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719000.0
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2020-08-30 00:00:00 UTC
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Splunk's Fiscal Q2 Revenue Declined: Here's Why That's Good News
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DDOG
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https://www.nasdaq.com/articles/splunks-fiscal-q2-revenue-declined%3A-heres-why-thats-good-news-2020-08-30
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nan
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Splunk's fiscal second-quarter performance looked ugly. In contrast to competitors that have recently posted strong double-digit revenue growth, the data specialist's top line declined despite sales and marketing expenses reaching almost two-thirds of revenue. However, investors should pay closer attention to the company's performance as its transition to the cloud hides a more attractive long-term story.
Short-term headwinds
Splunk offers solutions to store, monitor, and analyze data from applications and devices. And given the digitization of enterprises, the quantity of data is exploding. Research specialist IDC estimates that the collective sum of the world's data will grow at a compound annual growth rate (CAGR) of 61% through 2025, which bodes well for Splunk.
Yet the company posted underwhelming second-quarter results as revenue declined 5% year over year to $491.7 million. In contrast, some competitors delivered much stronger numbers on the top line.
COMPANY LATEST QUARTER'S REVENUE YOY CHANGE
Splunk (NASDAQ: SPLK) $491.7 million (5%)
Datadog $140.0 million 68%
Elastic N.V. $128.9 million 44%
Data source: company press releases. Latest quarter ended June 30, 2020 for Datadog and July 31, 2020 for Splunk and Elastic. YOY = year over year.
Splunk's weak performance was due to its declining legacy license segment, which shrank to $176.8 million, down 37% year over year. By comparison, cloud services increased 79% to $125.9 million. Growing revenue from cloud services could not quite offset the decline of the license segment, as the former corresponds to ratable revenue versus the larger upfront payments for the latter.
For that reason, management expects another quarter of unexciting performance with third-quarter revenue expected to land in the range of $600 million to $630 million, depending on how the cloud segment performs. Splunk reported $626.3 million of revenue in the prior-year quarter.
In addition, that transition to the cloud is pressuring the company's gross margin. Its legacy licensing business involves minimal costs, as it consists of distributing software to its customers' infrastructure. But now, Splunk must provide the computing infrastructure with its cloud-based offerings.
Thus, during the recent quarter, cloud services' relatively low gross margin of 52.5% paled in comparison to the license segment's 96.9%. And non-GAAP (adjusted) total gross margin declined 560 basis points to 78.4%, down from 84.2% one year ago.
Unsurprisingly, diminishing revenue and lower gross margin led to a larger GAAP loss of $261 million, more than doubling the loss posted in the prior-year quarter and reflecting the company's near-term challenges.
Image source: Getty Images.
Accelerated transition to the cloud
Splunk's transition to the cloud is happening faster than anticipated. As an illustration, cloud-based bookings represented 53% of total software bookings in the fiscal second quarter, up from 36% one year ago. During the earnings call, CEO Doug Merritt anticipated that this forward-looking metric will reach 60% this fiscal year, ending Jan. 31, two years ahead of the initial plan.
That accelerated development led to lower-than-expected fiscal second-quarter revenue. But it remains a positive outcome that shows customers are embracing Splunk's cloud portfolio, which bodes well for its long-term business. In particular, management highlighted the company's observability solutions, an essential element for monitoring and managing cloud infrastructures and applications, as contributing to the strong cloud performance.
During the second quarter, cloud annual recurring revenue (annualized revenue run-rate of active subscription contracts) growth accelerated to 89% year over year, up from 81% in the prior-year period, to $568 million. Trailing 12-month dollar-based net retention rate for cloud reached 132%, which means existing customers spent 32% more than one year ago to use the company's cloud solutions.
In addition, as Splunk is scaling its cloud business, its gross margins should improve. Management forecast cloud non-GAAP (adjusted) gross margins to exceed 70% by next year, which seems reasonable considering the 80% gross margin reported by the cloud-native competitor Datadog last quarter.
Looking forward
As the transition to the cloud is progressing, management expects operating cash flow to become positive in fiscal 2022 and grow to $1 billion the following year.
Splunk's market cap is 35 times that forecasted 2023 operating cash flow, but despite that rich valuation and the short-term headwinds, investors should keep Splunk on their watchlists. The company is poised to profit from the explosive growth of data in the coming years, thanks to its rapid transition to the cloud.
10 stocks we like better than Splunk
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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
*Stock Advisor returns as of August 1, 2020
Herve Blandin has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Datadog, Elastic N V, 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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Research specialist IDC estimates that the collective sum of the world's data will grow at a compound annual growth rate (CAGR) of 61% through 2025, which bodes well for Splunk. But it remains a positive outcome that shows customers are embracing Splunk's cloud portfolio, which bodes well for its long-term business. Looking forward As the transition to the cloud is progressing, management expects operating cash flow to become positive in fiscal 2022 and grow to $1 billion the following year.
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In contrast to competitors that have recently posted strong double-digit revenue growth, the data specialist's top line declined despite sales and marketing expenses reaching almost two-thirds of revenue. Splunk (NASDAQ: SPLK) $491.7 million (5%) Datadog $140.0 million 68% Elastic N.V. $128.9 million 44% Data source: company press releases. Management forecast cloud non-GAAP (adjusted) gross margins to exceed 70% by next year, which seems reasonable considering the 80% gross margin reported by the cloud-native competitor Datadog last quarter.
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Splunk's weak performance was due to its declining legacy license segment, which shrank to $176.8 million, down 37% year over year. During the second quarter, cloud annual recurring revenue (annualized revenue run-rate of active subscription contracts) growth accelerated to 89% year over year, up from 81% in the prior-year period, to $568 million. Management forecast cloud non-GAAP (adjusted) gross margins to exceed 70% by next year, which seems reasonable considering the 80% gross margin reported by the cloud-native competitor Datadog last quarter.
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Yet the company posted underwhelming second-quarter results as revenue declined 5% year over year to $491.7 million. Splunk (NASDAQ: SPLK) $491.7 million (5%) Datadog $140.0 million 68% Elastic N.V. $128.9 million 44% Data source: company press releases. During the second quarter, cloud annual recurring revenue (annualized revenue run-rate of active subscription contracts) growth accelerated to 89% year over year, up from 81% in the prior-year period, to $568 million.
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9cd3e384-e629-4504-9bfd-c559c97c5cf5
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719001.0
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2020-08-26 00:00:00 UTC
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Notable Wednesday Option Activity: TGT, EA, DDOG
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DDOG
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https://www.nasdaq.com/articles/notable-wednesday-option-activity%3A-tgt-ea-ddog-2020-08-26
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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 Target Corp (Symbol: TGT), where a total volume of 25,856 contracts has been traded thus far today, a contract volume which is representative of approximately 2.6 million underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 43.6% of TGT's average daily trading volume over the past month, of 5.9 million shares. Especially high volume was seen for the $155 strike call option expiring August 28, 2020, with 2,523 contracts trading so far today, representing approximately 252,300 underlying shares of TGT. Below is a chart showing TGT's trailing twelve month trading history, with the $155 strike highlighted in orange:
Electronic Arts, Inc. (Symbol: EA) options are showing a volume of 8,138 contracts thus far today. That number of contracts represents approximately 813,800 underlying shares, working out to a sizeable 43.3% of EA's average daily trading volume over the past month, of 1.9 million shares. Especially high volume was seen for the $145 strike call option expiring August 28, 2020, with 626 contracts trading so far today, representing approximately 62,600 underlying shares of EA. Below is a chart showing EA's trailing twelve month trading history, with the $145 strike highlighted in orange:
And Datadog Inc (Symbol: DDOG) options are showing a volume of 20,153 contracts thus far today. That number of contracts represents approximately 2.0 million underlying shares, working out to a sizeable 42.2% of DDOG's average daily trading volume over the past month, of 4.8 million shares. Especially high volume was seen for the $92 strike call option expiring August 28, 2020, with 1,585 contracts trading so far today, representing approximately 158,500 underlying shares of DDOG. Below is a chart showing DDOG's trailing twelve month trading history, with the $92 strike highlighted in orange:
For the various different available expirations for TGT options, EA 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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Especially high volume was seen for the $92 strike call option expiring August 28, 2020, with 1,585 contracts trading so far today, representing approximately 158,500 underlying shares of DDOG. Below is a chart showing EA's trailing twelve month trading history, with the $145 strike highlighted in orange: And Datadog Inc (Symbol: DDOG) options are showing a volume of 20,153 contracts thus far today. That number of contracts represents approximately 2.0 million underlying shares, working out to a sizeable 42.2% of DDOG's average daily trading volume over the past month, of 4.8 million shares.
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That number of contracts represents approximately 2.0 million underlying shares, working out to a sizeable 42.2% of DDOG's average daily trading volume over the past month, of 4.8 million shares. Below is a chart showing EA's trailing twelve month trading history, with the $145 strike highlighted in orange: And Datadog Inc (Symbol: DDOG) options are showing a volume of 20,153 contracts thus far today. Especially high volume was seen for the $92 strike call option expiring August 28, 2020, with 1,585 contracts trading so far today, representing approximately 158,500 underlying shares of DDOG.
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That number of contracts represents approximately 2.0 million underlying shares, working out to a sizeable 42.2% of DDOG's average daily trading volume over the past month, of 4.8 million shares. Below is a chart showing EA's trailing twelve month trading history, with the $145 strike highlighted in orange: And Datadog Inc (Symbol: DDOG) options are showing a volume of 20,153 contracts thus far today. Especially high volume was seen for the $92 strike call option expiring August 28, 2020, with 1,585 contracts trading so far today, representing approximately 158,500 underlying shares of DDOG.
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That number of contracts represents approximately 2.0 million underlying shares, working out to a sizeable 42.2% of DDOG's average daily trading volume over the past month, of 4.8 million shares. Especially high volume was seen for the $92 strike call option expiring August 28, 2020, with 1,585 contracts trading so far today, representing approximately 158,500 underlying shares of DDOG. Below is a chart showing DDOG's trailing twelve month trading history, with the $92 strike highlighted in orange: For the various different available expirations for TGT options, EA options, or DDOG options, visit StockOptionsChannel.com.
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545c7624-8968-4f07-a8ad-4eee82e0e411
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719002.0
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2020-08-26 00:00:00 UTC
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Here's Why Appian, Datadog, Okta, and Other Tech Stocks Are Higher Wednesday
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DDOG
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https://www.nasdaq.com/articles/heres-why-appian-datadog-okta-and-other-tech-stocks-are-higher-wednesday-2020-08-26
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nan
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nan
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What happened
The stock market was having a relatively flat day on Wednesday, with both the Dow Jones Industrial Average and the S&P 500 benchmark index hovering around neutral for much of the morning. But the Nasdaq was significantly higher, led by strong gains from several big tech stocks.
To name some of the most significant movers as of 11:15 am EDT today, Appian (NASDAQ: APPN) was higher by 6%, Datadog (NASDAQ: DDOG) was up by more than 5%, Okta (NASDAQ: OKTA) had gained 7%, MongoDB (NASDAQ: MDB) was 6% higher, and Slack Technologies (NYSE: WORK) was a particularly strong performer, with shares rising by about 8%.
Image source: Getty Images.
So what
There isn't really any company-specific news propelling these stocks higher. Rather, there seems to be an overall rise in tech sector sentiment, fueled by the blowout earnings report issued by Salesforce.com (NYSE: CRM) on Tuesday afternoon.
Salesforce stock rocketed by more than 25% on Wednesday morning, and this was on the heels of another strong gain after it was announced the company would be added to the Dow Jones Industrial Average. Now, the customer relationship management giant is trading at a fresh all-time high, and by a wide margin.
In a nutshell, Salesforce delivered results that far exceeded expectations. Revenue was up 29% year over year for the quarter, operating margins expanded by 200 basis points, and the company increased its revenue guidance for the current fiscal year. There was very little, if anything, not to like about Salesforce's numbers.
Now what
Since earnings season ended a few weeks ago, Salesforce provided an interim glimpse at how tech companies could be doing in the third calendar quarter. (Salesforce's fiscal second quarter ended July 31, so it shows results from a month later than most other companies' second-quarter reports.)
While nothing company-specific is fueling today's moves, if other software companies' numbers are as impressive as Salesforce's in the upcoming third-quarter earnings season, there could be more room to climb.
10 stocks we like better than Salesforce.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 Salesforce.com 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 Appian. The Motley Fool owns shares of and recommends Appian, Datadog, MongoDB, Okta, Salesforce.com, and Slack Technologies. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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To name some of the most significant movers as of 11:15 am EDT today, Appian (NASDAQ: APPN) was higher by 6%, Datadog (NASDAQ: DDOG) was up by more than 5%, Okta (NASDAQ: OKTA) had gained 7%, MongoDB (NASDAQ: MDB) was 6% higher, and Slack Technologies (NYSE: WORK) was a particularly strong performer, with shares rising by about 8%. What happened The stock market was having a relatively flat day on Wednesday, with both the Dow Jones Industrial Average and the S&P 500 benchmark index hovering around neutral for much of the morning. Salesforce stock rocketed by more than 25% on Wednesday morning, and this was on the heels of another strong gain after it was announced the company would be added to the Dow Jones Industrial Average.
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To name some of the most significant movers as of 11:15 am EDT today, Appian (NASDAQ: APPN) was higher by 6%, Datadog (NASDAQ: DDOG) was up by more than 5%, Okta (NASDAQ: OKTA) had gained 7%, MongoDB (NASDAQ: MDB) was 6% higher, and Slack Technologies (NYSE: WORK) was a particularly strong performer, with shares rising by about 8%. Salesforce stock rocketed by more than 25% on Wednesday morning, and this was on the heels of another strong gain after it was announced the company would be added to the Dow Jones Industrial Average. The Motley Fool owns shares of and recommends Appian, Datadog, MongoDB, Okta, Salesforce.com, and Slack Technologies.
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To name some of the most significant movers as of 11:15 am EDT today, Appian (NASDAQ: APPN) was higher by 6%, Datadog (NASDAQ: DDOG) was up by more than 5%, Okta (NASDAQ: OKTA) had gained 7%, MongoDB (NASDAQ: MDB) was 6% higher, and Slack Technologies (NYSE: WORK) was a particularly strong performer, with shares rising by about 8%. Salesforce stock rocketed by more than 25% on Wednesday morning, and this was on the heels of another strong gain after it was announced the company would be added to the Dow Jones Industrial Average. See the 10 stocks *Stock Advisor returns as of August 1, 2020 Matthew Frankel, CFP owns shares of Appian.
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To name some of the most significant movers as of 11:15 am EDT today, Appian (NASDAQ: APPN) was higher by 6%, Datadog (NASDAQ: DDOG) was up by more than 5%, Okta (NASDAQ: OKTA) had gained 7%, MongoDB (NASDAQ: MDB) was 6% higher, and Slack Technologies (NYSE: WORK) was a particularly strong performer, with shares rising by about 8%. While nothing company-specific is fueling today's moves, if other software companies' numbers are as impressive as Salesforce's in the upcoming third-quarter earnings season, there could be more room to climb. * David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Salesforce.com wasn't one of them!
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5e3e3567-cc35-41f2-a1b0-ae6b6b081bb9
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719003.0
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2020-08-25 00:00:00 UTC
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DataDog Rival Sumo Logic Files for IPO to Get in on the Rally
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DDOG
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https://www.nasdaq.com/articles/datadog-rival-sumo-logic-files-for-ipo-to-get-in-on-the-rally-2020-08-25
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nan
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nan
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Sumo Logic has filed a preliminary S-1 with the Securities and Exchange Commission (SEC) in preparation for its initial public offering (IPO). The company plans to trade on the Nasdaq (NASDAQ: NDAQ) stock exchange using the ticker symbol "SUMO." Since this is the company's initial regulatory filing, Sumo Logic has said it hopes to raise $100 million, which is typically a placeholder to be updated later. It hasn't yet disclosed when it will begin trading or how many shares it will offer.
The company competes with the likes of Datadog (NASDAQ: DDOG), Dynatrace (NYSE: DT), and Splunk (NASDAQ: SPLK) in the business-intelligence space and markets itself as a "continuous intelligence platform," pouring over data to provide its customers with more actionable information.
Image source: Getty Images.
Over the past fiscal year (ended Jan. 31), Sumo Logic reported revenue of $155 million, up 50% year over year, after generating 53% growth in the prior year. At the same time, the company's losses nearly doubled to $92 million. Sumo Logic kept up the pace during the three months ended April 30, with revenue of $47 million, up 45%, while its losses of nearly $24 million worsened by 55%.
Sumo Logic boasts 2,131 customers worldwide, with 125,000 users. Customers who contribute annual recurring revenue (ARR) of more than $100,000 grew to 323, up 38% over the past fiscal year, after 25% growth in the prior year. At the same time, customers with ARR over $1 million grew to 25 last year, up 47%, on top of 142% growth in the prior year. In the most recent quarter, those customers grew to 329 and 27, respectively.
The company's dollar-based retention rate, which measures year-over-year spending by current customers, has been over 120% for each of the past nine quarters.
Management estimates Sumo Logic's total addressable market at more than $49 billion.
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
Danny Vena owns shares of Datadog. The Motley Fool owns shares of and recommends Datadog and Splunk. The Motley Fool recommends Nasdaq. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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The company competes with the likes of Datadog (NASDAQ: DDOG), Dynatrace (NYSE: DT), and Splunk (NASDAQ: SPLK) in the business-intelligence space and markets itself as a "continuous intelligence platform," pouring over data to provide its customers with more actionable information. Sumo Logic has filed a preliminary S-1 with the Securities and Exchange Commission (SEC) in preparation for its initial public offering (IPO). Since this is the company's initial regulatory filing, Sumo Logic has said it hopes to raise $100 million, which is typically a placeholder to be updated later.
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The company competes with the likes of Datadog (NASDAQ: DDOG), Dynatrace (NYSE: DT), and Splunk (NASDAQ: SPLK) in the business-intelligence space and markets itself as a "continuous intelligence platform," pouring over data to provide its customers with more actionable information. Since this is the company's initial regulatory filing, Sumo Logic has said it hopes to raise $100 million, which is typically a placeholder to be updated later. Over the past fiscal year (ended Jan. 31), Sumo Logic reported revenue of $155 million, up 50% year over year, after generating 53% growth in the prior year.
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The company competes with the likes of Datadog (NASDAQ: DDOG), Dynatrace (NYSE: DT), and Splunk (NASDAQ: SPLK) in the business-intelligence space and markets itself as a "continuous intelligence platform," pouring over data to provide its customers with more actionable information. The company plans to trade on the Nasdaq (NASDAQ: NDAQ) stock exchange using the ticker symbol "SUMO." Over the past fiscal year (ended Jan. 31), Sumo Logic reported revenue of $155 million, up 50% year over year, after generating 53% growth in the prior year.
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The company competes with the likes of Datadog (NASDAQ: DDOG), Dynatrace (NYSE: DT), and Splunk (NASDAQ: SPLK) in the business-intelligence space and markets itself as a "continuous intelligence platform," pouring over data to provide its customers with more actionable information. At the same time, customers with ARR over $1 million grew to 25 last year, up 47%, on top of 142% growth in the prior year. In the most recent quarter, those customers grew to 329 and 27, respectively.
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26202699-899a-445a-84d8-fe7a8fa46a32
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719004.0
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2020-08-25 00:00:00 UTC
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3 Tech Stocks Billionaires Bought Hand Over Fist in Q2
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DDOG
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https://www.nasdaq.com/articles/3-tech-stocks-billionaires-bought-hand-over-fist-in-q2-2020-08-25
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nan
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nan
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With all that's going on in the country right now, between the coronavirus disease 2019 (COVID-19) pandemic and the upcoming local, state, and national elections in November, you might have missed what's arguably the most important date for investors of the third quarter: August 14.
Roughly a week and a half ago (Aug. 14) marked the deadline for money managers with at least $100 million in assets under management to file Form 13F with the Securities and Exchange Commission. A 13F provides a snapshot of what stocks money managers were holding, as of June 30, 2020, as well as what they purchased and sold during the previous quarter. In other words, it's an under-the-hood look at what the brightest minds on Wall Street have been up to during an exceptionally volatile time for the stock market.
Of particular interest is how billionaire money managers threw their weight around in the tech sector during the second quarter. It's no secret that tech stocks have been leading the market higher for months, making tech a logical parking spot for billionaires during the second quarter. The question being, which tech stocks did they fancy?
Image source: Getty Images.
With 13Fs now filed, we know the answer. The following three tech stocks were absolutely bought hand over first by billionaire money managers during Q2.
CrowdStrike Holdings
The first stock that successful money managers couldn't stop buying in the second quarter is cybersecurity solutions provider CrowdStrike (NASDAQ: CRWD). Chase Coleman's Tiger Global Management added nearly 4.8 million shares, with Larry Fink's BlackRock and Jim Simons' Renaissance Technologies boosting their respective stakes by 3.93 million and 1.8 million shares. In total, 13F filers upped their aggregate holdings in CrowdStrike by 22% from the sequential first quarter to 135.6 million shares.
Billionaires don't have to look far to find data points that are going to attract them to CrowdStrike. Its number of subscribing customers has grown by triple digits for three consecutive years, and 91% of the company's revenue in the most recent quarter was generated via subscriptions. As a reminder, subscription revenue tends to be high margin (78% adjusted gross margin in Q1 2021), very predictable, and it leads to low client churn.
Perhaps the most telling aspect of CrowdStrike's success has been the scalability of its cloud-based Falcon security platform. As of the fiscal first quarter of 2021, better than 55% of its customers had four or more cloud module subscriptions. Since CrowdStrike's business model is built on clients adding new subscription services over time, the fact that it's seen the percentage of its clients with four or more cloud modules jump from 9% to over 55% in only three years is a testament to the quality of its services.
With margins improving, sales skyrocketing, and cybersecurity solutions growing in importance because of COVID-19, Crowdstrike has been a no-brainer selection by billionaire money managers.
Image source: Getty Images.
Datadog
If there's a theme to be seen here, it's that billionaires had their heads in the "cloud" this past quarter. Software-as-a-service star Datadog (NASDAQ: DDOG), which provides cloud-based infrastructure and application performance monitoring solutions for enterprises, was a clear favorite among top-tier money managers. BlackRock added 4.68 million shares, Renaissance Technologies bought 1.8 million shares, and Tiger Global Management scooped up 1.08 million shares. Overall, 13F filers increased their collective stakes in Datadog by 44% from the sequential first quarter to 127.8 million shares.
As is the case with most cloud-focused companies, we were already seeing a shift into a remote and/or shared work environment well before COVID-19. However, the pandemic has really accelerated this shift and forced companies to adapt. In other words, it's the perfect environment for Datadog to thrive.
This is a company that delivered 68% revenue growth during the coronavirus-impacted second quarter from the prior-year period, and managed to increase its large customer count to over 1,000 (a 71% jump from the prior-year large customer count). Datadog defines larger customers as providing over $100,000 in annual recurring revenue. Similar to CrowdStrike, Datadog is winning over new customers, but is seeing its greatest margin expansion from its existing clients adding on new services.
After producing $362.8 million in full-year sales in 2019, Wall Street is looking for Datadog to approach $1.5 billion in full-year sales by 2023. For those of you keeping score at home, that's a compound annual growth rate (CAGR) of 42.6%. This is what rightly has successful money managers excited.
Image source: Getty Images.
Fastly
Did I mention that cloud-based companies were hot during the second quarter? Edge cloud platform Fastly (NYSE: FSLY) saw BlackRock pick up 1.99 million shares, had Jeff Yass' Susquehanna International buy almost 256,000 shares, and saw Ken Griffin's Citadel Advisors increase its stake by more than 142,000 shares. All told, aggregate ownership by 13F filers in Fastly jumped 46% from the sequential first quarter to 55.3 million shares.
Keeping with the theme, Fastly has been a key beneficiary of the work-from-home trend that's swept the country since the coronavirus pandemic upended the traditional office space. Fastly's cloud solutions are stepping in to ensure that content is being delivered to end users as quickly, efficiently, and securely as possible. And based on the company's growth rate, it would certainly appear that it's gained the trust of a number of big businesses.
During one of the worst quarters for economic growth in U.S. history, Fastly delivered a 62% increase in year-over-year sales. It also produced an acceleration in dollar-based net expansion rate of 137% in Q2 2020, up from 133% in Q1 2020. This implies that Fastly's existing clients are not only sticking around, but they're buying additional services and spending more money. Perhaps unsurprisingly, this subscription-based model where more money is being spent by existing clients saw its adjusted gross margin expand to 61.7% in Q2 2020 from 55.6% in the prior-year quarter.
Although Fastly isn't yet profitable, Wall Street doesn't seem to care. It's growing exceptionally fast, retaining its existing customers, and landing some brand-name clients. With an expected CAGR of roughly 32% through 2023 (based on Wall Street's consensus estimate), it's becoming a must-own tech stock.
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 August 1, 2020
Sean Williams has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends CrowdStrike Holdings, 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.
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Software-as-a-service star Datadog (NASDAQ: DDOG), which provides cloud-based infrastructure and application performance monitoring solutions for enterprises, was a clear favorite among top-tier money managers. With all that's going on in the country right now, between the coronavirus disease 2019 (COVID-19) pandemic and the upcoming local, state, and national elections in November, you might have missed what's arguably the most important date for investors of the third quarter: August 14. Keeping with the theme, Fastly has been a key beneficiary of the work-from-home trend that's swept the country since the coronavirus pandemic upended the traditional office space.
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Software-as-a-service star Datadog (NASDAQ: DDOG), which provides cloud-based infrastructure and application performance monitoring solutions for enterprises, was a clear favorite among top-tier money managers. CrowdStrike Holdings The first stock that successful money managers couldn't stop buying in the second quarter is cybersecurity solutions provider CrowdStrike (NASDAQ: CRWD). Chase Coleman's Tiger Global Management added nearly 4.8 million shares, with Larry Fink's BlackRock and Jim Simons' Renaissance Technologies boosting their respective stakes by 3.93 million and 1.8 million shares.
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Software-as-a-service star Datadog (NASDAQ: DDOG), which provides cloud-based infrastructure and application performance monitoring solutions for enterprises, was a clear favorite among top-tier money managers. CrowdStrike Holdings The first stock that successful money managers couldn't stop buying in the second quarter is cybersecurity solutions provider CrowdStrike (NASDAQ: CRWD). BlackRock added 4.68 million shares, Renaissance Technologies bought 1.8 million shares, and Tiger Global Management scooped up 1.08 million shares.
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Software-as-a-service star Datadog (NASDAQ: DDOG), which provides cloud-based infrastructure and application performance monitoring solutions for enterprises, was a clear favorite among top-tier money managers. CrowdStrike Holdings The first stock that successful money managers couldn't stop buying in the second quarter is cybersecurity solutions provider CrowdStrike (NASDAQ: CRWD). BlackRock added 4.68 million shares, Renaissance Technologies bought 1.8 million shares, and Tiger Global Management scooped up 1.08 million shares.
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dede1311-a42b-4275-b55b-96042201c5a4
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719005.0
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2020-08-23 00:00:00 UTC
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Are You a Growth Investor? Check Out These 3 Tech Stocks Right Now
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DDOG
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https://www.nasdaq.com/articles/are-you-a-growth-investor-check-out-these-3-tech-stocks-right-now-2020-08-23
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nan
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nan
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Despite the coronavirus's effect on economies around the world, the tech sector has largely boomed since the pandemic began. Even large, established tech giants like Apple have seen their share prices spike since the beginning of the year. But there's also a lot of smaller, fast-growing tech stocks that are surging as well.
Take DataDog (NASDAQ: DDOG), Alteryx (NYSE: AYX), and Fastly (NYSE: FSLY), for example. Demand is booming for the products and services these tech companies offer, and investors would be wise to take notice now. Here's why.
Image source: Getty Images.
DataDog: the cloud operator's best friend
Danny Vena (DataDog): With the pandemic as a backstop, there's has been a notable acceleration in the adoption of cloud computing, which makes work systems easy to access from anywhere. As many employers shifted their focus to remote work and employees began to work from home, it became more important than ever that cloud-based systems stayed up and running with a minimum of downtime. The decentralization of IT staff -- now working out of their homes -- made an already challenging job even more difficult.
DataDog was there to answer the call. The cloud-native company provides near-real time analytics and monitoring services through the use of a unified data platform that monitors a vast array of cloud operations, including servers, databases, tools, and services, and detects problems before they result in critical and costly outages. Not only that, the analytics can help identify the source of the problem to help keep it from recurring.
Business is booming. For the second quarter, DataDog reported revenue that grew 68% year over year, decelerating slightly from the 87% gains it delivered in the first quarter. The company also generated a small profit for the second consecutive quarter, which is impressive, considering the platform-as-a-service (PaaS) company only went public less than a year ago. This outstanding performance has made DataDog a hot commodity with investors, who have driven the stock price to triple-digit gains so far in 2020.
It isn't just the financial metrics that are impressive. DataDog's customer base continues to expand, with large, more lucrative enterprise businesses leading the charge. Customers representing annual revenue in excess of $100,000 grew to 1,015, up from just 594 in the year-ago quarter.
Not only that, once customers experience the benefits of DataDog's services, they tend to stick around. The company reported a dollar-based retention rate -- which measures the level of spending by existing customers -- of over 130% for the 12th consecutive quarter. Put another way, existing customers were spending 30% more over the past year than they did in the 12 months prior.
DataDog also recently completed the coveted Federal Risk and Authorization Management Program (FedRAMP) certification process for low-impact software-as-a-service. While that's a mouthful, it means U.S. federal government departments and agencies can now use DataDog's analytics and monitoring services to watch over their cloud operations, giving the company access to potentially lucrative government contracts.
This all bodes well for the company's future and also helps to illustrate why those looking for an intriguing growth stock should take DataDog for a walk.
Image source: Getty Images.
The coronavirus doesn't reduce the need for data analytics
Brian Withers (Alteryx): Growth investors have loved Alteryx's 69% compound annual revenue growth over the last three calendar years. Coming into 2020, it looked like the trend would continue. The data analytics specialist posted a solid 43% top-line gain in the first quarter, but that was before the impacts due to the coronavirus were fully realized. Roll forward 90 days and its second-quarter year-over-year growth dropped to 17%. Management projected an 11% gain for the full year, indicating that growth during the second half of the year would be minimal. As a result, the stock dived over 30%, and some investors are wondering whether the data analytics specialist has lost its mojo. I'm here to tell you that isn't the case at all. This pullback offers a great chance for patient growth investors to buy into a long-term trend at a discount.
Why am I so confident? Because I know how hard the data analyst's job is without these tools. Before I became a writer for The Motley Fool, I spent 30 years working for medium-to-large companies in roles focused on making their operations run better. Having the right metrics and robust data analysis was critical for providing insights for process improvements, cost savings, and better decision-making. I've worked with many data analysts over the years, and much of their time is spent capturing and cleaning data to make it useful, leaving little time for the most valuable part of their job: the analysis. Alteryx changes all that.
Jay Caplan, Coca-Cola's senior business analytics manager, downloaded a trial of Alteryx's Designer software to see if it could deal with a problem he couldn't solve with Excel. Within a couple of hours, he was not only able to solve his data analytics problem, but he was hooked on Alteryx. Word of the tool's capabilities spread, and the company now has several hundred users across its organization. This example demonstrates the power of the land-and-expand strategy Alteryx has relied on for growth. But management knows that companies are tightening their purse strings and may not be as willing to fork out over $5,000 for a year's worth of an individual license. It's ramping up sales of a six-month "adoption" license, which will allow companies to make a smaller financial commitment and give data analyst users enough time to prove the value these tools can bring to the enterprise. The land-and-expand strategy can still work during a pandemic-fueled recession; it just may take a little longer.
With 37% of Global 2000 on its customer list, the opportunity to capture new large organizations as customers is tremendous. Big companies have big data problems, and Alteryx is perfectly suited to help. Its international business represents only 31% of the top-line and grew at a solid 25% year over year last quarter, giving management another lever to drive growth.
The company is continuing to invest in platform innovations during the coronavirus to strengthen its offerings for customers. As companies emerge from the pandemic, the desire to do more with less will be stronger than ever, and Alteryx will be ready. With some patience, growth investors should see this analytics leader get back to growing faster than the big data analytics market's projected 15% annual growth rate.
Image source: Getty Images.
Growth as fast as the Flash
Chris Neiger (Fastly): Investors who missed out on Fastly's meteoric rise this year have been given a second chance to pick up some of Fastly's stock at a cheaper price after its recent share-price slide. Some investors sold off shares following the company's second-quarter results at the beginning of August, but the sell-off was an overreaction.
Fastly's revenue increased 62% in the quarter to $74.7 million, outpacing analysts' consensus estimate of $71.4 million. Additionally, the company's earnings per share of $0.02 was a huge improvement from its adjusted loss per share of $0.16 in the year-ago quarter. It also beat Wall Street's estimate of a loss of $0.01 per share.
Despite the revenue and earnings beat, some investors took their gains from earlier in the year and sold off shares, leading the stock to fall 9% since the beginning of August. But the company's earnings and sales growth in the midst of a U.S. recession and global pandemic prove the resilience of Fastly's business. Consider that the company added 114 new customers in the quarter. As more companies look to Fastly to improve their apps, video, and website speeds, the company is poised for further growth.
Fastly's management was so optimistic about its growth opportunities following the second quarter that it raised its full-year revenue guidance to a range of $290 million to $300 million, up from a range of $280 million to $290 million.
For investors looking for a fast-growing tech company that still has lots of growth ahead of it, Fastly looks like a good bet. The company's tech is helping companies speed up their online services. As people spend more time online during the pandemic, Fastly is in demand more than ever.
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 August 1, 2020
Brian Withers owns shares of Alteryx, Apple, and Coca-Cola. Chris Neiger owns shares of Apple. Danny Vena owns shares of Alteryx, Apple, Datadog, and Fastly. The Motley Fool owns shares of and recommends Alteryx, Apple, 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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Take DataDog (NASDAQ: DDOG), Alteryx (NYSE: AYX), and Fastly (NYSE: FSLY), for example. DataDog also recently completed the coveted Federal Risk and Authorization Management Program (FedRAMP) certification process for low-impact software-as-a-service. Jay Caplan, Coca-Cola's senior business analytics manager, downloaded a trial of Alteryx's Designer software to see if it could deal with a problem he couldn't solve with Excel.
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Take DataDog (NASDAQ: DDOG), Alteryx (NYSE: AYX), and Fastly (NYSE: FSLY), for example. The coronavirus doesn't reduce the need for data analytics Brian Withers (Alteryx): Growth investors have loved Alteryx's 69% compound annual revenue growth over the last three calendar years. With some patience, growth investors should see this analytics leader get back to growing faster than the big data analytics market's projected 15% annual growth rate.
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Take DataDog (NASDAQ: DDOG), Alteryx (NYSE: AYX), and Fastly (NYSE: FSLY), for example. The coronavirus doesn't reduce the need for data analytics Brian Withers (Alteryx): Growth investors have loved Alteryx's 69% compound annual revenue growth over the last three calendar years. Growth as fast as the Flash Chris Neiger (Fastly): Investors who missed out on Fastly's meteoric rise this year have been given a second chance to pick up some of Fastly's stock at a cheaper price after its recent share-price slide.
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Take DataDog (NASDAQ: DDOG), Alteryx (NYSE: AYX), and Fastly (NYSE: FSLY), for example. The coronavirus doesn't reduce the need for data analytics Brian Withers (Alteryx): Growth investors have loved Alteryx's 69% compound annual revenue growth over the last three calendar years. Alteryx changes all that.
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719006.0
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2020-08-17 00:00:00 UTC
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Notable Monday Option Activity: ANAB, DDOG, ABMD
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DDOG
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https://www.nasdaq.com/articles/notable-monday-option-activity%3A-anab-ddog-abmd-2020-08-17
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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 AnaptysBio Inc (Symbol: ANAB), where a total of 945 contracts have traded so far, representing approximately 94,500 underlying shares. That amounts to about 52.7% of ANAB's average daily trading volume over the past month of 179,480 shares. Especially high volume was seen for the $25 strike put option expiring August 21, 2020, with 470 contracts trading so far today, representing approximately 47,000 underlying shares of ANAB. Below is a chart showing ANAB's trailing twelve month trading history, with the $25 strike highlighted in orange:
Datadog Inc (Symbol: DDOG) saw options trading volume of 24,517 contracts, representing approximately 2.5 million underlying shares or approximately 52.2% of DDOG's average daily trading volume over the past month, of 4.7 million shares. Particularly high volume was seen for the $70 strike put option expiring August 28, 2020, with 10,277 contracts trading so far today, representing approximately 1.0 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 ABIOMED, Inc. (Symbol: ABMD) saw options trading volume of 1,768 contracts, representing approximately 176,800 underlying shares or approximately 51.8% of ABMD's average daily trading volume over the past month, of 341,340 shares. Particularly high volume was seen for the $330 strike put option expiring August 21, 2020, with 303 contracts trading so far today, representing approximately 30,300 underlying shares of ABMD. Below is a chart showing ABMD's trailing twelve month trading history, with the $330 strike highlighted in orange:
For the various different available expirations for ANAB options, DDOG options, or ABMD 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 August 28, 2020, with 10,277 contracts trading so far today, representing approximately 1.0 million underlying shares of DDOG. Below is a chart showing ANAB's trailing twelve month trading history, with the $25 strike highlighted in orange: Datadog Inc (Symbol: DDOG) saw options trading volume of 24,517 contracts, representing approximately 2.5 million underlying shares or approximately 52.2% of DDOG's average daily trading volume over the past month, of 4.7 million shares. Below is a chart showing DDOG's trailing twelve month trading history, with the $70 strike highlighted in orange: And ABIOMED, Inc. (Symbol: ABMD) saw options trading volume of 1,768 contracts, representing approximately 176,800 underlying shares or approximately 51.8% of ABMD's average daily trading volume over the past month, of 341,340 shares.
