a cheap stock, the growth speaks for itself, and I'm excited to add it to my portfolio.
A wonderful business, but I had to do some rebalancing
I don't just buy stocks; I sell them from time to time for a variety of reasons. One that I recently decided to get rid of recently was Apple. More specifically, I sold half of my Apple stock, which had been my largest investment by a wide margin.
To be perfectly clear, I sold Apple primarily because it performed so well that it became too large a portion of my portfolio. This is different than selling a stock just because the share price went up. There are several stocks in my portfolio that have increased 1,000% or more since I bought them, such as Square (NYSE: SQ), and I have absolutely no plans to sell them. My personal comfort zone maxes out at about 10% of my investments in any given stock, and Apple's recent run put it well in excess of that limit. Even after selling half of my Apple shares, the tech giant is still my largest investment. It's also worth mentioning that my Apple shares are held in retirement accounts, so I won't have to pay tax on the profit. This fact also impacted my decision.
I'm not losing faith in Apple as a great long-term investment, nor am I taking profits because the stock went up. If either was the case, I would've sold all of it. But it's important to take a step back and decide if rebalancing your portfolio is a good idea every once in a while.
Do your own due diligence
Don't buy or sell any stock just because someone else did. These three moves make good sense for my investment strategy, goals, and risk tolerance, but they might not be a great fit for you. Do your own due diligence before buying or selling any of them.
10 stocks we like better than Apple
When investing geniuses David and Tom Gardner have 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.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Apple 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 1, 2020
Matthew Frankel, CFP owns shares of Apple, Datadog, Lemonade, Inc., and Square and has the following options: short September 2022 $155 calls on Square and short October 2020 $140 calls on Apple. The Motley Fool owns shares of and recommends Apple, Datadog, and Square. The Motley Fool owns shares of Lemonade, Inc and recommends the following options: short September 2020 $70 puts on Square. 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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I bought shares of recent IPO Lemonade (NYSE: LMND) and cloud analytics company Datadog (NASDAQ: DDOG), and decided to sell a large chunk of my Apple (NASDAQ: AAPL) position. Lemonade aims to leverage artificial intelligence (AI) technology to create the most user-friendly, fastest, and most cost-effective insurance buying experience. However, they've pulled back a bit recently, and I decided to add shares of cloud analytics company Datadog to my portfolio.
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I bought shares of recent IPO Lemonade (NYSE: LMND) and cloud analytics company Datadog (NASDAQ: DDOG), and decided to sell a large chunk of my Apple (NASDAQ: AAPL) position. However, they've pulled back a bit recently, and I decided to add shares of cloud analytics company Datadog to my portfolio. The Motley Fool owns shares of Lemonade, Inc and recommends the following options: short September 2020 $70 puts on Square.
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I bought shares of recent IPO Lemonade (NYSE: LMND) and cloud analytics company Datadog (NASDAQ: DDOG), and decided to sell a large chunk of my Apple (NASDAQ: AAPL) position. New and exciting IPOs are hitting the market with increasing frequency, tech stocks have been soaring higher at breathtaking paces, and some of the largest stocks in the market decided to split their shares. See the 10 stocks *Stock Advisor returns as of August 1, 2020 Matthew Frankel, CFP owns shares of Apple, Datadog, Lemonade, Inc., and Square and has the following options: short September 2022 $155 calls on Square and short October 2020 $140 calls on Apple.
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I bought shares of recent IPO Lemonade (NYSE: LMND) and cloud analytics company Datadog (NASDAQ: DDOG), and decided to sell a large chunk of my Apple (NASDAQ: AAPL) position. One stock that I've been watching since its IPO and recently decided to pull the trigger on is Lemonade, an insurance technology company. I'm not losing faith in Apple as a great long-term investment, nor am I taking profits because the stock went up.
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c8fef7db-d467-4e82-8de8-a0250b30d29e
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718993.0
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2020-09-04 00:00:00 UTC
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Why Fastly, Datadog, PagerDuty, and Slack Stocks Plunged Today
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DDOG
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https://www.nasdaq.com/articles/why-fastly-datadog-pagerduty-and-slack-stocks-plunged-today-2020-09-04
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nan
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nan
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What happened
Shares of cloud software companies Fastly (NYSE: FSLY), Datadog (NASDAQ: DDOG), PagerDuty (NYSE: PD), and Slack Technologies (NYSE: WORK) tumbled on Friday as investors punished high-flying tech stocks.
Here's where the stocks stood at 11:10 a.m. EDT today:
STOCK
PERCENTAGE CHANGE (DECLINE)
Fastly
(9.8%)
Datadog
(3.8%)
PagerDuty
(9.7%)
Slack
(7.6%)
Data source: Yahoo! Finance.
So what
Many tech stocks have soared since the market bottomed out in March despite a lingering pandemic and the worst economy in years. software-as-a-service (SaaS) stocks were already expensive before the pandemic hit; the rally pushed valuations even further into nosebleed territory.
FSLY data by YCharts.
A broad stock market sell-off started on Thursday, with the tech-heavy Nasdaq Composite plunging nearly 5%. The Nasdaq was down another 3.9% by late Friday morning. Expensive SaaS stocks have taken the brunt of the storm.
Fastly, a provider of edge cloud computing services, has been a big winner this year. The stock was up over 1,000% from its low at one point as investors bet that the company would thrive in a post-pandemic world.
Fastly's results have been solid. Revenue soared 62% in the second quarter, and the company was profitable on an adjusted basis. That growth has been well reflected in the stock price; at the 52-week high reached in August, Fastly traded for around 40 times forward sales. The stock has now plunged 36% from that high, and for good reason.
Cloud data analytics provider Datadog has been growing at a similar rate as Fastly, with revenue up 68% in the second quarter. The market has been valuing the company at an even frothier valuation. At its peak, Datadog stock was going for around 45 times forward sales.
Datadog stock hasn't suffered quite as much as Fastly's, but that may not remain the case as investors rethink the sky-high valuations awarded to SaaS stocks. Datadog is still trading for over 40 times sales following Friday's plunge.
PagerDuty has been getting hammered after reporting its second-quarter results on Wednesday. The incident-response software provider beat analyst expectations for earnings and matched them for revenue, but that was not nearly enough to satisfy investors. The stock has now tumbled around 23% from its pre-earnings level.
PagerDuty is growing far more slowly than either Fastly or Datadog, with second-quarter revenue up just 25.7%. The company is also unprofitable, even on an adjusted basis. PagerDuty stock hasn't garnered as rich a valuation, peaking at a price-to-sales ratio around 15 earlier this month. That multiple is now substantially lower after the post-earnings plunge.
Shares of workplace-collaboration software provider Slack have largely treaded water in recent months, no doubt under some pressure due to intense competition from Microsoft (NASDAQ: MSFT) Teams. Even so, the stock traded at a price-to-sales ratio as high as 25 in recent days. Slack's revenue soared 50% in the fiscal first quarter, although the company is unprofitable.
While Slack will certainly benefit from increased working from home, the competition with Microsoft shouldn't be ignored. Teams is bundled with some business Office 365 plans, giving the product a distinct edge in the workplace collaboration market.
Image source: Getty Images.
Now what
Is it reasonable to pay 30, 40, or even 50 times annual sales for a fast-growing subscription software company? Until recently, the stock market's answer was a resounding yes. Growth was all that mattered.
With a two-day sell-off in high-flying tech stocks underway, the premium that investors are willing to pay for growth stocks may be coming down. This sell-off may turn out to be a short correction that then leads to even higher highs, or it could mark the beginning of a steep downturn like the one in March. Only time will tell.
10 stocks we like better than PagerDuty
When investing geniuses David and Tom Gardner have 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.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and PagerDuty 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 1, 2020
Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool's board of directors. Timothy Green has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Datadog, Fastly, Microsoft, PagerDuty, and Slack Technologies and recommends the following options: long January 2021 $85 calls on Microsoft and short January 2021 $115 calls on 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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What happened Shares of cloud software companies Fastly (NYSE: FSLY), Datadog (NASDAQ: DDOG), PagerDuty (NYSE: PD), and Slack Technologies (NYSE: WORK) tumbled on Friday as investors punished high-flying tech stocks. Shares of workplace-collaboration software provider Slack have largely treaded water in recent months, no doubt under some pressure due to intense competition from Microsoft (NASDAQ: MSFT) Teams. Teams is bundled with some business Office 365 plans, giving the product a distinct edge in the workplace collaboration market.