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Below is a chart showing ANAB's trailing twelve month trading history, with the $25 strike highlighted in orange: Datadog Inc (Symbol: DDOG) saw options trading volume of 24,517 contracts, representing approximately 2.5 million underlying shares or approximately 52.2% of DDOG's average daily trading volume over the past month, of 4.7 million shares. Particularly high volume was seen for the $70 strike put option expiring August 28, 2020, with 10,277 contracts trading so far today, representing approximately 1.0 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 ABIOMED, Inc. (Symbol: ABMD) saw options trading volume of 1,768 contracts, representing approximately 176,800 underlying shares or approximately 51.8% of ABMD's average daily trading volume over the past month, of 341,340 shares.
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Below is a chart showing ANAB's trailing twelve month trading history, with the $25 strike highlighted in orange: Datadog Inc (Symbol: DDOG) saw options trading volume of 24,517 contracts, representing approximately 2.5 million underlying shares or approximately 52.2% of DDOG's average daily trading volume over the past month, of 4.7 million shares. Below is a chart showing DDOG's trailing twelve month trading history, with the $70 strike highlighted in orange: And ABIOMED, Inc. (Symbol: ABMD) saw options trading volume of 1,768 contracts, representing approximately 176,800 underlying shares or approximately 51.8% of ABMD's average daily trading volume over the past month, of 341,340 shares. Particularly high volume was seen for the $70 strike put option expiring August 28, 2020, with 10,277 contracts trading so far today, representing approximately 1.0 million underlying shares of DDOG.
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Particularly high volume was seen for the $70 strike put option expiring August 28, 2020, with 10,277 contracts trading so far today, representing approximately 1.0 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 ABIOMED, Inc. (Symbol: ABMD) saw options trading volume of 1,768 contracts, representing approximately 176,800 underlying shares or approximately 51.8% of ABMD's average daily trading volume over the past month, of 341,340 shares. Below is a chart showing ANAB's trailing twelve month trading history, with the $25 strike highlighted in orange: Datadog Inc (Symbol: DDOG) saw options trading volume of 24,517 contracts, representing approximately 2.5 million underlying shares or approximately 52.2% of DDOG's average daily trading volume over the past month, of 4.7 million shares.
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164fce35-7df0-4d0a-86ee-8229fadbfc46
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719007.0
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2020-08-14 00:00:00 UTC
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Investing $4,000 in These 4 Top Stocks Might Make You Rich
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DDOG
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https://www.nasdaq.com/articles/investing-%244000-in-these-4-top-stocks-might-make-you-rich-2020-08-14
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nan
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nan
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This year has certainly been one for the record books, with investors experiencing both a record stock market plunge and a record recovery, all in the span of several months. The screaming stock bargains that were available in late March didn't last for long, and investors who hesitated may feel they missed the boat.
Fortunately, for investors with a keen eye, a stomach for an element of risk, and a sufficiently long investing timeline, there are still opportunities to boost your long-term returns by adding some high-growth stocks into the mix.
If you have $4,000 (or less) in disposable cash to invest that you don't need for immediate expenses or to supplement your emergency fund, putting it to work in these four stocks could just make you rich.
Image source: Getty Images.
1. Teladoc and 2: Livongo: A healthy two-for-one sale
There's little doubt that Teladoc Health (NYSE: TDOC) and Livongo Health (NASDAQ: LVGO), with their ties to connected instruments and telehealth, have been on fire this year as the result of the stay-at-home orders resulting from the coronavirus pandemic. Patients young and old have done their level best to avoid trips to the doctor's office for fear of contracting COVID-19.
The ability to serve patients remotely has served these companies well. For its second quarter, Teladoc reported revenue that grew 85% year over year and total patient visits that soared 203%. For the first six months of 2020, revenue climbed 63% and visits jumped 144%.
Livongo Health fared similarly well, with second-quarter revenue up 125% year over year, while patients enrolled in its flagship program -- Livongo for Diabetes -- climbed 113%. That was after 115% revenue growth and patient growth of 100% in the first quarter.
Through the beginning of this month, these factors helped drive Teladoc's shares up nearly 200% year to date, while Livongo's soared more than 475%.
Investors seemed to completely dismiss these robust results and the potential for future gains when the two providers announced in early August that they would merge, creating a "new standard in global healthcare delivery, access, and experience." In the wake of last week's announcement, shares of Livongo and Teladoc have plunged 20% and 26%, respectively, thus far.
The stock market's reaction defies logic. It isn't as if growth will simply dry up as a result of the merger. These are two high-growth companies that will be able to make deeper inroads in the connected health market, with specialties that are completely complimentary.
Of course, there's always the potential that conflicting management styles or corporate cultures could derail a successful integration, but assuming that's going to happen is a leap too far. I expect the combined company will continue to be hugely successful, and investors who add now will be very glad they did.
Image source: Getty Images.
3. DataDog: Take this puppy for a walk
The pivot to cloud computing was already in full swing, but in the face of the pandemic, the shift accelerated into high gear, as remote work became the rule rather than the exception. It also became more important than ever that cloud-based systems were ready to meet the increased demands of a distributed workforce, with the ability to identify problems before they became critical issues, resulting in unnecessary downtime.
That's what DataDog (NASDAQ: DDOG) brings to the table. The cloud-native analytics provider monitors servers, databases, tools, and services, using artificial intelligence to detect anomalies, providing near-real-time information about problems as they occur, to keep them from becoming even bigger issues. Once the snag has been resolved, DataDog provides helpful analytics that can be used to help keep the problem from recurring.
DataDog reported robust results for the second quarter, with revenue that grew 68% year over year, down slightly from 87% gains in the first quarter. Customers bringing in annual revenue in excess of $100,000 grew to 1,015, up nearly 71% year over year.
The company continues to garner industry accolades that attest to its stature. DataDog was recognized as a 2020 Gartner Peer Insights Customers' Choice for IT Infrastructure Monitoring Tools, receiving 4.5 out of 5.0 stars from IT professionals who use its products.
Management is guiding for 50% year-over-year revenue gains in the third quarter, a deceleration from its recent torrid growth, which no doubt contributed to the markets' tepid reception of its recent results. Given DataDog's historic practice of issuing conservative guidance, only to easily surpass its forecast, this move isn't entirely unexpected. However, bargain hunters can now get the stock for a 20% discount to recent highs.
Image source: DocuSign.
4. DocuSign: (E) Sign here for revenue growth
Another company that's gotten a shot in the arm from the need for remote work and social distancing is DocuSign (NASDAQ: DOCU). The provider of electronic signatures was already the undisputed leader, with about 70% of the e-signature market, but the new reality requiring deals to be sealed remotely gave the company a sizable advantage.
DocuSign reported first-quarter revenue that grew 39%, matching its growth rate from 2019. The company has keen insight into its future revenue, as nearly 95% of its revenue came from subscriptions, providing a solid base of recurring income that typically isn't subject to fluctuation. At the same time, DocuSign's adjusted profits climbed 71%.
The company has another revenue stream that's sure to grow in importance in the coming years. Early last year, DocuSign introduced the Agreement Cloud, a suite of products and integrations that help automate the entire life-cycle of contracts, creating a digital process to prepare, sign, act on, and manage agreements.
Even as the leader, the e-signature market is still in the early stages. Management estimates the potential market at $25 billion, and with just $974 million in revenue last year, DocuSign still has a massive opportunity -- and that doesn't count another $25 billion market opportunity for the Agreement Cloud, giving the company a long runway ahead.
Yet, the recent rotation out of high-flyers has sent DocuSign's stock down more than 15%, with no company-specific news driving the decline. This means that forward-looking investors can get the stock at a discount to recent highs, with no change in the thesis.
Data by YCharts
Every rose has its thorns
Each of the companies highlighted above has the potential to be a multi-bagger, returning many times its original investment, which is what you'd expect from a high-risk, high-reward stock. That said, eagle-eyed investors will also have detected that in addition to their high-flying status, these stocks share another common trait -- their expensive valuations.
Teladoc and Livongo Health are currently valued at 15 and 32 times forward sales, respectively, when a good price-to-sales ratio is generally considered to be between one and two. DataDog and DocuSign are equally pricey, with forward valuations of 40 and 26, respectively. In each case, however, investors have thus far been willing to pay up for the impressive top-line growth and the potential for future success.
Past performance is no guarantee of future success, but given the results these growth stocks have achieved so far this year, if they continue on their current trajectory, they could just make investors rich.
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
*Stock Advisor returns as of August 1, 2020
Danny Vena owns shares of Datadog, DocuSign, Livongo Health Inc, and Teladoc Health. The Motley Fool owns shares of and recommends Datadog, DocuSign, Livongo Health Inc, and Teladoc Health. 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 what DataDog (NASDAQ: DDOG) brings to the table. Fortunately, for investors with a keen eye, a stomach for an element of risk, and a sufficiently long investing timeline, there are still opportunities to boost your long-term returns by adding some high-growth stocks into the mix. Investors seemed to completely dismiss these robust results and the potential for future gains when the two providers announced in early August that they would merge, creating a "new standard in global healthcare delivery, access, and experience."
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That's what DataDog (NASDAQ: DDOG) brings to the table. For its second quarter, Teladoc reported revenue that grew 85% year over year and total patient visits that soared 203%. See the 10 stocks *Stock Advisor returns as of August 1, 2020 Danny Vena owns shares of Datadog, DocuSign, Livongo Health Inc, and Teladoc Health.
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That's what DataDog (NASDAQ: DDOG) brings to the table. Teladoc and 2: Livongo: A healthy two-for-one sale There's little doubt that Teladoc Health (NYSE: TDOC) and Livongo Health (NASDAQ: LVGO), with their ties to connected instruments and telehealth, have been on fire this year as the result of the stay-at-home orders resulting from the coronavirus pandemic. Management estimates the potential market at $25 billion, and with just $974 million in revenue last year, DocuSign still has a massive opportunity -- and that doesn't count another $25 billion market opportunity for the Agreement Cloud, giving the company a long runway ahead.
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That's what DataDog (NASDAQ: DDOG) brings to the table. That was after 115% revenue growth and patient growth of 100% in the first quarter. In each case, however, investors have thus far been willing to pay up for the impressive top-line growth and the potential for future success.
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719008.0
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2020-08-13 00:00:00 UTC
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5 Top Stock Trades for Friday: FSLY, GOOGL, CSCO, DDOG, TLT
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DDOG
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https://www.nasdaq.com/articles/5-top-stock-trades-for-friday%3A-fsly-googl-csco-ddog-tlt-2020-08-13
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nan
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
It was a choppy day on Thursday as we approach mid-August near the highs. With that in mind, though, let’s look at a few top stock trades to end the week with.
Top Stock Trades for Tomorrow No. 1: Fastly (FSLY)
Click to Enlarge
Source: Chart courtesy of StockCharts.com
Fastly (NYSE:FSLY) became the growth darling from the first half of 2020. However, it has struggled since reporting earnings, having fallen for five straight sessions and suffering a peak-to-trough decline of 38%.
Shares are trying to hammer out a low here near the 50-day moving average and $75 support. However, this chart still needs some work.
On a further push higher, let’s see that FSLY can reclaim the 10-day and 20-day moving averages. Above puts that big gap from $95 to $107 in play. If it can fill that, then we’ll need to re-evaluate the stock.
The 10 Top Stocks to Buy and Hold Into 2021
If shares can’t reclaim the 10-day and 20-day moving averages, though, then we need to see the post-earnings low at $72.55 hold. Below could put a larger correction in play.
Top Stock Trades for Tomorrow No. 2: Alphabet (GOOG, GOOGL)
Click to Enlarge
Source: Chart courtesy of StockCharts.com
Alphabet (NASDAQ:GOOGL,NASDAQ:GOOG) flirted with a strong move to the upside today, but simply couldn’t follow through.
Shares are holding the 20-day moving average and 10-week moving average well, but struggling with a weekly-up rotation over $1,520. Above keeps a move higher in play while below puts more risk on traders’ plate.
A break of the 50-day is a concern and investors who are long will likely consider stopping out below $1,460 until there is more clarity.
On the upside, I want to see GOOGL clear the February high near $1,530 before rotating up to that $1,575 to $1,600 area.
Top Stock Trades for Tomorrow No. 3: Cisco Systems (CSCO)
Click to Enlarge
Source: Chart courtesy of StockCharts.com
Cisco Systems (NASDAQ:CSCO) is really disappointing the bulls on Thursday, down more than 11% after reporting earnings. The stock was flirting with a breakout over $48, and $50-plus would have been in play on a bullish reaction.
Instead, shares are gapping below the 20-day, 50-day and 200-day moving averages with force, while also losing the June low near $43.25 and uptrend support (blue line).
7 AI Stocks to Buy for the Increasing Digitization of Healthcare
This one is tough. For bulls, this may be a no-touch for the time being. Either shares need to reclaim the July low and preferably the 200-day moving average, or it needs to decline further. Specifically, the May low could now be in play near $40.
Top Trades for Tomorrow No. 4: DataDog (DDOG)
Click to Enlarge
Source: Chart courtesy of StockCharts.com
The trading in DataDog (NASDAQ:DDOG) has been sloppy lately, although some M&A chatter got the stock warmed up a bit today.
A move back over $82.50 is encouraging, but really, bulls want to see a close above the 20-day and 50-day moving averages and a gap-fill up toward $90. If that happens, it puts the August highs back in play near $95 — followed by the all-time high near $100.
Of course, that is assuming short-term downtrend resistance doesn’t hinder DDOG (blue line). On the downside, a break of $75 and close below the August low of $72.60 could really cause a flush in this name.
Top Trades for Tomorrow No. 5: TLT ETF (TLT)
Click to Enlarge
Source: Chart courtesy of StockCharts.com
The iShares 20+ Treasury Bond ETF (NASDAQ:TLT) has been getting some attention lately. Working on its fifth straight daily decline, the ETF is down a quick 4% already.
Worse though, it gapped below the 20-day moving average and is now failing to hold the 50-day moving average.
From here, let’s exercise some patience. Either wait for a slightly deeper decline toward the July low, or wait for a multi-day rotation up and a reclaiming of the 50-day moving average.
A close back above the 50-day could trigger a move up toward the 20-day. Above that, and the prior highs are in play. Below the July low could put the mid-$150s on the table.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret is long FSLY.
The post 5 Top Stock Trades for Friday: FSLY, GOOGL, CSCO, DDOG, TLT 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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Click to Enlarge Source: Chart courtesy of StockCharts.com The trading in DataDog (NASDAQ:DDOG) has been sloppy lately, although some M&A chatter got the stock warmed up a bit today. 4: DataDog (DDOG) Of course, that is assuming short-term downtrend resistance doesn’t hinder DDOG (blue line).
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Click to Enlarge Source: Chart courtesy of StockCharts.com The trading in DataDog (NASDAQ:DDOG) has been sloppy lately, although some M&A chatter got the stock warmed up a bit today. 4: DataDog (DDOG) Of course, that is assuming short-term downtrend resistance doesn’t hinder DDOG (blue line).
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Click to Enlarge Source: Chart courtesy of StockCharts.com The trading in DataDog (NASDAQ:DDOG) has been sloppy lately, although some M&A chatter got the stock warmed up a bit today. 4: DataDog (DDOG) Of course, that is assuming short-term downtrend resistance doesn’t hinder DDOG (blue line).
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The post 5 Top Stock Trades for Friday: FSLY, GOOGL, CSCO, DDOG, TLT appeared first on InvestorPlace. 4: DataDog (DDOG) Click to Enlarge Source: Chart courtesy of StockCharts.com The trading in DataDog (NASDAQ:DDOG) has been sloppy lately, although some M&A chatter got the stock warmed up a bit today.
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2020-08-13 00:00:00 UTC
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Software-as-a-Service Stocks Save Nasdaq From Cisco Swoon
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DDOG
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https://www.nasdaq.com/articles/software-as-a-service-stocks-save-nasdaq-from-cisco-swoon-2020-08-13
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The Nasdaq Composite (NASDAQINDEX: ^IXIC) held up well on Thursday, keeping its big gains from Wednesday even as other major benchmarks gave up ground. At 3:30 p.m. EDT, the index was up 44 points to 11,055, while the Nasdaq-100 climbed higher by 36 points to 11,194.
Ordinarily, a 12% drop in shares of tech giant Cisco Systems (NASDAQ: CSCO) would have been enough to send the Nasdaq falling sharply. Yet elsewhere in technology, stocks of companies using software-as-a-service (SaaS) business models fared extremely well and offset some of Cisco's losses.
Image source: Getty Images.
A SaaS-y market
Some of the best performers of 2020 were among those stocks posting solid gains today. Zoom Video Communications (NASDAQ: ZM) was up more than 4%, while data analytics company Datadog (NASDAQ: DDOG) climbed over 7%.
SaaS stocks had gotten hit hard recently, so part of today's bounce was simply a recognition of their intrinsic value. There's a lot of controversy about appropriate valuations for these young, fast-growing companies. Their shares have therefore been extremely volatile, enjoying solid overall gains but occasionally experiencing gut-wrenching declines. Overall, SaaS companies are faring well during the coronavirus pandemic, as digital innovation has forced businesses of all types and sizes to add to their tech capabilities. Zoom in particular has benefited from that trend, given the need for collaboration in an environment full of remote work.
Datadog's gains also stemmed from takeover rumors. Reports surfaced that SaaS pioneer salesforce.com (NYSE: CRM) might be looking at trying to buy Datadog, with speculation that an all-stock deal could be in the works. It makes sense that Salesforce might want to add greater data analytics capacity to its scope of business, but there could be some difficulty arriving at an agreeable price for a deal to take place. Salesforce shares moved higher by 1%, so investors don't seem to have a problem with the concept of a merger between the two companies.
Cisco falls
Tech giant Cisco Systems, however, didn't fare as well. The networking specialist released its fiscal fourth-quarter results, and although the numbers looked good, Cisco's forecast didn't satisfy its shareholders.
Cisco's key financial metrics did take a hit from the pandemic, but the impact wasn't severe. Revenue fell 9% year over year in the fiscal fourth quarter, and adjusted earnings per share were down 4% over the same period. As the 2020 fiscal year came to a close, Cisco boosted adjusted earnings 4% on a per-share basis while limiting declines in revenue to just 5%.
The problem, though, is that Cisco sees no end in sight to future challenges. Both revenue and earnings in the fiscal first quarter could drop double-digit percentages, which was a weaker outlook than most had hoped to see. That reflects heightened competition in the services and software segments, where the company has tried to make a transition in order to avoid relying on more volatile hardware sales.
Cisco is likely losing out on software and services revenue to SaaS specialists, and that could continue to be a problem going forward. With the retirement of its CFO adding to the challenges, Cisco doesn't look like a compelling investment proposition right now in the tech industry.
10 stocks we like better than Cisco Systems
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*Stock Advisor returns as of August 1, 2020
Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Datadog, Salesforce.com, and Zoom Video Communications and recommends the following options: short August 2020 $130 calls on 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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Zoom Video Communications (NASDAQ: ZM) was up more than 4%, while data analytics company Datadog (NASDAQ: DDOG) climbed over 7%. Overall, SaaS companies are faring well during the coronavirus pandemic, as digital innovation has forced businesses of all types and sizes to add to their tech capabilities. It makes sense that Salesforce might want to add greater data analytics capacity to its scope of business, but there could be some difficulty arriving at an agreeable price for a deal to take place.
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Zoom Video Communications (NASDAQ: ZM) was up more than 4%, while data analytics company Datadog (NASDAQ: DDOG) climbed over 7%. Ordinarily, a 12% drop in shares of tech giant Cisco Systems (NASDAQ: CSCO) would have been enough to send the Nasdaq falling sharply. Cisco falls Tech giant Cisco Systems, however, didn't fare as well.
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Zoom Video Communications (NASDAQ: ZM) was up more than 4%, while data analytics company Datadog (NASDAQ: DDOG) climbed over 7%. Yet elsewhere in technology, stocks of companies using software-as-a-service (SaaS) business models fared extremely well and offset some of Cisco's losses. Cisco falls Tech giant Cisco Systems, however, didn't fare as well.
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Zoom Video Communications (NASDAQ: ZM) was up more than 4%, while data analytics company Datadog (NASDAQ: DDOG) climbed over 7%. A SaaS-y market Some of the best performers of 2020 were among those stocks posting solid gains today. Cisco falls Tech giant Cisco Systems, however, didn't fare as well.
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2020-08-09 00:00:00 UTC
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4 Growth Stocks Worth Buying After Last Week's Sell-Off
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https://www.nasdaq.com/articles/4-growth-stocks-worth-buying-after-last-weeks-sell-off-2020-08-09
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Last week proved to be a difficult one for growth stocks. Many of the market's fastest-growing technology darlings were slammed, particularly during the second half of the week. The pullback was likely primarily a function of some profit-taking after many of these stocks soared since the bottom of the coronavirus market crash in March.
Sure, many of these stocks were due for a correction. After all, stocks can't trend sharply upward forever. Eventually, they become overvalued. A pullback in these stocks, therefore, was largely merited. But the decline may have also led to some stocks getting oversold.
Three great growth stocks that look like good buying opportunities after last week's sell-off are cloud database company MongoDB (NASDAQ: MDB), monitoring and analytics platform provider Datadog (NASDAQ: DDOG), and telehealth and virtual care companies Teladoc Health (NYSE: TDOC) and Livongo Health (NASDAQ: LVGO).
Image source: Getty Images.
MongoDB: Down 18%
After this week's sell-off, shares of MongoDB are now down 18% from an all-time high, giving today's investors a much better entry point than many other investors have been paying for the stock this summer.
MongoDB has been able to continue growing its business rapidly -- even through the pandemic. The company's revenue for the quarter ending on April 30, 2020 (MongoDB's first quarter of fiscal 2021), rose 46% year over year. This was notably an acceleration from 44% growth in the prior quarter. The company even lifted the low end of its full-year fiscal 2021 revenue outlook by $10 million, guiding for fiscal 2021 revenue to be between $520 million and $530 million.
"While the impact from COVID-19 will be longer than we originally expected at the beginning of this fiscal year, we are seeing clear signs that the current environment is reinforcing the long-term trends toward digital transformation and cloud migration," said MongoDB CEO Dev Ittycheria in the company's fiscal first-quarter earnings release. "MongoDB is a clear beneficiary of these trends and we will continue making investments to fully capitalize on this market opportunity."
Datadog: Down 23%
Shares of Datadog are down 23% since touching a high of $98.99 earlier this month. Yet Datadog's underlying business is booming. While second-quarter revenue growth decelerated from a growth rate of 87% in Q1, it was still up a strong 68% year over year.
The company's customers with contracts boasting annual recurring revenue of $100,000 or more as of the end of Datadog's second quarter were notably up 71% year over year, at 1,015.
Looking ahead, the company provided a full-year outlook for $566 million to $572 million in revenue. Analysts were expecting 2020 revenue of $564 million.
Livongo Health and Teladoc: Down 19% and 23%, respectively
Finally, there's Livongo Health and Teladoc -- two companies whose stocks fell sharply last week after they announced that they planned to cozy up and merge their businesses -- a move that would make them the unquestionable leader in telehealth and virtual care.
The two companies estimate the combination will drive $100 million in revenue synergies by the end of the second year following the close of the merger. In addition, they forecast $500 million of revenue synergies on a run-rate basis by 2025. Considering the two companies generate just $923 million in annual revenue together today, this is quite a projection.
Investors who buy into these telehealth tech companies are taking a stake in an incredible growth story. Livongo Health, a company specializing in virtual care solutions for people with chronic conditions, saw second-quarter revenue surge 125% year over year to $91.9 million. Telehealth platform provider Teladoc saw its second-quarter revenue soar 85% year over year.
Of course, there's always a risk that the merger doesn't close. But even as individual entities, both Livongo Health and Teladoc Health have excellent competitive positioning -- and their shares are down 19% and 23%, respectively, from all-time highs.
Expect more volatility ahead
While these stocks look attractive today, that doesn't mean the prices they saw on Friday will be the lowest they trade from now on. Growth stocks can be very volatile as investors constantly try to reevaluate the present value of share today based on wild forecasts for future growth. Small changes in the sentiment for these companies' growth trajectories can trigger significant swings in their prices.
Looking out five years and beyond, however, these fast-growing tech companies will likely continue winning market share and enhancing their offering for their customers, making them critical technologies of the future and ultimately rewarding investors. More importantly, their scalable business models will likely generate substantial profits over the long haul. But investors will need to exercise patience because these companies are still investing heavily in the big growth opportunities in front of them.
10 stocks we like better than Teladoc Health
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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.
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*Stock Advisor returns as of August 1, 2020
Daniel Sparks owns shares of Livongo Health Inc. The Motley Fool owns shares of and recommends Datadog, Livongo Health Inc, MongoDB, and Teladoc Health. 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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Three great growth stocks that look like good buying opportunities after last week's sell-off are cloud database company MongoDB (NASDAQ: MDB), monitoring and analytics platform provider Datadog (NASDAQ: DDOG), and telehealth and virtual care companies Teladoc Health (NYSE: TDOC) and Livongo Health (NASDAQ: LVGO). The pullback was likely primarily a function of some profit-taking after many of these stocks soared since the bottom of the coronavirus market crash in March. Expect more volatility ahead While these stocks look attractive today, that doesn't mean the prices they saw on Friday will be the lowest they trade from now on.
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Three great growth stocks that look like good buying opportunities after last week's sell-off are cloud database company MongoDB (NASDAQ: MDB), monitoring and analytics platform provider Datadog (NASDAQ: DDOG), and telehealth and virtual care companies Teladoc Health (NYSE: TDOC) and Livongo Health (NASDAQ: LVGO). Telehealth platform provider Teladoc saw its second-quarter revenue soar 85% year over year. The Motley Fool owns shares of and recommends Datadog, Livongo Health Inc, MongoDB, and Teladoc Health.
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Three great growth stocks that look like good buying opportunities after last week's sell-off are cloud database company MongoDB (NASDAQ: MDB), monitoring and analytics platform provider Datadog (NASDAQ: DDOG), and telehealth and virtual care companies Teladoc Health (NYSE: TDOC) and Livongo Health (NASDAQ: LVGO). Livongo Health and Teladoc: Down 19% and 23%, respectively Finally, there's Livongo Health and Teladoc -- two companies whose stocks fell sharply last week after they announced that they planned to cozy up and merge their businesses -- a move that would make them the unquestionable leader in telehealth and virtual care. Livongo Health, a company specializing in virtual care solutions for people with chronic conditions, saw second-quarter revenue surge 125% year over year to $91.9 million.
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Three great growth stocks that look like good buying opportunities after last week's sell-off are cloud database company MongoDB (NASDAQ: MDB), monitoring and analytics platform provider Datadog (NASDAQ: DDOG), and telehealth and virtual care companies Teladoc Health (NYSE: TDOC) and Livongo Health (NASDAQ: LVGO). * 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! The Motley Fool owns shares of and recommends Datadog, Livongo Health Inc, MongoDB, and Teladoc Health.
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2020-08-07 00:00:00 UTC
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4 Top Stock Trades for Monday: FSLY, BABA, DDOG, S&P 500
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https://www.nasdaq.com/articles/4-top-stock-trades-for-monday%3A-fsly-baba-ddog-sp-500-2020-08-07
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
The market had trouble gaining upside momentum on Friday, as tech and growth stocks came under selling pressure. With that in mind, let’s look at a few top stock trades for next week.
Top Stock Trades for Monday No. 1: Fastly (FSLY)
Click to Enlarge
Source: Chart courtesy of StockCharts.com
Are you interested in Fastly (NYSE:FSLY) as a long-term investor? This was a favorite holding of mine earlier this year. Then the stock rallied 1,000% in a few months, and it became too rich for me.
Now that the stock has pulled back, perhaps it is worth another look. Many bulls were hoping that Thursday’s post-earnings spill of 17.7% would be the end of the selling. Well, we’re seeing another painful day on Friday, as the 20-day moving average and uptrend support failed to buoy the name.
Now, shares are approaching the 50-day moving average. If you plan on holding this one for a while — like, a few years — then there are likely worse things you can do than nibble FSLY at the 50-day.
7 Travel Stocks to Buy Banking On Pent-Up Demand
Ultimately, this name could see $50 — particularly if we get a selloff in the broader market. Now 32% off the highs in just a few days, though, and shares may be nearing an exhaustion point. Keep this one on your radar.
Top Stock Trades for Monday No. 2: Alibaba (BABA)
Click to Enlarge
Source: Chart courtesy of StockCharts.com
Alibaba (NYSE:BABA) was dinged on Friday, down more than 5% as the tension between the U.S. and China continues to grow.
Shares are losing the 20-day moving average in the process, while $265 cements itself as resistance. Let’s see if we can’t get a bit more downside selling pressure in this one before taking a closer look at it.
Specifically, I want to see BABA stock trade down into the $235 to $240 area, where it finds recent range support and the 50-day moving average. Below $233 could get some gap-fills going down to $225 and $215, respectively.
Provided that much selling doesn’t take place, though, look to see if Alibaba can reclaim the 50-day moving average. Above puts $260 to $265 back in play.
Top Stock Trades for Monday Tomorrow No. 3: DataDog (DDOG)
Click to Enlarge
Source: Chart courtesy of StockCharts.com
Ouch, DataDog (NASDAQ:DDOG) is getting whacked here — down more than 16% after reporting earnings.
Shares are making a decisive decline below the 50-day moving average and $82 level as a result. On the upside, these levels have to be reclaimed for bulls to regain momentum. Based on the intensity of the selling though, it looks like we could get some more washout in this name like Fastly.
8 Coronavirus Stocks That Are Still Going Strong
On the downside, however, keep an eye on $71. This is the two-times range extension, followed by $62.
Top Stock Trades for Monday No. 4: S&P 500 (SPY)
Click to Enlarge
Source: Chart courtesy of StockCharts.com
Let’s talk about the S&P 500. Whether you trade options on the index, futures or the SPDR S&P 500 ETF (NYSEARCA:SPY), this is one to keep up on the screens.
We’ve now seen a multi-month rally extend more than 50% from the lows. More recently, the index has now filled the gap from February. That is a “job well done” for me, but in this particular case, it leaves more questions than answers. That is due to the uncertain climate we find ourselves in.
We’re now left with an interesting position: Do we go on to retest or potentially push to new all-time highs, or do we begin to correct? A drop to the 50-day moving average would be reasonable. Heck after such a strong run, even a drop to the 3,000 level wouldn’t be so crazy.
Not that I am a huge fan of shorting a massive bull market, but for short-sellers, were getting to a point where it may be a reasonable risk/reward to lean the other way. Let price confirm though — and always obey your stops.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret did not hold a position in any of the aforementioned securities.
The post 4 Top Stock Trades for Monday: FSLY, BABA, DDOG, S&P 500 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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Click to Enlarge Source: Chart courtesy of StockCharts.com Ouch, DataDog (NASDAQ:DDOG) is getting whacked here — down more than 16% after reporting earnings. 3: DataDog (DDOG) The post 4 Top Stock Trades for Monday: FSLY, BABA, DDOG, S&P 500 appeared first on InvestorPlace.
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Click to Enlarge Source: Chart courtesy of StockCharts.com Ouch, DataDog (NASDAQ:DDOG) is getting whacked here — down more than 16% after reporting earnings. The post 4 Top Stock Trades for Monday: FSLY, BABA, DDOG, S&P 500 appeared first on InvestorPlace. 3: DataDog (DDOG)
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The post 4 Top Stock Trades for Monday: FSLY, BABA, DDOG, S&P 500 appeared first on InvestorPlace. 3: DataDog (DDOG) Click to Enlarge Source: Chart courtesy of StockCharts.com Ouch, DataDog (NASDAQ:DDOG) is getting whacked here — down more than 16% after reporting earnings.
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The post 4 Top Stock Trades for Monday: FSLY, BABA, DDOG, S&P 500 appeared first on InvestorPlace. 3: DataDog (DDOG) Click to Enlarge Source: Chart courtesy of StockCharts.com Ouch, DataDog (NASDAQ:DDOG) is getting whacked here — down more than 16% after reporting earnings.
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2020-08-07 00:00:00 UTC
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Nasdaq Falls 97 Points as Datadog Dives; Groupon Skyrockets on Recovery Hopes
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https://www.nasdaq.com/articles/nasdaq-falls-97-points-as-datadog-dives-groupon-skyrockets-on-recovery-hopes-2020-08-07
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The Nasdaq Composite (NASDAQINDEX: ^IXIC) has been on a tear recently, posting many record highs over the past several sessions. On Friday, though, the stock market finally took a break, and even the Nasdaq wasn't able to avoid declines. Losses for the Nasdaq-100 Index amounted to nearly 1.25%, while the Composite fell roughly 1% on the day.
Software-as-a-service companies have helped lead the Nasdaq higher, but they also proved to be a headwind to performance on Friday. Datadog (NASDAQ: DDOG) released second-quarter financial results that fell short of investor hopes despite showing strong growth. However, Groupon (NASDAQ: GRPN) was able to give shareholders a great deal as its turnaround efforts appear to be paying off.
Playing dead?
Shares of Datadog plunged 16% on Friday. Even though the cloud monitoring and security specialist's results showed continuing growth, investors seemed more concerned about the sustainability of future gains.
Image source: Getty Images.
Datadog's performance looked great on its face. Revenue for the quarter was up 68% from year-ago levels, as Datadog boosted the number of clients producing at least $100,000 in annual recurring revenue to more than 1,000. The company broke even using standard accounting practices and posted a modest adjusted profit. Those results were better than most investors had anticipated.
Yet some shareholders weren't pleased about Datadog's guidance. The company's outlook included third-quarter revenue estimates that would work out to about a 50% year-over-year rise, with full-year 2020 top-line growth of around 57%. Datadog's valuation is high enough that even those strong growth rates came as somewhat of a disappointment.
Datadog has a lot of potential to keep growing its business. The question is whether its stock valuation still has room for investors to benefit from that growth. At least for today, shareholders seem to think the answer to that question is no.
Here's a deal for you
On the other side of the spectrum, Groupon shares soared 56%. The one-time daily deals specialist has worked hard to try to turn its business around, and investors liked what they saw in its second-quarter report.
Fundamentally, Groupon still has a long way to go. Revenue fell 26% from year-ago levels to $396 million, and net losses nearly doubled year over year. Unit sales volume plunged 35% as the COVID-19 pandemic had a dramatic impact on Groupon's local business segment.
However, investors seem excited about Groupon's growth strategies. The company hopes to expand its inventory while improving its online marketplace to meet customer expectations. Groupon's restructuring will happen in phases and take a couple of years, but savings should start coming this year and build into 2021.
Even with today's gains, Groupon stock is still down by nearly half so far in 2020. The company will need to move fast to capitalize on its newfound optimism, or else increasingly impatient investors might simply give up on the e-commerce company ever becoming a growth stock again.
10 stocks we like better than Groupon
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 Groupon 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
Dan Caplinger 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 (NASDAQ: DDOG) released second-quarter financial results that fell short of investor hopes despite showing strong growth. Even though the cloud monitoring and security specialist's results showed continuing growth, investors seemed more concerned about the sustainability of future gains. The company's outlook included third-quarter revenue estimates that would work out to about a 50% year-over-year rise, with full-year 2020 top-line growth of around 57%.
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Datadog (NASDAQ: DDOG) released second-quarter financial results that fell short of investor hopes despite showing strong growth. Even though the cloud monitoring and security specialist's results showed continuing growth, investors seemed more concerned about the sustainability of future gains. Even with today's gains, Groupon stock is still down by nearly half so far in 2020.
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Datadog (NASDAQ: DDOG) released second-quarter financial results that fell short of investor hopes despite showing strong growth. The company will need to move fast to capitalize on its newfound optimism, or else increasingly impatient investors might simply give up on the e-commerce company ever becoming a growth stock again. See the 10 stocks *Stock Advisor returns as of August 1, 2020 Dan Caplinger has no position in any of the stocks mentioned.
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Datadog (NASDAQ: DDOG) released second-quarter financial results that fell short of investor hopes despite showing strong growth. Shares of Datadog plunged 16% on Friday. The question is whether its stock valuation still has room for investors to benefit from that growth.
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2020-08-07 00:00:00 UTC
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Datadog Inc (DDOG) Q2 2020 Earnings Call Transcript
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https://www.nasdaq.com/articles/datadog-inc-ddog-q2-2020-earnings-call-transcript-2020-08-07
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Image source: The Motley Fool.
Datadog Inc (NASDAQ: DDOG)
Q2 2020 Earnings Call
Aug 06, 2020, 5:00 p.m. ET
Contents:
Prepared Remarks
Questions and Answers
Call Participants
Prepared Remarks:
Operator
Thank you for standing by, and welcome to the Quarter 2 2020 Datadogearnings conference call [Operator instructions] Please be advised that today's conference is being recorded. [Operator instructions] I would now like to hand the conference over to your speaker today, Mr. A.J.
Ljubich, the director of investor relations. Please go ahead, sir.
A.J. Ljubich -- Director of Investor Relations
Thank you, Frenzy. Good afternoon, and thank you for joining us today to review Datadog's second-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 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 third quarter and for the full year of 2020; our strategy; the potential benefits for our products, R&D and go-to-market investments; expected capital expenditures; anticipated hiring; the size of and our ability to capitalize on our market opportunity; as well as the impact of the COVID-19 pandemic on our customers, their usage of our products, our market industry trends and our business and operating results.
The words anticipate, believe, continue, estimate, expect, intend, will, and other 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 March 31, 2020, filed with the SEC on May 12, 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 August 1, 2020
Additional information will be made available in our quarterly report on Form 10-Q for the quarterly period ended June 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 the call will be available there for a limited time. Additional information may also be made available in our other filings and reports that we may file from time to time with the SEC.
Additionally, 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 -- Co-Founder and Chief Executive Officer
Thank you, A.J., and thank you all for joining us today. Before discussing the results of the quarter, I want to proudly report that, together with our employees, we raised over $1 million for charities supporting COVID relief, as well as organizations working to dismantle the systemic discrimination experienced by Black communities. We are living in unprecedented times for many reasons, and we want to do our part to help. And as always, Datadog is committed to supporting diversity and inclusion within our company and communities.
Now turning to Q2 results. We are happy to report another quarter of strong growth and demonstrated financial efficiency. Execution was strong during challenging times, including robust new logo generation and continued platform adoption. While we are pleased with our execution in the quarter, we did experience some impact to the rate of usage growth of our customers related to the microenvironment.
While this macro uncertainty remains in the near term, we continue to believe that this environment accentuates the need to be digital-first and agile and confirms the cloud as the best path to achieve these outcomes over the long term. And we see evidence of this in growing overall demand in the form of new customers and new use cases existing customers. To summarize Q2 at a high level, revenue was $140 million, an increase of 68% year-over-year and above the high end of our guidance range. We ended the quarter with 1,015 customers with ARR of $100,000 or more, which is an increase of 71% from last year.
This customer generated about 75% of our ARR. We have about 12,100 customers, which represent growth of 37% from about 8,800 last year. We also continue to be capital-efficient with free cash flow of $19 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.
So we are continuing to deliver high growth at scale. Now looking at Q2 in more detail. New logo generation was robust in the quarter as new logo ARR grew both from last quarter and year-over-year, and gross new customer additions matched the record set in Q1. We saw companies of all sizes and geographies prioritize cloud migration and digital transformation.
For instance, in the quarter, we had a few small yet notable new logo wins from two global hotel chains, an amusement park chain, a large U.S. university and a European airline. 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.
As of the end of Q2, 68% of customers are using two or more products, which is up 40% a year ago. We had another quarter in which approximately 75% of new logos landed with two more products, and I would add that over 15% of our customers are now using four or more products, while we had zero last year. We are also very pleased with the uptake of our newest products in a short period of time, with Synthetics, RUM, NPM and Security all released over the last year. We are winning in the market because we are cloud native.
Our support of cloud and other ephemeral architectures is more important than ever as the rapid change from work-from-home has demonstrated the limitation of legacy infrastructure. And we believe recent events will accelerate the migration to the cloud as the economy improves. We win because we offer a broader solution with end-to-end visibility from back-end infrastructure all the way through to the end-user experience and now security as well. And we win because we offer a truly integrated platform for a single paid view into the IT stack.
Now as we mentioned earlier, while execution was strong, the macro environment did have some impact on our top line results and in particular on growth of existing customers. Our customers continue to grow usage of our platform in Q2, but the rate of this growth was below the trends we saw before pandemic. This dynamic was primarily seen in our larger customers who already have sizable cloud environments. Given macro uncertainty, we saw these customers look to conserve cash where they still could and therefore optimize the consumption of cloud infrastructure.
On the flip side, smaller customers and large enterprises that are earlier in their cloud journey continue to see stronger growth. To put it plainly, customers with large cloud deals from AWS, Azure or GCP look for short-term savings. Note that this is not a new motion as we see many enterprises go through these optimization exercises on a regular basis. What was unusual this quarter was to see a large number of companies going through it at the same time.
I would also note that while these customers are at a greater scale in the cloud, they mostly remain at a low penetration relative to their overall IT environment. Therefore, these customers continue to have a long runway of growth in their cloud adoption over time. Lastly, while we do not want to get into the habit of providing intra-quarter updates, I'd like to provide some commentary on what we saw in July, given the unique macro circumstances. We saw over the last month a notable improvement in usage growth relative to Q2, driven by broad-based strength across our customer base.
It is however too soon to know if this growth will sustain given the macro environment. As a result and while we are encouraged by this trend, we remain prudently conservative in our outlook for the remainder of the year, which David will speak to. As a reminder, we have both a subscription and usage-based revenue model, and the growth of our revenue is related to the growth of our customers' cloud footprint and data volume. Finally, to bookend this topic, I am very proud of the performance of our go-to-market teams during these challenging times as we are executing well against what we can control, and our teams are delivering record levels of new logos and product cross-sell.
Next, onto R&D. We continue to make significant investments to rapidly deliver innovation. We have a proven track record of success in creating new products, and we see many new opportunities to expand our portfolio. For example, we recently announced the general availability of Private Locations for Synthetics, which enables dev and ops teams to proactively test internal applications that are not accessible from the public Internet.
We also acquired Undefined Labs, a provider of observability for dev and test workflows. This will enable Datadog to be injected earlier in the software life cycle, starting before code is even committed to a central repository. And this will equip customers with better tracking of continuous integration and deployment workflows, enable them to identify issues before reaching production. Other continued product innovations include the general availability of the Datadog mobile app to provide engineers with access to the alerts and dashboards on the go, support for Amazon Kinesis Data Firehose to enable streaming logs directly from AWS services to Datadog and the preview release of the Datadog IoT agent to provide visibility into Internet of Things devices.
We have also added and improved a number of integrations, including AWS one-click deployed, HiveMQ, Apache Ignite and Hazelcast. As we keep investing in R&D, we plan for a continued rapid pace of innovation, and we'll be showcasing some of our newer products at our annual user conference, Dash, which is held online next week on August 11. Switching gears a bit. We recently achieved FedRAMP authorization for low-impact SaaS, and Datadog is now fully available in the FedRAMP marketplace.
We continue to build out our public sector go-to-market motion. And while it is likely to take some time, we are excited about this long-term opportunity. Now let's talk briefly about some of our wins in the quarter. First, we had a seven-figure upsell with a large fintech company.
With Datadog, this customer has been able to move from multiple disparate monitoring tools to using a single platform for all three pillars of observability. This allowed them to refocus engineering teams on building new features, and they expect more than $1 million in savings from consolidating disparate monitoring and logging vendors into Datadog. Another seven-figure expansion came from a European automotive company, which is modernizing and adopting Microsoft Azure. Through adoption of Datadog infrastructure monitoring, APM and NPM, their teams are now collaborating on a shared platform and are moving to an increasingly agile development model.
Next, we saw a large entertainment platform that has been using more and more of our products to commit to over $10 million in the year. This company has made a decision to increase investment in observability and broader use of Datadog both with new products and by scaling up on existing products. I will also mention a high six-figure land deal with a leading asset manager, which is now using us for infrastructure monitoring, APM and logs, as well as Synthetics and early adoption of Security. And last, we had a six-figure upsell to a seven-figure ARR with a social networking platform that has seen tremendous growth during the pandemic.
At record levels of scale, they can use Datadog to quickly drill down into any failed request and easily identified layers. This company is now using all three pillars, including Synthetics, RUM and NPM, and has standardized monitoring on Datadog. Now moving on to our outlook. As we look ahead to the second half of the year, we remain very excited about our market opportunity.
Recent events have made one thing very clear. It is more important than ever to be a digital-first business, and the cloud is the best path to achieve this outcome. We continue to believe Datadog is the primary beneficiary of this trend and remains very well-positioned to win in the market. In the near term, the macro environment is likely to continue to cause uncertainty, but our focus remains on executing against our strategic priorities, which have not changed.
First, we are building on our strong track record of innovation by introducing new products, entering new categories and continuing to improve existing solutions. Second, we continue to hire rapidly in R&D and are pursuing talent that would not otherwise be in the market. And third, we are aggressively expanding our go-to-market globally and into newer channels. We are very confident 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 second-quarter top and bottom line results amid a difficult macro backdrop. Revenue was $140 million, up 68% year-over-year against the challenging compare. Execution was strong with robust new logo generation and continued platform traction, while the macro environment did pressure usage of existing customers.
To provide some more context. First, in Q2, we saw strong new logo additions, with robust contributions from both enterprise and commercial sales channels and sequential growth of new logo ARR. Execution against our platform has been very strong, with 68% of customers now using two or more products versus just 40% a year ago, driven by both land and cross-selling. In the second quarter, our dollar-based net retention was once again above 130% for the 12th consecutive quarter.
We saw continued growth of our existing customers, driven by both increased usage of existing solutions and robust cross-selling to newer solutions. Our net retention rate, which remains best-in-class above 130%, did however decline from Q1. As Olivier discussed, macro factors pressured usage increases. To add some detail.
First, while existing customers did grow, the rate of growth was below pre-pandemic levels. This was primarily seen from our larger customers with the greater scale in the cloud, who experienced business pressures and sought to save in the near term by slowing down their consumption. Additionally, one dynamic which we discussed as a possibility on our Q1 call is that we did see the normalization of some spiked usage from Q1. In March, we had a number of customers, such as streaming media vendors, scale rapidly in the face of COVID.
Over the following months, some of these customers were able to optimize usage and save on cloud spending amid budget pressures and normalization of business activities. Next, some customers, such as delivery and at-home media companies, have continued to see elevated demand and therefore, have continued to meaningfully grow their Datadog usage. Lastly, we saw some of our COVID-impacted customers reduce usage. As a reminder, these customers, such as those in hospitality and travel, contribute less than 10% of our ARR, and therefore, they were a mild detractor.
Lastly, churn was a bit elevated related to the most hard-hit COVID customers but better than expected. Our dollar-based gross retention rate has remained largely unchanged in the low to mid-90s. Performance of our SMB customer base has been robust, including stable dollar-based churn and continued rapid growth year-over-year. Now turning to billings, which was $160.1 million and up 62% year-over-year, relatively in line with revenue growth.
Entering the quarter, as we discussed on the last call, we thought it was possible some customers would seek to renegotiate terms or slow payments, but that did not happen in a material way, pointing to the importance of our solution. Remaining performance obligations, or RPO, was $287 million, up 53% year-over-year. We did not see a material change in billings durations in Q2. We did see some slight shortening of contract duration year-over-year related to large multiyear contracts closed in the year-ago quarter.
We continue to have great success in closing annual committed deals, which remains our strategic focus. As a reminder, billings and RPO can fluctuate versus revenues 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 our earnings release. Gross profit in the quarter was $111.8 million, representing a gross margin of 80%. This compares to a gross margin of 80% also last quarter and 75% in the year-ago period. Year-over-year improvement of gross margin was driven by efficient use in our cloud hosting.
Our gross margins may fluctuate quarter-to-quarter within acceptable ranges as we prioritize product development and innovation, as well as the build-out of cloud data centers in newer geographies. R&D expense was $38.3 million or 27% of revenue, compared to 30% in the year-ago quarter. We have continued to invest significantly in R&D, as Olivier mentioned, including high growth of our engineering headcount. However, the growth of revenue continues to outpace even our substantial investments, and we did have some leverage from T&E and overhead savings related to work-from-home.
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 going forward. Sales and marketing expenses were $45.7 million or 33% of revenue, compared to 42% in the year-ago period. Similar to R&D, we continue to make substantial investments, but the pace of revenue growth has outpaced that investment. This was the first full quarter of no in-person trade shows for marketing events.
While we have successfully redeployed much of the event's budget to advertising and other lead-generating activities, it is not so on a one-for-one ratio. G&A expense was $12.5 million or 9% of revenue, in line with the same ratio a year-ago quarter. Operating income was $15.3 million or an 11% operating margin, compared to a loss of $5 million and a negative 7% margin in the year-ago period. Beyond the improvement in gross margin and revenues outpacing investments, the reduction in travel and entertainment and facilities overhead contributed to the operating margin.
Non-GAAP net income in the quarter was $17.5 million or $0.05 per share based on 331 million weighted average diluted shares outstanding. Note that our non-GAAP net income does not include the $5.6 million non-cash benefit related to payroll taxes. We have a very efficient business model and experienced a high return on our investments in sales and marketing and R&D. While we have delivered four consecutive quarters of breakeven to positive operating income, we note that our priority remains top line growth, and we intend to continue investments aggressively in R&D and go-to-market.
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, which includes the $641 million of proceeds from our convertible note issuance during the quarter, net of issuance costs and the capped call transaction. Cash flow from operations was $24.7 million in the quarter. After taking into consideration capex and capitalized software, free cash flow was $18.6 million in the quarter for a margin of 13%.
Free cash flow includes an approximately $4.4 million outflow related to the conclusion of our first employee stock purchase program. I would now like to turn to our outlook for the third quarter and the full-year 2020. We are pleased with our execution and ability to drive new sales in an uncertain macro environment. As discussed, we did see some lower growth in usage from our existing customers in Q2 due to the overall slowing of the economy.
As Olivier noted, however, in July, we experienced an improvement in usage trends relative to Q2 that were closer to our pre-pandemic historical levels. However, it is too soon to know if this will prove to be sustainable. And given the lack of clarity of economic trends, we are assuming usage growth of existing customers below pre-COVID growth rates. Additionally, while we have not yet seen a material impact to our new sales, we think it is prudent to expect some impact in the second half given the macro backdrop.
Beginning with the third quarter, we expect revenues to be in the range of $143 million to $145 million, which represents a year-over-year growth of 50% at the midpoint. Non-GAAP operating income is expected to be in the range of a loss of $1 million to an income of $1 million. Non-GAAP net income per share is expected to be breakeven to $0.01 per share based on approximately 333 million weighted average diluted shares outstanding. Now for the full-year 2020, revenue is expected to be in the range of $566 million to $572 million, which represents a 57% year-over-year growth at the midpoint.
Non-GAAP operating income is expected to be in the range of $28 million to $34 million, and non-GAAP net income per share is expected to be in the range of $0.11 to $0.13 per share based on approximately 332 million weighted average fully diluted shares. A few things to take into account in our guidance. First, when evaluating our quarterly growth rates, it is important to consider the accelerated growth rates in the second half of 2019, creating more challenging comps. Next, while we've seen continued improvement in our gross margins, we are running toward the top end of our long-term target.
As we prioritize product development and diversifying our cloud hosting regions, our gross margins may fluctuate within a range of acceptability. Next, as I've mentioned earlier, our intention continues to be to invest meaningfully, including aggressive hiring in R&D and sales and marketing, and we have not changed our plans during COVID. Then some notes below operating income. We expect approximately $2.4 million of quarterly non-GAAP other income, which is net including interest income in our cash and marketable securities less the interest expenses of our convertible debt.
Next, we do not expect to be a federal taxpayer but have a tax provision related to our international entities. We expect a tax provision of approximately $350,000 per quarter. Note that our share count forecast for Q3 and the full year are diluted given that we expect to be non-GAAP net income breakeven to profitable for both periods. To summarize, we are pleased with our execution during a very challenging time.
While the macro environment has impacted our top line results in the near term, we believe the current environment will prove to be a catalyst for digital transformation and cloud migration over the long term. And we are very well-positioned to be a primary beneficiary of those trends. We have a highly efficient business model and are making investments across the organization today in order to capitalize on the large opportunity ahead of us. With that, we will now open the call for questions.
Operator, let's begin the Q&A.
Questions & Answers:
Operator
[Operator instructions] Your first question comes from the line of Sanjit Singh of Morgan Stanley. Your line is open.
Sanjit Singh -- Morgan Stanley -- Analyst
Hi, and thank you for taking the question. Really appreciate all of the detail that you guys provided around the environment and usage. That's very helpful context. So I guess maybe to start with Oli, you sort of singled out the sort of primary factor.
And correct me if I'm wrong, but the primary factor being large customers that have large-scale cloud deployments, which sort of just makes sense, right? It's sort of a law of large numbers impact there as well. What gives you the confidence, Oli, that you think this is a temporary pause with those customers versus something more sustained? Is there any sort of customer conversations you're having? Or is it just kind of like the secular tailwinds of digital transformation? I just want to get a sense of what gives you guys the confidence that in these large customer cohorts that it's more of a digestion period after a period of strong growth versus a more sustained downturn.
Olivier Pomel -- Co-Founder and Chief Executive Officer
Yeah. So the first thing I'd say is it's something we've seen before. It happens from time to time, like companies ramp up their cloud consumption. At some point, they notice their bills going up, and they ask themselves, can we optimize? And look, we've done that too as a company.
You've seen our gross margin, for example, go up from last year, that was fairly similar in that respect. What happened there is that everybody had the same idea at the same time, like everybody asked themselves, "How can we save some cash?" The words came in pretty much every single company affected by COVID, that because of the uncertainty, cash has to be conserved. One of the good things about cloud is that a lot of it is opex, and a lot of it still has to be paid in the next bill. It's not some costs.
So there are still savings to be made if you take action. So that's what we saw happen. In terms of -- continuing on that, again, it's hard to tell what's going to happen in the near term. But in the broader scheme of things, companies are still moving to the cloud.
New companies are moving to the cloud that were not before, and we've mentioned that on the call that we've had a number of companies that started using us right now, when you think of hotel chains and amusement parks and things like that. We see, in the July data and even in some of the June data, companies that have optimized their cost infrastructure. And by the way, in general, what we mean by that is not that they call Datadog to cut their bill, is that they're trying to figure out what they could shut down or optimize on the Amazon side or on the Google side or on the Azure side. And so we see some decrease of their data volume or infrastructure sizes over a period of a few weeks.
But then what we see after that is that they start going again because then their teams keep building, and they keep deploying and keep serving customers, etc., etc. So it's not an exercise that is new or unexpected. I think what's different now is that it makes sense for all these companies to do it at the same time, and it just happened.
Sanjit Singh -- Morgan Stanley -- Analyst
Understood. That makes total sense. And then, David, if I think about the guidance, right, 68% growth this quarter. And I look at Q3, the high end is roughly around 50%, and then Q4 is roughly around 40%, at least by my math.
I think it would be helpful to understand the underlying assumptions behind that guidance and particularly around those usage trends. Right? So I know there was, prior to COVID, there was a significant amount of customers that were sort of overspending relative to their committed usage. If you could sort of give us, like, the pre-level of usage, any way to sort of quantify that on what it looks like post COVID to understand the underlying assumptions behind your guidance. Because I think what your guidance assumes is that some of the weaker usage trends persist for the second half.
And so any way to frame that out, I think, would be very helpful in terms of understanding that, the guidance.
David Obstler -- Chief Financial Officer
Yeah. I think that's right. We have, in our guidance throughout our history as a public company, been fairly prudent in our forward-looking usage and implicit net retention, and we're particularly cognizant of that given COVID. Most of our guidance has conservative assumptions in that, and we'll continue to do that.
I think as we said, we had strong cross-sell, and so we see a continued adoption of the platform, which is a good sign. And as far as the usage, the more variable usage, we saw, as Oli just mentioned, some constraints. So we try to use conservative assumptions going forward in our guidance.
Sanjit Singh -- Morgan Stanley -- Analyst
Understood. Thank you very much.
David Obstler -- Chief Financial Officer
Thank you.
Operator
Your next question comes from the line of Chris Merwin of Goldman Sachs. Your line is open.
Chris Merwin -- Goldman Sachs -- Analyst
OK. Thanks very much for taking my question. For Olivier, I wanted to ask about your thoughts on pricing, particularly in light of all the convergence that we're seeing going on within the observability space. I remember with your log product, when you launched it, you had a pretty disruptive pricing strategy, where you're charging a very low price for ingestion, and you're letting the customers pay just for the logs that they actually want to index.
And now we're seeing other players in this space give away entire aspects of their platform for free and creating free tier. So I guess the question is, how do you see your pricing model evolving, if at all, in time? And as you keep up the industry-leading pace of innovation, do you see the ability to even raise price as you deliver more value to your customers? Thanks.
Olivier Pomel -- Co-Founder and Chief Executive Officer
Yeah. So I think we're very careful about pricing in that the way we do it is, first of all, we encourage having the maximum deployment with our customers. Meaning, that's why we don't charge by the user. We want absolutely everybody to use it.
And then we want to make sure that customers have the levers to align what they pay to Datadog with the value they get. And in our case, that means having differentiated pricing for very different parts of our platform because not every single gigabyte of data that's being sent to us has the same value to the customer and represents the same amount of processing and other things online. So we try to align that. Right now, we're happy with our pricing.
It works well in the market. It gives the customers flexibility. But, look, we've had a pricing model evolve over time. It will probably still evolve in the future.
We believe in our ability to win in the market. And if you win the market and give them more and more value, you have pricing power in the long term. And that's where we are today, where we want to be in the future. I think when your only tool is to play on pricing, like it's usually bad news, it means you can't actually win based on the quality of your products alone.
Chris Merwin -- Goldman Sachs -- Analyst
Understood. Thank you. And maybe just a follow-up for David. Would you be able to share some more detail about some of the trends that you saw by customer segment during the quarter as it relates to net expansion or gross churn or any metrics you could share, I guess, across SMB, mid-market and your enterprise customers? Thank you.
David Obstler -- Chief Financial Officer
Yeah. That was one of the surprises. We had very stable gross churn, dollar-based gross churn. And it's very similar to what we have discussed in the last call that all of the metrics, in gross, are in the 90s, with enterprise tending to be toward the upper part of that range and SMB toward the lower, but all of them strong and in the 90s.
We really didn't see very much disruption from that. And similarly, we saw net retention rates come down. We said a little more at the larger end because of this concentration on costs but all within the same type of bands we've had since we've become a public company.
Chris Merwin -- Goldman Sachs -- Analyst
Great. Thanks very much.
David Obstler -- Chief Financial Officer
Yeah.
Operator
Your next question comes from the line of Sterling Auty of JP Morgan. Your line is open.
Sterling Auty -- J.P. Morgan -- Analyst
Yeah. Thanks. Hi, guys. So in terms of the macro impact and the slowing of usage of existing customers, is there any evidence that you've seen of some of those customers slowing the usage of your tools but supplementing it with maybe the cloud platform tools or something else? Or they're just slowing the usage and that's it?
Olivier Pomel -- Co-Founder and Chief Executive Officer
No. I think what we've seen mostly is they're slowing the usage of the cloud infrastructure that's directly related to how we recognize new revenue. So that's what we saw. To put it in other terms, they've used less Amazon instances or containers or less Azure instances and containers.
And that would end up moving the needle for us. And I should say this is something that we're used to seeing in the other way. We used to see -- like the way we sell it, we sell to customers, and they're still early in their cloud transition, and we grow with them as they grow. What happened this quarter is that their growth slowed overall during the quarter.
It still grew, and they're still going to grow. And what we said in the call is in July and also toward the end of June, we saw some acceleration of the growth again, but we want to remain prudent. Considering all the uncertainty that there is right now in terms of how long the credit crisis is going to last and what's going to be the impact in various parts of the economy, we remain prudent in what we think is going to happen in the near term.
Sterling Auty -- J.P. Morgan -- Analyst
Understood. And then one follow-up. How would you characterize the ramping of the new sales resources that you've hired over the last couple of quarters? Are they ramping at the same pace that you've traditionally seen? Are they ramping faster, slower?
Olivier Pomel -- Co-Founder and Chief Executive Officer
We haven't seen any changes there. And everything that is within control of the sales team actually worked really well. We mentioned it during the call, but we had a record level of new logos, both in terms of numbers and in terms of revenue. We had a record level of new products attached, and this is what our sales teams spend their time on.
The growth of customers, once they're set up, every single month, is only partially related to the world of CECL, that we don't have full control over that, which is also why when we set expectations around our net retention initially, we said we're going to set it at 130% because we don't fully control that number. A great part of it is driven by the rate of migration to the cloud and the rate at which customers are scaling into the cloud. Again, we're very early in that transition, and customers are going to keep transitioning for a much longer time, keep scaling, and we see that they only want to do that more now that they see the impact of COVID on their business and they need to transform. But from a quarter-to-quarter basis, in the near term, we don't exactly know where that's going.
Sterling Auty -- J.P. Morgan -- Analyst
Understood. Thank you.
Operator
Your next question comes from the line of Brad Zelnick of Credit Suisse. Your line is open. Mr. Brad Zelnick of Credit Suisse, your line is now open.
Ray McDonough -- Credit Suisse -- Analyst
Hi. Sorry about that. This is Ray McDonough, on for Brad Zelnick. Thanks for taking the question.
I just wanted to ask, can you help us understand a little bit more the relative size or recent attach rates of your APM and log management solution, both of which, I think you mentioned last quarter, were growing faster than the overall business? Has that remained the case in this recent quarter?
Olivier Pomel -- Co-Founder and Chief Executive Officer
Yeah. So they're both in hyper growth. So the picture hasn't changed a lot since the last time we talked. The infrastructure, iPhone would still be a great public company.
Logs and APM are still in hyper growth and are growing much faster than data overall at the scale. And the other products that are smaller and earlier are also growing extremely fast right now. So, overall, we're fairly happy with those.
David Obstler -- Chief Financial Officer
And the attach rates and their contribution to net retention has been very similar to the trends that we've talked about last time. So we continue to have an increasing number of customers using the platform. And what they're spending on the additional components of the platform continues to grow in hyper growth.
Olivier Pomel -- Co-Founder and Chief Executive Officer
Yeah. It's important to understand, the signs of active demand are really strong. Whether it's a new logo, new products, like the attach rates are actually up from what they've been before, and this keeps growing over time. So all that is great.
The one thing that's been a detractor this quarter has been, I would say, the passive consumption. I don't like the word passive because it actually sounds like we're not doing anything and customers are not doing anything, but it's something that's not directly related to an action customers are taking with us today.
Ray McDonough -- Credit Suisse -- Analyst
Thanks. That's helpful color. And then if I could, building on Chris' question from earlier and appreciating that the majority of your lands are greenfield. How do you think -- one of your competitors' recent pricing changes and packaging changes will impact your ability to cross-sell APM into your customer base? And overall, what do you think the medium or long-term implications are for your business as this one competitor, in particular, seems to be focused on competing more aggressively on price and total cost of ownership at this point?
Olivier Pomel -- Co-Founder and Chief Executive Officer
Yeah. So for these kinds of changes, like we always have to keep an open mind, see what can work and not work. At the same time, look, we don't see that having a major impact on us because we don't actually -- our business, as you said, is mostly greenfield. And you saw today the strength of our individual products that get tied together in the platform.
And there's no problem with our customers adopting our products little by little, like they can adopt as little as they want as APM or as little as they want on top of their infrastructure or as little as they want as Synthetics. That's not an issue. That's already something we have. We actually give them differentiated pricing that is more tailored to the value they're going to get for each of those products.
So I don't see anything very disruptive there or anything very different. So again, from our end, there's no big change there.
Ray McDonough -- Credit Suisse -- Analyst
Alright. Thank you for the color.
Operator
Your next question comes from the line of Raimo Lenschow from Barclays. Your line is now open.
Raimo Lenschow -- Barclays -- Analyst
Hey. Thank you. A quick question for me. So you mentioned about like the slowing usage in the public cloud.
I mean like the one benefit we have is that we see Azure and Amazon and AWS then report numbers before you. And so in a way, you were always seen as a little bit of a derivative of those. And if I look at AWS growth slowdown, Azure slowdown, I'm just wondering, like you almost seem not directly in terms of the growth numbers, but in terms of directionally related. Is that something that you're paying attention to as well? Because it seems like there seems to be a correlation here.
Olivier Pomel -- Co-Founder and Chief Executive Officer
Well, there's definitely a correlation. I mean we don't call it exactly with them, right, because they have different product portfolios. And some of these tie to what we do today, the kind of the products we already have for our customers to consume. But what I will say is we understand the dynamics of what happened to the cloud providers, we saw it happen to their customers, basically, which is they try to save for the next deal because every million dollar counts in big companies right now.
And before they know where that price is going, they want to make sure they do everything they can. So we are quality to them. The one thing I will say is we are growing a lot faster than the cloud providers because we keep adding more products, and we're still underpenetrated in the market. So we are growing a lot faster than they are, and we're still growing faster, even in more recent quarters.
Raimo Lenschow -- Barclays -- Analyst
Yeah. Exactly. No. Exactly.
Yes. Yes, that's true. And then the other question I had on that subject is like, in theory, the one offset you have is like, one is consumption usage, and there's not that much you can do about. On the other hand, you mentioned some stats around product uptake, etc.
Have you taken any action to kind of change or incentivize the sales force or push more toward more upselling and cross-selling of other products? Or is this something, look, we're riding it up because like COVID is there for everyone, you saw some better trends in July? Or are you taking extra action here?
Olivier Pomel -- Co-Founder and Chief Executive Officer
No. We didn't change anything. The sales incentives are the same. The way we sell, we ask the teams to do the same.
So we haven't changed anything to the way we proceed. What we're doing right now is working, right? What we said earlier is we're delivering the right numbers of new logos, the right numbers of product cross-sells. That was our focus before. That's still our focus today.
The rest, the growth in usage, will come because the transition into digital businesses and move to the cloud is not going to stop.
Raimo Lenschow -- Barclays -- Analyst
Yes. Makes sense. Perfect. Thank you.
Well done.
Operator
Your next question comes from the line of Matt Hedberg from RBC Capital Markets. Your line is now open.
Dan Bergstrom -- RBC Capital Markets -- Analyst
It's Dan Bergstrom for Matt Hedberg. Wondering about linearity in the quarter, given callouts around the macro and then large enterprise. You provided some color in July. That was helpful.
But anything else from a linearity perspective in the quarter to note, maybe different than what you expected?
Olivier Pomel -- Co-Founder and Chief Executive Officer
Yeah. So this quarter was actually -- I mean, David, I hope you'd understand if I take the numbers question, but...
David Obstler -- Chief Financial Officer
No. Go ahead.
Olivier Pomel -- Co-Founder and Chief Executive Officer
The way we saw that this quarter was a little bit different in that what we saw from early July was fairly consistent with what we had before in Q1. So we saw good growth and a great behavior of new logos, which is what we discussed in the last call -- sorry, I mentioned July, April. The first few weeks of April were very good growth in new logos. New logos remain for the rest of the quarter, but what we saw is toward the end of April and then the full month of May, we had much lower growth.
And then things recovered, or started recovering in June. So growth was going up in June and is recovering further in July. So these are the trends we've seen. Now this is what we saw in the past quarter.
It was a lot noisier than what we're used to. Like we're used to having very consistent numbers month-over-month. We can't really tell whether in the near term we'll see some return to the previous normal or if we'll still see some oscillation as the state of the economy and other things prove of the same motion in our customers.
Dan Bergstrom -- RBC Capital Markets -- Analyst
Great. Thanks. Helpful. And then Security Monitoring, that's been generally available here for a little over three months.
Just curious of initial reception from customers and security engineers. I know it saw strong demand in beta. And then maybe where should we think about you heading with security? Certainly, a long runway left there.
Olivier Pomel -- Co-Founder and Chief Executive Officer
Yeah. So like, look, it's still super early, right? It's a very, very early product. It has some very focused use cases to start with for some very focused types of customers. We're very happy with the uptake, we did get to a good start in terms of customers starting to use it and pay for it.
But again, super, super early. So I think maybe we'll talk about it some more in the future when it becomes more material and when we have more products to talk about there. But I would say we're excited, but still early, still a lot of work to do.
Dan Bergstrom -- RBC Capital Markets -- Analyst
Thank you.
Operator
Your next question comes from the line of Brad Reback from Stifel. Your line is now open.
Brad Reback -- Stifel Financial Corp. -- Analyst
David, I know you don't guide to billings, but I believe, looking through my notes, next quarter, you have some difficult comps with pretty significant contracts that paid up last 3Q. Any color on that would be super helpful. Thank you.
David Obstler -- Chief Financial Officer
We didn't have that. We didn't present the pro forma because it wasn't as impactful. We did say in RPOs, we had the multiyear contracts and a quarter ago which were more concentrated than we had in creating RPO, but it didn't affect the billings numbers that much, and so there was nothing to point out.
Brad Reback -- Stifel Financial Corp. -- Analyst
OK. And no issue for 3Q as we look forward?
David Obstler -- Chief Financial Officer
Sorry, I can't hear you. No issues with?
Brad Reback -- Stifel Financial Corp. -- Analyst
Sorry. Any issues for 3Q with difficult comps than the year before?
David Obstler -- Chief Financial Officer
Yeah. Nothing that we're pointing out on this call. So nothing that we wanted to point out.
Brad Reback -- Stifel Financial Corp. -- Analyst
OK. Thanks very much.
David Obstler -- Chief Financial Officer
Yeah.
Operator
Your next question comes from the line of Jack Andrews from Needham. Your line is now open.
Jack Andrews -- Needham and Company -- Analyst
Good afternoon. Thanks for taking my question. I want to follow up on the go-to-market strategy. You talked about you haven't really changed anything, but I'm just wondering if you continue to innovate rapidly and roll out these new products, are you running into new buyers or new personas within organizations? And how do we think about the implications of that, whether you might need to either make more investments or maybe change your strategy over time?
Olivier Pomel -- Co-Founder and Chief Executive Officer
Yeah. You're certainly right. I think for the bulk of our product portfolio, we still talk to buyers that are going to be either the same or work in the same way for everything that relates to observability, I will say. When it comes to security, in some cases, now we're starting to see some different buyers.
So today, we're still selling the same way. I mean the security product is focused enough in terms of the customers we're going after, that it works that way, but it's something that we're monitoring. It's possible that we'll make changes in the future to that motion. Nothing yet.
We'll get more data. We'll see more how the product behaves and how the customers behave as we keep expanding the target audience for that product, but that's something that we're aware of and we're monitoring.
Jack Andrews -- Needham and Company -- Analyst
OK. Great. And just as a follow-up, could you elaborate on how you're thinking about the opportunity for the Private Locations for Synthetic Monitoring product? I mean, is this essentially a new way to leverage your technology for employee use? Or how do you think about the opportunity around that?
Olivier Pomel -- Co-Founder and Chief Executive Officer
Yeah. I think it's more for all of the internal services that are being exposed inside companies that don't have a web-facing UI. In fact, it has many good advantages, but for me, it's more difficult to go and reach in to test some endpoints that are not exposed to the Internet. So that's all that.
So it allows customers to put probes inside their own networks to automatically test and verify the APIs in their old application. It also allows them to install probes in the networks they might manage or that their employees might be using. For example, they might deploy that to cable providers or specific cloud providers, things that we were not hosted in as Datadog, but they want to monitor this directly. So it opens a whole range of possibilities for them.
Jack Andrews -- Needham and Company -- Analyst
Great. Thank you.
Operator
Your next question comes from the line of Bhavan Suri of William Blair. Your line is now open.
Kamil Mielczarek -- William Blair -- Analyst
Hi. This is Kamil Mielczarek on for Bhavan Suri. You announced the launch of your formal partner network in January, which expands support for partners via things like go-to-market collateral, self-service training for implementation, opportunity registration, partner located listing. Can you talk about early interest across partner categories in your near- and medium-term channel strategy? And how important of a growth lever do you see this channel being over time? And at least qualitatively, can you talk about how it's been impacted by the macro environment? Thank you.
Olivier Pomel -- Co-Founder and Chief Executive Officer
Thanks. So, yes, since it's a fairly recent program for us. We've had great uptake like we signed up a large number of partners, actually larger than we thought we would. I don't think we've communicated that number publicly.
So I will not do it today. But it's been off to a strong start. I think we're working on making sure we have the right process in place so we can enable those partners and develop them. So it's not enough to just be a partner, but be at different levels of partnership that are also going to have different expectations in terms of what they provide to us, what we provide to them.
And so we're working on promoting for partners through different levels right now. So far, we've seen some interesting outputs from that. So we've closed deals, large deals, much earlier than we thought, through partners. And we've done that in multiple regions.
We haven't seen a specific impact from COVID just because that partner network is so new that it's growing very fast, no matter what. And we can focus on the partners that want to grow now and that have opportunities now as opposed to maintaining a large base of existing partners. So, so far, early great signs, but a lot more to do.