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What happened Shares of cloud software companies Fastly (NYSE: FSLY), Datadog (NASDAQ: DDOG), PagerDuty (NYSE: PD), and Slack Technologies (NYSE: WORK) tumbled on Friday as investors punished high-flying tech stocks. Fastly (9.8%) Datadog (3.8%) PagerDuty (9.7%) Slack (7.6%) Data source: Yahoo! The Motley Fool owns shares of and recommends Datadog, Fastly, Microsoft, PagerDuty, and Slack Technologies and recommends the following options: long January 2021 $85 calls on Microsoft and short January 2021 $115 calls on Microsoft.
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What happened Shares of cloud software companies Fastly (NYSE: FSLY), Datadog (NASDAQ: DDOG), PagerDuty (NYSE: PD), and Slack Technologies (NYSE: WORK) tumbled on Friday as investors punished high-flying tech stocks. Datadog stock hasn't suffered quite as much as Fastly's, but that may not remain the case as investors rethink the sky-high valuations awarded to SaaS stocks. With a two-day sell-off in high-flying tech stocks underway, the premium that investors are willing to pay for growth stocks may be coming down.
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What happened Shares of cloud software companies Fastly (NYSE: FSLY), Datadog (NASDAQ: DDOG), PagerDuty (NYSE: PD), and Slack Technologies (NYSE: WORK) tumbled on Friday as investors punished high-flying tech stocks. Cloud data analytics provider Datadog has been growing at a similar rate as Fastly, with revenue up 68% in the second quarter. Datadog is still trading for over 40 times sales following Friday's plunge.
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6b416cdf-5653-4105-b9bb-15ad85c54406
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718994.0
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2020-09-04 00:00:00 UTC
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3 Top Cloud Computing Stocks to Buy Right Now
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DDOG
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https://www.nasdaq.com/articles/3-top-cloud-computing-stocks-to-buy-right-now-2020-09-04
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nan
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nan
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Cloud computing is red-hot right now but it's one of those overnight successes that were years in the making. Decades, even. The idea of running intense computing processes in a data center and presenting the results in a web browser or mobile apps over the internet started to make sense way back in the dot-com boom, and the coronavirus health crisis simply accelerated the cloud computing industry's snowballing growth trajectory.
Some cloud computing stocks are taking off very quickly, and you're not likely to see them at their current prices again for years to come. Others were lost in the shuffle as investors, analysts, and journalists focused on the most obvious superstars of the industry, and these stocks are simply undervalued right now.
Let's take a look at a mix of skyrocketing winners and undervalued dark horses in the cloud computing sector. These three stocks are solid buys today.
Image source: Getty Images.
1. Anaplan
Business-planning software maker Anaplan (NYSE: PLAN) crashed hard in the spring of 2020 but climbed back to yearly highs last week, thanks to a stellar second-quarter report. Sales rose 26% year over year to $107 million, and adjusted net losses narrowed from $0.12 to $0.04 per share. The results exceeded Wall Street's expectations across the board, and management explained that the company is poised to grow rapidly in the next few years.
CEO Frank Calderoni said on the earnings call:
A majority of our customers didn't come to Anaplan to do a single-use case. They came to Anaplan with an objective to really drive a more extensive use of our platform. And so that provides us with a good opportunity. I've said this before, I'll say it now. I do believe, with many of our customers, we're in the early stages of working with them.
In other words, Anaplan is making a ton of connections with new long-term customers right now. That should result in robust sales growth for years to come, which, in turn, drives profit growth in this high-margin corner of the technology market.
That report pushed Anaplan's stock price 30% higher in a single day. The long-term growth story is much greater than that quick bounce back from the doldrums of the spring and early summer.
2. Datadog
Things are getting a bit meta here. Datadog (NASDAQ: DDOG) offers cloud-based services that help other companies monitor their own cloud computing products and services. If that sounds like a great business to run in the era of coronavirus-inspired work-from-home policies, you're absolutely right. Datadog is crushing Wall Street's expectations this year, and the stock has gained 123% year to date.
This is a young stock, having entered the stock market just 50 weeks ago, but Datadog's business has been around for a full decade. The company's client list includes household names like Samsung, Whole Foods Market, Comcast, and Twitter. Maybe you thought that some of these heavyweights would have their own monitoring solutions for cloud computing data centers and services -- especially technology titan Samsung and Amazon.com subsidiary Whole Foods -- but they all rely, at least in part, on Datadog, instead.
And once Datadog sniffs its way into your monitoring setup, many customers find it hard to live without it. In the second-quarter earnings call, CEO Olivier Pomel highlighted a handful of deals with airlines, universities, a theme-park chain, and two unnamed hotel brands. As Pomel said:
These wins show that even in the face of challenging times for these customers, transforming to ensure business resilience and longevity is a top priority. Next, our platform strategy continues to resonate and win in the market. We have about 12,100 customers, which represent growth of 37% from about 8,800 last year.
And when established Datadog clients renew their contracts, they tend to add services and spend more. The company aims for a dollar-based net retention rate of 130% per quarter, which works out to a 30% increase in the average renewal's dollar value. That goal has been met in each of the company's three earnings reports as a public company.
That combination of customer loyalty and rising contract values adds up to a fantastic growth story for the long haul. If you don't invest in this puppy while it's young, that mistake could hound you for years to come.
Image source: Getty Images.
3. Limelight Networks
Content delivery network (CDN) specialist Limelight Networks (NASDAQ: LLNW) helps other companies deliver data to consumers around the world. The company provides storage inside high-traffic network hubs, automatically delivering your download or media stream from a nearby hub. It's perhaps the most consumer-oriented cloud computing business model I know. The company plays a part in high-volume download operations such as software updates for popular video game Fortnite, but most of its moneymaking business springs from streaming video services.
It's been quite a year in that industry, starting with Walt Disney launching Disney+ in November and followed by a steady stream of new video platforms ever since. And consumers are tuning in to these video services in droves, looking for entertainment options while stuck at home in the era of COVID-19 lockdowns.
"This is a good time for the industry and a particularly good time for us," Chief Strategy Officer Sajid Malhotra told me over the phone in July. "We have never grown sales by 10% and here we are thinking about growing 15%-plus in 2020. So our growth is accelerating, the profitability of the business is accelerating."
10 stocks we like better than Limelight Networks
When investing geniuses David and Tom Gardner have 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.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Limelight Networks 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 1, 2020
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Anders Bylund owns shares of Amazon and Walt Disney. The Motley Fool owns shares of and recommends Amazon, Anaplan Inc, Datadog, Twitter, and Walt Disney. The Motley Fool recommends Comcast and recommends the following options: long January 2021 $60 calls on Walt Disney, short January 2022 $1940 calls on Amazon, long January 2022 $1920 calls on Amazon, and short October 2020 $125 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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Datadog (NASDAQ: DDOG) offers cloud-based services that help other companies monitor their own cloud computing products and services. Maybe you thought that some of these heavyweights would have their own monitoring solutions for cloud computing data centers and services -- especially technology titan Samsung and Amazon.com subsidiary Whole Foods -- but they all rely, at least in part, on Datadog, instead. In the second-quarter earnings call, CEO Olivier Pomel highlighted a handful of deals with airlines, universities, a theme-park chain, and two unnamed hotel brands.
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Datadog (NASDAQ: DDOG) offers cloud-based services that help other companies monitor their own cloud computing products and services. Maybe you thought that some of these heavyweights would have their own monitoring solutions for cloud computing data centers and services -- especially technology titan Samsung and Amazon.com subsidiary Whole Foods -- but they all rely, at least in part, on Datadog, instead. The Motley Fool owns shares of and recommends Amazon, Anaplan Inc, Datadog, Twitter, and Walt Disney.
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Datadog (NASDAQ: DDOG) offers cloud-based services that help other companies monitor their own cloud computing products and services. This is a young stock, having entered the stock market just 50 weeks ago, but Datadog's business has been around for a full decade. See the 10 stocks *Stock Advisor returns as of August 1, 2020 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 (NASDAQ: DDOG) offers cloud-based services that help other companies monitor their own cloud computing products and services. We have about 12,100 customers, which represent growth of 37% from about 8,800 last year. * David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Limelight Networks wasn't one of them!