Kamil Mielczarek -- William Blair -- Analyst
That's very helpful. Thank you. And can you talk a little bit more on your international performance this quarter? Are there any specific regions where you're seeing particular strength? And additionally, can you talk about your plans for international investment this year and where you maybe see the most opportunity? Thanks.
Olivier Pomel -- Co-Founder and Chief Executive Officer
David, do you want to take this one?
David Obstler -- Chief Financial Officer
Yeah. We are continuing, as we talked about before, to build out regions, either when we get to critical mass and have a successful sales team, or when we're landing in new territories. So we're continuing the same plan we had, which is to build out Asia, complete the build-out of EMEA, as well as to expand in some areas like Latin America. We saw good performance, as we've talked about before, in the second quarter in EMEA on the back of the build-outs we had done.
And as we said all along, we're earlier in Asia, building out teams and filling out teams for the first time. So we'll continue that as part of our plan in the remainder of the year.
Olivier Pomel -- Co-Founder and Chief Executive Officer
One thing that's interesting is that the pandemic is hitting different parts of the world at different times. So we have these, in various parts of the world, it gets turned on and turned off at different times, and we've seen that through 2Q basically. Again, it's hard to tell what's going to happen in Q3 with respect to that.
Kamil Mielczarek -- William Blair -- Analyst
OK. That's great. Thanks for the color.
Operator
Your next question comes from the line of Brent Thill from Jefferies. Your line is now open.
Parthiv Varadarajan -- Jefferies -- Analyst
Thanks. This is Parthiv, on for Brent. Oli, I wanted to ask about the Undefined acquisition. Can you help us frame the opportunity for observability in the application testing space? I guess how should we think about usage patterns in development environments relative to production environments?
Olivier Pomel -- Co-Founder and Chief Executive Officer
Yeah. So what's very interesting with Undefined is that they focused completely on what happens when developers test their own code first on their own machine and then to share Naxi ITD process until it ends up being deployed in production. So it's not an area where we've been present before. We haven't been typically used with developers on coding their own machine before they commit anything to share there.
So that's new for us. It allows us to be closer to the developer, closer to their code in many ways, and also allows us to really get extremely high flexibility information for what happened from the time the code is committed, all the way through the release of production. So very good change level that we see there. So we are super excited about it because it's a company that built a great product in a short amount of time.
And we are very excited about building a common product together. Right now, we're busy, the plan is to sunset the existing products and to rebuild the data platform to have it being maximally integrated. And the team is hard at work toward that right now.
Parthiv Varadarajan -- Jefferies -- Analyst
OK. Got it. Thank you.
Operator
Your next question comes from the line of Pat Walravens from JMP Sec. Your line is now open.
Pat Walravens -- JMP Securities -- Analyst
Thank you for getting me in. So, Oli, I'd like to ask you pretty much the same question I asked you last quarter, which was you've been doing this for 20 years, you've seen a number of sort of slowdowns in the economy, how does this one feel in comparison? And then just to remind you, last time, you said that the one thing you'd learned was that you don't really know where it's going until it's over. So do you still feel the same way? Or what have you learned?
Olivier Pomel -- Co-Founder and Chief Executive Officer
Yeah. I think, like the thing we knew last time, was that we wouldn't exactly know what would happen. We had some ideas, and some of the things we thought would happen did happen. Some others happened a little bit differently.
So when we thought about Q2 back in Q1, we thought we might see elevated churn. We thought we might see certain parts of our customer base being much more affected than others. And it's not exactly what happened. We actually didn't see the churn we're expecting to see.
But we saw a broader slowdown among a certain category of larger-scale customers. In retrospect, you can explain it easily. You understand the behavior. You see what's happening, and it makes sense.
I think collecting it before, that was the difficult part. So going back to where we are today, we're super confident about where we are, what the product is doing in the market, who our customers are adopting it, developing the various parts of it and are growing with it. The one thing we are a little bit more careful about is our understanding of what's going to happen over the next few quarters as the world navigates through the end of the pandemic, hopefully.
Pat Walravens -- JMP Securities -- Analyst
Great. Thank you very much.
Operator
Your next question comes from the line of Gregg Moskowitz from Mizuho. Your line is now open.
Gregg Moskowitz -- Mizuho Securities -- Analyst
Hey, thanks very much. Hi guys, and thanks for taking the questions. For Olivier, the increased level of cloud optimization among larger customers that you saw this quarter, do you think that this will have any impact on the pace of multi-cloud adoption going forward?
Olivier Pomel -- Co-Founder and Chief Executive Officer
I don't think so because when customers are adopting multi-cloud, like they typically have one cloud of scale now and a smaller one addition to that. So I think it is going to impact mostly their cloud of scale first. That's my guess and maybe what we've seen in some cases. But we'll see what happens.
Again, it's a little bit harder to tell, but that's my guess.
Gregg Moskowitz -- Mizuho Securities -- Analyst
OK. Thanks. And then just for David. Your growth in RPO on a year-over-year basis did decelerate quite a bit this quarter.
I think you said that your annual contract billing has remained strong and that you were coming up against some longer-duration contracts from a year ago. And I know you don't break out current RPO. Just wondering if you have any commentary on duration-adjusted RPO growth or just how we should be thinking about that.
David Obstler -- Chief Financial Officer
Yeah. You're exactly right. The RPO, the current RPO, is similar growth to the billings, much closer to the revenues in the 60s. The difference there is the timing of some multiyear contracts in the second quarter of last year.
So the billing period you see didn't change. The contract duration came down slightly just because those contracts are being consumed. And that's the reason why if we had a current RPO, it would be much more aligned with the billings and the revenue.
Gregg Moskowitz -- Mizuho Securities -- Analyst
OK. Very clear. Very helpful. Thank you.
David Obstler -- Chief Financial Officer
Yes.
Operator
And right now, I would like to turn it over to Mr. Olivier Pomel. Please continue.
Olivier Pomel -- Co-Founder and Chief Executive Officer
Thank you. All right. So to close this call, I'd like to repeat that we are very pleased with our execution in Q2 against what has been a challenging backdrop. And while the macro environment has presented near-term uncertainties, the situation has made more imperative than ever for businesses to be digital-first and in the cloud.
We believe Datadog is ideally positioned to be a primary beneficiary of this long term, and we continue to invest to capture that opportunity. I want to thank you all for attending the call.
Duration: 62 minutes
Call participants:
A.J. Ljubich -- Director of Investor Relations
Olivier Pomel -- Co-Founder and Chief Executive Officer
David Obstler -- Chief Financial Officer
Sanjit Singh -- Morgan Stanley -- Analyst
Chris Merwin -- Goldman Sachs -- Analyst
Sterling Auty -- J.P. Morgan -- Analyst
Ray McDonough -- Credit Suisse -- Analyst
Raimo Lenschow -- Barclays -- Analyst
Dan Bergstrom -- RBC Capital Markets -- Analyst
Brad Reback -- Stifel Financial Corp. -- Analyst
Jack Andrews -- Needham and Company -- Analyst
Kamil Mielczarek -- William Blair -- Analyst
Parthiv Varadarajan -- Jefferies -- Analyst
Pat Walravens -- JMP Securities -- Analyst
Gregg Moskowitz -- Mizuho Securities -- 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) Q2 2020 Earnings Call Aug 06, 2020, 5:00 p.m. Ljubich -- Director of Investor Relations Olivier Pomel -- Co-Founder and Chief Executive Officer David Obstler -- Chief Financial Officer Sanjit Singh -- Morgan Stanley -- Analyst Chris Merwin -- Goldman Sachs -- Analyst Sterling Auty -- J.P. Morgan -- Analyst Ray McDonough -- Credit Suisse -- Analyst Raimo Lenschow -- Barclays -- Analyst Dan Bergstrom -- RBC Capital Markets -- Analyst Brad Reback -- Stifel Financial Corp. -- Analyst Jack Andrews -- Needham and Company -- Analyst Kamil Mielczarek -- William Blair -- Analyst Parthiv Varadarajan -- Jefferies -- Analyst Pat Walravens -- JMP Securities -- Analyst Gregg Moskowitz -- Mizuho Securities -- 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 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 third quarter and for the full year of 2020; our strategy; the potential benefits for our products, R&D and go-to-market investments; expected capital expenditures; anticipated hiring; the size of and our ability to capitalize on our market opportunity; as well as the impact of the COVID-19 pandemic on our customers, their usage of our products, our market industry trends and our business and operating results.
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Ljubich -- Director of Investor Relations Olivier Pomel -- Co-Founder and Chief Executive Officer David Obstler -- Chief Financial Officer Sanjit Singh -- Morgan Stanley -- Analyst Chris Merwin -- Goldman Sachs -- Analyst Sterling Auty -- J.P. Morgan -- Analyst Ray McDonough -- Credit Suisse -- Analyst Raimo Lenschow -- Barclays -- Analyst Dan Bergstrom -- RBC Capital Markets -- Analyst Brad Reback -- Stifel Financial Corp. -- Analyst Jack Andrews -- Needham and Company -- Analyst Kamil Mielczarek -- William Blair -- Analyst Parthiv Varadarajan -- Jefferies -- Analyst Pat Walravens -- JMP Securities -- Analyst Gregg Moskowitz -- Mizuho Securities -- 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) Q2 2020 Earnings Call Aug 06, 2020, 5:00 p.m. During this call, we will make statements related to our business that are forward-looking under federal securities laws and 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 third quarter and for the full year of 2020; our strategy; the potential benefits for our products, R&D and go-to-market investments; expected capital expenditures; anticipated hiring; the size of and our ability to capitalize on our market opportunity; as well as the impact of the COVID-19 pandemic on our customers, their usage of our products, our market industry trends and our business and operating results.
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Ljubich -- Director of Investor Relations Olivier Pomel -- Co-Founder and Chief Executive Officer David Obstler -- Chief Financial Officer Sanjit Singh -- Morgan Stanley -- Analyst Chris Merwin -- Goldman Sachs -- Analyst Sterling Auty -- J.P. Morgan -- Analyst Ray McDonough -- Credit Suisse -- Analyst Raimo Lenschow -- Barclays -- Analyst Dan Bergstrom -- RBC Capital Markets -- Analyst Brad Reback -- Stifel Financial Corp. -- Analyst Jack Andrews -- Needham and Company -- Analyst Kamil Mielczarek -- William Blair -- Analyst Parthiv Varadarajan -- Jefferies -- Analyst Pat Walravens -- JMP Securities -- Analyst Gregg Moskowitz -- Mizuho Securities -- 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) Q2 2020 Earnings Call Aug 06, 2020, 5:00 p.m. During this call, we will make statements related to our business that are forward-looking under federal securities laws and 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 third quarter and for the full year of 2020; our strategy; the potential benefits for our products, R&D and go-to-market investments; expected capital expenditures; anticipated hiring; the size of and our ability to capitalize on our market opportunity; as well as the impact of the COVID-19 pandemic on our customers, their usage of our products, our market industry trends and our business and operating results.
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Ljubich -- Director of Investor Relations Olivier Pomel -- Co-Founder and Chief Executive Officer David Obstler -- Chief Financial Officer Sanjit Singh -- Morgan Stanley -- Analyst Chris Merwin -- Goldman Sachs -- Analyst Sterling Auty -- J.P. Morgan -- Analyst Ray McDonough -- Credit Suisse -- Analyst Raimo Lenschow -- Barclays -- Analyst Dan Bergstrom -- RBC Capital Markets -- Analyst Brad Reback -- Stifel Financial Corp. -- Analyst Jack Andrews -- Needham and Company -- Analyst Kamil Mielczarek -- William Blair -- Analyst Parthiv Varadarajan -- Jefferies -- Analyst Pat Walravens -- JMP Securities -- Analyst Gregg Moskowitz -- Mizuho Securities -- 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) Q2 2020 Earnings Call Aug 06, 2020, 5:00 p.m. What happened this quarter is that their growth slowed overall during the quarter.
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2020-08-07 00:00:00 UTC
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Technology Sector Update for 08/07/2020: TWLO,DDOG,GPRO,CNDT
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DDOG
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https://www.nasdaq.com/articles/technology-sector-update-for-08-07-2020%3A-twloddoggprocndt-2020-08-07
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Technology stocks weighed on the broader Friday markets, with the SPDR Technology Select Sector ETF losing 1.6% in value while the Philadelphia Semiconductor Index also was sinking 1.7% this afternoon.
In company news, Twilio (TWLO) was 5% lower in late Friday trading after the cloud communications company priced a $1.25 billion public offering of 5.06 million Class A common shares at $247 apiece, or 5.2% under Thursday's closing price. Net proceeds will fund general corporate purposes, including potential acquisitions, refinancing or repaying existing debt, working capital and stock buybacks.
GoPro (GPRO) dropped nearly 12% after the company reported a non-GAAP Q2 net loss per share of $0.20, reversing a $0.03 profit during the year-ago period and missing the Capital IQ consensus expecting a $0.16 loss for the the digital camera company, excluding one-time items.
Datadog (DDOG) tumbled over 16% after the analytics and monitoring company late Thursday announced its acquisition of privately held workflow testing and observability company Undefined Labs for an undisclosed amount, upstaging better-than-expected Q2 results and strong FY20 outlook. The deal is expected to expand DataDog's developer offerings, the company said.
Among gainers, Conduent (CNDT) surged more than 82% after the transaction analytics firm reported non-GAAP Q2 net income of $0.12 per share on $1.02 billion in revenue, exceeding estimates for a $0.05 loss on $925.50 million in revenue.
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) tumbled over 16% after the analytics and monitoring company late Thursday announced its acquisition of privately held workflow testing and observability company Undefined Labs for an undisclosed amount, upstaging better-than-expected Q2 results and strong FY20 outlook. Net proceeds will fund general corporate purposes, including potential acquisitions, refinancing or repaying existing debt, working capital and stock buybacks. GoPro (GPRO) dropped nearly 12% after the company reported a non-GAAP Q2 net loss per share of $0.20, reversing a $0.03 profit during the year-ago period and missing the Capital IQ consensus expecting a $0.16 loss for the the digital camera company, excluding one-time items.
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Datadog (DDOG) tumbled over 16% after the analytics and monitoring company late Thursday announced its acquisition of privately held workflow testing and observability company Undefined Labs for an undisclosed amount, upstaging better-than-expected Q2 results and strong FY20 outlook. In company news, Twilio (TWLO) was 5% lower in late Friday trading after the cloud communications company priced a $1.25 billion public offering of 5.06 million Class A common shares at $247 apiece, or 5.2% under Thursday's closing price. GoPro (GPRO) dropped nearly 12% after the company reported a non-GAAP Q2 net loss per share of $0.20, reversing a $0.03 profit during the year-ago period and missing the Capital IQ consensus expecting a $0.16 loss for the the digital camera company, excluding one-time items.
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Datadog (DDOG) tumbled over 16% after the analytics and monitoring company late Thursday announced its acquisition of privately held workflow testing and observability company Undefined Labs for an undisclosed amount, upstaging better-than-expected Q2 results and strong FY20 outlook. In company news, Twilio (TWLO) was 5% lower in late Friday trading after the cloud communications company priced a $1.25 billion public offering of 5.06 million Class A common shares at $247 apiece, or 5.2% under Thursday's closing price. GoPro (GPRO) dropped nearly 12% after the company reported a non-GAAP Q2 net loss per share of $0.20, reversing a $0.03 profit during the year-ago period and missing the Capital IQ consensus expecting a $0.16 loss for the the digital camera company, excluding one-time items.
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Datadog (DDOG) tumbled over 16% after the analytics and monitoring company late Thursday announced its acquisition of privately held workflow testing and observability company Undefined Labs for an undisclosed amount, upstaging better-than-expected Q2 results and strong FY20 outlook. Technology stocks weighed on the broader Friday markets, with the SPDR Technology Select Sector ETF losing 1.6% in value while the Philadelphia Semiconductor Index also was sinking 1.7% this afternoon. In company news, Twilio (TWLO) was 5% lower in late Friday trading after the cloud communications company priced a $1.25 billion public offering of 5.06 million Class A common shares at $247 apiece, or 5.2% under Thursday's closing price.
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6dec8165-755c-499a-b1d7-45d46a3bced9
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719015.0
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2020-08-07 00:00:00 UTC
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Technology Sector Update for 08/07/2020: DDOG,GPRO,CNDT
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DDOG
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https://www.nasdaq.com/articles/technology-sector-update-for-08-07-2020%3A-ddoggprocndt-2020-08-07
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nan
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nan
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Technology stocks continue to weigh on the broader Friday markets, with the SPDR Technology Select Sector ETF losing 1.9% while the Philadelphia Semiconductor Index fell1.9% this afternoon.
In company news, Datadog (DDOG) tumbled 16% after the analytics and monitoring company late Thursday announced its acquisition of privately held workflow testing and observability company Undefined Labs for an undisclosed amount, upstaging better-than-expected Q2 results and strong FY20 outlook. The deal is expected to expand DataDog's developer offerings, the company said.
GoPro (GPRO) dropped 10% after the company reported a non-GAAP Q2 net loss per share of $0.20, reversing a $0.03 profit during the year-ago period and missing the Capital IQ consensus expecting a $0.16 loss for the the digital camera company, excluding one-time items.
Among gainers, Conduent (CNDT) surged more than 74% after the transaction analytics firm reported non-GAAP Q2 net income of $0.12 per share on $1.02 billion in revenue, exceeding estimates for a $0.05 loss on $925.50 million in revenue.
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 company news, Datadog (DDOG) tumbled 16% after the analytics and monitoring company late Thursday announced its acquisition of privately held workflow testing and observability company Undefined Labs for an undisclosed amount, upstaging better-than-expected Q2 results and strong FY20 outlook. The deal is expected to expand DataDog's developer offerings, the company said. GoPro (GPRO) dropped 10% after the company reported a non-GAAP Q2 net loss per share of $0.20, reversing a $0.03 profit during the year-ago period and missing the Capital IQ consensus expecting a $0.16 loss for the the digital camera company, excluding one-time items.
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In company news, Datadog (DDOG) tumbled 16% after the analytics and monitoring company late Thursday announced its acquisition of privately held workflow testing and observability company Undefined Labs for an undisclosed amount, upstaging better-than-expected Q2 results and strong FY20 outlook. GoPro (GPRO) dropped 10% after the company reported a non-GAAP Q2 net loss per share of $0.20, reversing a $0.03 profit during the year-ago period and missing the Capital IQ consensus expecting a $0.16 loss for the the digital camera company, excluding one-time items. Among gainers, Conduent (CNDT) surged more than 74% after the transaction analytics firm reported non-GAAP Q2 net income of $0.12 per share on $1.02 billion in revenue, exceeding estimates for a $0.05 loss on $925.50 million in revenue.
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In company news, Datadog (DDOG) tumbled 16% after the analytics and monitoring company late Thursday announced its acquisition of privately held workflow testing and observability company Undefined Labs for an undisclosed amount, upstaging better-than-expected Q2 results and strong FY20 outlook. Technology stocks continue to weigh on the broader Friday markets, with the SPDR Technology Select Sector ETF losing 1.9% while the Philadelphia Semiconductor Index fell1.9% this afternoon. GoPro (GPRO) dropped 10% after the company reported a non-GAAP Q2 net loss per share of $0.20, reversing a $0.03 profit during the year-ago period and missing the Capital IQ consensus expecting a $0.16 loss for the the digital camera company, excluding one-time items.
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In company news, Datadog (DDOG) tumbled 16% after the analytics and monitoring company late Thursday announced its acquisition of privately held workflow testing and observability company Undefined Labs for an undisclosed amount, upstaging better-than-expected Q2 results and strong FY20 outlook. Technology stocks continue to weigh on the broader Friday markets, with the SPDR Technology Select Sector ETF losing 1.9% while the Philadelphia Semiconductor Index fell1.9% this afternoon. The deal is expected to expand DataDog's developer offerings, the company said.
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718046b4-1c5c-47f5-b90b-ab8747f6bccd
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719016.0
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2020-08-07 00:00:00 UTC
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Why Datadog Stock Was Slammed on Friday
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DDOG
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https://www.nasdaq.com/articles/why-datadog-stock-was-slammed-on-friday-2020-08-07
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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) tumbled on Friday, falling about 14% as of 12:15 p.m. EDT.
The growth stock's decline follows Datadog's second-quarter earnings release. While the company's second-quarter results were better than analysts were expecting, they weren't impressive enough to prevent some profit-taking on the stock after a huge run-up recently.
Image source: Getty Images.
So what
Datadog reported second-quarter revenue of $140 million, up 68% year over year. The company's non-GAAP (adjusted) earnings per share was $0.05, compared to an adjusted loss per share of $0.07 in the year-ago period.
Analysts, on average, were expecting revenue of $135.4 million and adjusted earnings per share of $0.01.
"Our growth at scale amid the global pandemic demonstrates Datadog's importance in enabling the digital operations of our customers," said Datadog co-founder and CEO Olivier Pomel in the company's second-quarter earnings release.
Despite how impressive these results seem on the surface, they apparently weren't enough to live up to the 150% rise the stock saw between the beginning of the year and the company's earnings report. Some investors appear to be taking some profits following the stock's massive rise.
Now what
Looking ahead, Datadog said it expects full-year revenue to be between $566 million and $572 million. Analysts were expecting revenue of $564 million.
"While the current macro environment has caused business pressures for our customers, we expect it to accelerate digital transformation and cloud migration over the long-term," Pomel said. "Datadog is very well positioned to be a primary beneficiary of these trends."
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
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) tumbled on Friday, falling about 14% as of 12:15 p.m. EDT. Despite how impressive these results seem on the surface, they apparently weren't enough to live up to the 150% rise the stock saw between the beginning of the year and the company's earnings report. "While the current macro environment has caused business pressures for our customers, we expect it to accelerate digital transformation and cloud migration over the long-term," Pomel said.
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What happened Shares of monitoring and analytics platform specialist Datadog (NASDAQ: DDOG) tumbled on Friday, falling about 14% as of 12:15 p.m. EDT. The growth stock's decline follows Datadog's second-quarter earnings release. So what Datadog reported second-quarter revenue of $140 million, up 68% year over year.
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What happened Shares of monitoring and analytics platform specialist Datadog (NASDAQ: DDOG) tumbled on Friday, falling about 14% as of 12:15 p.m. EDT. "Our growth at scale amid the global pandemic demonstrates Datadog's importance in enabling the digital operations of our customers," said Datadog co-founder and 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.
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What happened Shares of monitoring and analytics platform specialist Datadog (NASDAQ: DDOG) tumbled on Friday, falling about 14% as of 12:15 p.m. EDT. So what Datadog reported second-quarter revenue of $140 million, up 68% year over year. Analysts, on average, were expecting revenue of $135.4 million and adjusted earnings per share of $0.01.
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d721b453-5c69-49cf-acdf-baa62f4b9588
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719017.0
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2020-08-05 00:00:00 UTC
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3 of the Best Big Data Stocks to Buy
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DDOG
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https://www.nasdaq.com/articles/3-of-the-best-big-data-stocks-to-buy-2020-08-05
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nan
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nan
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
During the bull run of the past decade, technology stocks led many investment portfolios higher. Most technology stocks posted remarkable comebacks since hitting 52-week lows in the novel coronavirus sell-off. The technology sector encompasses many high-growth businesses and one area that gets considerable attention is big data.
According to recent research led by Zeki Simsek of Clemson University, there are three dimensions to big data, i.e., “volume (the magnitude of data), variety (structural heterogeneity in a data set), and velocity (the rate at which data are generated and speed at which they are analyzed and used).” The research further highlights that “Big data is becoming an increasingly important business in which various actors not only control the databases but also regulate the marketing, sales, and use of such data and analytical capabilities.”
Many analysts agree the big data space will play a key part in the continued tech revolution. In other words, the oil or gold rush of past centuries is being replaced with big data rush.
7 Growth Stocks to Ride for the Rest of 2020
Most of these companies focus on digital transformation and cloud migration. They work to make it easier for their customers to be found by their prospective clients. The Covid-19 pandemic is also helping accelerate the adoption of cloud-based tools.
With all that mind, here are three of the best big data stocks for long-term investors to buy:
Cloudera (NASDAQ:CLDR)
Datadog (NASDAQ:DDOG)
Splunk (NASDAQ:SPLK)
Big Data Stocks: Cloudera (CLDR)
Source: Shutterstock
Palo Alto, California-based Cloudera’s data platform and software allow clients to engineer and warehouse data, as well as to engage in machine learning and multi-function data analytics. Machine learning, for example, uses systems to perform tasks without explicit instructions. The company deals with Hadoop, a way of compressing and processing very large data sets.
Clients include the Bank of England, Lufthansa (OTCMKTS:DLAKY), Deutsche Telekom (OTCMKTS:DTEGY), Morgan Stanley (NYSE:MS), and Navistar (NYSE:NAV), and the U.S. Census Bureau. The increasing number of business partners can provide an important tailwind for CLDR stock.
On June 3, Cloudera reported its Q1 financial earnings. Total revenue came at $210.5 million, an increase of 12% year-over-year. The results showed subscription revenue of $187.1 million, a YoY increase of 21%. Furthermore, Cloudera’s annualized recurring revenue grew 11% YoY. As of April 30, Cloudera’s cash and cash equivalents totaled $518.7 million.
“We believe that remote working environments have placed heightened importance on data, data analysis and data security, which has increased the value of data architecture design and the criticality of hybrid cloud solutions,” CEO Rob Bearden said.”
Cloudera is expected to publish its Q2 results in the coming days. Year-to-date, the share price is down 3%. If you are looking for a enterprise data cloud company to invest in for the long-term, CLDR stock should be on your watchlist.
Datadog (DDOG)
Source: Shutterstock
Monitoring and security platform Datadog went public in September 2019. Since then, DDOG stock more than doubled. The company monitors cloud applications by analyzing vast amounts of data and monitoring servers so customers can maximize performance and improve user experience. Datadog offers real-time bird’s eye insight into the client’s entire technology stack.
Datadog’s current customers come from a wide range of industries. They include Activision Blizzard (NASDAQ:ATVI), Cargill, DraftKings (NASDAQ:DKNG), Harvard Medical School and Peloton (NASDAQ:PTON).
In early May, Datadog released Q1 results. Quarterly revenue grew 87% YoY to $131 million. As of March 31, it served 960 customers with annual recurring revenue of $100,000 or more, an increase of 89% from 508 as of March 31, 2019.
CEO Olivier Pomel said, “We are very pleased with our first quarter performance… We continue to deliver innovation to our customers, including the recent launch of our Security Monitoring product, as well as surpassing over 400 supported integrations.”
7 Growth Stocks to Ride for the Rest of 2020
Software-as-a-service company Datadog will report its second-quarter fiscal year 2020 financial results after the markets close on Aug. 6. For Q2, management is expecting revenue to be between $134 million and $136 million. Long-term investors may consider buying the dips in DDOG stock.
Splunk (SPLK)
Source: Michael Vi / Shutterstock.com
San Francisco, California-based Splunk’s software allows businesses to analyze and interact with machine-generated big data through a website style interface. The company uses a cloud-based annual subscription model.
Some of their high profile long-term clients include Airbus (OTCPK:EADSY), Domino’s Pizza (NYSE:DPZ) and Intel (NASDAQ:INTC). This year, it gained several high profile clients including Expedia (NASDAQ:EXPE), Mount Sinai Health System, Take-Two Interactive (NASDAQ:TTWO) and TD Ameritrade (NASDAQ:AMTD).
On May 21, Splunk released its Q1 earnings report. Total revenue was $434 million, representing a YoY increase of 2%. Cloud revenue was $112 million, up 81% YoY.
CEO Doug Merritt remarked, “COVID-19 has transformed the world into one that requires rapidly accelerated digital transformation to keep organizations moving – we are seeing some resilient customers complete three-to-five year projects in just months. As customers continue to adapt to this new normal, data matters more than ever, evidenced by our continued strong momentum this quarter.”
The group is expected to report Q2 earnings report in the coming days. YTD, SPLK stock is up over 40%. Any dip below $200 makes the share price a better buy for long-term investors. UBS currently has a target price of $228.
Tezcan Gecgil has worked in investment management for over two decades in the U.S. and U.K. In addition to formal higher education in the field, including a Ph.D. degree, she has also completed all 3 levels of the Chartered Market Technician (CMT) examination. Her passion is for options trading based on technical analysis of fundamentally strong companies. She especially enjoys setting up weekly covered calls for income generation. As of this writing, Tezcan Gecgil did not hold a position in any of the aforementioned securities.
The post 3 of the Best Big Data Stocks to Buy 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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With all that mind, here are three of the best big data stocks for long-term investors to buy: Cloudera (NASDAQ:CLDR) Datadog (NASDAQ:DDOG) Splunk (NASDAQ:SPLK) Big Data Stocks: Cloudera (CLDR) Source: Shutterstock Palo Alto, California-based Cloudera’s data platform and software allow clients to engineer and warehouse data, as well as to engage in machine learning and multi-function data analytics. Datadog (DDOG) Source: Shutterstock Monitoring and security platform Datadog went public in September 2019. Since then, DDOG stock more than doubled.
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With all that mind, here are three of the best big data stocks for long-term investors to buy: Cloudera (NASDAQ:CLDR) Datadog (NASDAQ:DDOG) Splunk (NASDAQ:SPLK) Big Data Stocks: Cloudera (CLDR) Source: Shutterstock Palo Alto, California-based Cloudera’s data platform and software allow clients to engineer and warehouse data, as well as to engage in machine learning and multi-function data analytics. Datadog (DDOG) Source: Shutterstock Monitoring and security platform Datadog went public in September 2019. Since then, DDOG stock more than doubled.
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With all that mind, here are three of the best big data stocks for long-term investors to buy: Cloudera (NASDAQ:CLDR) Datadog (NASDAQ:DDOG) Splunk (NASDAQ:SPLK) Big Data Stocks: Cloudera (CLDR) Source: Shutterstock Palo Alto, California-based Cloudera’s data platform and software allow clients to engineer and warehouse data, as well as to engage in machine learning and multi-function data analytics. Datadog (DDOG) Source: Shutterstock Monitoring and security platform Datadog went public in September 2019. Since then, DDOG stock more than doubled.
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With all that mind, here are three of the best big data stocks for long-term investors to buy: Cloudera (NASDAQ:CLDR) Datadog (NASDAQ:DDOG) Splunk (NASDAQ:SPLK) Big Data Stocks: Cloudera (CLDR) Source: Shutterstock Palo Alto, California-based Cloudera’s data platform and software allow clients to engineer and warehouse data, as well as to engage in machine learning and multi-function data analytics. Datadog (DDOG) Source: Shutterstock Monitoring and security platform Datadog went public in September 2019. Since then, DDOG stock more than doubled.
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9754a7ff-1a50-490c-a93d-a24268bd0c75
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719018.0
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2020-07-31 00:00:00 UTC
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This Datadog Competitor Has Doubled Since Last Year, but No One Is Talking About It
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DDOG
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https://www.nasdaq.com/articles/this-datadog-competitor-has-doubled-since-last-year-but-no-one-is-talking-about-it-2020-07
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nan
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nan
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Datadog (NASDAQ: DDOG) has been one of the breakout winners among cloud stocks this year. The software-as-a-service (SaaS) provider of an infrastructure monitoring and analytics platform has jumped about 140% this year and has more than tripled since its bottom during the market crash in March.
The stock surged after a blowout first-quarter earnings report that included revenue growth of 87% to $131 million, and the company saw its base of larger customers (those generating more than $100,000 in annual recurring revenue) nearly double from a year ago.
Image source: Getty Images.
While it's easy to see why investors would be excited about a cloud stock nearly doubling revenue, Datadog's valuation has gotten stretched after the recent rally as it trades at a steep price-to-sales ratio of about 50 based on this year's guidance, and the company is only expecting a minimal profit this year.
Investors looking for other options in the sector may want to consider one of Datadog's peers, Dynatrace (NYSE: DT), a cloud-based software intelligence provider, whose performance has nearly matched Datadog since that company's IPO last year.
DT data by YCharts.
Dynatrace isn't growing as fast as Datadog, but brings in more revenue, is solidly profitable, and is trading at a more reasonable price-to-sales ratio of less than 20 based on guidance for the year. It also has a forward P/E ratio of around 80.
What is Dynatrace?
Dynatrace's business is built around its AI-driven software intelligence platform. That platform provides real-time notifications and solutions to problems that arise across the software stack and the underlying multicloud infrastructure. These issues include application performanceand the experience of customers' end users.
The service, which is focused on enterprises generating more than $1 billion in annual revenue, helps ensure that mission-critical applications stay online. The company draws customers from a wide range of industries including banking, logistics, retail, and healthcare, and its customers include the likes of MGM, National Grid, and Santander.
Dynatrace's focus on large companies, including those in the Global 2000, limits the competition it faces because barriers to entry are higher when dealing with bigger companies. CEO John Van Siclen explained that the scale and complexity of a company's tech needs grow as they get bigger and requirements are more demanding. The company currently has 2,400 enterprise customers with the average one contributing $229,000 in annual recurring revenue. And it's targeting a pool of about 15,000 customers, since that's how many firms Van Siclen said have more than $1 billion in revenue.
As the digital transformation in business continues, demand for Dynatrace's services should steadily increase, and the company estimates its total addressable market to be worth $20 billion to $30 billion. In fact, the market for such software and infrastructure monitoring services is big enough that Van Siclen doesn't consider Datadog to be a direct competitor, saying the companies operate in different lanes, though Datadog is listed among its competitors in its prospectus.
In its first quarter, which ended in June, Dynatrace saw solid growth with reported revenue up 27%, or 30% on a constant currency basis, to $155.5 million, while annual recurring revenue jumped 37%, or 39% in constant currency, to $601.4 million. Nearly all of the company's revenue comes from subscriptions, generally in one- or three-year contracts, giving it a reliable revenue stream that can act as a buffer in a recession.
Operating expenses on a generally accepted accounting principles (GAAP) basis fell in the quarter largely due to lower share-based compensation, and the company finished with adjusted earnings per share of $0.13.
Management also raised its guidance for the year, calling for constant-currency revenue growth of 20% to 22%, to $646 million to $656 million, and adjusted earnings per share of $0.46 to $0.49.
What the future holds
Like much of the cloud sector, Dynatrace has demonstrated its resilience during the pandemic, and Van Siclen believes the crisis will accelerate the digital transformation and migration to more-advanced cloud technologies, supporting the company's long-term growth. Gartner estimates that enterprises will quadruple their use of application performance management (APM) from 2018 to 2021 to reach 20% of all business applications, and the IT research firm considers Dynatrace a leader in the APM category. As APM adoption grows, so will Dynatrace's market opportunity.
With solid revenue growth, a net expansion rate around 120%, a wide profit margin, gross margin at 85%, and an expected free cash flow margin around 30% this year, it's hard to find fault with Dynatrace. For investors looking for a reliable cloud stock with long-term growth potential, the software intelligence specialist looks like a good bet.
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 June 2, 2020
Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Datadog. The Motley Fool recommends Gartner and National Grid. 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) has been one of the breakout winners among cloud stocks this year. The software-as-a-service (SaaS) provider of an infrastructure monitoring and analytics platform has jumped about 140% this year and has more than tripled since its bottom during the market crash in March. Dynatrace isn't growing as fast as Datadog, but brings in more revenue, is solidly profitable, and is trading at a more reasonable price-to-sales ratio of less than 20 based on guidance for the year.
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Datadog (NASDAQ: DDOG) has been one of the breakout winners among cloud stocks this year. The stock surged after a blowout first-quarter earnings report that included revenue growth of 87% to $131 million, and the company saw its base of larger customers (those generating more than $100,000 in annual recurring revenue) nearly double from a year ago. In its first quarter, which ended in June, Dynatrace saw solid growth with reported revenue up 27%, or 30% on a constant currency basis, to $155.5 million, while annual recurring revenue jumped 37%, or 39% in constant currency, to $601.4 million.
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Datadog (NASDAQ: DDOG) has been one of the breakout winners among cloud stocks this year. The stock surged after a blowout first-quarter earnings report that included revenue growth of 87% to $131 million, and the company saw its base of larger customers (those generating more than $100,000 in annual recurring revenue) nearly double from a year ago. While it's easy to see why investors would be excited about a cloud stock nearly doubling revenue, Datadog's valuation has gotten stretched after the recent rally as it trades at a steep price-to-sales ratio of about 50 based on this year's guidance, and the company is only expecting a minimal profit this year.
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Datadog (NASDAQ: DDOG) has been one of the breakout winners among cloud stocks this year. Investors looking for other options in the sector may want to consider one of Datadog's peers, Dynatrace (NYSE: DT), a cloud-based software intelligence provider, whose performance has nearly matched Datadog since that company's IPO last year. Dynatrace isn't growing as fast as Datadog, but brings in more revenue, is solidly profitable, and is trading at a more reasonable price-to-sales ratio of less than 20 based on guidance for the year.
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fe7dcebe-dc77-4348-be78-4e7dc28119e3
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719019.0
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2020-07-30 00:00:00 UTC
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Notable Thursday Option Activity: DDOG, LITE, STRA
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DDOG
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https://www.nasdaq.com/articles/notable-thursday-option-activity%3A-ddog-lite-stra-2020-07-30
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nan
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nan
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Looking at options trading activity among components of the Russell 3000 index, there is noteworthy activity today in Datadog Inc (Symbol: DDOG), where a total volume of 17,001 contracts has been traded thus far today, a contract volume which is representative of approximately 1.7 million underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 50.2% of DDOG's average daily trading volume over the past month, of 3.4 million shares. Particularly high volume was seen for the $100 strike call option expiring August 07, 2020, with 1,587 contracts trading so far today, representing approximately 158,700 underlying shares of DDOG. Below is a chart showing DDOG's trailing twelve month trading history, with the $100 strike highlighted in orange:
Lumentum Holdings Inc (Symbol: LITE) options are showing a volume of 5,551 contracts thus far today. That number of contracts represents approximately 555,100 underlying shares, working out to a sizeable 49.2% of LITE's average daily trading volume over the past month, of 1.1 million shares. Especially high volume was seen for the $90 strike call option expiring September 18, 2020, with 1,332 contracts trading so far today, representing approximately 133,200 underlying shares of LITE. Below is a chart showing LITE's trailing twelve month trading history, with the $90 strike highlighted in orange:
And Strategic Education Inc (Symbol: STRA) saw options trading volume of 703 contracts, representing approximately 70,300 underlying shares or approximately 49% of STRA's average daily trading volume over the past month, of 143,530 shares. Particularly high volume was seen for the $125 strike call option expiring September 18, 2020, with 208 contracts trading so far today, representing approximately 20,800 underlying shares of STRA. Below is a chart showing STRA's trailing twelve month trading history, with the $125 strike highlighted in orange:
For the various different available expirations for DDOG options, LITE options, or STRA options, visit StockOptionsChannel.com.
Today's Most Active Call & Put Options of the S&P 500 »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Particularly high volume was seen for the $100 strike call option expiring August 07, 2020, with 1,587 contracts trading so far today, representing approximately 158,700 underlying shares of DDOG. Looking at options trading activity among components of the Russell 3000 index, there is noteworthy activity today in Datadog Inc (Symbol: DDOG), where a total volume of 17,001 contracts has been traded thus far today, a contract volume which is representative of approximately 1.7 million underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 50.2% of DDOG's average daily trading volume over the past month, of 3.4 million shares.
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Below is a chart showing DDOG's trailing twelve month trading history, with the $100 strike highlighted in orange: Lumentum Holdings Inc (Symbol: LITE) options are showing a volume of 5,551 contracts thus far today. Looking at options trading activity among components of the Russell 3000 index, there is noteworthy activity today in Datadog Inc (Symbol: DDOG), where a total volume of 17,001 contracts has been traded thus far today, a contract volume which is representative of approximately 1.7 million underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 50.2% of DDOG's average daily trading volume over the past month, of 3.4 million shares.
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Looking at options trading activity among components of the Russell 3000 index, there is noteworthy activity today in Datadog Inc (Symbol: DDOG), where a total volume of 17,001 contracts has been traded thus far today, a contract volume which is representative of approximately 1.7 million underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 50.2% of DDOG's average daily trading volume over the past month, of 3.4 million shares. Particularly high volume was seen for the $100 strike call option expiring August 07, 2020, with 1,587 contracts trading so far today, representing approximately 158,700 underlying shares of DDOG.
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Looking at options trading activity among components of the Russell 3000 index, there is noteworthy activity today in Datadog Inc (Symbol: DDOG), where a total volume of 17,001 contracts has been traded thus far today, a contract volume which is representative of approximately 1.7 million underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 50.2% of DDOG's average daily trading volume over the past month, of 3.4 million shares. Particularly high volume was seen for the $100 strike call option expiring August 07, 2020, with 1,587 contracts trading so far today, representing approximately 158,700 underlying shares of DDOG.
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49f7cccf-0001-453e-bb38-ffdabb386429
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719020.0
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2020-07-29 00:00:00 UTC
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Got $1,500 to Invest? Buy These 3 Tech Stocks Poised for Explosive Growth Over the Next Decade
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DDOG
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https://www.nasdaq.com/articles/got-%241500-to-invest-buy-these-3-tech-stocks-poised-for-explosive-growth-over-the-next
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nan
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nan
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While the S&P 500 is flat so far in 2020, the tech-heavy Nasdaq has trounced the returns of the broader market, gaining more than 17%. That isn't an anomaly, either. The Nasdaq has outperformed both the S&P 500 and the Dow Jones Industrial Average over the one-year, three-year, five-year, and 10-year periods. In fact, over the past decade, the Nasdaq has returned a whopping 359%, with the Dow Jones and S&P 500 returning just 153% and 191%, respectively.
This provides a pretty clear indication of why investors should include a number of technology stocks in their portfolios or risk missing out on better-than-average gains. With that in mind, let's look at three tech stocks that are poised for substantial growth over the coming decade.
Image source: Getty Images.
Datadog: A cloud-computing necessity
One of the consequences of the pandemic has been the accelerated shift to cloud computing. This has made it more critical than ever that companies keep their cloud-based systems up and running, as any critical issues can result in downtime that businesses can ill afford, particularly with the decentralization of IT departments.
That's where Datadog (NASDAQ: DDOG) comes in. The cloud-native data analytics platform provides a host of services for monitoring servers, databases, tools, and services. It not only notifies companies of problems as they occur, but it also provides useful analytics that can prevent the issue from recurring in the future.
Don't just take my word for it. Datadog was recognized as a visionary in application performance monitoring, according to research company Gartner. Forrester Research came to a similar conclusion, naming it an industry leader in the intelligent application and service monitoring space.
The strong demand for its services is evident in Datadog's first-quarter results as revenue grew 87% year over year, accelerating slightly from 85% in Q4. Even more telling, the company turned profitable for the first time, as it was able to leverage its increasing customer base to boost its bottom line. This also helped drive the stock's triple-digit gains so far this year.
The need to prevent downtime won't end when the pandemic is a distant memory, which will help drive Datadog's growth for years to come.
Image source: Getty Images.
Zoom: When face-to-face just won't do
More beneficiaries of the transition to remote work are video-conferencing services that allow teams to stay in touch without the need for in-person meetings that can lead to transmission of the coronavirus. Zoom Video Communications (NASDAQ: ZM) was there to heed the call, helping to make it one of the hottest stocks of 2020.
Many investors feared that the number of free accounts wouldn't translate into revenue growth, but nothing could be further from the truth. Zoom produced blockbuster results in its fiscal first quarter (which ended April 30), putting to bed any question about its future growth prospects. Revenue grew 169% year over year, while the customers contributing $100,000 in trailing-12-month revenue climbed 90%. Zoom continues to expand in the enterprise space, as the number of customers with more than 10 employees grew 354%. The company nearly doubled its full-year guidance as the result of its earnings report.
The future looks equally bright for Zoom. There's no end in sight for the pandemic, so many companies will continue to work remotely, at least for the foreseeable future, with robust demand from the company's video conferencing solutions. In addition, in mid-June, Zoom announced that it had earned the coveted U.S. Federal Risk and Authorization Management Program (FedRAMP) authorization, permitting its use by U.S. federal government departments and agencies.
These factors should help Zoom continue its impressive growth far into the future.
Image source: Getty Images.
Fastly: The name says it all
Filling out our trifecta of high-growth tech stocks is Fastly (NYSE: FSLY). The aptly named company uses a state-of-the-art content delivery network (CDN) to help clients achieve speedier response times and rapid loading of websites, photos, videos, apps, and more. This is accomplished with the help of its strategically placed data centers, which form a lightning-fast edge cloud platform.
With in-person transactions largely at a standstill, a company's digital presence is more important than ever before, and nothing will send potential customers running to a competitor faster than slow digital access or lagging content-delivery speeds. Streaming video, e-commerce, and online gaming providers were already experiencing robust adoption pre-pandemic and have all gotten a boost this year, largely the result of stay-at-home orders. These providers use Fastly to ensure their offerings don't suffer from extensive loading times.
Fastly's first-quarter results help highlight the opportunity. Revenue grew 38% year over year, while its non-GAAP losses declined by about 80%. At the same time, its base of enterprise customers grew 22% year over year, while existing customers spent 33% more than the same period last year.
The need for fast, secure, and scalable content delivery isn't going anywhere and will only increase as the complexity of the connections grows. Fastly's platform has already demonstrated the ability to handle hundreds of billions of internet requests a day.
Fastly generated $200 million in revenue last year and estimated its addressable market in the neighborhood of $36 billion. This shows that Fastly has only just begun to tap a large and growing opportunity, giving it plenty of room to run in the months and years ahead.
Data by YCharts.
A word on valuation
In keeping with the opportunity for ridiculous growth, these companies all fall squarely into the high-risk, high-reward category. As with many high-growth young companies, these highfliers are by no means cheap. Datadog, Zoom, and Fastly are selling at 46, 39, and 29 times forward sales, respectively -- when a good price-to-sales ratio is generally considered to be between 1 and 2. Additionally, while Datadog and Zoom have recently made the jump to profitability, Fastly is still incurring losses.
Still, if the results so far this year are any indicator, each of these technology companies appears poised for success.
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 June 2, 2020
Danny Vena owns shares of Datadog, Fastly, and Zoom Video Communications. The Motley Fool owns shares of and recommends Datadog, Fastly, and Zoom Video Communications. The Motley Fool recommends Gartner and recommends the following options: short August 2020 $130 calls on 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 where Datadog (NASDAQ: DDOG) comes in. Zoom: When face-to-face just won't do More beneficiaries of the transition to remote work are video-conferencing services that allow teams to stay in touch without the need for in-person meetings that can lead to transmission of the coronavirus. The aptly named company uses a state-of-the-art content delivery network (CDN) to help clients achieve speedier response times and rapid loading of websites, photos, videos, apps, and more.
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That's where Datadog (NASDAQ: DDOG) comes in. The strong demand for its services is evident in Datadog's first-quarter results as revenue grew 87% year over year, accelerating slightly from 85% in Q4. At the same time, its base of enterprise customers grew 22% year over year, while existing customers spent 33% more than the same period last year.
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That's where Datadog (NASDAQ: DDOG) comes in. At the same time, its base of enterprise customers grew 22% year over year, while existing customers spent 33% more than the same period last year. *Stock Advisor returns as of June 2, 2020 Danny Vena owns shares of Datadog, Fastly, and Zoom Video Communications.
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That's where Datadog (NASDAQ: DDOG) comes in. The need to prevent downtime won't end when the pandemic is a distant memory, which will help drive Datadog's growth for years to come. 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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10 Best Cloud Stocks to Buy for Rapid Growth
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Cloud computing – and thus investing in cloud stocks – is becoming more sophisticated by the year.
More than a decade ago, the "cloud" mostly was just basic infrastructure. Then it eventually became the platforms on which companies built applications and software used directly by workers.
But increasingly, applications are written for the cloud, that live entirely in the cloud, and/or even serve the cloud. Some companies – think Microsoft (MSFT) and its Office productivity suite – use cloud-based business models for older applications. Others assure that the speed and reliability of the cloud is maintained, from hyperscale data centers to phones, TVs and PCs.
This is a high-growth industry that's being bid up to the … well, clouds. Valuations are sky-high, and pullbacks across the space certainly are possible. But the technology has staying power; companies won't quickly ditch the benefits they're capturing from cloud apps after offices re-open, if they ditch them at all. Thus, many cloud stocks' opportunities should extend well into the future.
Here are 10 of the best cloud stocks to buy. While you might be able to jump in at better prices down the road, each of these companies represents a promising business that many analysts think has long-term legs.
SEE MORE Pros' Picks: The 15 Best Nasdaq Stocks You Can Buy
Data is as of July 27.
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Crowdstrike Holdings
Market value: $22.4 billion
Crowdstrike (CRWD, $103.60) illustrates how the cloud has transformed the computer security industry.
Crowdstrike provides "endpoint" security for PCs and other devices. Its Falcon platform includes 11 different modules for maintaining security against the most sophisticated attacks from state-based actors. Think of it as a Norton Security or McAfee for the cloud era.
Crowdstrike's approach has put CRWD on several analysts' lists of cloud stocks to buy.
It has caught the eye of Stifel's Gur Talpaz (Buy) because it has been able to double revenues each of the past four years – and could do so again this year, even amid the pandemic. Talpaz recently increased his 2021 revenue estimate to $761 million. "With heightened fragmentation across workloads, the opportunity to scale into arenas like cloud (virtual machines/containers), IoT, and mobile drastically increases the potential size of deployments," Talpaz writes.
Investors are willing to pay above analysts' price targets because it's "a clear winner in a winning sector," says Victoria Greene, founding partner at G Squared Private Wealth in College Station, Texas. With 25% to 30% of workers doing at least some work from home in 2021, against 2.6% before the virus, Greene said Crowdstrike can now sell company-wide deployments and upsell profitable consulting services.
First-quarter earnings handily beat analyst estimates, says Gregg Moskowitz (Buy), software research analyst at Mizuho Securities. The company added 830 customers during the quarter, and 45% of all customers have adopted CRWD's high-end Discover module, he said.
Brad Zelnick (Neutral), a managing director at Credit Suisse, writes that Crowdstrike's "cloud native security" approach will continue to displace vendors such as Symantec (SYMC), which produces Norton Security.
SEE MORE 14 Best Tech Stocks That Aren't on Your Radar
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DataDog
Market value: $26.3 billion
DataDog (DDOG, $87.83), like Crowdstrike, illustrates how the cloud is creating new opportunities in what seem like old niches. In this case, the niche is monitoring the performance of applications.
Splunk (SPLK) and Elastic (ESTC) pioneered this business in the 2000s. As with Crowdstrike, DataDog is gaining share because it's cloud-native. It works with applications and customers using Amazon.com's (AMZN) Amazon Web Services, Microsoft's Azure, the Google Cloud Platform, International Business Machines' (IBM) Red Hat OpenShift, and open-source OpenStack.
DataDog has been innovating faster than its competitors, writes investment advisor Nicholas Rossolillo of Spokane, Washington. The software was completely rewritten in 2017. And before going public in 2019, DataDog acquired log visualization company Logmatic, and testing platform Madumbo.
This has helped DDOG shares surge in 2020, with 132% gains and climbing.
In May, DataDog reported 87% year-over-year growth in first-quarter revenues and said the number of customers spending more than $100,000 apiece doubled to 960. DataDog now features 400 third-party integrations for software with security, program development and operations.
FBN Securities analyst Shebly Seyrafi (Outperform, equivalent of Buy) says DataDog is a "beneficiary of the movement of workloads to the cloud." Healthy average revenue per user (ARPU), pricing power and strong international revenue growth are all tailwinds for this cloud stock, he says.
SEE MORE 17 Wonderful Work-From-Home Stocks to Buy
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DocuSign
Market value: $36.0 billion
DocuSign (DOCU, $196.27) is among the more popular and well-known cloud stocks. This company provides the ability to electronically sign and manage financial documents, making other online applications much more powerful by eliminating the need for paper.
The company was founded in 2003 and spent its earliest years primarily serving the real estate industry. In addition to taking signatures, its technology maintains a record of where documents have gone and what was done with them.
Since then, DocuSign's usefulness has expanded rapidly, with most of the Fortune 500 now boasting the ability to use its software. Revenues exploded by 39% during the most recent quarter, with growth rolling on throughout the pandemic as working from home makes it more difficult to get physical signatures. DOCU's usefulness has sparked a nearly 165% rally so far in 2020.
Marina Vaamonde, founder of HouseCashin.com and a full-time investor, speaks to the utility of DocuSign's offering. "I can truly say that without DocuSign, my cost of doing business and liability would increase tremendously," she says, adding that its cloud-based solution "is set to capitalize on the current market conditions."
DocuSign revenues grew 39% in 2019, and growth is continuing in the pandemic, as the need for working at home makes it harder to get physical signatures. This has helped the stock to a 133% gain for the first half of 2020, though DOCU shares now trade at a wild 240 times forward-looking earnings estimates.
Despite its valuation, William Blair maintains an Outperform rating on shares. The firm's analysts hosted CEO Dan Springer at a recent investment conference, where he said the total addressable market for the company's service is now $50 billion, half of that in e-signatures. While international revenue grew 46% last year, they still represent just 18% of the total. The company now has teams in eight countries, pursuing legal requirements in civil law nation by nation.
Deutsche Bank's Taylor McGinnis (Buy) believes the company can continue to expand its sales at more than 30% each year. Even if workers return to offices, the convenience of e-documents should keep growth high.
SEE MORE The Best AI Stocks to Buy for 2021 and Beyond
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Fastly
Market value: $8.3 billion
Fastly (FSLY, $80.11) is a content delivery network that ensures sure files are streamed to users with minimal delay.
Akamai Technologies (AKAI) and Limelight Networks (LLNW) are among the companies that pioneered this market in the 1990s. Nowadays, Fastly operates entirely through Application Program Interface (API) software hosted in cloud data centers. By working in software, fast-growing customers can maintain a global footprint without having to invest in remote servers.
At Fastly's core is Varnish, an open-source web application accelerator that tracks the location of users, then makes certain they're connected to the nearest server with the data they need. This makes it especially valuable for companies hosting streams or video conferences. Paths can be set to expire at any time or be purged instantly. Users see less jitter on videos, while hosts save on server bills.
And the pandemic has made Fastly one of the best-performing work-from-home (WFH) stocks at roughly 300% gains in 2020.
Most of that gain came after Fastly's Q1 report in early May, when it announced 38% growth in sales to $63 million and said that 88% of trailing 12-month revenues came from large enterprise customers. These customers spend an average of $642,000 per year with the service. Among Fastly's big customers are Shopify (SHOP) and Spotify (SPOT). Thanks to the cloud, Fastly now has operations on every continent.
What's nice is that Fastly's software allows even smaller companies to create a global footprint. This is among several factors that have made the cloud stock a darling, writes D.A. Davidson analyst Rishi Jaluria (Buy).
Daniel Milan, managing partner of wealth manager Cornerstone Financial Services, says that while FSLY isn't profitable yet, it's well positioned for long-term growth. When Fastly customers such as Shopify sign alliances with companies like Walmart (WMT), Fastly benefits. "Over the next year, we suspect Fastly will be able to gain an even larger share of the vast content delivery network market, which will be worth an estimated $22 billion by 2024," Milan adds.
SEE MORE 11 Best E-Commerce Stocks for Electrifying Returns
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Microsoft
Market value: $1.54 trillion
Microsoft (MSFT, $203.85) offers a way for even the most conservative of investors to join the rush to cloud applications.
The company's decision in 2014 to commit to the cloud and make Satya Nadella its CEO has delivered shareholders a 36% average annual gain over the past five years. The dividend has risen 64%, from 31 cents per quarter to 51. Microsoft is now the second most-valuable company in the world, trailing only Apple (AAPL).
The secret to this is the Azure cloud, which represented most of its $16.9 billion capital budget in 2019. Of course, Microsoft has the financial wherewithal to do this – it boasted cash and short-term investments worth more than $137 billion at the end of March. It also grew revenues 13% year-over-year in the June quarter, to $38 billion, and earnings of $1.46 per share, while off YoY, were better than what analysts expected.
While Microsoft is usually seen as a software power, it's now one of the world's great telecommunications companies, in a way. Azure has data centers on every continent, including Africa, all linked by fiber cable. This capacity is managed to handle the local laws and regulations regarding use of customer data, creating an ever-higher barrier to entry for rivals.
Of the 29 analysts that have sounded off on MSFT over the past three months, 26 have the stock on their buy lists. Deutsche Bank's McGinnis (Buy) writes that Azure's business has become more durable during the pandemic in a note raising its 12-month price target on Microsoft stock to $215 per share.
Growth is also fueled by acquisitions, Cornerstone's Milan says. New acquisitions such as CyberX, a security company, deepen its push into new trends like the Internet of Things, in which all machines have networked intelligence built into them. Milan calls Microsoft "a sound retirement investment."
SEE MORE 5 EV Stocks Every Investor Should Know
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The Trade Desk
Market value: $19.9 billion
The Trade Desk (TTD, $432.16) is not a stock trading service, despite the fitting name. It's a cloud-based platform for managing digital ad buys – whether they display on PCs, phones or TVs – from all types of media companies. CEO Jeff Green is actually leading his second startup in the space; he previously sold AdECN to Microsoft in 2007. With The Trade Desk, Green has developed a platform that not only helps agencies book ad dollars but justify their spending to clients.
Success for an ad platform involves getting new partners whose ads it can sell. In addition to online inventory, TTD carries digital ad inventory for TV networks at ViacomCBS (VIAC), Fox (FOXA) and Discovery (DISCA). Digital sales channels such as TTD can also be used by streaming services like Roku (ROKU) and Apple TV.
This year, The Trade Desk also struck a partnership with Zalora, an Asian fashion shopping site, so brands selling there can measure the sales they generate on the site from ads, and how many of their visitors can be converted into buyers.
This integration of online and offline ad buying helps TTD compete with such rivals as Alphabet's (GOOGL) Google, Criteo (CRTO) and privately held MediaMath. It also mitigates the risk of buyers pulling away from social networks such as Facebook (FB) by giving them alternatives that can be evaluated the same way.
While companies have been pulling back on ad spend throughout the pandemic, TTD delivered a 33% gain in revenues during the March quarter.
TTD, up 66% year-to-date, is among the best cloud stocks in several analysts' eyes. It's considered a "top pick" at Needham, which raised its price target in June from $370 per share to $475. In May, Pivotal Research analyst Michael Levine called TTD a buy and raised his price target.
Rosenblatt Securities analyst Mark Zgutowic also raised his price target in May but maintained a Neutral rating on the stock, concerned about earnings visibility. That should improve, however, as programmatic advertising improved in May, according to The Trade Desk managers and market rivals.
Cornerstone's Milan expects advertising growth to slow in the second half of 2020. Still, he finds The Trade Desk well-positioned as "advertisers continue their march toward digital outlets. Like radio and print before it, traditional television is being disrupted by a new medium."
Also, unlike many high-growth tech companies, The Trade Desk is profitable, and it exited the first-quarter with a solid balance sheet including $446 million in cash and equivalents – more than its long-term debt and lease obligations.
SEE MORE 7 Top Robinhood Stocks: Do the Pros Agree?
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Twilio
Market value: $35.4 billion
Twilio (TWLO, $252.86) is a communications platform-as-a-service (CPaaS) business. That means it lets developers quickly add voice, text and other services to their apps through the cloud. And it's a red-hot business – one that saw TWLO's revenues shoot 75% higher in 2019, and 57% in Q1 2020.
Twilio, which went public in mid-2016, has seen its sales exploded four-fold since then, to $1.13 billion in 2019. The company now serves more than 190,000 organizations, from startups and nonprofits to governments and Fortune 500 companies. Twilio isn't profitable because it keeps plowing more money into growth, but investors still have driven TWLO shares 157% higher in 2020.
Chief Financial Officer Khozema Shipchandler, speaking at a recent William Blair conference, announced that the company had achieved HIPAA compliance for its technology, making it available to the health care community. Telemedicine has been taking off during the pandemic, and Shipchandler believes this business will remain after the pandemic is over.
He also said Flex, the company's cloud-based company contact center, is leading many business partners to leave old technologies for the cloud entirely. Pittsburgh, for instance, kept its 311 center running during the pandemic thanks to Twilio Flex.
Canaccord Genuity analyst Michael Walkley initiated TWLO at Buy at the end of May, saying that Twilio "has proven resilient" amid the pandemic. It has established itself as the leading CPaaS brand and is successfully aiming at large enterprises that were not previously using cloud computing. "Twilio has a long runway of growth," he concluded, even as digital engagement moves beyond the phone to channels like Facebook.
Before the pandemic, Walkley estimated that only 17% of 15 million contact center seats were in the cloud. Now he believes 50% could be by 2025, many of them built on Twilio Flex.
SEE MORE The Top Artificial Intelligence (AI) ETFs
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Zoom Video Communications
Market value: $71.2 billion
Zoom Video Communications (ZM, $252.33) is the poster child for what cloud applications can do for a portfolio, and one of the best cloud stocks of 2020. However, at the moment, it might also be signaling that the industry has entered a bubble phase.
It's sometimes seen as a danger signal when a company is worth 10 times its revenue. Zoom currently is trading at more than 87 times sales. The company, which went public in April 2019, has exploded by 600% from its IPO price of $36 per share. That includes a 270% performance in 2020 – a performance reminiscent of run-ups during the dot-com bubble.
That said, how many 9-year-old companies can say they're already a verb?
The pandemic has made Zoom a cultural touchstone. When people say they're joining a shared videoconference, they now say they're "going to a zoom" or even "zooming," even though videoconferencing has been around for more than a decade. The idea was pioneered by Cisco Systems (CSCO), which used expensive conferencing rooms. It also is available through Google and Microsoft as part of a larger offering. But it's Zoom people want, and Zoom they often they get.
Zoom CFO Tom McCallum discussed another opportunity at a recent William Blair conference: Zoom Phone, which can replace a company's business telephone system. While it hasn't done much marketing, Zoom Phone has closed deals for up to 18,000 seats during the first quarter. McCallum hopes to have it available in 50 countries by the end of 2020.
Stifel analyst Tom Roderick called the company's first-quarter numbers a "jaw dropper" but is concerned about the company's valuation. He too makes dot-com comparisons and says the good news is well priced into the stock. His PT of $180 per share seems like a distant memory at this point.
Cornerstone's Milan, like many others, says to buy ZM after it cools off. The company's full-year revenue guidance has been pushed to as much as $1.8 billion, and growth will continue into 2021.
"Companies want to get folks back into the office and schools long for the in-class experience, but there will now be a strong Zoom component to these businesses," Milan says.
SEE MORE 12 Splendid Small-Cap Growth Stocks to Buy
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zScaler
Market value: $16.3 billion
Zscaler (ZS, $124.87), like Crowdstrike, offers computer security in the cloud. It offers simple subscription pricing and can be set up in minutes. And the stock has been a winner, with nearly 170% gains so far in 2020. Revenues are expected to grow by one-third in 2020, to $390 million.
"From a technology perspective the company's differentiated data center approach (150 data centers around the world) and pure cloud architecture gives it a unique advantage on this IT pain point vs. competitors according to a number of our conversations in the field," write Wedbush analysts Daniel Ives and Strecker Backe, who rate the stock at Outperform.
"Based on our recent checks in the field for the July quarter, we continue to believe Zscaler's deal flow is holding up extremely well in this COVID-19 pandemic environment as the company's DNA plays right into the Remote access/work from home cloud theme serving a major need given the lockdowns globally."
Credit Suisse analysts said the cloud stock's most recent results were $15 million stronger than they expected. Adjusted billings are now growing at 55% per year, against 30% previously. The shift to working from home "was an ideal use case" for protection beyond the corporate network. They now expect fiscal 2021 revenues of $676 million.
SEE MORE 50 Top Stocks That Billionaires Love
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Global X Cloud Computing ETF
Market value: $993.7 million
Expenses: 0.68%, or $68 annually for every $10,000 invested
If you want to jump into cloud stocks but don't want to pick just one or two companies can leverage the industry via exchange-traded funds.
The Global X Cloud Computing ETF's (CLOU, $22.18) 36 holdings include most of the companies mentioned on this list, and plenty more besides – Shopify, Coupa Software (COUP) and Workday (WDAY) are among other top 10 holdings. While the gains haven't been as stellar as some of the highest-performing stocks on this list, its 40% year-to-date gains are clobbering S&P 500 and even the tech-heavy Nasdaq.
CLOU invests in businesses such as software-as-a-service (SaaS), platform-as-a-service (PaaS) and infrastructure-as-a-service (IaaS), cloud computing infrastructure companies, even data center real estate investment trusts (REITs).
Global X Cloud Computing ETF is a young fund that launched in April 2019, so it doesn't have much history to lean on. It's also on the pricey side at 68 basis points in annual expenses. Still, CLOU puts this expanding technology into your portfolio with instant diversification, making it easy for investors who want to simply set it and forget it.
SEE MORE 20 Best Stocks to Buy for the Next Bull Market
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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SEE MORE 14 Best Tech Stocks That Aren't on Your Radar Getty Images DataDog Market value: $26.3 billion DataDog (DDOG, $87.83), like Crowdstrike, illustrates how the cloud is creating new opportunities in what seem like old niches. This has helped DDOG shares surge in 2020, with 132% gains and climbing. It works with applications and customers using Amazon.com's (AMZN) Amazon Web Services, Microsoft's Azure, the Google Cloud Platform, International Business Machines' (IBM) Red Hat OpenShift, and open-source OpenStack.
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SEE MORE 14 Best Tech Stocks That Aren't on Your Radar Getty Images DataDog Market value: $26.3 billion DataDog (DDOG, $87.83), like Crowdstrike, illustrates how the cloud is creating new opportunities in what seem like old niches. This has helped DDOG shares surge in 2020, with 132% gains and climbing. It works with applications and customers using Amazon.com's (AMZN) Amazon Web Services, Microsoft's Azure, the Google Cloud Platform, International Business Machines' (IBM) Red Hat OpenShift, and open-source OpenStack.
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SEE MORE 14 Best Tech Stocks That Aren't on Your Radar Getty Images DataDog Market value: $26.3 billion DataDog (DDOG, $87.83), like Crowdstrike, illustrates how the cloud is creating new opportunities in what seem like old niches. This has helped DDOG shares surge in 2020, with 132% gains and climbing. SEE MORE 17 Wonderful Work-From-Home Stocks to Buy Getty Images DocuSign Market value: $36.0 billion DocuSign (DOCU, $196.27) is among the more popular and well-known cloud stocks.
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SEE MORE 14 Best Tech Stocks That Aren't on Your Radar Getty Images DataDog Market value: $26.3 billion DataDog (DDOG, $87.83), like Crowdstrike, illustrates how the cloud is creating new opportunities in what seem like old niches. This has helped DDOG shares surge in 2020, with 132% gains and climbing. Cloud computing – and thus investing in cloud stocks – is becoming more sophisticated by the year.