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cdc9457e-48ed-4ed5-8541-a845d5929c5a
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718995.0
|
2020-09-03 00:00:00 UTC
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Notable Thursday Option Activity: IRBT, COUP, DDOG
|
DDOG
|
https://www.nasdaq.com/articles/notable-thursday-option-activity%3A-irbt-coup-ddog-2020-09-03
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nan
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nan
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Among the underlying components of the Russell 3000 index, we saw noteworthy options trading volume today in iRobot Corp (Symbol: IRBT), where a total of 5,516 contracts have traded so far, representing approximately 551,600 underlying shares. That amounts to about 106.4% of IRBT's average daily trading volume over the past month of 518,610 shares. Particularly high volume was seen for the $85 strike put option expiring September 18, 2020, with 1,736 contracts trading so far today, representing approximately 173,600 underlying shares of IRBT. Below is a chart showing IRBT's trailing twelve month trading history, with the $85 strike highlighted in orange:
Coupa Software Inc (Symbol: COUP) saw options trading volume of 9,100 contracts, representing approximately 910,000 underlying shares or approximately 97.3% of COUP's average daily trading volume over the past month, of 935,345 shares. Especially high volume was seen for the $300 strike put option expiring September 04, 2020, with 445 contracts trading so far today, representing approximately 44,500 underlying shares of COUP. Below is a chart showing COUP's trailing twelve month trading history, with the $300 strike highlighted in orange:
And Datadog Inc (Symbol: DDOG) saw options trading volume of 49,690 contracts, representing approximately 5.0 million underlying shares or approximately 95.9% of DDOG's average daily trading volume over the past month, of 5.2 million shares. Particularly high volume was seen for the $85 strike call option expiring November 20, 2020, with 17,714 contracts trading so far today, representing approximately 1.8 million underlying shares of DDOG. Below is a chart showing DDOG's trailing twelve month trading history, with the $85 strike highlighted in orange:
For the various different available expirations for IRBT options, COUP 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 $85 strike call option expiring November 20, 2020, with 17,714 contracts trading so far today, representing approximately 1.8 million underlying shares of DDOG. Below is a chart showing COUP's trailing twelve month trading history, with the $300 strike highlighted in orange: And Datadog Inc (Symbol: DDOG) saw options trading volume of 49,690 contracts, representing approximately 5.0 million underlying shares or approximately 95.9% of DDOG's average daily trading volume over the past month, of 5.2 million shares. Below is a chart showing DDOG's trailing twelve month trading history, with the $85 strike highlighted in orange: For the various different available expirations for IRBT options, COUP options, or DDOG options, visit StockOptionsChannel.com.
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Below is a chart showing COUP's trailing twelve month trading history, with the $300 strike highlighted in orange: And Datadog Inc (Symbol: DDOG) saw options trading volume of 49,690 contracts, representing approximately 5.0 million underlying shares or approximately 95.9% of DDOG's average daily trading volume over the past month, of 5.2 million shares. Particularly high volume was seen for the $85 strike call option expiring November 20, 2020, with 17,714 contracts trading so far today, representing approximately 1.8 million underlying shares of DDOG. Below is a chart showing DDOG's trailing twelve month trading history, with the $85 strike highlighted in orange: For the various different available expirations for IRBT options, COUP options, or DDOG options, visit StockOptionsChannel.com.
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Below is a chart showing COUP's trailing twelve month trading history, with the $300 strike highlighted in orange: And Datadog Inc (Symbol: DDOG) saw options trading volume of 49,690 contracts, representing approximately 5.0 million underlying shares or approximately 95.9% of DDOG's average daily trading volume over the past month, of 5.2 million shares. Particularly high volume was seen for the $85 strike call option expiring November 20, 2020, with 17,714 contracts trading so far today, representing approximately 1.8 million underlying shares of DDOG. Below is a chart showing DDOG's trailing twelve month trading history, with the $85 strike highlighted in orange: For the various different available expirations for IRBT options, COUP options, or DDOG options, visit StockOptionsChannel.com.
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Particularly high volume was seen for the $85 strike call option expiring November 20, 2020, with 17,714 contracts trading so far today, representing approximately 1.8 million underlying shares of DDOG. Below is a chart showing COUP's trailing twelve month trading history, with the $300 strike highlighted in orange: And Datadog Inc (Symbol: DDOG) saw options trading volume of 49,690 contracts, representing approximately 5.0 million underlying shares or approximately 95.9% of DDOG's average daily trading volume over the past month, of 5.2 million shares. Below is a chart showing DDOG's trailing twelve month trading history, with the $85 strike highlighted in orange: For the various different available expirations for IRBT options, COUP options, or DDOG options, visit StockOptionsChannel.com.
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5f2e678c-334a-4bdc-97a6-8be7e9453e76
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718996.0
|
2020-09-03 00:00:00 UTC
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Why Datadog Stock Fell 11% in August
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DDOG
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https://www.nasdaq.com/articles/why-datadog-stock-fell-11-in-august-2020-09-03
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nan
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nan
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What happened
Shares of Datadog (NASDAQ: DDOG) slipped 11% in July, according to data from S&P Global Market Intelligence. The stock fell after the data management company posted second-quarter earnings.
DDOG data by YCharts
Datadog reported its second-quarter results on Aug. 6, prompting steep sell-offs for the stock despite sales and earnings that were better than the market anticipated. The company posted adjusted earnings per share of $0.05 on revenue of $140 million, while the average analyst estimate had guided for adjusted earnings of $0.01 on sales of $135 million. However, management warned that its customers were facing pressure from economic impacts related to the coronavirus pandemic, and investors appear to have interpreted that as a signal to take profits on the stock.
Image source: Getty Images.
So what
Datadog's second-quarter sales climbed 68% year over year, and the company swung into adjusted profitability after posting a loss of $0.07 per share in the second quarter of 2019. The business closed out the quarter with 1,015 customer contracts worth at least $100,000 in annualized recurring revenue, which was up from 594 customers in the category at the end of the prior-year period.
The quarterly results were actually pretty good on many fronts, but they weren't exciting enough to keep Datadog's stock rally alive going amid indications that growth might be under pressure in the near term.
Now what
Datadog's stock has continued to slump early in September's trading. The company's share price has declined roughly 4% in the month so far.
DDOG data by YCharts
Datadog's data monitoring services put the business in a good position to capitalize on the long-term growth of cloud-based applications, but the company's highly growth-dependent valuation suggests the stock could be poised for volatility in the near term. The data software specialist has a market capitalization of roughly $24.9 billion and is valued at approximately 43.5 times this year's expected sales.
10 stocks we like better than Datadog
When investing geniuses David and Tom Gardner have 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.*
David and Tom 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 1, 2020
Keith Noonan has no position in any of the stocks mentioned. The Motley Fool owns shares of 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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DDOG data by YCharts Datadog reported its second-quarter results on Aug. 6, prompting steep sell-offs for the stock despite sales and earnings that were better than the market anticipated. What happened Shares of Datadog (NASDAQ: DDOG) slipped 11% in July, according to data from S&P Global Market Intelligence. DDOG data by YCharts Datadog's data monitoring services put the business in a good position to capitalize on the long-term growth of cloud-based applications, but the company's highly growth-dependent valuation suggests the stock could be poised for volatility in the near term.
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What happened Shares of Datadog (NASDAQ: DDOG) slipped 11% in July, according to data from S&P Global Market Intelligence. DDOG data by YCharts Datadog reported its second-quarter results on Aug. 6, prompting steep sell-offs for the stock despite sales and earnings that were better than the market anticipated. DDOG data by YCharts Datadog's data monitoring services put the business in a good position to capitalize on the long-term growth of cloud-based applications, but the company's highly growth-dependent valuation suggests the stock could be poised for volatility in the near term.
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DDOG data by YCharts Datadog reported its second-quarter results on Aug. 6, prompting steep sell-offs for the stock despite sales and earnings that were better than the market anticipated. DDOG data by YCharts Datadog's data monitoring services put the business in a good position to capitalize on the long-term growth of cloud-based applications, but the company's highly growth-dependent valuation suggests the stock could be poised for volatility in the near term. What happened Shares of Datadog (NASDAQ: DDOG) slipped 11% in July, according to data from S&P Global Market Intelligence.
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DDOG data by YCharts Datadog reported its second-quarter results on Aug. 6, prompting steep sell-offs for the stock despite sales and earnings that were better than the market anticipated. What happened Shares of Datadog (NASDAQ: DDOG) slipped 11% in July, according to data from S&P Global Market Intelligence. DDOG data by YCharts Datadog's data monitoring services put the business in a good position to capitalize on the long-term growth of cloud-based applications, but the company's highly growth-dependent valuation suggests the stock could be poised for volatility in the near term.
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617e5ba1-8817-40ce-b984-a87ba0158644
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718997.0
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2020-09-03 00:00:00 UTC
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Is Datadog Stock a Buy?
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DDOG
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https://www.nasdaq.com/articles/is-datadog-stock-a-buy-2020-09-03
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nan
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nan
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It was just less than a year ago that Datadog (NASDAQ: DDOG) made its public debut, and this dog has been running ever since. The stock was priced at $27 for its IPO, surged 39% out of the gate, and never looked back. The coronavirus pandemic and resulting pivot to remote work made its services more valuable than ever, driving shares up 125% so far this year, with no end in sight.
With Datadog's robust gains as a backdrop, some investors are wondering if they can still profit from this red-hot investment, or if the opportunity has already passed them by.
Image source: Getty Images.
An indispensable cloud monitoring tool
With the decentralization of IT departments and more people working from home than ever before, it's extremely important for companies to stay on top of their cloud computing operations. In light of the growing demands brought about by an increasingly remote workforce, it's crucial to keep these systems running at peak efficiency and identify issues that can result in downtime and resolve them before they become costly.
That's where Datadog comes in. The cloud-based platform-as-a-service provides monitoring and analytics for developers and IT departments that keep a digital eye on servers, databases, tools, services, and other cloud-centric operations. It sends up a red flag when an issue arises that might result in downtime. Datadog goes even further, providing helpful analytics and useful feedback that get to the root of the problem and help prevent it from happening again.
Impressive quarterly results
Datadog has experienced rising demand since the onset of the pandemic, as shown by its results so far this year. Revenue grew by 68% year over year in the second quarter, decelerating slightly from the 87% growth it delivered in the first quarter. This continued robust growth also helped generate a profit for the second consecutive quarter, an impressive feat for a company that had its IPO less than a year ago.
Customers continued to sign up at an impressive clip, climbing to 12,100, up 37% year over year. Those that provide annual revenue greater than $100,000 grew to 1,015, up nearly 71% year over year. Not only are new customers joining the fold, but existing customers also continue to spend more, as evidenced by the company's dollar-based net retention rate of 130%. Customers not only expanded their usage, but they also adopted new products.
Management is doing its best to temper expectations, guiding for year-over-year growth of just 50% in the third quarter, a marked deceleration from the current rate. That forecast might turn out to be conservative, since it's difficult to know how long the pandemic will last and what long-lasting impact (if any) it will have on Datadog's future results.
Image source: Getty Images.
The competition is significant
While Datadog has captured hearts and minds of investors over the past year, it's important to note it isn't without competition. In a recent regulatory filing, the company lists IBM, Microsoft, Amazon, Cisco, and Alphabet among its biggest competitors. There are a number of younger upstarts as well, including Splunk, Elastic, New Relic, and Sumo Logic, just to name a few.
With the pedigree and deep pockets of some of these rivals, Datadog will have to continue delivering the goods if it wants to continue its eye-catching growth.
Valuation
It's worth noting that Datadog stock is by no means cheap. As of Tuesday's market close, it trades at 45 times forward sales (when a price-to-sales ratio of between 1 and 2 is considered reasonable), so investors clearly have high expectations.
To put that into perspective, analysts expect year-over-year revenue growth of 50% in the current quarter, 57% for the current year, and 35% next year -- though those estimates appear to be piggybacking on management's expectations, so Datadog's actual growth could be higher.
Image source: Getty Images.
The bottom line
But the quintessential investing question remains: Should you buy Datadog stock right now? A good part of that answer depends on what you believe as an investor. There's an old saying: "For those who believe, no explanation is necessary. For those who do not, no explanation will suffice."
The company booked $363 million in revenue in 2019, but that pales in comparison to the massive opportunity that remains. Management estimates its target market at about $37 billion by 2023, not including the more recent multicloud and hybrid cloud environments. This shows that Datadog still has a long potential runway for growth.
Datadog may not be a fit for every portfolio, or indeed every investor. Those who shy away from high valuations or unproven high-growth stocks, in general, will likely not find this stock appealing. That said, those with a stomach for volatility and an appropriate long-term investing horizon should consider adding this high flier to their portfolio.
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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. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool's board of directors. Danny Vena owns shares of Alphabet (A shares), Amazon, Datadog, and Microsoft. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Datadog, Elastic N V, Microsoft, New Relic, and Splunk and recommends the following options: long January 2021 $85 calls on Microsoft, short January 2021 $115 calls on Microsoft, short January 2022 $1940 calls on Amazon, and long January 2022 $1920 calls on Amazon. 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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It was just less than a year ago that Datadog (NASDAQ: DDOG) made its public debut, and this dog has been running ever since. The coronavirus pandemic and resulting pivot to remote work made its services more valuable than ever, driving shares up 125% so far this year, with no end in sight. In light of the growing demands brought about by an increasingly remote workforce, it's crucial to keep these systems running at peak efficiency and identify issues that can result in downtime and resolve them before they become costly.
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It was just less than a year ago that Datadog (NASDAQ: DDOG) made its public debut, and this dog has been running ever since. To put that into perspective, analysts expect year-over-year revenue growth of 50% in the current quarter, 57% for the current year, and 35% next year -- though those estimates appear to be piggybacking on management's expectations, so Datadog's actual growth could be higher. Danny Vena owns shares of Alphabet (A shares), Amazon, Datadog, and Microsoft.
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It was just less than a year ago that Datadog (NASDAQ: DDOG) made its public debut, and this dog has been running ever since. To put that into perspective, analysts expect year-over-year revenue growth of 50% in the current quarter, 57% for the current year, and 35% next year -- though those estimates appear to be piggybacking on management's expectations, so Datadog's actual growth could be higher. See the 10 stocks *Stock Advisor returns as of August 1, 2020 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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It was just less than a year ago that Datadog (NASDAQ: DDOG) made its public debut, and this dog has been running ever since. That's where Datadog comes in. Customers continued to sign up at an impressive clip, climbing to 12,100, up 37% year over year.
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Why You Must Not Ignore This Tech IPO
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https://www.nasdaq.com/articles/why-you-must-not-ignore-this-tech-ipo-2020-09-01
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In this episode of Industry Focus: Tech, Dylan Lewis and Motley Fool analyst Brian Feroldi discuss one of the most anticipated tech IPOs this year. Learn about executives and culture, their core product that gives them a huge advantage in the space, their financials and a business model which ensures tremendous retention. They also talk about their key competitors and much more.
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.
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This video was recorded on August 28, 2020.
Dylan Lewis: It's Friday, August 28th, and we're talking about a recent tech S-1 filing. I'm your host Dylan Lewis, and I'm joined by Fool.com's salty sultan of so-so stock searching, Brian Feroldi. Brian, did you pick the S' there, because we're talking Snowflake?
Brian Feroldi: That was completely unfair that you slowed down in the middle of that, Dylan, I want you to go full speed, so I can trip you up one of these times.
Lewis: You will get me at some point. Let me know when your birthday is, and that'll be the week that I intentionally, kind of, put my finger on the scale and maybe trip up on-purpose. I always love the alliteration, it's always a fun way to kick off the show.
Brian, today we are talking about Snowflake, and for anyone that has been watching the tech private markets and those lists that come out every year of most anticipated IPOs, you see it almost every year, this company has been on it. I think this company and Palantir people have been watching for a long time wondering when it's going to happen. We have the prospectus, so presumably it's going to finally happen in 2020.
Feroldi: Yeah. This is one of the S-1s that I was most looking forward to digging into this year. Full disclosure, I had no idea what Snowflake did prior to reading about this. However, I had heard that Tim Beyers is really excited and several other tech focused Fools were really excited about Snowflake and were avid users and promoters of the company. And from what I see here, it seems like Snowflake just raised $0.5 billion in February at a $12.4 billion valuation. So, this is already a very big company.
Lewis: Yes. And that is not their first big raise, they have raised a substantial amount of money in the public markets, I think they're probably at that point where they're getting big, growth is still pretty strong and it's probably a good time for them to hop into the public markets, offer some liquidity and maybe get people a little bit more familiar with the name.
Feroldi: Yeah, that's right. And when I dug into the founding story here, it reminded me a lot of Zoom, Dylan. This is a company that was founded by two former engineers at Oracle, they were talking to their clients, their clients were frustrated by the limitations of data storage. And this was back in 2012, when the two Co-Founders saw an opportunity, left their business, founded Snowflake to help bring data into the cloud, and they've been wildly successful. I love that.
Lewis: Let's talk a little bit about the name, Brian, because it would be easy to look at a tech company and say, Snowflake? Like, what is this, what are we doing here, why are we calling it this? What's the story behind the name?
Feroldi: Snowflakes, Dylan, are born in the cloud. So is this company. You got to like that, right? They're having a fun play on words.
Lewis: Yeah. I think that's fun. I think there was probably a collective groan from some of our audience members, but I like that. That name makes sense and it's a fun story. And really, that's the story with this company, that's the story with the stock, right, is business that was born in the cloud, cloud native, and really helping people make sense of data in the cloud.
Feroldi: Uh-huh. And if you don't like the name, how about this, it's eight years old and it's going to come public at a $20 billion or $30 billion valuation; we still don't know that yet. Or how about this, it's going to be the second-fastest growing SaaS company ever to IPO; or how about this, it's the No. 3 fastest public SaaS company to reach $0.5 billion in annualized revenue. Those are impressive metrics.