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2020-07-27 00:00:00 UTC
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BUZZ-U.S. STOCKS ON THE MOVE-Diffusion Pharma, Black Knight, Diana Shipping
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DDOG
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https://www.nasdaq.com/articles/buzz-u.s.-stocks-on-the-move-diffusion-pharma-black-knight-diana-shipping-2020-07-27
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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 gained on Monday as investors looked past surging U.S. COVID-19 cases, betting instead on more stimulus to revive a battered domestic economy ahead of a week packed with quarterly earnings reports. .N
At 13.00 ET, the Dow Jones Industrial Average .DJI was up 0.32% at 26,554.41. The S&P 500 .SPX was up 0.46% at 3,230.45 and the Nasdaq Composite .IXIC was up 1.11% at 10,478.487. The top three S&P 500 .PG.INX percentage gainers: ** Alexion Pharmaceuticals Inc , up 5.6% ** KLA Corp , up 4.9% ** Biogen Inc , up 4.3% The top three S&P 500 .PL.INX percentage losers: ** Hasbro Inc , down 7.8% ** Carnival Corp , down 6.8% ** Norwegian Cruise Line Holdings Ltd , down 6.7% The top three NYSE .PG.N percentage gainers: ** Sogou Inc , up 47.7% ** Amira Nature Foods Ltd , up 30.1% ** CNX Midstream Partners LP , up 25.3% The top three NYSE .PL.N percentage losers: ** Ambow Education Holding Ltd , down 21.8% ** Indonesa Energy Corporation Ltd , down 15.7% ** Ibio Inc , down 13.4% The top three Nasdaq .PG.O percentage gainers: ** Wilhelmina International Inc , up 216.6% ** Socket Moble Inc , up 103.4% ** MediciNova Inc , up 98.6% The top three Nasdaq .PL.O percentage losers: ** WiMi Hologram Cloud Inc , down 34.6% ** Tridnt Acquisitions Corp , down 28.3% ** Sequential Brands Group Inc , down 22.2% ** Verizon Communications Inc VZ.N: up 0.1%
BUZZ-Street View: Verizon's long-term strategy intact despite 5G competition ** American Express Co AXP.N: up 0.1%
BUZZ-Street View: AmEx comeback hinges on travel, entertainment recovery ** Qualcomm Inc QCOM.O: up 3.0%
BUZZ-JP Morgan raises PT on upside from 5G phone shipments ** Hasbro Inc HAS.O: down 7.8%
BUZZ-Q2 results miss due to store closures, product shortages ** MediciNova Inc MNOV.O: up 98.6%
BUZZ-Rises on deal to develop COVID-19 vaccine ** Barrick Gold GOLD.N: up 4.5% ** Newmont Corp NEM.N: up 2.3%
BUZZ-U.S.-listed gold miners rise as bullion skyrockets ** dMY Technology Inc DMYT.N: up 4.4%
BUZZ-Jumps on SPAC deal to take Rush Street Interactive public -
** CNX Midstream Partners LP CNXM.N: up 25.3%
BUZZ-Surges on buyout deal with CNX Resources ** Can-Fite BioPharma CANF.N: up 6.7%
BUZZ-Rises as co seeks FDA nod to test COVID-19 drug candidate ** ON Semiconductor Corp ON.O: up 2.9%
BUZZ-Needham raises PT on automotive market recovery ** Ocugen Inc OCGN.O: up 48.3%
BUZZ-Rises on orphan drug status for eye disorder drug ** ServiceNow Inc NOW.N: up 2.4%
BUZZ-Brokerage Needham raises PT on potential from rapid digital shift ** Lincoln Electric Holdings Inc LECO.O: up 1.1%
BUZZ-Rises as cost-cutting powers Q2 beat ** PDS Biotechnology Corp PDSB.O: up 6.1%
BUZZ-Rises as preclinical COVID-19 vaccine trial shows promise ** Lemonade Inc LMND.O: down 7.1%
BUZZ-Leaks as Goldman initiates with "sell" on risk profile ** Onconova Therapeutics Inc ONTX.O: up 7.2%
BUZZ-Rises on seeking NIH funding to study cancer drug in COVID-19 patients ** Archer Daniels Midland Co ADM.N: down 0.4% BUZZ-Credit Suisse cuts PT of ADM, Bunge on weak industry fundamentals ** Emergent Biosolutions Inc EBS.N: up 3.5%
BUZZ-Up on COVID-19 vaccine manufacture deal with AstraZeneca ** Sogou Inc SOGO.N: up 47.5%
BUZZ-Jumps on take-private offer from Tencent ** EQT Corp EQT.N: down 3.9%
BUZZ-Drops on second-quarter loss, lower revenue ** Koppers Holdings KOP.N: up 18.4%
BUZZ-Rises on upbeat prelim Q2 results ** Moderna MRNA.O: up 8.3%
BUZZ-Jumps on start of late-stage trial of potential COVID-19 vaccine ** Walgreens Boots Alliance Inc WBA.O: down 1.3%
BUZZ-Slides after CEO decides to step down ** Professional Diversity Network Inc IPDN.O: down 29.0%
BUZZ-Slumps on pricing stock offering at discount ** Datadog Inc DDOG.O: up 3.3%
BUZZ-Needham hikes PT on growth prospects ** Spotify Technology SA SPOT.N: up 0.7%
BUZZ-Stifel raises PT on strong podcast outlook ** Dun & Bradstreet Inc DNB.N: down 2.5%
BUZZ-Most analysts bullish on turnaround story as IPO quiet period ends ** Diffusion Pharma DFFN.O: down 12.9%
BUZZ-Falls on COVID-19 drug trial delay ** Black Knight Inc BKI.N: up 1.9%
BUZZ-Rises as co set to acquire Optimal Blue ** Diana Shipping DSX.N: down 2.1%
BUZZ-Drops on wider quarterly loss
The 11 major S&P 500 sectors:
Communication Services
.SPLRCL
up 0.51%
Consumer Discretionary
.SPLRCD
up 0.68%
Consumer Staples
.SPLRCS
up 0.23%
Energy
.SPNY
down 0.65%
Financial
.SPSY
down 0.79%
Health
.SPXHC
up 0.66%
Industrial
.SPLRCI
up 0.25%
Information Technology
.SPLRCT
up 1.28%
Materials
.SPLRCM
up 1.04%
Real Estate
.SPLRCR
up 0.47%
Utilities
.SPLRCU
down 1.34%
(Compiled by Shivani Kumaresan in Bengaluru)
((Shivani.Kumaresan@thomsonreuters.com ; +1 646 223 8780))
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: ** Alexion Pharmaceuticals Inc , up 5.6% ** KLA Corp , up 4.9% ** Biogen Inc , up 4.3% The top three S&P 500 .PL.INX percentage losers: ** Hasbro Inc , down 7.8% ** Carnival Corp , down 6.8% ** Norwegian Cruise Line Holdings Ltd , down 6.7% The top three NYSE .PG.N percentage gainers: ** Sogou Inc , up 47.7% ** Amira Nature Foods Ltd , up 30.1% ** CNX Midstream Partners LP , up 25.3% The top three NYSE .PL.N percentage losers: ** Ambow Education Holding Ltd , down 21.8% ** Indonesa Energy Corporation Ltd , down 15.7% ** Ibio Inc , down 13.4% The top three Nasdaq .PG.O percentage gainers: ** Wilhelmina International Inc , up 216.6% ** Socket Moble Inc , up 103.4% ** MediciNova Inc , up 98.6% The top three Nasdaq .PL.O percentage losers: ** WiMi Hologram Cloud Inc , down 34.6% ** Tridnt Acquisitions Corp , down 28.3% ** Sequential Brands Group Inc , down 22.2% ** Verizon Communications Inc VZ.N: up 0.1% BUZZ-Street View: Verizon's long-term strategy intact despite 5G competition ** American Express Co AXP.N: up 0.1% BUZZ-Street View: AmEx comeback hinges on travel, entertainment recovery ** Qualcomm Inc QCOM.O: up 3.0% BUZZ-JP Morgan raises PT on upside from 5G phone shipments ** Hasbro Inc HAS.O: down 7.8% BUZZ-Q2 results miss due to store closures, product shortages ** MediciNova Inc MNOV.O: up 98.6% BUZZ-Rises on deal to develop COVID-19 vaccine ** Barrick Gold GOLD.N: up 4.5% ** Newmont Corp NEM.N: up 2.3% BUZZ-U.S.-listed gold miners rise as bullion skyrockets ** dMY Technology Inc DMYT.N: up 4.4% BUZZ-Jumps on SPAC deal to take Rush Street Interactive public - ** CNX Midstream Partners LP CNXM.N: up 25.3% BUZZ-Surges on buyout deal with CNX Resources ** Can-Fite BioPharma CANF.N: up 6.7% BUZZ-Rises as co seeks FDA nod to test COVID-19 drug candidate ** ON Semiconductor Corp ON.O: up 2.9% BUZZ-Needham raises PT on automotive market recovery ** Ocugen Inc OCGN.O: up 48.3% BUZZ-Rises on orphan drug status for eye disorder drug ** ServiceNow Inc NOW.N: up 2.4% BUZZ-Brokerage Needham raises PT on potential from rapid digital shift ** Lincoln Electric Holdings Inc LECO.O: up 1.1% BUZZ-Rises as cost-cutting powers Q2 beat ** PDS Biotechnology Corp PDSB.O: up 6.1% BUZZ-Rises as preclinical COVID-19 vaccine trial shows promise ** Lemonade Inc LMND.O: down 7.1% BUZZ-Leaks as Goldman initiates with "sell" on risk profile ** Onconova Therapeutics Inc ONTX.O: up 7.2% BUZZ-Rises on seeking NIH funding to study cancer drug in COVID-19 patients ** Archer Daniels Midland Co ADM.N: down 0.4% BUZZ-Credit Suisse cuts PT of ADM, Bunge on weak industry fundamentals ** Emergent Biosolutions Inc EBS.N: up 3.5% BUZZ-Up on COVID-19 vaccine manufacture deal with AstraZeneca ** Sogou Inc SOGO.N: up 47.5% BUZZ-Jumps on take-private offer from Tencent ** EQT Corp EQT.N: down 3.9% BUZZ-Drops on second-quarter loss, lower revenue ** Koppers Holdings KOP.N: up 18.4% BUZZ-Rises on upbeat prelim Q2 results ** Moderna MRNA.O: up 8.3% BUZZ-Jumps on start of late-stage trial of potential COVID-19 vaccine ** Walgreens Boots Alliance Inc WBA.O: down 1.3% BUZZ-Slides after CEO decides to step down ** Professional Diversity Network Inc IPDN.O: down 29.0% BUZZ-Slumps on pricing stock offering at discount ** Datadog Inc DDOG.O: up 3.3% BUZZ-Needham hikes PT on growth prospects ** Spotify Technology SA SPOT.N: up 0.7% BUZZ-Stifel raises PT on strong podcast outlook ** Dun & Bradstreet Inc DNB.N: down 2.5% BUZZ-Most analysts bullish on turnaround story as IPO quiet period ends ** Diffusion Pharma DFFN.O: down 12.9% BUZZ-Falls on COVID-19 drug trial delay ** Black Knight Inc BKI.N: up 1.9% BUZZ-Rises as co set to acquire Optimal Blue ** Diana Shipping DSX.N: down 2.1% BUZZ-Drops on wider quarterly loss 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 gained on Monday as investors looked past surging U.S. COVID-19 cases, betting instead on more stimulus to revive a battered domestic economy ahead of a week packed with quarterly earnings reports. down 1.34% (Compiled by Shivani Kumaresan in Bengaluru) ((Shivani.Kumaresan@thomsonreuters.com ; +1 646 223 8780)) 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: ** Alexion Pharmaceuticals Inc , up 5.6% ** KLA Corp , up 4.9% ** Biogen Inc , up 4.3% The top three S&P 500 .PL.INX percentage losers: ** Hasbro Inc , down 7.8% ** Carnival Corp , down 6.8% ** Norwegian Cruise Line Holdings Ltd , down 6.7% The top three NYSE .PG.N percentage gainers: ** Sogou Inc , up 47.7% ** Amira Nature Foods Ltd , up 30.1% ** CNX Midstream Partners LP , up 25.3% The top three NYSE .PL.N percentage losers: ** Ambow Education Holding Ltd , down 21.8% ** Indonesa Energy Corporation Ltd , down 15.7% ** Ibio Inc , down 13.4% The top three Nasdaq .PG.O percentage gainers: ** Wilhelmina International Inc , up 216.6% ** Socket Moble Inc , up 103.4% ** MediciNova Inc , up 98.6% The top three Nasdaq .PL.O percentage losers: ** WiMi Hologram Cloud Inc , down 34.6% ** Tridnt Acquisitions Corp , down 28.3% ** Sequential Brands Group Inc , down 22.2% ** Verizon Communications Inc VZ.N: up 0.1% BUZZ-Street View: Verizon's long-term strategy intact despite 5G competition ** American Express Co AXP.N: up 0.1% BUZZ-Street View: AmEx comeback hinges on travel, entertainment recovery ** Qualcomm Inc QCOM.O: up 3.0% BUZZ-JP Morgan raises PT on upside from 5G phone shipments ** Hasbro Inc HAS.O: down 7.8% BUZZ-Q2 results miss due to store closures, product shortages ** MediciNova Inc MNOV.O: up 98.6% BUZZ-Rises on deal to develop COVID-19 vaccine ** Barrick Gold GOLD.N: up 4.5% ** Newmont Corp NEM.N: up 2.3% BUZZ-U.S.-listed gold miners rise as bullion skyrockets ** dMY Technology Inc DMYT.N: up 4.4% BUZZ-Jumps on SPAC deal to take Rush Street Interactive public - ** CNX Midstream Partners LP CNXM.N: up 25.3% BUZZ-Surges on buyout deal with CNX Resources ** Can-Fite BioPharma CANF.N: up 6.7% BUZZ-Rises as co seeks FDA nod to test COVID-19 drug candidate ** ON Semiconductor Corp ON.O: up 2.9% BUZZ-Needham raises PT on automotive market recovery ** Ocugen Inc OCGN.O: up 48.3% BUZZ-Rises on orphan drug status for eye disorder drug ** ServiceNow Inc NOW.N: up 2.4% BUZZ-Brokerage Needham raises PT on potential from rapid digital shift ** Lincoln Electric Holdings Inc LECO.O: up 1.1% BUZZ-Rises as cost-cutting powers Q2 beat ** PDS Biotechnology Corp PDSB.O: up 6.1% BUZZ-Rises as preclinical COVID-19 vaccine trial shows promise ** Lemonade Inc LMND.O: down 7.1% BUZZ-Leaks as Goldman initiates with "sell" on risk profile ** Onconova Therapeutics Inc ONTX.O: up 7.2% BUZZ-Rises on seeking NIH funding to study cancer drug in COVID-19 patients ** Archer Daniels Midland Co ADM.N: down 0.4% BUZZ-Credit Suisse cuts PT of ADM, Bunge on weak industry fundamentals ** Emergent Biosolutions Inc EBS.N: up 3.5% BUZZ-Up on COVID-19 vaccine manufacture deal with AstraZeneca ** Sogou Inc SOGO.N: up 47.5% BUZZ-Jumps on take-private offer from Tencent ** EQT Corp EQT.N: down 3.9% BUZZ-Drops on second-quarter loss, lower revenue ** Koppers Holdings KOP.N: up 18.4% BUZZ-Rises on upbeat prelim Q2 results ** Moderna MRNA.O: up 8.3% BUZZ-Jumps on start of late-stage trial of potential COVID-19 vaccine ** Walgreens Boots Alliance Inc WBA.O: down 1.3% BUZZ-Slides after CEO decides to step down ** Professional Diversity Network Inc IPDN.O: down 29.0% BUZZ-Slumps on pricing stock offering at discount ** Datadog Inc DDOG.O: up 3.3% BUZZ-Needham hikes PT on growth prospects ** Spotify Technology SA SPOT.N: up 0.7% BUZZ-Stifel raises PT on strong podcast outlook ** Dun & Bradstreet Inc DNB.N: down 2.5% BUZZ-Most analysts bullish on turnaround story as IPO quiet period ends ** Diffusion Pharma DFFN.O: down 12.9% BUZZ-Falls on COVID-19 drug trial delay ** Black Knight Inc BKI.N: up 1.9% BUZZ-Rises as co set to acquire Optimal Blue ** Diana Shipping DSX.N: down 2.1% BUZZ-Drops on wider quarterly loss 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 gained on Monday as investors looked past surging U.S. COVID-19 cases, betting instead on more stimulus to revive a battered domestic economy ahead of a week packed with quarterly earnings reports. down 1.34% (Compiled by Shivani Kumaresan in Bengaluru) ((Shivani.Kumaresan@thomsonreuters.com ; +1 646 223 8780)) 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 , up 5.6% ** KLA Corp , up 4.9% ** Biogen Inc , up 4.3% The top three S&P 500 .PL.INX percentage losers: ** Hasbro Inc , down 7.8% ** Carnival Corp , down 6.8% ** Norwegian Cruise Line Holdings Ltd , down 6.7% The top three NYSE .PG.N percentage gainers: ** Sogou Inc , up 47.7% ** Amira Nature Foods Ltd , up 30.1% ** CNX Midstream Partners LP , up 25.3% The top three NYSE .PL.N percentage losers: ** Ambow Education Holding Ltd , down 21.8% ** Indonesa Energy Corporation Ltd , down 15.7% ** Ibio Inc , down 13.4% The top three Nasdaq .PG.O percentage gainers: ** Wilhelmina International Inc , up 216.6% ** Socket Moble Inc , up 103.4% ** MediciNova Inc , up 98.6% The top three Nasdaq .PL.O percentage losers: ** WiMi Hologram Cloud Inc , down 34.6% ** Tridnt Acquisitions Corp , down 28.3% ** Sequential Brands Group Inc , down 22.2% ** Verizon Communications Inc VZ.N: up 0.1% BUZZ-Street View: Verizon's long-term strategy intact despite 5G competition ** American Express Co AXP.N: up 0.1% BUZZ-Street View: AmEx comeback hinges on travel, entertainment recovery ** Qualcomm Inc QCOM.O: up 3.0% BUZZ-JP Morgan raises PT on upside from 5G phone shipments ** Hasbro Inc HAS.O: down 7.8% BUZZ-Q2 results miss due to store closures, product shortages ** MediciNova Inc MNOV.O: up 98.6% BUZZ-Rises on deal to develop COVID-19 vaccine ** Barrick Gold GOLD.N: up 4.5% ** Newmont Corp NEM.N: up 2.3% BUZZ-U.S.-listed gold miners rise as bullion skyrockets ** dMY Technology Inc DMYT.N: up 4.4% BUZZ-Jumps on SPAC deal to take Rush Street Interactive public - ** CNX Midstream Partners LP CNXM.N: up 25.3% BUZZ-Surges on buyout deal with CNX Resources ** Can-Fite BioPharma CANF.N: up 6.7% BUZZ-Rises as co seeks FDA nod to test COVID-19 drug candidate ** ON Semiconductor Corp ON.O: up 2.9% BUZZ-Needham raises PT on automotive market recovery ** Ocugen Inc OCGN.O: up 48.3% BUZZ-Rises on orphan drug status for eye disorder drug ** ServiceNow Inc NOW.N: up 2.4% BUZZ-Brokerage Needham raises PT on potential from rapid digital shift ** Lincoln Electric Holdings Inc LECO.O: up 1.1% BUZZ-Rises as cost-cutting powers Q2 beat ** PDS Biotechnology Corp PDSB.O: up 6.1% BUZZ-Rises as preclinical COVID-19 vaccine trial shows promise ** Lemonade Inc LMND.O: down 7.1% BUZZ-Leaks as Goldman initiates with "sell" on risk profile ** Onconova Therapeutics Inc ONTX.O: up 7.2% BUZZ-Rises on seeking NIH funding to study cancer drug in COVID-19 patients ** Archer Daniels Midland Co ADM.N: down 0.4% BUZZ-Credit Suisse cuts PT of ADM, Bunge on weak industry fundamentals ** Emergent Biosolutions Inc EBS.N: up 3.5% BUZZ-Up on COVID-19 vaccine manufacture deal with AstraZeneca ** Sogou Inc SOGO.N: up 47.5% BUZZ-Jumps on take-private offer from Tencent ** EQT Corp EQT.N: down 3.9% BUZZ-Drops on second-quarter loss, lower revenue ** Koppers Holdings KOP.N: up 18.4% BUZZ-Rises on upbeat prelim Q2 results ** Moderna MRNA.O: up 8.3% BUZZ-Jumps on start of late-stage trial of potential COVID-19 vaccine ** Walgreens Boots Alliance Inc WBA.O: down 1.3% BUZZ-Slides after CEO decides to step down ** Professional Diversity Network Inc IPDN.O: down 29.0% BUZZ-Slumps on pricing stock offering at discount ** Datadog Inc DDOG.O: up 3.3% BUZZ-Needham hikes PT on growth prospects ** Spotify Technology SA SPOT.N: up 0.7% BUZZ-Stifel raises PT on strong podcast outlook ** Dun & Bradstreet Inc DNB.N: down 2.5% BUZZ-Most analysts bullish on turnaround story as IPO quiet period ends ** Diffusion Pharma DFFN.O: down 12.9% BUZZ-Falls on COVID-19 drug trial delay ** Black Knight Inc BKI.N: up 1.9% BUZZ-Rises as co set to acquire Optimal Blue ** Diana Shipping DSX.N: down 2.1% BUZZ-Drops on wider quarterly loss The 11 major S&P 500 sectors: Communication Services up 0.51% Consumer Discretionary up 0.68% Consumer Staples
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The top three S&P 500 .PG.INX percentage gainers: ** Alexion Pharmaceuticals Inc , up 5.6% ** KLA Corp , up 4.9% ** Biogen Inc , up 4.3% The top three S&P 500 .PL.INX percentage losers: ** Hasbro Inc , down 7.8% ** Carnival Corp , down 6.8% ** Norwegian Cruise Line Holdings Ltd , down 6.7% The top three NYSE .PG.N percentage gainers: ** Sogou Inc , up 47.7% ** Amira Nature Foods Ltd , up 30.1% ** CNX Midstream Partners LP , up 25.3% The top three NYSE .PL.N percentage losers: ** Ambow Education Holding Ltd , down 21.8% ** Indonesa Energy Corporation Ltd , down 15.7% ** Ibio Inc , down 13.4% The top three Nasdaq .PG.O percentage gainers: ** Wilhelmina International Inc , up 216.6% ** Socket Moble Inc , up 103.4% ** MediciNova Inc , up 98.6% The top three Nasdaq .PL.O percentage losers: ** WiMi Hologram Cloud Inc , down 34.6% ** Tridnt Acquisitions Corp , down 28.3% ** Sequential Brands Group Inc , down 22.2% ** Verizon Communications Inc VZ.N: up 0.1% BUZZ-Street View: Verizon's long-term strategy intact despite 5G competition ** American Express Co AXP.N: up 0.1% BUZZ-Street View: AmEx comeback hinges on travel, entertainment recovery ** Qualcomm Inc QCOM.O: up 3.0% BUZZ-JP Morgan raises PT on upside from 5G phone shipments ** Hasbro Inc HAS.O: down 7.8% BUZZ-Q2 results miss due to store closures, product shortages ** MediciNova Inc MNOV.O: up 98.6% BUZZ-Rises on deal to develop COVID-19 vaccine ** Barrick Gold GOLD.N: up 4.5% ** Newmont Corp NEM.N: up 2.3% BUZZ-U.S.-listed gold miners rise as bullion skyrockets ** dMY Technology Inc DMYT.N: up 4.4% BUZZ-Jumps on SPAC deal to take Rush Street Interactive public - ** CNX Midstream Partners LP CNXM.N: up 25.3% BUZZ-Surges on buyout deal with CNX Resources ** Can-Fite BioPharma CANF.N: up 6.7% BUZZ-Rises as co seeks FDA nod to test COVID-19 drug candidate ** ON Semiconductor Corp ON.O: up 2.9% BUZZ-Needham raises PT on automotive market recovery ** Ocugen Inc OCGN.O: up 48.3% BUZZ-Rises on orphan drug status for eye disorder drug ** ServiceNow Inc NOW.N: up 2.4% BUZZ-Brokerage Needham raises PT on potential from rapid digital shift ** Lincoln Electric Holdings Inc LECO.O: up 1.1% BUZZ-Rises as cost-cutting powers Q2 beat ** PDS Biotechnology Corp PDSB.O: up 6.1% BUZZ-Rises as preclinical COVID-19 vaccine trial shows promise ** Lemonade Inc LMND.O: down 7.1% BUZZ-Leaks as Goldman initiates with "sell" on risk profile ** Onconova Therapeutics Inc ONTX.O: up 7.2% BUZZ-Rises on seeking NIH funding to study cancer drug in COVID-19 patients ** Archer Daniels Midland Co ADM.N: down 0.4% BUZZ-Credit Suisse cuts PT of ADM, Bunge on weak industry fundamentals ** Emergent Biosolutions Inc EBS.N: up 3.5% BUZZ-Up on COVID-19 vaccine manufacture deal with AstraZeneca ** Sogou Inc SOGO.N: up 47.5% BUZZ-Jumps on take-private offer from Tencent ** EQT Corp EQT.N: down 3.9% BUZZ-Drops on second-quarter loss, lower revenue ** Koppers Holdings KOP.N: up 18.4% BUZZ-Rises on upbeat prelim Q2 results ** Moderna MRNA.O: up 8.3% BUZZ-Jumps on start of late-stage trial of potential COVID-19 vaccine ** Walgreens Boots Alliance Inc WBA.O: down 1.3% BUZZ-Slides after CEO decides to step down ** Professional Diversity Network Inc IPDN.O: down 29.0% BUZZ-Slumps on pricing stock offering at discount ** Datadog Inc DDOG.O: up 3.3% BUZZ-Needham hikes PT on growth prospects ** Spotify Technology SA SPOT.N: up 0.7% BUZZ-Stifel raises PT on strong podcast outlook ** Dun & Bradstreet Inc DNB.N: down 2.5% BUZZ-Most analysts bullish on turnaround story as IPO quiet period ends ** Diffusion Pharma DFFN.O: down 12.9% BUZZ-Falls on COVID-19 drug trial delay ** Black Knight Inc BKI.N: up 1.9% BUZZ-Rises as co set to acquire Optimal Blue ** Diana Shipping DSX.N: down 2.1% BUZZ-Drops on wider quarterly loss 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 gained on Monday as investors looked past surging U.S. COVID-19 cases, betting instead on more stimulus to revive a battered domestic economy ahead of a week packed with quarterly earnings reports. .N At 13.00 ET, the Dow Jones Industrial Average .DJI was up 0.32% at 26,554.41.
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f4ce32cc-53e7-404d-9c96-93d24ecc0180
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719023.0
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2020-07-27 00:00:00 UTC
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BUZZ-U.S. STOCKS ON THE MOVE-Sogou, Lemonade, Professional Diversity Network
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DDOG
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https://www.nasdaq.com/articles/buzz-u.s.-stocks-on-the-move-sogou-lemonade-professional-diversity-network-2020-07-27
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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. stocks rebounded on Monday as investors shrugged off surging COVID-19 cases and U.S.-China tensions, betting instead on more stimulus to revive a battered domestic economy ahead of a week packed with quarterly earnings reports. .N
At 11:30 a.m. ET, the Dow Jones Industrial Average .DJI was up 0.10% at 26,497.35. The S&P 500 .SPX was up 0.13% at 3,219.76 and the Nasdaq Composite .IXIC was up 0.37% at 10,401.57. The top three S&P 500 .PG.INX percentage gainers: ** Newmont Corp , up 3.7% ** Biogen Inc , up 3.6% ** Alexion Pharmaceuticals Inc , up 3.6% The top three S&P 500 .PL.INX percentage losers: ** Hasbro Inc , down 7.8% ** American Electric Power Company Inc , down 6.8% ** Carnival Corp , down 6.5% The top three NYSE .PG.N percentage gainers: ** Sogou Inc , up 47.1% ** Amira Nature Foods Ltd , up 30.4% ** CNX Midstream Partners LP , up 21.2% The top three NYSE .PL.N percentage losers: ** Ibio Inc , down 12.6% ** Range Resources RRC.N, down 11.5% ** Medley Capital Corp , down 9.8% The top three Nasdaq .PG.O percentage gainers: ** Wilhelmina International Inc , up 163.7% ** Socket Moble Inc , up 102% ** MediciNova Inc , up 63.8% The top three Nasdaq .PL.O percentage losers: ** WiMi Hologram Cloud Inc , down 33.9% ** Trident Acquisitions Corp , down 28.3% ** Vaxart Inc , down 23.4% ** Verizon Communications Inc VZ.N: up 0.3%
BUZZ-Street View: Verizon's long-term strategy intact despite 5G competition ** Qualcomm Inc QCOM.O: up 1.7%
BUZZ-JP Morgan raises PT on upside from 5G phone shipments ** Hasbro Inc HAS.O: down 7.9%
BUZZ-Q2 results miss due to store closures, product shortages ** MediciNova Inc MNOV.O: up 63.8%
BUZZ-Rises on deal to develop COVID-19 vaccine ** Barrick Gold GOLD.N: up 4.3% ** Newmont Corp NEM.N: up 3.7%
BUZZ-U.S.-listed gold miners rise as bullion skyrockets ** dMY Technology Inc DMYT.N: up 4.1%
BUZZ-Jumps on SPAC deal to take Rush Street Interactive public -
** CNX Midstream Partners LP CNXM.N: up 21.5%
BUZZ-Surges on buyout deal with CNX Resources ** Can-Fite BioPharma CANF.N: up 7.9%
BUZZ-Rises as co seeks FDA nod to test COVID-19 drug candidate ** ON Semiconductor Corp ON.O: up 2.0%
BUZZ-Needham raises PT on automotive market recovery ** Ocugen Inc OCGN.O: up 42.2%
BUZZ-Rises on orphan drug status for eye disorder drug ** ServiceNow Inc NOW.N: up 1.0%
BUZZ-Brokerage Needham raises PT on potential from rapid digital shift ** Lincoln Electric Holdings Inc LECO.O: up 1.0%
BUZZ-Rises as cost-cutting powers Q2 beat ** PDS Biotechnology Corp PDSB.O: up 2.8%
BUZZ-Rises as preclinical COVID-19 vaccine trial shows promise ** Lemonade Inc LMND.O: down 7.6%
BUZZ-Leaks as Goldman initiates with "sell" on risk profile ** Onconova Therapeutics Inc ONTX.O: up 9.0%
BUZZ-Rises on seeking NIH funding to study cancer drug in COVID-19 patients ** Archer Daniels Midland Co ADM.N: down 0.7% BUZZ-Credit Suisse cuts PT of ADM, Bunge on weak industry fundamentals ** Emergent Biosolutions Inc EBS.N: up 2.5%
BUZZ-Up on COVID-19 vaccine manufacture deal with AstraZeneca ** Sogou Inc SOGO.N: up 47.1%
BUZZ-Jumps on take-private offer from Tencent ** EQT Corp EQT.N: down 4.8%
BUZZ-Drops on second-quarter loss, lower revenue ** Koppers Holdings KOP.N: up 18.1%
BUZZ-Rises on upbeat prelim Q2 results ** Moderna MRNA.O: up 6.4%
BUZZ-Jumps on start of late-stage trial of potential COVID-19 vaccine ** Walgreens Boots Alliance Inc WBA.O: down 2.5%
BUZZ-Slides after CEO decides to step down ** Professional Diversity Network Inc IPDN.O: down 29.5%
BUZZ-Slumps on pricing stock offering at discount ** Datadog Inc DDOG.O: up 1.6%
BUZZ-Needham hikes PT on growth prospects ** Spotify Technology SA SPOT.N: up 0.2%
BUZZ-Stifel raises PT on strong podcast outlook ** Dun & Bradstreet Inc DNB.N: down 2.1%
BUZZ-Most analysts bullish on turnaround story as IPO quiet period ends
The 11 major S&P 500 sectors:
Communication Services
.SPLRCL
up 0.07%
Consumer Discretionary
.SPLRCD
down 0.01%
Consumer Staples
.SPLRCS
up 0.21%
Energy
.SPNY
down 0.59%
Financial
.SPSY
down 0.71%
Health
.SPXHC
up 0.32%
Industrial
.SPLRCI
up 0.15%
Information Technology
.SPLRCT
up 0.52%
Materials
.SPLRCM
up 1.11%
Real Estate
.SPLRCR
up 0.03%
Utilities
.SPLRCU
down 1.30%
(Compiled by Shivani Kumaresan in Bengaluru)
((Shivani.Kumaresan@thomsonreuters.com ; +1 646 223 8780))
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: ** Newmont Corp , up 3.7% ** Biogen Inc , up 3.6% ** Alexion Pharmaceuticals Inc , up 3.6% The top three S&P 500 .PL.INX percentage losers: ** Hasbro Inc , down 7.8% ** American Electric Power Company Inc , down 6.8% ** Carnival Corp , down 6.5% The top three NYSE .PG.N percentage gainers: ** Sogou Inc , up 47.1% ** Amira Nature Foods Ltd , up 30.4% ** CNX Midstream Partners LP , up 21.2% The top three NYSE .PL.N percentage losers: ** Ibio Inc , down 12.6% ** Range Resources RRC.N, down 11.5% ** Medley Capital Corp , down 9.8% The top three Nasdaq .PG.O percentage gainers: ** Wilhelmina International Inc , up 163.7% ** Socket Moble Inc , up 102% ** MediciNova Inc , up 63.8% The top three Nasdaq .PL.O percentage losers: ** WiMi Hologram Cloud Inc , down 33.9% ** Trident Acquisitions Corp , down 28.3% ** Vaxart Inc , down 23.4% ** Verizon Communications Inc VZ.N: up 0.3% BUZZ-Street View: Verizon's long-term strategy intact despite 5G competition ** Qualcomm Inc QCOM.O: up 1.7% BUZZ-JP Morgan raises PT on upside from 5G phone shipments ** Hasbro Inc HAS.O: down 7.9% BUZZ-Q2 results miss due to store closures, product shortages ** MediciNova Inc MNOV.O: up 63.8% BUZZ-Rises on deal to develop COVID-19 vaccine ** Barrick Gold GOLD.N: up 4.3% ** Newmont Corp NEM.N: up 3.7% BUZZ-U.S.-listed gold miners rise as bullion skyrockets ** dMY Technology Inc DMYT.N: up 4.1% BUZZ-Jumps on SPAC deal to take Rush Street Interactive public - ** CNX Midstream Partners LP CNXM.N: up 21.5% BUZZ-Surges on buyout deal with CNX Resources ** Can-Fite BioPharma CANF.N: up 7.9% BUZZ-Rises as co seeks FDA nod to test COVID-19 drug candidate ** ON Semiconductor Corp ON.O: up 2.0% BUZZ-Needham raises PT on automotive market recovery ** Ocugen Inc OCGN.O: up 42.2% BUZZ-Rises on orphan drug status for eye disorder drug ** ServiceNow Inc NOW.N: up 1.0% BUZZ-Brokerage Needham raises PT on potential from rapid digital shift ** Lincoln Electric Holdings Inc LECO.O: up 1.0% BUZZ-Rises as cost-cutting powers Q2 beat ** PDS Biotechnology Corp PDSB.O: up 2.8% BUZZ-Rises as preclinical COVID-19 vaccine trial shows promise ** Lemonade Inc LMND.O: down 7.6% BUZZ-Leaks as Goldman initiates with "sell" on risk profile ** Onconova Therapeutics Inc ONTX.O: up 9.0% BUZZ-Rises on seeking NIH funding to study cancer drug in COVID-19 patients ** Archer Daniels Midland Co ADM.N: down 0.7% BUZZ-Credit Suisse cuts PT of ADM, Bunge on weak industry fundamentals ** Emergent Biosolutions Inc EBS.N: up 2.5% BUZZ-Up on COVID-19 vaccine manufacture deal with AstraZeneca ** Sogou Inc SOGO.N: up 47.1% BUZZ-Jumps on take-private offer from Tencent ** EQT Corp EQT.N: down 4.8% BUZZ-Drops on second-quarter loss, lower revenue ** Koppers Holdings KOP.N: up 18.1% BUZZ-Rises on upbeat prelim Q2 results ** Moderna MRNA.O: up 6.4% BUZZ-Jumps on start of late-stage trial of potential COVID-19 vaccine ** Walgreens Boots Alliance Inc WBA.O: down 2.5% BUZZ-Slides after CEO decides to step down ** Professional Diversity Network Inc IPDN.O: down 29.5% BUZZ-Slumps on pricing stock offering at discount ** Datadog Inc DDOG.O: up 1.6% BUZZ-Needham hikes PT on growth prospects ** Spotify Technology SA SPOT.N: up 0.2% BUZZ-Stifel raises PT on strong podcast outlook ** Dun & Bradstreet Inc DNB.N: down 2.1% BUZZ-Most analysts bullish on turnaround story as IPO quiet period ends 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 U.S. stocks rebounded on Monday as investors shrugged off surging COVID-19 cases and U.S.-China tensions, betting instead on more stimulus to revive a battered domestic economy ahead of a week packed with quarterly earnings reports. down 1.30% (Compiled by Shivani Kumaresan in Bengaluru) ((Shivani.Kumaresan@thomsonreuters.com ; +1 646 223 8780)) 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: ** Newmont Corp , up 3.7% ** Biogen Inc , up 3.6% ** Alexion Pharmaceuticals Inc , up 3.6% The top three S&P 500 .PL.INX percentage losers: ** Hasbro Inc , down 7.8% ** American Electric Power Company Inc , down 6.8% ** Carnival Corp , down 6.5% The top three NYSE .PG.N percentage gainers: ** Sogou Inc , up 47.1% ** Amira Nature Foods Ltd , up 30.4% ** CNX Midstream Partners LP , up 21.2% The top three NYSE .PL.N percentage losers: ** Ibio Inc , down 12.6% ** Range Resources RRC.N, down 11.5% ** Medley Capital Corp , down 9.8% The top three Nasdaq .PG.O percentage gainers: ** Wilhelmina International Inc , up 163.7% ** Socket Moble Inc , up 102% ** MediciNova Inc , up 63.8% The top three Nasdaq .PL.O percentage losers: ** WiMi Hologram Cloud Inc , down 33.9% ** Trident Acquisitions Corp , down 28.3% ** Vaxart Inc , down 23.4% ** Verizon Communications Inc VZ.N: up 0.3% BUZZ-Street View: Verizon's long-term strategy intact despite 5G competition ** Qualcomm Inc QCOM.O: up 1.7% BUZZ-JP Morgan raises PT on upside from 5G phone shipments ** Hasbro Inc HAS.O: down 7.9% BUZZ-Q2 results miss due to store closures, product shortages ** MediciNova Inc MNOV.O: up 63.8% BUZZ-Rises on deal to develop COVID-19 vaccine ** Barrick Gold GOLD.N: up 4.3% ** Newmont Corp NEM.N: up 3.7% BUZZ-U.S.-listed gold miners rise as bullion skyrockets ** dMY Technology Inc DMYT.N: up 4.1% BUZZ-Jumps on SPAC deal to take Rush Street Interactive public - ** CNX Midstream Partners LP CNXM.N: up 21.5% BUZZ-Surges on buyout deal with CNX Resources ** Can-Fite BioPharma CANF.N: up 7.9% BUZZ-Rises as co seeks FDA nod to test COVID-19 drug candidate ** ON Semiconductor Corp ON.O: up 2.0% BUZZ-Needham raises PT on automotive market recovery ** Ocugen Inc OCGN.O: up 42.2% BUZZ-Rises on orphan drug status for eye disorder drug ** ServiceNow Inc NOW.N: up 1.0% BUZZ-Brokerage Needham raises PT on potential from rapid digital shift ** Lincoln Electric Holdings Inc LECO.O: up 1.0% BUZZ-Rises as cost-cutting powers Q2 beat ** PDS Biotechnology Corp PDSB.O: up 2.8% BUZZ-Rises as preclinical COVID-19 vaccine trial shows promise ** Lemonade Inc LMND.O: down 7.6% BUZZ-Leaks as Goldman initiates with "sell" on risk profile ** Onconova Therapeutics Inc ONTX.O: up 9.0% BUZZ-Rises on seeking NIH funding to study cancer drug in COVID-19 patients ** Archer Daniels Midland Co ADM.N: down 0.7% BUZZ-Credit Suisse cuts PT of ADM, Bunge on weak industry fundamentals ** Emergent Biosolutions Inc EBS.N: up 2.5% BUZZ-Up on COVID-19 vaccine manufacture deal with AstraZeneca ** Sogou Inc SOGO.N: up 47.1% BUZZ-Jumps on take-private offer from Tencent ** EQT Corp EQT.N: down 4.8% BUZZ-Drops on second-quarter loss, lower revenue ** Koppers Holdings KOP.N: up 18.1% BUZZ-Rises on upbeat prelim Q2 results ** Moderna MRNA.O: up 6.4% BUZZ-Jumps on start of late-stage trial of potential COVID-19 vaccine ** Walgreens Boots Alliance Inc WBA.O: down 2.5% BUZZ-Slides after CEO decides to step down ** Professional Diversity Network Inc IPDN.O: down 29.5% BUZZ-Slumps on pricing stock offering at discount ** Datadog Inc DDOG.O: up 1.6% BUZZ-Needham hikes PT on growth prospects ** Spotify Technology SA SPOT.N: up 0.2% BUZZ-Stifel raises PT on strong podcast outlook ** Dun & Bradstreet Inc DNB.N: down 2.1% BUZZ-Most analysts bullish on turnaround story as IPO quiet period ends 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 U.S. stocks rebounded on Monday as investors shrugged off surging COVID-19 cases and U.S.-China tensions, betting instead on more stimulus to revive a battered domestic economy ahead of a week packed with quarterly earnings reports. down 1.30% (Compiled by Shivani Kumaresan in Bengaluru) ((Shivani.Kumaresan@thomsonreuters.com ; +1 646 223 8780)) 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: ** Newmont Corp , up 3.7% ** Biogen Inc , up 3.6% ** Alexion Pharmaceuticals Inc , up 3.6% The top three S&P 500 .PL.INX percentage losers: ** Hasbro Inc , down 7.8% ** American Electric Power Company Inc , down 6.8% ** Carnival Corp , down 6.5% The top three NYSE .PG.N percentage gainers: ** Sogou Inc , up 47.1% ** Amira Nature Foods Ltd , up 30.4% ** CNX Midstream Partners LP , up 21.2% The top three NYSE .PL.N percentage losers: ** Ibio Inc , down 12.6% ** Range Resources RRC.N, down 11.5% ** Medley Capital Corp , down 9.8% The top three Nasdaq .PG.O percentage gainers: ** Wilhelmina International Inc , up 163.7% ** Socket Moble Inc , up 102% ** MediciNova Inc , up 63.8% The top three Nasdaq .PL.O percentage losers: ** WiMi Hologram Cloud Inc , down 33.9% ** Trident Acquisitions Corp , down 28.3% ** Vaxart Inc , down 23.4% ** Verizon Communications Inc VZ.N: up 0.3% BUZZ-Street View: Verizon's long-term strategy intact despite 5G competition ** Qualcomm Inc QCOM.O: up 1.7% BUZZ-JP Morgan raises PT on upside from 5G phone shipments ** Hasbro Inc HAS.O: down 7.9% BUZZ-Q2 results miss due to store closures, product shortages ** MediciNova Inc MNOV.O: up 63.8% BUZZ-Rises on deal to develop COVID-19 vaccine ** Barrick Gold GOLD.N: up 4.3% ** Newmont Corp NEM.N: up 3.7% BUZZ-U.S.-listed gold miners rise as bullion skyrockets ** dMY Technology Inc DMYT.N: up 4.1% BUZZ-Jumps on SPAC deal to take Rush Street Interactive public - ** CNX Midstream Partners LP CNXM.N: up 21.5% BUZZ-Surges on buyout deal with CNX Resources ** Can-Fite BioPharma CANF.N: up 7.9% BUZZ-Rises as co seeks FDA nod to test COVID-19 drug candidate ** ON Semiconductor Corp ON.O: up 2.0% BUZZ-Needham raises PT on automotive market recovery ** Ocugen Inc OCGN.O: up 42.2% BUZZ-Rises on orphan drug status for eye disorder drug ** ServiceNow Inc NOW.N: up 1.0% BUZZ-Brokerage Needham raises PT on potential from rapid digital shift ** Lincoln Electric Holdings Inc LECO.O: up 1.0% BUZZ-Rises as cost-cutting powers Q2 beat ** PDS Biotechnology Corp PDSB.O: up 2.8% BUZZ-Rises as preclinical COVID-19 vaccine trial shows promise ** Lemonade Inc LMND.O: down 7.6% BUZZ-Leaks as Goldman initiates with "sell" on risk profile ** Onconova Therapeutics Inc ONTX.O: up 9.0% BUZZ-Rises on seeking NIH funding to study cancer drug in COVID-19 patients ** Archer Daniels Midland Co ADM.N: down 0.7% BUZZ-Credit Suisse cuts PT of ADM, Bunge on weak industry fundamentals ** Emergent Biosolutions Inc EBS.N: up 2.5% BUZZ-Up on COVID-19 vaccine manufacture deal with AstraZeneca ** Sogou Inc SOGO.N: up 47.1% BUZZ-Jumps on take-private offer from Tencent ** EQT Corp EQT.N: down 4.8% BUZZ-Drops on second-quarter loss, lower revenue ** Koppers Holdings KOP.N: up 18.1% BUZZ-Rises on upbeat prelim Q2 results ** Moderna MRNA.O: up 6.4% BUZZ-Jumps on start of late-stage trial of potential COVID-19 vaccine ** Walgreens Boots Alliance Inc WBA.O: down 2.5% BUZZ-Slides after CEO decides to step down ** Professional Diversity Network Inc IPDN.O: down 29.5% BUZZ-Slumps on pricing stock offering at discount ** Datadog Inc DDOG.O: up 1.6% BUZZ-Needham hikes PT on growth prospects ** Spotify Technology SA SPOT.N: up 0.2% BUZZ-Stifel raises PT on strong podcast outlook ** Dun & Bradstreet Inc DNB.N: down 2.1% BUZZ-Most analysts bullish on turnaround story as IPO quiet period ends The 11 major S&P 500 sectors: Communication Services up 0.07% Consumer Discretionary down 0.01% Consumer Staples
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The top three S&P 500 .PG.INX percentage gainers: ** Newmont Corp , up 3.7% ** Biogen Inc , up 3.6% ** Alexion Pharmaceuticals Inc , up 3.6% The top three S&P 500 .PL.INX percentage losers: ** Hasbro Inc , down 7.8% ** American Electric Power Company Inc , down 6.8% ** Carnival Corp , down 6.5% The top three NYSE .PG.N percentage gainers: ** Sogou Inc , up 47.1% ** Amira Nature Foods Ltd , up 30.4% ** CNX Midstream Partners LP , up 21.2% The top three NYSE .PL.N percentage losers: ** Ibio Inc , down 12.6% ** Range Resources RRC.N, down 11.5% ** Medley Capital Corp , down 9.8% The top three Nasdaq .PG.O percentage gainers: ** Wilhelmina International Inc , up 163.7% ** Socket Moble Inc , up 102% ** MediciNova Inc , up 63.8% The top three Nasdaq .PL.O percentage losers: ** WiMi Hologram Cloud Inc , down 33.9% ** Trident Acquisitions Corp , down 28.3% ** Vaxart Inc , down 23.4% ** Verizon Communications Inc VZ.N: up 0.3% BUZZ-Street View: Verizon's long-term strategy intact despite 5G competition ** Qualcomm Inc QCOM.O: up 1.7% BUZZ-JP Morgan raises PT on upside from 5G phone shipments ** Hasbro Inc HAS.O: down 7.9% BUZZ-Q2 results miss due to store closures, product shortages ** MediciNova Inc MNOV.O: up 63.8% BUZZ-Rises on deal to develop COVID-19 vaccine ** Barrick Gold GOLD.N: up 4.3% ** Newmont Corp NEM.N: up 3.7% BUZZ-U.S.-listed gold miners rise as bullion skyrockets ** dMY Technology Inc DMYT.N: up 4.1% BUZZ-Jumps on SPAC deal to take Rush Street Interactive public - ** CNX Midstream Partners LP CNXM.N: up 21.5% BUZZ-Surges on buyout deal with CNX Resources ** Can-Fite BioPharma CANF.N: up 7.9% BUZZ-Rises as co seeks FDA nod to test COVID-19 drug candidate ** ON Semiconductor Corp ON.O: up 2.0% BUZZ-Needham raises PT on automotive market recovery ** Ocugen Inc OCGN.O: up 42.2% BUZZ-Rises on orphan drug status for eye disorder drug ** ServiceNow Inc NOW.N: up 1.0% BUZZ-Brokerage Needham raises PT on potential from rapid digital shift ** Lincoln Electric Holdings Inc LECO.O: up 1.0% BUZZ-Rises as cost-cutting powers Q2 beat ** PDS Biotechnology Corp PDSB.O: up 2.8% BUZZ-Rises as preclinical COVID-19 vaccine trial shows promise ** Lemonade Inc LMND.O: down 7.6% BUZZ-Leaks as Goldman initiates with "sell" on risk profile ** Onconova Therapeutics Inc ONTX.O: up 9.0% BUZZ-Rises on seeking NIH funding to study cancer drug in COVID-19 patients ** Archer Daniels Midland Co ADM.N: down 0.7% BUZZ-Credit Suisse cuts PT of ADM, Bunge on weak industry fundamentals ** Emergent Biosolutions Inc EBS.N: up 2.5% BUZZ-Up on COVID-19 vaccine manufacture deal with AstraZeneca ** Sogou Inc SOGO.N: up 47.1% BUZZ-Jumps on take-private offer from Tencent ** EQT Corp EQT.N: down 4.8% BUZZ-Drops on second-quarter loss, lower revenue ** Koppers Holdings KOP.N: up 18.1% BUZZ-Rises on upbeat prelim Q2 results ** Moderna MRNA.O: up 6.4% BUZZ-Jumps on start of late-stage trial of potential COVID-19 vaccine ** Walgreens Boots Alliance Inc WBA.O: down 2.5% BUZZ-Slides after CEO decides to step down ** Professional Diversity Network Inc IPDN.O: down 29.5% BUZZ-Slumps on pricing stock offering at discount ** Datadog Inc DDOG.O: up 1.6% BUZZ-Needham hikes PT on growth prospects ** Spotify Technology SA SPOT.N: up 0.2% BUZZ-Stifel raises PT on strong podcast outlook ** Dun & Bradstreet Inc DNB.N: down 2.1% BUZZ-Most analysts bullish on turnaround story as IPO quiet period ends 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 U.S. stocks rebounded on Monday as investors shrugged off surging COVID-19 cases and U.S.-China tensions, betting instead on more stimulus to revive a battered domestic economy ahead of a week packed with quarterly earnings reports. ET, the Dow Jones Industrial Average .DJI was up 0.10% at 26,497.35.