Lewis: Those are very impressive metrics. I think, "Or how about this," could be a new recurring segment on Industry Focus. I like the idea of you highlighting some core strength and giving us some things to tee off on as we go through the business. We're going to be talking about who they are, what they do. Data management for the cloud is, kind of, a wonky topic. I know that you spoke with a couple of people at the company who really know this space. Well, Tim Beyers, who's actually one of our lead techs, one of our lead cloud people, as well as some of our more, kind of, behind the weeds or in the weeds tech people as well. So, we're going to be talking about what the business does and then we're also going to be looking at the financials, some of the risks.
This is a fascinating business. They are both partnered with some of the big tech players and also in competition with some of the big tech players. So, there are some interesting dynamics at play here, Brian.
Feroldi: Yeah. And I got to admit, Dylan, I heard about Snowflake, I read through the S-1 and the business description top to bottom and I said, I still don't really know what they do. It's a confusing business to understand if you are not in this world and you're not a Chief Information Officer.
But here's what I understand about this business. They are all about providing businesses with universal access to their data in a secure and cloud-based way. As you teed up, Snowflake actually runs on top of three of the biggest cloud providers in the world. That would be Amazon Web Services, Microsoft Azure, and Google Cloud. [Alphabet] So, Snowflake partners and buys computing and storage space from all three of those businesses and provides a layer on top of that.
Now, my initial question was, why would you go to Snowflake if what they're essentially doing is reselling those services underneath it? And there's a couple of reasons that we'll get into. But, yeah, to your point, they are both buying from and dependent on Amazon, Microsoft and Google, and competing with them. That's interesting.
Lewis: If we're looking for parallels maybe, to make this space a little bit more accessible to people, would it be fair to call them, kind of, like a Roku in the cloud? Where they are giving access to content, they are a hardware player that is competing with big tech companies, but then also, kind of, partnered up in the way that, you know, they're competing with Amazon when it comes to streaming video devices, but they're also making it so that you can watch Amazon Studios content?
Feroldi: Yeah, I think that that's a pretty fair comparison. In essence what Snowflake does is it makes each of those platforms even better and even more usable. And as we'll get into from the numbers here, it's very clear that the market really values this service, because this company has been logging up triple-digit growth for years. And triple-digit customer growth, the amount of customers that are on there. You can't do that unless you're doing something special.
Lewis: No we can't. Why don't we start unpacking some of the terminology we're going to be throwing around here? I think one of the things that will probably come up a couple of times is the idea of the Data Cloud.
Feroldi: Yeah. So, that is their core product here. So, it's "an ecosystem where customers, partners, and data providers can break down data silos from rapidly growing data sets in secured, governed, and compliant ways." Essentially that's a mouthful, but they make it so that companies can upload to Snowflake both structured and semi-structured data and make it universally accessible to all of their employees in a fast and secured and seamless manner. Another benefit that we'll get into is not only can their own employees access this data, but it can actually be seamlessly shared with other Snowflake users. So, this allows data to be shared among organizations seamlessly; that's a key advantage.
Lewis: That is a key advantage. And maybe the easiest way to just think about this is interoperability and being able to easily access and easily use data in different formats across different organizations, simply making it easier and maybe a little bit less friction involved with that process.
Feroldi: Yeah. A lot of companies right now have tremendous amounts of data that is stored on-site, on-premise, Snowflake's software makes it easy for you to take that data and upload it to their cloud. And one thing that Snowflake can do that's unique is they can spread that around Amazon Web Services, Microsoft Azure, and Google Cloud, depending on what the customer wants. That's pretty attractive if you're a Chief Information Officer, because if you go directly to Google or directly to Azure or directly to Amazon, you are, in essence, locking into that one platform. And perhaps that one platform isn't best for a certain geography or for a certain function; by going through Snowflake, you are not locked into any one platform and you can spread your data as need be. That's what I understand is a really key and powerful advantage of this company.
Lewis: I wonder too, if that puts businesses in a position where they maybe have a little bit more negotiating power. You know, these AWS', Azures, and Google Clouds of the world, they have a lot of clout and there aren't too many players there. So, if you're looking for these services, you really only have so many places that you can go shopping, you know, kind of having a middleman that can help connect you to the product that makes the most sense might help you out.
Feroldi: Yep. And it is also -- we'll get into the business model here, but by going through Snowflake, not only does Snowflake have tremendous combined buying power over these three businesses, but their business model is based on usage. So, it's not a subscription that you pay and you pay a flat fee, you pay Snowflake based on how much data you store, how much computing you have and how much cloud servicing you need. So, it's a pay-as-you-go model. Depending on your organization's needs that can actually save you money. So, it's easy to use, it offers you broad diversification, it's wicked fast, you can share data with customers, and you could potentially save money. When you combine that together, I understand the appeal.
Lewis: You made me smile there, Brian, when you said "wicked," I always like to hear that little New England, kind of, seeping out of you. No, but I think that pay-as-you-use and, kind of, use-as-you-go model is very effective and it's a huge selling point for smaller organizations. You know, the idea of having a relatively large upfront commitment or having a monthly fee that you feel like you have to justify can be, kind of, hard. We've seen a lot of businesses be very successful with the pay-as-you-use model.
Feroldi: Yes. And the one that comes to mind immediately is Twilio. And this is something that their CEO and Founder, Jeff Lawson, called out. He said, software, at first, was the licensing model, you pay a fee and then you get access to it for a period of time until you have to upgrade. The second generation was Software-as-a-Service, where you pay a recurring monthly fee for access to it. And he said, the third wave is really the usage model, where you're not necessarily paying to get started on a monthly fee, you're paying for how much you use it. That model is leading to extreme or wicked -- "wicked," Dylan -- net revenue retention rates.
Lewis: Yeah. And it creates a symbiotic relationship between the company and their client, because they are only being used in as much as they are helpful. And I think, you know, if you're kind of taking a pessimistic view of things, if company prospects dip, they're going to look pretty hard at monthly subscription or annual subscription services that they then have to justify, whereas a usage-based model puts them in a spot where they're probably only paying things as they actually incur the activity that's related to that. So, hopefully those are revenue generating opportunities for those businesses.
Feroldi: Yes. Exactly. And there's three ways that they generate revenue. Well, there's four but we'll get into the three that we really care about. The first is storage; so how much data you have stored. That's built on a terabyte/month basis. The second is for computing; so, once you get the data in there, you want to process it, you want to analyze it, you want to draw conclusions from it. So, they can scale up and down your computing needs depending on what kind of information you have and how much computing power you need; that's the second way. The third is when you're doing data transfers, and that's when they charge by terabytes of data. They do have a fourth revenue source, and that is professional services. Where Snowflake employees go in and can help you with any of these functions. That's not something that we as investors really care about, because that is zero gross margin business, but nonetheless, it is something that generates revenue for them.
Lewis: Yeah. And that kind of model isn't uncommon to have some business line like that. You know, at the end of the day you probably need some professional services in there to make sure that clients and customers are happy with what they're getting and they understand how to use everything. You know, I think that a lot of those servicing models, they kind of have to be either not all that big in terms of their contribution revenue or possibly even lost leaders, just to really put clients in a position for success. So, that you see the retention and you see the recurring revenue come through.
Feroldi: Exactly. And they did call it out that they do have it; it's less than 10% of revenue. The only reason I bring that up is because that is obviously a revenue that we really don't care about. Some companies that are a much bigger percentage of revenue, and for those companies you really have to think through the price-to-sales ratio, because that is not revenue that you should pay a price for, like subscription revenue.
Lewis: So, Brian, we talked a little bit about the value prop with specifically talking about data consolidation and, really, the idea of interoperability of data. But let's talk about some of the other benefits that customers get when they're using a Snowflake product.
Feroldi: Yep. So, the real big benefit is that it's extremely easy to use and it's extremely easy to get started. They have a trial period and you can get up and get going. This is the same thing that Twilio uses when they're getting people on board. Again, it's a try us out and pay-as-you-go. That's a very low hurdle for a lot of people to jump over when they're trying to get started. But again, once their data is in there, not only is it universally accessible across all of their employees, but it can also easily be shared with their customers. They have numerous use cases here where they talk about how valuable that is to some partners.
For example, one of their customers has a tremendous amount of health data related to COVID-19 and they can easily share that information with hundreds or even thousands of other Snowflake customers so that they can make business decisions based on updated data that is already within Snowflake's network. And that can affect supply chains, where employees can go, sales calls, etc. So, that is one small example of how sharing data between organizations creates a network effect for this company.
Lewis: Yeah. And we talked about it too, but the pricing model for them is kind of a value prop. In addition to all of the platform elements of it, the idea that you're only paying for what you use is certainly something that I think clients would rather see. So, I think as they're bundling their product and making it available to people that something that I look at and I say, yeah, I would consider that part of the benefit or part of the value proposition.
Feroldi: Yeah. Again, this is a complex thing to really think through, but I think when we get into the numbers you'll see, all right, they're doing something special that the market clearly appreciates.
Lewis: The eye popping number here, Brian, speaking of numbers, is net revenue retention. It is bolded and exclamation pointed in our outline doc. So, I think that we are fairly impressed with this number to say the least. 158%, is there a business that comes to mind that puts up anything close to that?
Feroldi: Again. The only thing that I can think is when Twilio came public that it was, sort of, within that range. And I'm sure that Zoom has gotten pretty close to that given COVID-19. But the amazing thing about that number, the truly amazing thing is, that's down from where it was previously. I'm looking at their net revenue retention rate over the last seven or eight quarters, this was as high as 223% a year ago, and it's fallen all the way to 158%. In their S-1 they specifically called out a major strategy of theirs is to get customers on board and then have them rapidly increase their spending. Boy! Are they doing a great job with that. And I think that that is mostly due to their usage-based model.
Lewis: Yeah, I think back to when we did that Datadog S-1 and we were looking at that company, right? And we were like, oh, my gosh! 140% net revenue retention number. This is incredible, this is some of the best numbers I've ever seen. And this just puts them to shame. I mean, 140% is nothing to sneeze at, but 158% is otherworldly, and it really speaks to the strength of the model. But they're seeing a lot of other really impressive metrics moving in the right direction as well. I mean, the +500 million daily queries, up from 254 million last year. Brian, that's impressive as well.
Feroldi: Yes. That clearly shows that there is value in this platform. Another quick point I just want to make. We talked about 158% net revenue retention; "retention," that's the good one. Not expansion, retention. That number is ridiculously impressive. It's wicked impress, Dylan, even.
Lewis: Is that a new bit. Did we just discover a new Industry Focus bit, Brian?
Feroldi: I think we're going to have to. We'll call this one, Snowflake, a wicked good company.
Lewis: Oh! Let's see what the listeners have to say about that.
Feroldi: But let's take a couple of the other numbers. Last quarter, revenue growth for this company was 121%; that was up sharply year-over-year. And for the first six months of 2020, you were talking about $242 million in revenue. Importantly, Dylan, during that huge revenue expansion phase, gross margin expanded. It was 49% last year; 62% this year. You combine those two, and gross profit tripled. Wow!
Lewis: That's remarkable. And I'm guessing, as this business gets bigger, that gross margin is probably going to expand a little bit more. We're starting to see the early signs of leverage. And this is something that we often look for in companies, because, you know, like, 49% is not bad, but we see a lot of cloud companies, and a lot of software companies in particular, operating in that 60%, 70%, if you're really good, in the 80% range. And that's where you're getting more of every dollar of sales flowing down through the rest of the income statement. That's really helpful as a business, and that's something you enjoy because you're able to leverage some of your fixed costs that come with actually delivering the revenue that you're collecting from your customers.
Feroldi: Yeah. I do think there's more room for that number to grow. However, it's also worth remembering with the business model here, they sit on top of AWS, Azure, and Google Cloud and the more that their customers buy from them, the more that they are going to have to buy from those cloud providers. So, I think that there's probably a cap on this number, but at 62%, I could see it getting into, say, the low-70%s overtime with more scale.
Lewis: That's a great point and I should have emphasized that, Brian. But yeah, this isn't the fixed-cost model that we see with a lot of equipment build-outs, they're going to have some variable costs really driving the cost of their delivery of the services that they're giving to their customers, because they're making those buying commitments.
Brian, not surprisingly, with the growth numbers we're talking about, pretty heavy spend on sales and marketing.
Feroldi: Yeah, you could call it that. They have been plowing every dollar that they can find back into the business. And sales and marketing expenses are really exploding, as well as R&D and G&A. So, because of that this company has a really big net loss. I mean, $133 million in revenue last quarter; $77 million net loss. That is a lot of spending.
Lewis: Yeah. And companies lose money for a variety of reasons, this is the kind of company losing money situation that I think people can generally be comfortable with and get behind, because if you're growing your topline at this rate and you're trying to establish yourself as a major player in a space that we know is just going to dominate tech for the next 10, 15, 20 years, it's a land grab phase and you want to make sure that you are getting as much land as you can so that you can take what you're doing, which is obviously working with your customers, and then hopefully be able to reinvest in your business, grow things out. It would be a mistake for them to be posting income that they are then going to be taxed on when they can so much better put that money to use by reinvesting in their business.
Feroldi: Yeah. And again, so after speaking with some of our colleagues, I learned that The Motley Fool is a customer of Snowflakes, and one of the benefits that Snowflake provides is, every customer gets not only a sales rep but also a professional data analyst that can help. So, you can clearly see that kind of customer service in the numbers. From what I understand, that kind of service is valued, especially in the beginning. So, not that surprising, but still, these are still some staggering net losses.
Lewis: They are, they are big. And actually, Brian, I want to take a pause here and talk a little bit about what their customer acquisition approach looks like, because I think it's probably a little bit different than what most people think of. Because we spend so much time when we're talking about cloud companies, talking about software companies. And so, there you can maybe appeal to a mid level decision maker, someone who has the ability to steer what tech department is using. You know, if it's a CRM software or something like that, then they can expand usage within that organization once they're embedded in there; the classic land and expand model.
This is a little different, because of the scale that these operations are on and how critical they are to the operations of the company, Snowflake is focusing much more on the Chief Information Officer or the Chief Technology Officer for the new customer acquisitions. They aren't going to be appealing to those mid level managers in the way that some of the software companies that we normally talk about are.
Feroldi: Yeah. So, getting their foot in the door is an expensive proposition upfront. However, those costs are worth it, and that is why Snowflake is plowing everything they can into sales and marketing. And on the flipside, if it's that hard and expensive for them to get in, it's also that hard and expensive for their competitors to get in. So, there's two sides of that coin.
Lewis: Yeah. And I mean, that could be viewed as a moat, particularly when the retention rates are as impressive as they are, because obviously that is money well spent if you're thinking about the lifetime value of the customers that are coming in.
Feroldi: Yeah. I think that that's fair. Now the good news is, even prior to the IPO here, this company has a ton of cash. $886 million in cash prior to the IPO. They also have $1.4 billion in redeemable convertible stock. That stock will likely be converted at the IPO, plus however much capital that they're going to raise. So, from what I see, and we still don't have the final numbers because they have not come public yet, I think it's reasonable to assume that they're going to have a ton of cash and no debt.
Lewis: We talked a little bit about switching costs before and the importance of getting in when people are making these initial investments, possibly getting into a space they currently aren't investing in as a company. What else do you see there in terms of moats, maybe competitive strengths and things like that?
Feroldi: Yeah, I think that switching cost is the big one here. It's so hard to get all of your data moved over to a platform. Once it's there, everyone is comfortable, everyone is using it. And, again, it rests on top of three of the biggest cloud providers, so you can move them around while staying a Snowflake customer. That does provide some pretty sizable switching costs.
The other moat that I think that is worth mentioning here is that network effect that we talked about before, where once you're on Snowflake's platform, it's easy to share with partners, with customers, with other data providers, all while staying in Snowflake's ecosystem. So, they called that out as the network effect. I don't think it's the strongest network effect that we've ever seen, because I don't know how interested, say, a bank would be with sharing their data with an oil company or something along those lines. I do think there are some uses when sharing data makes sense, but I don't think it's a true network effect where every new user provides value to all users. But I do think there is a weak network effect at play here.
Lewis: Yeah, I think that makes sense to me. I mean, you could definitely see that being a benefit to someone who has outsourced a significant business operation to a major partner, maybe it's payment processing, maybe it's marketing, maybe it's CRM, maybe they have an agency, who knows. But that interoperability makes sense. But I do think that you could set similar things up outside of Snowflake if you wanted to. It would be painful to make that switch, but it wouldn't kill you.
Feroldi: Yeah. Again, that's one of the benefits of Snowflake, it makes that process easy. So, they call it out as a long-term competitive advantage. I buy it, just I don't think you should give them full credit for their moat.
Lewis: You get half a gold star. This is already a pretty sizable business, Brian. You mentioned earlier that they raised just under $0.5 billion from Dragoneer earlier this year, putting their valuation north of $10 billion. A big part of that is they're going after a pretty sizable market. We've talked a lot about how important cloud is. And you know, I mean, AWS, Google Cloud, and Azure have proven to be massive businesses. There are some pretty big expectations and pretty big opportunities in front of this company.