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79624d19-5417-4a7e-88a0-22c84cdce4e3
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719024.0
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2020-07-20 00:00:00 UTC
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CrowdStrike Stock Looks Risky With a Super-High Valuation
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DDOG
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https://www.nasdaq.com/articles/crowdstrike-stock-looks-risky-with-a-super-high-valuation-2020-07-20
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nan
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nan
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
I don’t often buy the stocks of money-losing companies — especially money-losing companies with price-sales ratios that are well above 10. And, with very few exceptions, I will only pull the trigger on such companies if they have a tremendous advantage over their competitors. Such an edge usually comes in the form of a clearly superior product or a first-mover advantage. CrowdStrike (NASDAQ:CRWD) stock is a name that’s trading for around 40 times its sales.
CRWD) logo on a mobile phone lying on a wooden table" width="300" height="169">
Source: Piotr Swat / Shutterstock.com
But it lacks those important advantages.
I’m far from an expert on either cybersecurity or CrowdStrike. But it appears that CrowdStrike and those who are bullish on CRWD stock mainly tout its use of artificial intelligence and its ability to protect data on the cloud.
However, multiple other companies now have both attributes. BlackBerry’s (NYSE:BB) Cylance unit, for example, has long used AI to prevent cybersecurity attacks. And back in November 2018, it launched a “cloud security solution” for Amazon’s (NASDAQ:AMZN) cloud product. Of course, Amazon’s cloud product, AWS, is the world’s leading cloud infrastructure offering.
And there’s some evidence that Cylance is no slouch in terms of technology. In 2019, it won the Best Innovator Award from SE Labs. Also last year, the unit claimed that it had won “excellence awards in five categories.”
Last quarter, Cylance’s revenue came in at $49 million, even though its sales dropped 4% year-over-year. CrowdStrike’s revenue for all of 2019 was $250 million, versus Cylance’s annual run rate of $196 million. So CrowdStrike actually isn’t so far ahead of Cylance when it comes to revenue and market share.
Multiple other IT companies are utilizing AI and optimizing their products for the cloud. For example, International Business Machines (NYSE:IBM) is using AI to enhance its cybersecurity offerings, while Datadog (NASDAQ:DDOG) is offering cloud security services.
CrowdStrike’s Growth Is Dropping
The year-over-year growth of CrowdStrike’s revenue dropped from 94% in the second quarter of 2019 to 85% last quarter. In Q3 of 2019, CrowdStrike’s reported a net loss of $35.5 million. Last quarter, the metric was a loss of $19 million.
8 Silver Stocks to Consider If Gold Isn't Your Thing
A $16.5 million bottom-line improvement over six months for a company with a huge valuation just doesn’t strike me as very impressive. A big reason for the company’s slow bottom-line growth is the rapid increase of its expenses. CrowdStrike’s operating expenses jumped to $153 million last quarter from $126 million in the third quarter of 2019. Those who own CRWD stock may want to keep an eye on the company’s expenses to see if it can get them under control going forward.
CrowdStrike Faces Other Headwinds
CRWD stock has gotten a boost from the stay-at-home trend. That makes sense, as the trend creates more endpoints that companies need to defend from hackers. Since CrowdStrike prices its products per endpoint, the trend has undoubtedly increased CrowdStrike’s top line.
But with the novel coronavirus threat easing in some parts of the country and a vaccine seemingly on the way by the end of the year, the strength of this positive catalyst will also ease soon.
Indeed, that is likely why CRWD stock, along with many other tech names, has lost momentum in recent days.
The Bottom Line on CRWD Stock
The shares are trading at almost 40 times the company’s 2019 sales, even though it has no obvious technological edge or first-mover advantage. Moreover, the company’s growth has slowed and its bottom line has increased relatively slowly in recent quarters. Finally, the work-from-home trend is losing momentum.
I’ve been overly bearish about a few high-flying tech names that Wall Street loves, but I would certainly not recommend buying CRWD stock at its current levels.
As of this writing, Larry Ramer owned shares of BlackBerry (BB). Larry has conducted research and written articles on U.S. stocks for 13 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Among his highly successful, contrarian picks have been Roku, oil stocks and Snap. Larry began writing columns for InvestorPlace in 2015. You can reach him on StockTwits at @larryramer.
The post CrowdStrike Stock Looks Risky With a Super-High Valuation 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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For example, International Business Machines (NYSE:IBM) is using AI to enhance its cybersecurity offerings, while Datadog (NASDAQ:DDOG) is offering cloud security services. 8 Silver Stocks to Consider If Gold Isn't Your Thing A $16.5 million bottom-line improvement over six months for a company with a huge valuation just doesn’t strike me as very impressive. The Bottom Line on CRWD Stock The shares are trading at almost 40 times the company’s 2019 sales, even though it has no obvious technological edge or first-mover advantage.
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For example, International Business Machines (NYSE:IBM) is using AI to enhance its cybersecurity offerings, while Datadog (NASDAQ:DDOG) is offering cloud security services. CrowdStrike (NASDAQ:CRWD) stock is a name that’s trading for around 40 times its sales. CrowdStrike’s Growth Is Dropping The year-over-year growth of CrowdStrike’s revenue dropped from 94% in the second quarter of 2019 to 85% last quarter.
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For example, International Business Machines (NYSE:IBM) is using AI to enhance its cybersecurity offerings, while Datadog (NASDAQ:DDOG) is offering cloud security services. InvestorPlace - Stock Market News, Stock Advice & Trading Tips I don’t often buy the stocks of money-losing companies — especially money-losing companies with price-sales ratios that are well above 10. CrowdStrike’s Growth Is Dropping The year-over-year growth of CrowdStrike’s revenue dropped from 94% in the second quarter of 2019 to 85% last quarter.
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For example, International Business Machines (NYSE:IBM) is using AI to enhance its cybersecurity offerings, while Datadog (NASDAQ:DDOG) is offering cloud security services. Also last year, the unit claimed that it had won “excellence awards in five categories.” Last quarter, Cylance’s revenue came in at $49 million, even though its sales dropped 4% year-over-year. Multiple other IT companies are utilizing AI and optimizing their products for the cloud.
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ef8fad01-f4a3-45f9-ab5f-2d6051663280
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719025.0
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2020-07-19 00:00:00 UTC
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3 of the Highest-Growth Stocks in the Market Today
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DDOG
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https://www.nasdaq.com/articles/3-of-the-highest-growth-stocks-in-the-market-today-2020-07-19
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nan
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nan
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In today's low-interest-rate, technology-disruption-based economy, growth stocks have been the flavor of the decade. In fact, growth stocks are currently outperforming value stocks by some of the widest margins since the dot-com bubble, and they've been outperforming for an unprecedented amount of time.
However, unlike the dot-com bubble, these new tech darlings have legitimate revenue and profit growth, suggesting they're more the real deal than not. So, when looking for the next multibagger stock, it's a good idea to keep tabs on those companies growing the very fastest, as the fastest-growers have the best shot at justifying their lofty valuations.
Here are three such skyrocketing stocks -- Zoom Video Communications (NASDAQ: ZM), Lemonade (NYSE: LMND), Datadog (NASDAQ: DDOG) -- each of which is posting revenue growth near or in the triple digits.
Image source: Getty Images.
Zoom Video Communications: Best quarter ever?
While I had been quite skeptical that Zoom Video Communications could ever justify the valuation investors had assigned it during the pandemic-fueled first quarter, to the company's credit, it posted some truly eye-popping results in early June.
Even though many people can use Zoom free of charge for 40 minutes, the ease and flexibility of Zoom's customer-friendly software and "freemium" business model was enough to spur torrid paid subscription growth as COVID-19 set in.
Zoom's recent quarter ended April 30, so it captured a good amount of the depths of the pandemic outbreak, during which "Zoom" became a verb closely associated with videoconferencing itself. That manifested itself in a massive 169% growth in revenue.
Profits and free cash flow also skyrocketed by many multiples -- adjusted operating income increased from $8.2 million to $54.6 million. Thanks to a lot of new subscriptions that are paid up front, free cash flow rose from $15.3 million to $251.7 million. Customers that pay over $100,000 in trailing 12-month revenue soared a bit less at 90%, but new customers with more than 10 employees grew a truly eye-opening 354%.
Investors should be aware that the stock is undeniably expensive at a 1,452 P/E ratio and a 92 price-to-sales ratio, even including the impact from the recent blockbuster quarter that is likely to be the best in the company's history. That being said, should Zoom execute and covert a lot of these new free or low-paying customers to becoming larger paying customers over time, the company could be in for continued marquee growth in the years ahead.
Lemonade: A spoonful of sugar in an otherwise bland industry
Never heard of Lemonade (NYSE: LMND)? That may be because this would-be insurance industry disruptor just had its initial public offering on July 2 -- and oh, what an IPO it was. Priced at $29, Lemonade's stock soared as much as 144% on its first day of trading, and it has continued climbing. Currently around $85.86 per share, Lemonade's market capitalization is $4.7 billion -- a whopping 36.2 times trailing sales.
The enthusiasm for Lemonade's new stock could be due to how fast its revenue is growing. In the quarter ended March 31, Lemonade's revenue was up a whopping 138% year-over-year, from $11 million to $26.2 million.
"What's so special about insurance?" you might ask, and you would be right to do so. The insurance industry is notoriously volatile, as insurers take in premiums that they attempt to line up with payout liabilities that can fluctuate year to year. Reflecting this ongoing risk, traditional insurance companies thus trade at low multiples.
So how is lemonade getting a software-like multiple? Well, Lemonade is attempting to do something a bit different, aiming its business model to more closely mirror that of a subscription-based software company. First, to tamp down the volatility associated with being an insurer, the company lays off much of its risk to reinsurers, which covers the downside. Interestingly, the company also seeks to limit its upside, promoting a unique "giveback" feature, in which it will donate "leftover money" (whatever that is) to causes that customers pick from a pre-vetted list of charities.
The result is that Lemonade is basically attempting to make its business more like a fee-earning, recurring revenue business with little change in its gross margin year to year. Thus, garnering loyal customers and volume growth will be pillars of its business. At the time of its IPO, Lemonade only provided renters and homeowners insurance, but it expanded into health insurance for cats and dogs last week, and the company is looking to offer more insurance products over time.
Lemonade thinks it can quickly become a leading insurance customer favorite, especially with younger adults. The prospectus points to its technology stack as being drawn from the ground up for the modern age, whereas incumbents may have older, more manual systems. Lemonade provides an easy-to-use, lightning-fast digital platform powered by artificial intelligence, with the company's custom claims processing bot, "AI Jim," paying claims in as little as three seconds.
The combination of an intuitive digital experience to streamline an unpleasant task of getting insurance, the unique "give-back" pledge, and other millennial-targeted features aims Lemonade squarely at a younger demographic who might be buying insurance for the first time in small policy amounts. Lemonade's idea is to incubate loyal customers who will stay with the company as they age and move on to larger apartments, houses, and condos, and buy more products over the coming decades.
There's still a lot of open questions with Lemonade, including how its underwriting tech will really perform over time, or if its business model can be easily replicated. The company is also losing lots of money, with a $36.5 million loss in the first quarter -- over 100% of its revenue. That being said, while losses have grown over the last few years, Lemonade's underwriting on a per policy basis has actually improved, with the company's gross loss ratios (gross losses divided by premiums) improving from 161% in 2017 to 79% in 2019.
While still very new and unproven, Lemonade's aim to reshape the $5 trillion global insurance business has excited investors, and there's admittedly a lot of potential there.
Datadog: Hungry for growth?
Finally, the "slowest" of the my three top high-growth stocks is IT monitoring software stock Datadog (NASDAQ: DDOG), with its revenue growth rate clocking in at "only" 87% last quarter. Customers who spent $100,000 or more on an annual revenue basis climbed from 508 to 960 over the past year, and total customers climbed above 11,500. Like Zoom, Datadog is also the rare high-growth software stock that is also turning profitable, with the company expecting $10 million in adjusted operating profits for the current quarter.
Like the preceding companies, Datadog is also newly public, having had its IPO in September of 2019, yet it's actually a 10-year-old company that has built a very powerful platform, with over 400 third-party integrations spanning infrastructure monitoring, cloud monitoring, application monitoring, and log management into a single, unified platform.
Acting as that "glue" between all different kinds of IT assets makes Datadog a preferred go-to for developers and operations personnel, helping companies quickly identify problems in their IT infrastructure and fix them quickly. In today's "always on" digital world in which employees and customers need quick and easy user experiences, Datadog's monitoring chops save organizations lots of time and money. It's therefore no surprise the company continues to rack up high-profile customer wins.
Datadog's stock is also highly priced at a whopping 62.5 times sales, and is up a ridiculous 224% since its IPO less than a year ago; however, with this kind of growth, and importantly, with expanding gross margin up 7 percentage points year-over-year, Datadog's astronomical rise might just be justified.
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 June 2, 2020
Billy Duberstein has no position in any of the stocks mentioned. His clients may own shares of the companies mentioned. The Motley Fool owns shares of and recommends Datadog and Zoom Video Communications and recommends the following options: short August 2020 $130 calls on 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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Here are three such skyrocketing stocks -- Zoom Video Communications (NASDAQ: ZM), Lemonade (NYSE: LMND), Datadog (NASDAQ: DDOG) -- each of which is posting revenue growth near or in the triple digits. Finally, the "slowest" of the my three top high-growth stocks is IT monitoring software stock Datadog (NASDAQ: DDOG), with its revenue growth rate clocking in at "only" 87% last quarter. While I had been quite skeptical that Zoom Video Communications could ever justify the valuation investors had assigned it during the pandemic-fueled first quarter, to the company's credit, it posted some truly eye-popping results in early June.
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Here are three such skyrocketing stocks -- Zoom Video Communications (NASDAQ: ZM), Lemonade (NYSE: LMND), Datadog (NASDAQ: DDOG) -- each of which is posting revenue growth near or in the triple digits. Finally, the "slowest" of the my three top high-growth stocks is IT monitoring software stock Datadog (NASDAQ: DDOG), with its revenue growth rate clocking in at "only" 87% last quarter. That being said, while losses have grown over the last few years, Lemonade's underwriting on a per policy basis has actually improved, with the company's gross loss ratios (gross losses divided by premiums) improving from 161% in 2017 to 79% in 2019.
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Here are three such skyrocketing stocks -- Zoom Video Communications (NASDAQ: ZM), Lemonade (NYSE: LMND), Datadog (NASDAQ: DDOG) -- each of which is posting revenue growth near or in the triple digits. Finally, the "slowest" of the my three top high-growth stocks is IT monitoring software stock Datadog (NASDAQ: DDOG), with its revenue growth rate clocking in at "only" 87% last quarter. That being said, should Zoom execute and covert a lot of these new free or low-paying customers to becoming larger paying customers over time, the company could be in for continued marquee growth in the years ahead.
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Here are three such skyrocketing stocks -- Zoom Video Communications (NASDAQ: ZM), Lemonade (NYSE: LMND), Datadog (NASDAQ: DDOG) -- each of which is posting revenue growth near or in the triple digits. Finally, the "slowest" of the my three top high-growth stocks is IT monitoring software stock Datadog (NASDAQ: DDOG), with its revenue growth rate clocking in at "only" 87% last quarter. That being said, should Zoom execute and covert a lot of these new free or low-paying customers to becoming larger paying customers over time, the company could be in for continued marquee growth in the years ahead.
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719026.0
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2020-07-14 00:00:00 UTC
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7 Software Stocks Surging Forward
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DDOG
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https://www.nasdaq.com/articles/7-software-stocks-surging-forward-2020-07-14
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nan
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nan
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Software stocks surging forward would partly explain the Nasdaq’s monumental all-time highs achieved recently. Much of the fundamentals shifted for the better when the world suddenly found the need for remote work.
The sharp increase in coronavirus infections in the U.S. following relaxed rules for social distancing also drives home a key point. Companies, especially in the technology space like Facebook (NASDAQ:FB), Twitter (NASDAQ:TWTR), and Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) are telling most staff to work from home indefinitely.
Markets already rewarded companies that supply remote software solutions. But because this trend will only increase as software stocks have a good chance of climbing to new highs. Value investors will avoid most of the stocks that will be discussed. Conversely, savvy investors who have a good grasp of the revenue growth potential in business models with software subscriptions will want to read on.
There are seven software stocks that investors should watch closely:
10 Micro-Cap Stocks to Buy Today for Value and Growth
Datadog (NASDAQ:DDOG)
Shopify (NYSE:SHOP)
ServiceNow (NYSE:NOW)
ZoomInfo Technologies (NASDAQ:ZI)
Fastly (NYSE:FSLY)
Square (NYSE:SQ)
PagSeguro Digital (NYSE:PAGS)
Software Stocks to Buy: Datadog (DDOG)
Source: Shutterstock
First up on this list of software stocks is Datadog. Datadog continued surging after posting solid first-quarter results. Revenue grew an astounding 87% year-over-year to $131 million. The company nearly doubled its larger customer base.
For example, it now has 960 customers with an average recurring revenue (ARR) of $100,000, up from 508 last year. CEO Olivier Prmel said that “In response to the COVID-19 pandemic, we are focused on ensuring the safety of our employees, continuing to best serve our customers, and investing in our platform.”
Data courtesy of Stock Rover Research
In the above bar chart, DataDog just completed its seasonally strong return period. Other than in November, potential returns are mixed.
On June 17, the company announced an integration deal with Amazon Elastic File Service. This helps the customer adopt to serverless workflows. Datadog also uses EFS and Amazon Web Service Lambda to help its customers “plan and track their maintenance.” Its strong product offering and growing customer base suggest that Datadog will sustain its revenue growth for at least the current year.
Datadog stock may come down a bit if investors grow nervous over its price-to-sales multiple of over 60 times. But the strong outlook suggests the stock will bounce back quickly.
Shopify (SHOP)
Source: Beyond The Scene / Shutterstock.com
Shopify enjoys the biggest market capitalization in its home country of Canada. The pandemic caught the attention of one analyst who set a price target of $1,000. On June 18, the RBC Capital Markets analyst said the market did not appreciate Shopify’s total addressable market.
Shopify stock has an unfavorable value score of 55/100. That is not stopping markets from bidding shares higher:
SHOP Industry S&P 500
Value Score 55 38 73
Price / Earnings – – 27.4
Price / Sales 67.1 8.9 2.3
Data Courtesy of Stockrover
Shopify hardly ever lost money for investors in any given month. October is its only under-performing month:
CChart courtesy of Stock Rover
Walmart (NYSE:WMT) joined forces with Shopify “to open the Walmart Marketplace to their sellers.” The deal re-affirms Shopify’s dominance in helping eCommerce businesses in the U.S. This grew 74% alone in the last quarter, probably due to the pandemic. Small businesses that relied on a physical storefront could not open, forcing them to start an online presence. This suggests that the second quarter will beat first-quarter results.
9 Ugly Natural Gas Stocks to Keep on Your Watchlist
In Q1, Shopify posted revenue growth of 46.7% Y/Y to $470 million. Non-GAAP EPS was 19 cents (but a loss of 27 cents EPS on a GAAP basis). Gross merchandise volume (GMV) was $17.4 billion, up sharply from $11.9 billion last year.
ServiceNow (NOW)
Source: Sundry Photography / Shutterstock.com
ServiceNow earned $1.05 a share (non-GAAP) as revenue grew 34% Y/Y to $1.06 billion in the first quarter. The NOW ticker should be renamed to “WOW” because the company added 37 transactions of over $1 million in new net annual contract value. This is up 48% Y/Y.
The company’s CFO, Gina Mastantuono, said “we continue to focus on customer-driven innovation and remain confident in our path to $10 billion in revenue and beyond.”
On its conference call, CEO Bill McDermott said “we’re studying very carefully, especially in the COVID environment, what we can do to help them.” So, the company is protecting its revenue base by developing a business continuity plan with its customers. If the world ever goes back from virtual to physical, ServiceNow will not face a slowdown in its business.
ZoomInfo Technologies (ZI)
Source: II.studio / Shutterstock.com
As a recent post-IPO, ZoomInfo Technologies is already enjoying a trajectory upward. ZI stock popped 90% from its $21 IPO price when it debuted on the markets on June 4, 2020.
The company operates a business intelligence platform. It provides businesses with data intelligence analysis in return for subscription revenue. But smaller businesses cannot afford to pay as much as big companies. So, ZoomInfo’s offering is appealing. By disrupting the market, ZI stock is rising because it creates more revenue sources. Investors are betting that the company will win more small business customers in the quarters ahead.
The 7 Best Stocks to Invest in Right Now
Conservative investors should not ignore ZoomInfo’s rich valuations. Any market correction would hurt the stock price but create a better entry point for those who missed the rally.
Fastly (FSLY)
Source: Shutterstock
Just as the company name suggests, Fastly is on a tear after falling to $10.63 in March 2020. Even after the company took advantage of the rally by pricing a follow-on public offering of 6 million shares at $41.50, the stock kept rising. The cash raised will give the company more resources to invest in the business to fuel further growth.
In the first quarter, Fastly reported a GAAP EPS loss of 13 cents. Revenue grew 37% Y/Y to $63 million. CEO Joshua Bixby said:
These unprecedented times highlight the importance of digital transformation now more than ever, and our innovative and resilient customer base enables us to remain confident in the demand for our mission-critical services and the accelerated growth of our business.
Lately, markets rewarded digital transformation providers like Fastly with high valuations with expectations of faster growth ahead.
The company highlighted the site’s platform suits a customer base driven with innovation. For example, those digital transformers will continue to drive demand and increase Fastly’s revenue. Bixby said that “as a system built by developers for developers, we are uniquely positioned to capture that inspiration and to serve the best of the web.”
Be warned that analysts have a downside price target of around $42, a 50% downside risk (per Tipranks).
Square (SQ)
Source: IgorGolovniov / Shutterstock.com
Square broke above 52-week highs in the last few weeks as investors bet on a strong rebound in retail and software stocks. The pandemic shut down most retailers since March. But when they reopened again, markets bought any e-transaction companies, including Square stock.
Revenue could surge in the current quarter but there are risks. Small and medium-sized businesses slowed down too much for Square to report a year-on-year increase in transactions. Still, Cash App’s total payment volume (TPV) may have recovered back to pre-COVID-19 levels. With pent up demand, TPV may have grown at a better pace than expected. When Square reports quarterly results next month, a revenue and earnings beat may lift the stock to new highs for the year.
10 Best ETFs for 2020: The Race Tightens With 'New Normal' Looming Ahead
Competitor Mastercard (NYSE:MA) and Visa (NYSE:V) also recovered from March lows but Square stock outperformed both of them on a year-to-date basis. On average, the 26 analysts covering Square have a price target of around $89 (per Tipranks).
PagSeguro Digital (PAGS)
Source: rafastockbr / Shutterstock.com
PagSeguro Digital, based in Sao Paulo, reported revenue growth 26.9% from last year. Net income grew 15.2%, despite the COVID-19 pandemic. TPV grew by 30% Y/Y as did its active merchant basis. With R$1,404 million in cash and cash equivalents, the company may weather any potential slowdown.
The company describes itself as “a disruptive provider of financial technology solutions focused primarily on consumers, individual entrepreneurs, micro-merchants, small companies, and medium-sized companies in Brazil.” It is a financial technology provider in digital banking, point of sale devices, credit cards, prepaid, and cash issuance.
PagSeguro’s launch of a virtual shopping format, PagPerto, will let its sellers offer a digital product catalog. This will lower marketing costs for customers and match sellers with buyers. The format will also support shopping vouchers, called “vale-compras,” which should drive shopping volumes higher.
On that same month of April 2020, the company launched PagBank Health. In troubled pandemic times, expect volumes surging for medical exams, setting up pharmacy purchases, and doctor’s appointments.
In a 5-year discounted cash flow growth exit model, at a perpetuity growth rate of 4%, PAGS stock has a fair value of ~$48 (per finbox.com).
As of this writing, the author did not hold a position in any of the aforementioned securities.
The post 7 Software Stocks Surging Forward 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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There are seven software stocks that investors should watch closely: 10 Micro-Cap Stocks to Buy Today for Value and Growth Datadog (NASDAQ:DDOG) Shopify (NYSE:SHOP) ServiceNow (NYSE:NOW) ZoomInfo Technologies (NASDAQ:ZI) Fastly (NYSE:FSLY) Square (NYSE:SQ) PagSeguro Digital (NYSE:PAGS) Software Stocks to Buy: Datadog (DDOG) Source: Shutterstock First up on this list of software stocks is Datadog. CEO Olivier Prmel said that “In response to the COVID-19 pandemic, we are focused on ensuring the safety of our employees, continuing to best serve our customers, and investing in our platform.” Data courtesy of Stock Rover Research In the above bar chart, DataDog just completed its seasonally strong return period. The company’s CFO, Gina Mastantuono, said “we continue to focus on customer-driven innovation and remain confident in our path to $10 billion in revenue and beyond.” On its conference call, CEO Bill McDermott said “we’re studying very carefully, especially in the COVID environment, what we can do to help them.” So, the company is protecting its revenue base by developing a business continuity plan with its customers.
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There are seven software stocks that investors should watch closely: 10 Micro-Cap Stocks to Buy Today for Value and Growth Datadog (NASDAQ:DDOG) Shopify (NYSE:SHOP) ServiceNow (NYSE:NOW) ZoomInfo Technologies (NASDAQ:ZI) Fastly (NYSE:FSLY) Square (NYSE:SQ) PagSeguro Digital (NYSE:PAGS) Software Stocks to Buy: Datadog (DDOG) Source: Shutterstock First up on this list of software stocks is Datadog. Lately, markets rewarded digital transformation providers like Fastly with high valuations with expectations of faster growth ahead. PagSeguro Digital (PAGS) Source: rafastockbr / Shutterstock.com PagSeguro Digital, based in Sao Paulo, reported revenue growth 26.9% from last year.
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There are seven software stocks that investors should watch closely: 10 Micro-Cap Stocks to Buy Today for Value and Growth Datadog (NASDAQ:DDOG) Shopify (NYSE:SHOP) ServiceNow (NYSE:NOW) ZoomInfo Technologies (NASDAQ:ZI) Fastly (NYSE:FSLY) Square (NYSE:SQ) PagSeguro Digital (NYSE:PAGS) Software Stocks to Buy: Datadog (DDOG) Source: Shutterstock First up on this list of software stocks is Datadog. InvestorPlace - Stock Market News, Stock Advice & Trading Tips Software stocks surging forward would partly explain the Nasdaq’s monumental all-time highs achieved recently. The company’s CFO, Gina Mastantuono, said “we continue to focus on customer-driven innovation and remain confident in our path to $10 billion in revenue and beyond.” On its conference call, CEO Bill McDermott said “we’re studying very carefully, especially in the COVID environment, what we can do to help them.” So, the company is protecting its revenue base by developing a business continuity plan with its customers.
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There are seven software stocks that investors should watch closely: 10 Micro-Cap Stocks to Buy Today for Value and Growth Datadog (NASDAQ:DDOG) Shopify (NYSE:SHOP) ServiceNow (NYSE:NOW) ZoomInfo Technologies (NASDAQ:ZI) Fastly (NYSE:FSLY) Square (NYSE:SQ) PagSeguro Digital (NYSE:PAGS) Software Stocks to Buy: Datadog (DDOG) Source: Shutterstock First up on this list of software stocks is Datadog. Datadog also uses EFS and Amazon Web Service Lambda to help its customers “plan and track their maintenance.” Its strong product offering and growing customer base suggest that Datadog will sustain its revenue growth for at least the current year. For example, those digital transformers will continue to drive demand and increase Fastly’s revenue.
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89c894c5-5e09-4a04-beca-3aeb44b98b31
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719027.0
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2020-07-13 00:00:00 UTC
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Nasdaq Sinks 227 Points as Zoom, Other Investor Favorites Reverse and Fall Hard
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DDOG
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https://www.nasdaq.com/articles/nasdaq-sinks-227-points-as-zoom-other-investor-favorites-reverse-and-fall-hard-2020-07-13
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nan
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nan
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The Nasdaq Composite (NASDAQINDEX: ^IXIC) has had a great run, rising to record highs. But at least for a few hours, investors decided to forget about the future promise of many of the companies whose shares trade on Nasdaq stock market and instead weighed their profits. After having been up significantly for much of the day, the Composite and the Nasdaq-100 index fell almost 2%.
To be clear, not all Nasdaq stocks suffered declines. But the majority of the Nasdaq-100 did, and many of the companies that have flown the highest saw big declines seemingly based on nothing more than just fatigue at the pace of their past advances.
Image source: Getty Images.
Some big declines
There were plenty of stocks that posted sizable one-day drops:
Zoom Video Communications (NASDAQ: ZM), which has been one of the best-performing stocks in the market so far in 2020, fell almost 6% after having been up more than 2% at points earlier in the day.
DocuSign (NASDAQ: DOCU), which has seen demand for its electronic signature service soar during the coronavirus pandemic, slumped 9%.
DexCom (NASDAQ: DXCM) -- maker of continuous glucose monitoring medical devices for diabetes patients -- suffered an 8% drop.
Data analytics specialist Datadog (NASDAQ: DDOG) sank 10%, just one of many software-as-a-service (SaaS) companies caught up in the downdraft.
For the most part, there wasn't any fundamental news that sent these stocks down, along with the countless others that lost ground on Monday. Instead, it's useful to look the psychology of the market right now for hints to explain the big reversal.
The higher they rise, the harder they fall
In the long run, stocks tend to rise in conjunction with the strength of their underlying businesses. That's why relatively few people have been surprised at the fact that high-flying stocks have been able to defy the coronavirus bear market and gain ground.
Specifically, each of these companies has found tremendous growth opportunities in recent months. Zoom has hundreds of millions of people using its video collaboration platform for the first time in 2020. DocuSign has filled the void created by people not being able to meet in person to sign important legal documents. DexCom's monitoring devices have become even more valuable in helping to keep diabetes patients from having to visit treatment centers for assessments. And Datadog and its SaaS peers have helped to give their enterprise clients the ability to make the most of the information they're collecting while letting workers be productive from remote locations.
What's less clear, though, is whether the size of the stock-price gains in these companies has been warranted. In the short run, what defines how much a stock goes up is popularity among investors and buying demand for its shares. Short-term moves rarely move solely in one direction, with inevitable zigs and zags to keep shareholders on their toes.