Feroldi: Yeah. So, management claims that its total addressable market opportunity for its cloud is currently about $81 billion. At this run-rate, it looks like they're going to do about $600 million-ish in revenue for the year. So, that's still sub 1% of their theoretical potential in cloud. The market for data analytics is also massive; that's another $56 billion market that they're going after. You combine them two together, it's very clear there's room to grow. And if you just zoom out and if just consider the big picture, we are creating unprecedented amounts of data. And the amount of data that humanity is going to generate is estimated to grow at a 27% compound annual growth rate between now and 2025; that necessitates the need for data storage and data analytics services like this. The point is, the market opportunity here is massive.
Lewis: Cloud is not going anywhere. I think that's a pretty safe bet over the next decade, and I'm sure Tim Beyers would agree with me. One of the things that we always want to look at, Brian, when we're looking at these prospectuses is the customer base for these companies. Particularly, how spread out is it and is there any one single customer that provides so much of their revenue that it becomes a risk to the business?
Feroldi: Yeah. And they call out that they have over 3,000 customers at this point. That is double where it was a year ago; that's certainly a good sign. 56 of their 3,000 customers are going to spend more than $1 million with Snowflake this year; that's a good sign. They call out that their net promoter score metric, that we Fools love to look at, was 71; that is excellent. They did say that last year Capital One was a 10% customer for them. In fact, it was 11% of total revenue in the last fiscal year. They've grown so much that Capital One is no longer a 10% customer for them. So, when I look up-and-down, I see customers like FactSet Research, McKesson, Sony, DoorDash, Adobe, DocuSign, Nielsen, and on and on and on. Customer concentration, not an issue here.
Lewis: Yeah. And as I understand that they are in, I think, 7 of the Fortune 10, and 150 of the Fortune 500. So, they are starting to work with some pretty big names, but there's obviously a lot of greenfield ahead of them in the Fortune 500 alone.
Feroldi: Yep. And another thing we like to think about is pricing power or expansion opportunity. It's obvious to me, when I look at that gross margin and how it's grown significantly over the last couple of years and there's probably still some upside, that this company does have some pricing power. So, A+ from me on the customers.
Lewis: Switching over to management and culture; we always have to, kind of, check that box as well, Brian. Folks that have followed some of our conversations about ServiceNow, might recognize the name at the top of the food chain here. CEO, Frank Slootman, was the former CEO of ServiceNow; he served there for about six years. And he is the Head of Snowflake now; not the Founder of the company, though.
Feroldi: Yes. And he had a very productive career at ServiceNow. He helped take the company from, I think, a $100 million in revenue to a +1 billion. He helped take them public. Anybody who bought at the IPO or any time thereafter has done fabulously well. ServiceNow has been a great performer. So, yes, he did join Snowflake recently. He is incentivized for this company to be successful. He himself owns more than 15 million shares, stock, they had to pay up to get him, but given his pedigree, I understand why they did so.
Lewis: Yeah, the pedigree is there. I think what's interesting about Slootman is, he clearly has a strong track record of being an effective executive. He is a little bit more of a pro executive, someone who knows how to run a business well and move it along. He's someone who can, kind of, drive the execution of things. There are pros and cons to having someone like that in the executive suite.
Feroldi: Yeah, there definitely are. He's a professional executive and he needs to be compensated accordingly. But the good news here is that the two Co-Founders are still involved and in the C-suite. One is the CTO, the other is the President of Product. And they both hold a decent slug of stock themselves. This setup reminds me a little bit of Google when they were first out of the gate. Larry Page and Sergey Brin were still in the C-suite and they brought in Eric Schmidt, a professional CEO, to kind of get them through. So, a similar setup here.
Lewis: Yeah, it can be helpful to have an adult in the room. And if you wind up investing as the company goes public, you will be alongside some pretty well-heeled investors. They have raised, I think, from Sequoia Capital, as well as a lot of other pretty big names in the private equity space.
Feroldi: Yep. They've raised billions of dollars in capital at this point, as you pointed out, from like, Redpoint Ventures, Iconiq, Altimeter Capital and Sequoia. So, they do have some heavy hitters behind them.
Lewis: Ventures. I should have said ventures, not private equity, that's my mistake. But, hey, we're doing this live, Brian, right? We talked about it a little before, but the risks and competition here, I can't help but see Roku when I look at this business. Just because of the way that they are playing in a space and they're, kind of, a frenemy who makes it easy to use services that are also owned by people who have hardware ambitions. And so, I do wonder if there's a risk at some point of one of these major players, whether it's AWS, Azure or Google Cloud saying, you know, I don't know if we need you to be doing this?
Feroldi: I think that that's fair, but you have to also remember, the better Snowflake does, the more businesses their customers gain too. So, it is a bit of a frenemy situation that's going on there. And again, if you look at just the growth rate in both the customer count as well as the spending, it's clear that there is a huge demand for a Switzerland-isque cloud provider, and that is exactly what Snowflake does. So, yes, they're competing against Amazon, Microsoft, and Google, but they're also partners that are giving them money. So, that will be a relationship to monitor for sure.
Lewis: I mentioned that their most recent valuation put them north of $10 billion. I am sure that when shares hit the public market, it is going to be at a healthy, healthy valuation, it's probably going to be pretty darn rich. I don't have a firm idea of what that market cap might be, Brian, but I think it's going to be pretty high as a multiple times sales.
Feroldi: Yeah. I mean, I've seen estimates between $20 billion and $30 billion. Again, this company is going to do about $600 million in revenue or so this year. Therefore, that right there could be a price-to-sales ratio of 50. But when you look at some of the other companies we've talked about before on the show, on the S-1s, we've done big commerce, we've done Zoom, for example, those companies enjoy even healthier premiums than that. So, I'm sure it's going to be huge and I'm sure it's going to even pop after the IPO.
Lewis: Yeah, I mean Datadog went public at a very rich valuation. And I think they're up about threefold on where shares, kind of, first became available for the average investor. So, quality is often worth paying for. And one of the things that I think we're noticing more and more is we're probably underestimating the strength of some of these cloud and tech business models. They are so different from what we have seen in the market over the last, you know, basically everything prior to 2015 in terms of growth, margin profile, and future profitability. Unfortunately, that means that you've got to pay a steep price now for it.
Feroldi: A super steep price. But again, this model reminds me of Twilio very much, because its usage-based on what has happened to Twilio, how have Twilio's shareholders done if they had bought at any time? Fantastic, is the answer.
Lewis: As I can attest as someone who owns shares. Before we wrap up, Brian, I have to ask, are you going to buy the "wicked" Snowflake?
Feroldi: I might. I mean, I'm still thinking through. You know, after we get off here, for this weekend tech, Tim and Tom are going to be doing a deep dive on the technology here. I still really want to make sure I understand that before I go, and I want to get a better understanding of how the company performs as a public company, but I could see myself pulling a Joey Solitro and buying some shares on day one here. How about you, Dylan?
Lewis: You know, you'd be in pretty good company. Joey does alright for himself as an investor. He has a lot of multi-baggers to his name. So, that isn't necessarily a bad thing. I'm a little bit with you. I think I need to get a better grip on the tech and really how differentiated they are and how strong that value proposition is. I want to talk a little bit more with some internal Fools about that to get a better handle on things. But this is a really compelling business, and that net retention rate number is just, I think, the sticker figure for this company. And very often when you see a number like that, it's worth investing alongside. I know Tom Gardner and Asit Sharma and have talked a lot about ServiceNow recently. And the number that they point to over and over again is 97%, 98% customer retention rate. So, that means they're losing 2% or 3% of their customers every year.
Those types of numbers, when you see them, are often a sign of a very successful business and a very good product. And it sticks out when you do, when you see them.
Feroldi: And you also got to consider the quality of the customers that Snowflake is going after. This is a product that you might not, you probably don't need if you are a very small consumer of data, you can just go straight to Amazon. This is a product that appeals to the biggest companies out there that have massive amounts of data needs. The nice thing about those customers is, they don't go out of business all that often and, man! are they sticky.
Lewis: Well, Brian, I had a real blast talking with you about this. And unfortunately, now we just need to wait for the company to go public. Now, we just have to play the waiting game.
Feroldi: That's right, until we get the rest of the information. Dylan, I had a wicked fun time.
Lewis: I love it. And I'll talk with you next week, it'll be fun.
Feroldi: Sounds good, bud!
Lewis: All right, listeners, that's going to do it for this episode of Industry Focus. If you have any questions or you want to reach out and say, "Hey!" shoot us an email over at IndustryFocus@Fool.com, or tweet us @MFIndustryFocus. If you want more stuff, subscribe on iTunes or wherever you get your podcasts.
As always, people on the program might own the companies discussed on the show, and The Motley Fool may have formal recommendations for or against the stocks mentioned, so don't buy or sell anything based solely on what you hear.
Thanks to Tim Sparks for all his work behind the glass today. Thank you for listening, until next time, Fool on!
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. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool's board of directors. Brian Feroldi owns shares of Adobe Systems, Alphabet (A shares), Alphabet (C shares), Amazon, DocuSign, FactSet Research Systems, Microsoft, and Twilio. Dylan Lewis owns shares of Alphabet (A shares), Amazon, DocuSign, and Twilio. The Motley Fool owns shares of and recommends Adobe Systems, Alphabet (A shares), Alphabet (C shares), Amazon, Datadog, DocuSign, FactSet Research Systems, Microsoft, Roku, ServiceNow, Inc., Twilio, and Zoom Video Communications. The Motley Fool recommends McKesson and recommends the following options: long January 2021 $85 calls on Microsoft, short January 2021 $115 calls on Microsoft, short January 2022 $1940 calls on Amazon, and long January 2022 $1920 calls on Amazon. 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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You know, I think that a lot of those servicing models, they kind of have to be either not all that big in terms of their contribution revenue or possibly even lost leaders, just to really put clients in a position for success. And companies lose money for a variety of reasons, this is the kind of company losing money situation that I think people can generally be comfortable with and get behind, because if you're growing your topline at this rate and you're trying to establish yourself as a major player in a space that we know is just going to dominate tech for the next 10, 15, 20 years, it's a land grab phase and you want to make sure that you are getting as much land as you can so that you can take what you're doing, which is obviously working with your customers, and then hopefully be able to reinvest in your business, grow things out. As always, people on the program might own the companies discussed on the show, and The Motley Fool may have formal recommendations for or against the stocks mentioned, so don't buy or sell anything based solely on what you hear.
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Brian Feroldi owns shares of Adobe Systems, Alphabet (A shares), Alphabet (C shares), Amazon, DocuSign, FactSet Research Systems, Microsoft, and Twilio. The Motley Fool owns shares of and recommends Adobe Systems, Alphabet (A shares), Alphabet (C shares), Amazon, Datadog, DocuSign, FactSet Research Systems, Microsoft, Roku, ServiceNow, Inc., Twilio, and Zoom Video Communications. The Motley Fool recommends McKesson and recommends the following options: long January 2021 $85 calls on Microsoft, short January 2021 $115 calls on Microsoft, short January 2022 $1940 calls on Amazon, and long January 2022 $1920 calls on Amazon.
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And really, that's the story with this company, that's the story with the stock, right, is business that was born in the cloud, cloud native, and really helping people make sense of data in the cloud. For example, one of their customers has a tremendous amount of health data related to COVID-19 and they can easily share that information with hundreds or even thousands of other Snowflake customers so that they can make business decisions based on updated data that is already within Snowflake's network. And companies lose money for a variety of reasons, this is the kind of company losing money situation that I think people can generally be comfortable with and get behind, because if you're growing your topline at this rate and you're trying to establish yourself as a major player in a space that we know is just going to dominate tech for the next 10, 15, 20 years, it's a land grab phase and you want to make sure that you are getting as much land as you can so that you can take what you're doing, which is obviously working with your customers, and then hopefully be able to reinvest in your business, grow things out.
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Lewis: Let's talk a little bit about the name, Brian, because it would be easy to look at a tech company and say, Snowflake? And it is also -- we'll get into the business model here, but by going through Snowflake, not only does Snowflake have tremendous combined buying power over these three businesses, but their business model is based on usage. So, you can clearly see that kind of customer service in the numbers.
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753cdea6-e850-494c-ac7e-3136104cdc51
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718999.0
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2020-08-30 00:00:00 UTC
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Up 45% Since March, Is New Relic's Stock Too High?
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DDOG
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https://www.nasdaq.com/articles/up-45-since-march-is-new-relics-stock-too-high-2020-08-30
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nan
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nan
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New Relic’s stock (NYSE: NEWR) has moderate upside left based on its valuation, after it rallied from $40 to $58 since March 23rd compared to the S&P which moved 53%. One of the reasons for the recovery was the Fed’s multi-billion dollar stimulus package announced on March 23rd which lifted market sentiments. New Relic, which provides a platform that companies use to build, develop, and operate their digital businesses, saw its stock recover in May after the company beat consensus estimates for Q4 2020 (ended March 2020). In July the company revamped its product into just three categories with a view to increase customer productivity while reducing costs.
New Relic’s stock reached its 2020 high in August after recovering from the drop in February and March due to the coronavirus outbreak becoming a pandemic. Despite the pandemic, the company has seen revenues increase in the last 2 quarters (Q1 2021 and Q4 2020), which we believe the stock has factored in, and we see a moderate upside potential remaining in the near term.
The company’s stock fell 21% in price since the end of FY 2018 (ended March 2018), New Relic’s revenue saw a rise of 69% from $355 million in FY 2018 to $600 million in FY 2020, but its net loss increased from $45 million in FY 2018 to $89 million in FY 2020.
The company has seen good revenue growth over recent years, while its P/S (price-to-sales) multiple has fallen. We believe the stock has some upside left after the recent rally. Our dashboard ‘What Factors Drove -21% Change In New Relic’s Stock Between FY 2018 And Now?‘ has the underlying numbers.
NEWR’s P/S multiple dropped from 11x in FY 2018 to around 4.5x in FY 2020. The company’s P/S has now risen to around 5.7x after beating earnings in the previous two quarters amidst the pandemic.
Effect of Coronavirus
The global spread of coronavirus led to lockdown in various cities across the globe, which has affected industrial and economic activity. Despite that, New Relic saw a rise of nearly 16% y-o-y in Total revenue for Q1 2021 (ended June 2020) but saw a fall in net income margin to -18% for the quarter compared to -11% in the same period of the previous year.
Over the coming weeks, we expect continued improvement in demand and subdued growth in the number of new Covid-19 cases in the U.S. to buoy market expectations. Following the Fed stimulus — which set a floor on fear — the market has been willing to “look through” the current weak period and take a longer-term view. With investors focusing their attention on 2021 results, the valuations become important in finding value.
While New Relic’s stock might currently offer a moderate proposition to potential investors, what if you are looking for a more balanced portfolio instead? Here’s a top quality portfolio to outperform the market, with over 100% return since 2016, versus 55% for the S&P 500. Comprised of companies with strong revenue growth, healthy profits, lots of cash, and low risk. It has outperformed the broader market year after year, consistently.
See all Trefis Price Estimates and Download Trefis Data here
What’s behind Trefis? See How It’s Powering New Collaboration and What-Ifs For CFOs and Finance Teams | Product, R&D, and Marketing Teams
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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New Relic’s stock (NYSE: NEWR) has moderate upside left based on its valuation, after it rallied from $40 to $58 since March 23rd compared to the S&P which moved 53%. New Relic’s stock reached its 2020 high in August after recovering from the drop in February and March due to the coronavirus outbreak becoming a pandemic. Despite that, New Relic saw a rise of nearly 16% y-o-y in Total revenue for Q1 2021 (ended June 2020) but saw a fall in net income margin to -18% for the quarter compared to -11% in the same period of the previous year.
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New Relic’s stock (NYSE: NEWR) has moderate upside left based on its valuation, after it rallied from $40 to $58 since March 23rd compared to the S&P which moved 53%. New Relic, which provides a platform that companies use to build, develop, and operate their digital businesses, saw its stock recover in May after the company beat consensus estimates for Q4 2020 (ended March 2020). The company’s stock fell 21% in price since the end of FY 2018 (ended March 2018), New Relic’s revenue saw a rise of 69% from $355 million in FY 2018 to $600 million in FY 2020, but its net loss increased from $45 million in FY 2018 to $89 million in FY 2020.
|
New Relic, which provides a platform that companies use to build, develop, and operate their digital businesses, saw its stock recover in May after the company beat consensus estimates for Q4 2020 (ended March 2020). Despite the pandemic, the company has seen revenues increase in the last 2 quarters (Q1 2021 and Q4 2020), which we believe the stock has factored in, and we see a moderate upside potential remaining in the near term. The company’s stock fell 21% in price since the end of FY 2018 (ended March 2018), New Relic’s revenue saw a rise of 69% from $355 million in FY 2018 to $600 million in FY 2020, but its net loss increased from $45 million in FY 2018 to $89 million in FY 2020.
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Despite the pandemic, the company has seen revenues increase in the last 2 quarters (Q1 2021 and Q4 2020), which we believe the stock has factored in, and we see a moderate upside potential remaining in the near term. The company has seen good revenue growth over recent years, while its P/S (price-to-sales) multiple has fallen. While New Relic’s stock might currently offer a moderate proposition to potential investors, what if you are looking for a more balanced portfolio instead?
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708806b5-4a61-4daf-8a00-b91e132e42c9
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