Always be ready for volatility
Last but not least, investors who've owned these stocks for a while shouldn't let a day's losses lure them away from their long-term investment strategies. If you still believe that Datadog, DexCom, DocuSign, or Zoom will be an important player and grow in the future, then a significant decline like today's is a better sign that you should think about adding to positions rather than taking away from them. There's no guarantee that the stocks won't lose more ground on Tuesday, later this week, or during the rest of 2020. But if the businesses do well, then these big names and the many strong tech stocks that make up much of the Nasdaq-100 should have further to climb.
10 stocks we like better than DexCom
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 DexCom wasn't one of them! That's right -- they think these 10 stocks are even better buys.
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*Stock Advisor returns as of June 2, 2020
Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Datadog, DocuSign, and Zoom Video Communications. The Motley Fool recommends DexCom and recommends the following options: short August 2020 $130 calls on 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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Data analytics specialist Datadog (NASDAQ: DDOG) sank 10%, just one of many software-as-a-service (SaaS) companies caught up in the downdraft. But at least for a few hours, investors decided to forget about the future promise of many of the companies whose shares trade on Nasdaq stock market and instead weighed their profits. And Datadog and its SaaS peers have helped to give their enterprise clients the ability to make the most of the information they're collecting while letting workers be productive from remote locations.
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Data analytics specialist Datadog (NASDAQ: DDOG) sank 10%, just one of many software-as-a-service (SaaS) companies caught up in the downdraft. Some big declines There were plenty of stocks that posted sizable one-day drops: Zoom Video Communications (NASDAQ: ZM), which has been one of the best-performing stocks in the market so far in 2020, fell almost 6% after having been up more than 2% at points earlier in the day. The Motley Fool owns shares of and recommends Datadog, DocuSign, and Zoom Video Communications.
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Data analytics specialist Datadog (NASDAQ: DDOG) sank 10%, just one of many software-as-a-service (SaaS) companies caught up in the downdraft. Some big declines There were plenty of stocks that posted sizable one-day drops: Zoom Video Communications (NASDAQ: ZM), which has been one of the best-performing stocks in the market so far in 2020, fell almost 6% after having been up more than 2% at points earlier in the day. 10 stocks we like better than DexCom When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen.
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Data analytics specialist Datadog (NASDAQ: DDOG) sank 10%, just one of many software-as-a-service (SaaS) companies caught up in the downdraft. Some big declines There were plenty of stocks that posted sizable one-day drops: Zoom Video Communications (NASDAQ: ZM), which has been one of the best-performing stocks in the market so far in 2020, fell almost 6% after having been up more than 2% at points earlier in the day. In the short run, what defines how much a stock goes up is popularity among investors and buying demand for its shares.
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46e2debd-8b35-4950-aa5e-624f9f04e351
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719028.0
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2020-07-08 00:00:00 UTC
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These 3 Tech Stocks Are Absurdly Overvalued Right Now
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DDOG
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https://www.nasdaq.com/articles/these-3-tech-stocks-are-absurdly-overvalued-right-now-2020-07-08
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nan
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nan
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Many of the most sought-after stocks on the market come from the tech sector. Over the last few decades, the tech industry has remained on the cutting edge, bringing new and innovative technologies to society. This has generated heavy demand in the market for some tech stocks.
Consequently, some tech names have risen to absurd valuations. While these companies may prosper for years to come, their stock prices have increased to levels that could make earning long-term gains more difficult. In this respect, investors need to weigh the valuations of companies such as Bill.com Holdings (NYSE: BILL), Datadog, Inc. (NASDAQ: DDOG), and Shopify, Inc. (NYSE: SHOP) carefully before taking a chance on such stocks.
Bill.com
Bill.com is a software-as-a-service (SaaS) company that provides back-office financial services to small and medium-sized businesses (SMBs). It streamlines and automates billing and payment processes that most SMBs still perform manually. This work happens through Intuit's QuickBooks Online and other popular software packages that integrate with Bill.com's Simple Bill Pay.
Image source: Getty Images.
SMBs continue to increasingly embrace this service. In the most recent quarter, quarterly revenue growth increased by 46% year over year. Subscriptions and transactions revenue rose by 63% over the same period.
Investors have taken notice. The stock's initial run-up following its December IPO came down amid the stock market swoon related to COVID-19. However, Bill.com moved higher as tech stocks bounced back, and it has almost quadrupled in value since the March lows.
BILL data by YCharts
Nonetheless, this could indicate the stock price has moved ahead of growth. With losses projected for the foreseeable future, Bill.com does not have a P/E ratio for now. Still, it trades at a price-to-sales (P/S) ratio of over 52.
In comparison, Square, a high-growth company offering a wider array of financial services, trades at a sales multiple of 10.9. While Bill.com should continue to offer value to businesses, the stock could struggle to compete with Square or other fintech stocks.
Datadog
Datadog monitors cloud platforms on a high-level basis. It oversees the entire data stack, including the parts that come from third-party vendors. This allows IT departments to isolate potential issues. It also prevents and minimizes downtimes, helping to provide a smoother user experience.
This value proposition helped send revenue higher in the previous quarter by 87% from year-ago levels and resulted in a quarterly profit of $0.02 per diluted share for that period. The company also reported a positive free cash flow of $19.31 million.
However, this story has begun to capture more investor attention. Datadog stock began trading last September. It saw little upward movement in the stock price until right after tech stocks began their recovery in March. Since that time, it has more than tripled in value.
DDOG data by YCharts
Analysts project positive annual earnings this year, and consensus estimates place those at $0.05 per share. However, the P/S ratio is just under 63. While that does not necessarily imply that the stock has finished rising, investors can buy a competitor such as Splunk for around 12.9 times sales. Such a disparity increases the odds that current buyers become bag holders if the stock's fortune turns.
Shopify
Shopify stock is another SaaS company that has appeared unstoppable over the last few months. The stock price continues to rise as more SMBs adopt the Shopify platform.
Even amid the COVID-19 pandemic, the growth has accelerated. As in-person shopping options became limited, many retailers had to emphasize online shopping, thus boosting Shopify. In the first quarter, revenue rose by 47% year over year, while subscription solutions saw a revenue increase of 34% over the same period. The company earned $0.19 per share on an adjusted basis.
This has helped to contribute to the recent surge in the stock price. It has risen by approximately 375% from its March low.
SHOP data by YCharts
However, this had led to questions regarding its valuation. Shopify stock sells for just over 65 times sales. Furthermore, profit projections could keep the P/E ratio above 1,000 for years to come. Even if a projection of 73.3% earnings growth for 2020 holds, it may not justify such lofty valuations.
Additionally, despite Shopify's popularity, it is far from the only available e-commerce platform. Many businesses also choose to go with WooCommerce. WooCommerce is an open-source platform that is Shopify's largest competitor, according to dropshipping company Oberlo. Adobe's Magento platform is another available option. Adobe is not a pure e-commerce play like Shopify. Still, at 18.3 times sales, it is a significantly more affordable option.
Shopify has long defied analyst predictions of a downturn. Forecasting if and how much Shopify will continue to rise has proven difficult. However, given its current valuation, Shopify stock could face a years-long recovery process should it fall out of favor.
10 stocks we like better than Shopify
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 Shopify wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of June 2, 2020
Will Healy owns shares of Square. The Motley Fool owns shares of and recommends Adobe Systems, Datadog, Intuit, Shopify, Splunk, and Square 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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DDOG data by YCharts Analysts project positive annual earnings this year, and consensus estimates place those at $0.05 per share. In this respect, investors need to weigh the valuations of companies such as Bill.com Holdings (NYSE: BILL), Datadog, Inc. (NASDAQ: DDOG), and Shopify, Inc. (NYSE: SHOP) carefully before taking a chance on such stocks. While these companies may prosper for years to come, their stock prices have increased to levels that could make earning long-term gains more difficult.
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In this respect, investors need to weigh the valuations of companies such as Bill.com Holdings (NYSE: BILL), Datadog, Inc. (NASDAQ: DDOG), and Shopify, Inc. (NYSE: SHOP) carefully before taking a chance on such stocks. DDOG data by YCharts Analysts project positive annual earnings this year, and consensus estimates place those at $0.05 per share. In the most recent quarter, quarterly revenue growth increased by 46% year over year.
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In this respect, investors need to weigh the valuations of companies such as Bill.com Holdings (NYSE: BILL), Datadog, Inc. (NASDAQ: DDOG), and Shopify, Inc. (NYSE: SHOP) carefully before taking a chance on such stocks. DDOG data by YCharts Analysts project positive annual earnings this year, and consensus estimates place those at $0.05 per share. It saw little upward movement in the stock price until right after tech stocks began their recovery in March.
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DDOG data by YCharts Analysts project positive annual earnings this year, and consensus estimates place those at $0.05 per share. In this respect, investors need to weigh the valuations of companies such as Bill.com Holdings (NYSE: BILL), Datadog, Inc. (NASDAQ: DDOG), and Shopify, Inc. (NYSE: SHOP) carefully before taking a chance on such stocks. The stock price continues to rise as more SMBs adopt the Shopify platform.
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7d8f1eae-3da3-4ab9-a607-ce0c1af05b68
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719029.0
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2020-07-07 00:00:00 UTC
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Here's the Surprising Coronavirus Stock You'll Really Want to Own
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DDOG
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https://www.nasdaq.com/articles/heres-the-surprising-coronavirus-stock-youll-really-want-to-own-2020-07-07
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nan
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nan
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A "black swan" event is a highly unusual, utterly unpredictable happening that throws everybody for a loop. As far as the stock market is concerned, black swans are almost always bad. For instance, 9/11 was a black swan. COVID-19 is a black swan, too.
The coronavirus, which did not exist a year ago, has now shut down much of the world economy. The stock market hates that sort of uncertainty, and so earlier this year there was a massive sell-off.
Image source: Getty Images.
Fear drove the market down
March in particular showed really a scary drop. For instance, Shopify (NYSE: SHOP) shares dropped from $593 on Feb. 12 to $305 on March 18. To lose almost half your money in a month is scary.
In the weeks and months that followed, the market discovered that Shopify's business is actually doing great during this crisis. Revenue was up, way up. When the market finally figured it out, Shopify zoomed up to over $1,000 a share. Indeed, many internet stocks are seeing a surge in their business during this health scare. Stocks like Twilio (NYSE: TWLO), Zoom (NASDAQ: ZM), and Datadog (NASDAQ: DDOG) have all doubled in six months.
INTERNET STOCK PRICE ON JAN. 2 PRICE ON JULY 2 GAIN
Shopify $403.99 $1,029.97 159%
Zoom $68.80 $261.74 284%
Datadog $38.22 $89.59 137%
Twilio $100.01 $232.35 136%
Data from Yahoo Finance.
Why is this happening in the middle of a quarantine? Humanity is fighting against COVID-19. We don't like this stupid virus, and we want to beat it: "You're not going to defeat me! I'll move my business online." The rise in internet stock prices reflects this resiliency.
Yet far bigger rewards are being made by those small-cap biotech companies that are pursuing a coronavirus vaccine. These tiny companies have declared war on COVID-19, and the market is cheering these stocks higher and higher.
BIOTECH STOCK PRICE ON JAN. 2 PRICE ON JULY 2 GAIN
Vaxart (NASDAQ: VXRT) $0.34 $7.37 2,006%
Novavax (NASDAQ: NVAX) $3.99 $81.64 1,951%
Inovio Pharmaceuticals (NASDAQ: INO) $3.39 $21.45 550%
Altimmune (NASDAQ: ALT) $1.89 $10.42 451%
Vir Biotechnology (NASDAQ: VIR) $12.56 $40.32 220%
VBI Vaccines (NASDAQ: VBIV) $1.41 $2.87 108%
Data from Yahoo Finance.
What is the surprising coronavirus stock?
It's a biotech stock. Specifically, it's a small-cap biotech company that specializes in vaccines. And it's very surprising. It's Novavax, in which I am an investor, and it has surprised me.
When I bought the stock, I knew it was super-cheap, and potentially had a magnificent upside because of the company's flu vaccine. But of course I was surprised by COVID-19, and how Novavax's stock took off when the company started pursuing a vaccine for the coronavirus.
It's shocking that Novavax has had a 20-bagger, when the company's COVID-19 vaccine isn't even out of phase 1 trials yet. And we're seeing similar market reactions across the biotech sector, in names from the table above -- Vaxart, Altimmune, Inovio Pharmaceuticals, Vir Biotechnology, and VBI Vaccines. If you had invested $1,000 in each of those companies on Jan. 2, your $6,000 would now be worth over $59,000.
While sharp gains are always surprising, in retrospect they're less so. These stocks have a lot in common. All six of these names are small-cap biotech companies, and all six of them specialize in vaccines.
Contrast this with Gilead Sciences (NASDAQ: GILD) and its COVID-19 drug, remdesivir. It's a very promising treatment for patients who are severely ill from COVID-19, yet the market's not excited at all about that news. Gilead is up 17% this year.
Understand that the number of patients who are severely ill from COVID-19 is a very small number of people. It's far less than 1% of humanity. But the number of people who might be vaccinated is astronomical. You and I will be vaccinated. Perfectly healthy people will be vaccinated. Most of the world will be vaccinated.
Let's put it this way -- Novavax is talking about manufacturing 1 billion doses in 2021. If the company charges $1 a shot, the drug's a blockbuster. Charge $40 a shot, and it's the most valuable drug in the world. Charge $100 a shot, and it's the most valuable drug in the history of pharmaceuticals.
Who will win the vaccine race?
It's too early to say for sure. Speculators and other optimists have run up share prices across this entire sector. While I can't name the ultimate winner yet, there are many surprises ahead of us. Here's one: Maybe this excited mob of investors is right to be excited about biotech vaccine companies, and right to be investing now.
I think many people are underestimating how big this opportunity is. For instance, an analyst at H.C. Wainwright, Vernon Bernardino, suggested that the Novavax vaccine for COVID-19 might be worth $400 million in annual sales. That's a conservative number, to put it mildly. I think there's a good chance that Novavax's COVID-19 vaccine will be worth $0 in 2021. That's the worst-case scenario. But the best-case scenario is a lot higher than $400 million. It might be $4 billion, or $40 billion.
The COVID-19 vaccine market will be incredibly large -- far bigger than flu vaccines, for instance. And all six of these biotechs are still very small companies, despite the massive gains so far. Yes, the market is speculating about possible riches in front of us. But it's not an irrational mob. Consider that these stocks are still tiny.
BIOTECH VACCINE SPECIALIST MARKET CAP
PHASE 1 VACCINE TRIAL STARTED?
Novavax $4.79 billion Yes
Vir Biotechnology $4.75 billion Yes
Inovio Pharmaceuticals $3.39 billion Yes
Vaxart $699 million No
VBI Vaccines $661 million No
Altimmune $225 million No
Financial data from Yahoo Finance.
The surprising COVID-19 stock you will really want to own is the small-cap biotech company that has a COVID-19 vaccine approved by the FDA. That stock will be amazing. Because Novavax has had such wonderful success with its flu vaccine, I'm optimistic about its COVID-19 chances. But it's not a bad idea to buy a basket of these stocks, and spread out your risk. While some of these names will be hit by bad news, the potential upside for the winners is far larger than we can fathom.
10 stocks we like better than Novavax
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 Novavax wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of June 2, 2020
Taylor Carmichael owns shares of Afterpay Touch Group Ltd, Datadog, Novavax, Sea Limited, and Shopify. The Motley Fool owns shares of and recommends Datadog, Gilead Sciences, Shopify, Twilio, and Zoom Video Communications. The Motley Fool recommends Sea Limited and recommends the following options: short August 2020 $130 calls on 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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Stocks like Twilio (NYSE: TWLO), Zoom (NASDAQ: ZM), and Datadog (NASDAQ: DDOG) have all doubled in six months. And we're seeing similar market reactions across the biotech sector, in names from the table above -- Vaxart, Altimmune, Inovio Pharmaceuticals, Vir Biotechnology, and VBI Vaccines. For instance, an analyst at H.C. Wainwright, Vernon Bernardino, suggested that the Novavax vaccine for COVID-19 might be worth $400 million in annual sales.
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Stocks like Twilio (NYSE: TWLO), Zoom (NASDAQ: ZM), and Datadog (NASDAQ: DDOG) have all doubled in six months. Vaxart (NASDAQ: VXRT) $0.34 $7.37 2,006% Novavax (NASDAQ: NVAX) $3.99 $81.64 1,951% Inovio Pharmaceuticals (NASDAQ: INO) $3.39 $21.45 550% Altimmune (NASDAQ: ALT) $1.89 $10.42 451% Vir Biotechnology (NASDAQ: VIR) $12.56 $40.32 220% VBI Vaccines (NASDAQ: VBIV) $1.41 $2.87 108% Data from Yahoo Finance. Novavax $4.79 billion Yes Vir Biotechnology $4.75 billion Yes Inovio Pharmaceuticals $3.39 billion Yes Vaxart $699 million No VBI Vaccines $661 million No Altimmune $225 million No Financial data from Yahoo Finance.
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Stocks like Twilio (NYSE: TWLO), Zoom (NASDAQ: ZM), and Datadog (NASDAQ: DDOG) have all doubled in six months. Vaxart (NASDAQ: VXRT) $0.34 $7.37 2,006% Novavax (NASDAQ: NVAX) $3.99 $81.64 1,951% Inovio Pharmaceuticals (NASDAQ: INO) $3.39 $21.45 550% Altimmune (NASDAQ: ALT) $1.89 $10.42 451% Vir Biotechnology (NASDAQ: VIR) $12.56 $40.32 220% VBI Vaccines (NASDAQ: VBIV) $1.41 $2.87 108% Data from Yahoo Finance. But of course I was surprised by COVID-19, and how Novavax's stock took off when the company started pursuing a vaccine for the coronavirus.
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Stocks like Twilio (NYSE: TWLO), Zoom (NASDAQ: ZM), and Datadog (NASDAQ: DDOG) have all doubled in six months. It's a biotech stock. You and I will be vaccinated.
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569fe37e-6fea-40c0-98f1-63d9e5814d8b
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719030.0
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2020-07-07 00:00:00 UTC
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Better Buy: Slack Technologies vs. Datadog
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DDOG
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https://www.nasdaq.com/articles/better-buy%3A-slack-technologies-vs.-datadog-2020-07-07
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nan
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nan
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Slack (NYSE: WORK) and Datadog (NASDAQ: DDOG) were both major software IPOs last year. Slack, which went public via a direct listing last April, provides streamlined communication tools that help companies replace traditional emails and phone calls. Datadog, which arrived via a traditional IPO last September, helps companies analyze their full infrastructure -- including cloud services, servers, apps, services, and more -- on a single real-time dashboard.
Both companies provide innovative services, but investors clearly favored Datadog over Slack. Datadog's stock has more than tripled from its IPO price of $27 per share, while Slack's stock has risen less than 20% from its initial price of $26 per share. Let's see why Datadog attracted more bulls, and whether that trend will continue.
Image source: Getty Images.
Which company is growing faster?
Slack enjoys a first mover's advantage in its market, but it currently faces stiff competition from Microsoft (NASDAQ: MSFT) Teams, which the tech giant now bundles with its other cloud-based services. Datadog's top competitor is New Relic (NYSE: NEWR), which offers similar services through its New Relic One dashboard.
Slack's revenue rose 57% to $630.4 million in fiscal 2020, which ended this January, and climbed another 50% annually to $201.7 million in the first quarter of fiscal 2021. Its number of paid customers grew 28% annually to 122,000 during the quarter, and 963 of those customers generated over $100,000 in recurring revenue -- up 49% from a year ago. Its net dollar retention rate, which measures its growth per existing customer, hit 132%.
Those robust figures indicate its platform, which can be integrated with a wide range of services (including Microsoft Office) isn't losing ground to Microsoft Teams yet. Slack expects its revenue to rise 42%-44% annually in the second quarter and 36%-38% for the full year.
Datadog's revenue surged 83% to $362.8 million in 2019, then jumped another 87% to $131.2 million in the first quarter of 2020. Datadog ended the quarter with 960 customers, which generated over $100,000 in annual recurring revenue -- up 89% from a year earlier.
Over 400 platforms, including Cisco's Meraki and Amazon's cloud-based tools, now support Datadog's software "out of the box," and that support could widen its moat against New Relic and other competitors. Datadog expects its second-quarter revenue to rise 62% annually at the midpoint, and for its full-year revenue to grow 54%.
Datadog beats Slack in another key area
Datadog not only generates stronger revenue growth than Slack. It's also a lot closer to consistent profitability.
Image source: Getty Images.
Slack isn't profitable, and its GAAP net loss widened from $140.7 million to $571.1 million in fiscal 2020. In the first quarter of 2021, its net loss widened again from $33.3 million to $75.2 million.
Slack's non-GAAP net losses narrowed year-over-year during both periods, but it still lacks a meaningful path toward profitability -- which is troubling when a tech titan like Microsoft is breathing down its neck. Slack didn't provide any bottom-line guidance, but analysts expect its non-GAAP net losses to slightly narrow over the next two years.
Datadog's GAAP net loss widened from $10.8 million to $16.7 million in 2019, but it posted a GAAP profit of $6.5 million in the first quarter, compared to a loss of $9.5 million a year earlier. Datadog also expects to stay profitable on a non-GAAP basis in both the second quarter and the full year. It attributed its improving profitability to its expanding gross margins, which are buoyed by the "efficient" usage of its cloud hosting.
The clear winner: Datadog
Datadog isn't cheap at nearly 50 times its estimated sales for 2020. Slack, by comparison, trades at about 20 times this year's sales. However, investors are paying a premium for Datadog for three obvious reasons: It generates stronger revenue growth than Slack, it's more profitable, and it faces less formidable competitors.
Investors should be careful with Datadog, since its stock could deflate quickly if its growth stalls out. But for now, this high-growth stock could keep attracting more bulls than Slack, which needs to punch back against Microsoft while narrowing its losses.
10 stocks we like better than Slack Technologies
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 Slack Technologies wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of June 2, 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, Microsoft, New Relic, and Slack Technologies 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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Slack (NYSE: WORK) and Datadog (NASDAQ: DDOG) were both major software IPOs last year. Slack, which went public via a direct listing last April, provides streamlined communication tools that help companies replace traditional emails and phone calls. Slack enjoys a first mover's advantage in its market, but it currently faces stiff competition from Microsoft (NASDAQ: MSFT) Teams, which the tech giant now bundles with its other cloud-based services.
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Slack (NYSE: WORK) and Datadog (NASDAQ: DDOG) were both major software IPOs last year. Over 400 platforms, including Cisco's Meraki and Amazon's cloud-based tools, now support Datadog's software "out of the box," and that support could widen its moat against New Relic and other competitors. Slack isn't profitable, and its GAAP net loss widened from $140.7 million to $571.1 million in fiscal 2020.
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Slack (NYSE: WORK) and Datadog (NASDAQ: DDOG) were both major software IPOs last year. Datadog beats Slack in another key area Datadog not only generates stronger revenue growth than Slack. Datadog's GAAP net loss widened from $10.8 million to $16.7 million in 2019, but it posted a GAAP profit of $6.5 million in the first quarter, compared to a loss of $9.5 million a year earlier.
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Slack (NYSE: WORK) and Datadog (NASDAQ: DDOG) were both major software IPOs last year. Both companies provide innovative services, but investors clearly favored Datadog over Slack. Datadog ended the quarter with 960 customers, which generated over $100,000 in annual recurring revenue -- up 89% from a year earlier.
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47892915-7a10-4741-ae57-bbb6151cf1e2
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719031.0
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2020-07-01 00:00:00 UTC
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Got $3,000 to Invest? These 3 Stocks Could Make You Rich
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DDOG
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https://www.nasdaq.com/articles/got-%243000-to-invest-these-3-stocks-could-make-you-rich-2020-07-01
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nan
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nan
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This is an unprecedented time in human history and a challenging time for investors. After taking part in the longest bull market run in history, investors were whipsawed into the fastest bear market decline on record. From its peak on Feb. 18, the S&P 500 plunged 27% in just 23 days, before ultimately shedding 34% of its value. This quick reversal of fortunes left investors dazed and confused, and while the market has regained much of those losses, the future is still uncertain. There's even the potential for additional lockdowns as we continue to battle the COVID-19 pandemic.
It's important to remember that, despite these challenges, investing in the stock market remains the clearest path to accumulating wealth over time, even in the face of historic volatility.
Assuming you have an adequate emergency fund and $3,000 (or less) in disposable cash you don't need for at least the next three to five years, here are three companies that could make you a small fortune over the coming decade.
Image source: Getty Images.
Datadog: Identifying problems before they become critical
One of the paradigm shifts that occurred as the result of the pandemic is the shuttering of office spaces and having employees work from home. Companies are relying on their cloud-based systems now more than ever, but that new reality brings with it the potential for problems. IT departments are now decentralized, and system downtime can be costly.
That's where Datadog (NASDAQ: DDOG) comes in. The cloud native platform-as-a-service provider keeps a close watch on its customers' cloud activity, sending out the alarm when a problem or issue arises that might result in downtime. It goes even further, providing useful feedback and analytics that can both prevent these issues from happening in the future and improve cloud-computing operations.
The groundswell in remote work has resulted in a surge of additional business for Datadog. The company's first-quarter revenue grew 87% year over year, accelerating slightly from its 85% growth in Q4. While Datadog's total customer count grew 40%, large enterprise customers -- those contributing annual recurring revenue of $100,000 or more -- grew at an even faster clip, up 89%. This helped the company turn profitable for the first time.
There could be much more to come. Datadog's revenue last year totaled about $363 million, but management estimates its market opportunity at about $35 billion, leaving plenty of runway for future growth.
By identifying and addressing problems before they become critical, Datadog has carved out a large and growing niche, and the need for remote work has accelerated the demand for its services.
Image source: DocuSign.
DocuSign: The future of contracts is now
Another by-product of the pandemic has been the need for social distancing, seriously curtailing the ability to sign documents in person. DocuSign (NASDAQ: DOCU) already controlled about 70% of the e-signature market, but the migration to digitally signed documents accelerated in light of recent events.
DocuSign's revenue grew by 39% in the first quarter, keeping pace with its growth rate in 2019 and accelerating from the 35% gains the year before. More importantly, nearly 95% of its revenue came from subscriptions, providing a solid base of recurring revenue that's unlikely to decline materially. At the same time, adjusted profits soared 71%.
What investors may have failed to notice, however, is that DocuSign is no longer just about signatures. Last year, the company launched the DocuSign Agreement Cloud, a suite of products and integrations that help businesses automate the entire life cycle of contracts, which includes preparing, signing, acting on, and managing them.
Management believes DocuSign has just scratched the surface of the e-signature market, which it estimates at about $25 billion, while the addition of the Agreement Cloud could potentially double its total addressable market to $50 billion. DocuSign generated just $974 million in revenue last year, showing the magnitude of the opportunity.
This gives investors plenty of incentive to sign up with DocuSign.
Image source: Getty Images.
Okta: Identity verification is more important than ever
With remote work becoming the rule rather than the exception, many businesses have entered uncharted waters. The majority of employees are now signing into workplace systems remotely, ratcheting up the potential for unauthorized access.
Okta (NASDAQ: OKTA) is the clear leader in identity and access management, and businesses turned to the company in droves to verify the identity of internet users accessing their systems. The company offers a wide variety of technology solutions geared to ensuring that only authorized users gain access to workplace applications. These permissions include the ability to use a single sign-on to gain access to multiple systems, more complex multifactor authentications, and everything in between.
Business is booming. Okta's first-quarter revenue grew 46% year over year, while subscription revenue grew more quickly at 48%. The company isn't yet profitable, but its losses appear to be manageable. Its customer count grew 28% year over year, but those spending more than $100,000 annually jumped 38%. Existing customers are spending more, as evidenced by Okta's dollar-based net retention rate of 121%. The combination of new customers and higher spending from existing clients pushed the company's calculated billings up 42% and its remaining performance obligation (read contract backlog) up 57% to $1.24 billion.
This could just be the beginning. Okta's revenue of $586 million in 2019 pales in comparison to its total addressable market, which management estimates at about $55 billion.
The need to verify the identity of internet users will only increase from here, playing right into Okta's wheelhouse.
10 stocks we like better than Okta
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 Okta wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of June 2, 2020
Danny Vena owns shares of Datadog, DocuSign, and Okta. The Motley Fool owns shares of and recommends Datadog, DocuSign, and Okta. 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. It's important to remember that, despite these challenges, investing in the stock market remains the clearest path to accumulating wealth over time, even in the face of historic volatility. Last year, the company launched the DocuSign Agreement Cloud, a suite of products and integrations that help businesses automate the entire life cycle of contracts, which includes preparing, signing, acting on, and managing them.
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That's where Datadog (NASDAQ: DDOG) comes in. While Datadog's total customer count grew 40%, large enterprise customers -- those contributing annual recurring revenue of $100,000 or more -- grew at an even faster clip, up 89%. Datadog's revenue last year totaled about $363 million, but management estimates its market opportunity at about $35 billion, leaving plenty of runway for future growth.
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That's where Datadog (NASDAQ: DDOG) comes in. Management believes DocuSign has just scratched the surface of the e-signature market, which it estimates at about $25 billion, while the addition of the Agreement Cloud could potentially double its total addressable market to $50 billion. Okta (NASDAQ: OKTA) is the clear leader in identity and access management, and businesses turned to the company in droves to verify the identity of internet users accessing their systems.
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That's where Datadog (NASDAQ: DDOG) comes in. This gives investors plenty of incentive to sign up with DocuSign. Okta (NASDAQ: OKTA) is the clear leader in identity and access management, and businesses turned to the company in droves to verify the identity of internet users accessing their systems.
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441aad04-0cf3-4c79-aca8-6d4d616a8907
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719032.0
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2020-06-20 00:00:00 UTC
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Splunk, Datadog, and Elastic: 3 Ways to Invest in Data Analytics and Cloud Management
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DDOG
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https://www.nasdaq.com/articles/splunk-datadog-and-elastic%3A-3-ways-to-invest-in-data-analytics-and-cloud-management-2020
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nan
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nan
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As the business world's migration to cloud-based operations has picked up steam in recent years, data analytics, log management, and application management software have been in high demand. The trend got a shot in the arm due to the COVID-19 pandemic, which compelled countless organizations to quickly deploy new cloud-based systems just to keep the wheels turning during shelter-in-place.
As a result, shares of analytics software providers Splunk (NASDAQ: SPLK), Datadog (NASDAQ: DDOG), and Elastic (NYSE: ESTC) are up 24%, 123%, and 38%, respectively, year to date. One can't make exact apples-to-apples comparisons between them: There is a little overlap between the services Datadog and Elastic provide, but both compete with elements of Splunk -- the largest industry player, offering services from simple data logging to cloud management to cybersecurity orchestration. With the cloud transition in full swing, I think investors could do far worse than to add any of these stocks to their portfolios. But one tops my list as the best buy right now.
Image source: Getty Images.
A view from above the clouds
The market has given these big data stocks significantly different valuations. Splunk -- the pure-play big data leader, and also the oldest in this group -- would appear to be stuck in neutral. That's not exactly the case, though. As I explained a few months back, Splunk has been migrating its business over to renewable cloud contracts, which creates some accounting changes that affect year-over-year revenue growth comparisons. But cloud-specific sales grew 81% and total annual recurring revenue (ARR) was up 52% to $1.78 billion in the first quarter of its fiscal 2021, which ended April 30, and it expects ARR to continue growing at an average mid-40% rate for the next couple of years.
Ultimately, Splunk's growth history is a testament to the opportunity that lies ahead, especially for Datadog, which is cloud-native and thus the fastest-growing business of these three -- it managed an 87% increase in revenue in its latest quarter. There's big potential for Elastic as well, which is undergoing a cloud transition of its own.
METRIC
SPLUNK
DATADOG
ELASTIC
Market cap
$29.4 billion
$24.9 billion
$7.22 billion
Trailing 12-month revenue
$2.37 billion
$424 million
$428 million
YOY revenue growth
16%
59%
57%
Gross profit margin (most recent quarter)
70.4%
79.8%
72.3%
Trailing 12-month free cash flow
($384 million)
$21.0 million
($35.6 million)
Price-to-sales ratio
12.4
58.2
16.9
Data source: Splunk, Datadog, Elastic, YCharts, and Noonum.ai.
Of note here is the stratospheric valuation placed on Datadog, which currently trades for 58 times revenue. Granted, it deserves a premium. Besides its growth, it has the highest gross profit margins of the three and is the only one with positive free cash flow over the last year.
However, it's worth mentioning Splunk returned to positive free cash flow in Q1 ($31.3 million) as it completed its transition to more modern billing. Elastic, though it is growing at an impressive rate, trades for far less than Datadog because of its smaller gross margins and negative free cash flow.
Also of note: Elastic had the least in cash and equivalents on its balance sheet as of last quarter. At the end of April, it had $297 million on the books -- which will easily cover its cash burn for quite some time -- and zero debt. However, Datadog had $795 million in cash and short-term securities and zero debt; and Splunk had $1.76 billion in cash and short-term securities and $1.74 billion in debt (in the form of notes that can be converted into stock).
To bolster their respective war chests, Splunk recently raised an additional $1.1 billion in cash and Datadog $634 million -- each via a fresh round of convertible debt issuance. Splunk said it will use $692 million of its proceeds to purchase and retire $488 million of its old convertible debt. At the end of the day, Datadog wins with the largest cash net of debt stockpile, but Splunk's liquidity is impressive -- although it gets discounted because its approximately $2.3 billion in notes (subsequent to the recent debt offering after the last quarterly report) could dilute current shareholders if redeemed for new shares in the coming years.
Ranking my buy recommendations
To be clear, I think each of these cloud computing stocks is worth considering, and I think there's a good chance shareholders of Splunk, Datadog, and Elastic will be happy campers 10 years from now.
But I promised to reveal my preferred buy at the moment. As impressive as Datadog's momentum is -- not to mention its massive cash balance, which makes me think some acquisitions may be coming -- given its price-to-sales ratio of 58, I can't quite justify making a purchase at the moment.
Elastic is a little more appealing to me, with almost as impressive growth in the last year and a clean balance sheet. It is spending to promote growth, but that goes with the territory for a high-growth software firm. It too has competition, including a free-to-start version of its open-source software distributed through Amazon Web Services (AWS). But thus far, it seems that has done little to slow Elastic down.
Sitting atop my list is Splunk. Though the smaller upstarts are gunning for it, Splunk is quickly making the transition to cloud software and has finished migrating over to more modern billing. It's also profitable again (based on free cash flow). And longer-term, the industry leader still sees massive gains for data analytics and cloud management software. Though its price-to-sales discount relative to peers exists for a reason, I think Splunk will begin to rebuild its net cash stockpile, and it remains a formidable high-growth force to contend with in its industry. Right now, if I had to pick only one cloud management and data analytics stock to invest in, Splunk would be it.
10 stocks we like better than Splunk
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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.
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*Stock Advisor returns as of June 2, 2020
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Nicholas Rossolillo and his clients own shares of Splunk. The Motley Fool owns shares of and recommends Amazon, Datadog, Elastic N V, and Splunk 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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As a result, shares of analytics software providers Splunk (NASDAQ: SPLK), Datadog (NASDAQ: DDOG), and Elastic (NYSE: ESTC) are up 24%, 123%, and 38%, respectively, year to date. Ultimately, Splunk's growth history is a testament to the opportunity that lies ahead, especially for Datadog, which is cloud-native and thus the fastest-growing business of these three -- it managed an 87% increase in revenue in its latest quarter. Ranking my buy recommendations To be clear, I think each of these cloud computing stocks is worth considering, and I think there's a good chance shareholders of Splunk, Datadog, and Elastic will be happy campers 10 years from now.
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As a result, shares of analytics software providers Splunk (NASDAQ: SPLK), Datadog (NASDAQ: DDOG), and Elastic (NYSE: ESTC) are up 24%, 123%, and 38%, respectively, year to date. Market cap $29.4 billion $24.9 billion $7.22 billion Trailing 12-month revenue $2.37 billion $424 million $428 million YOY revenue growth 16% 59% 57% Gross profit margin (most recent quarter) 70.4% 79.8% 72.3% Trailing 12-month free cash flow ($384 million) $21.0 million ($35.6 million) Price-to-sales ratio 12.4 58.2 16.9 Data source: Splunk, Datadog, Elastic, YCharts, and Noonum.ai. However, it's worth mentioning Splunk returned to positive free cash flow in Q1 ($31.3 million) as it completed its transition to more modern billing.
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As a result, shares of analytics software providers Splunk (NASDAQ: SPLK), Datadog (NASDAQ: DDOG), and Elastic (NYSE: ESTC) are up 24%, 123%, and 38%, respectively, year to date. Market cap $29.4 billion $24.9 billion $7.22 billion Trailing 12-month revenue $2.37 billion $424 million $428 million YOY revenue growth 16% 59% 57% Gross profit margin (most recent quarter) 70.4% 79.8% 72.3% Trailing 12-month free cash flow ($384 million) $21.0 million ($35.6 million) Price-to-sales ratio 12.4 58.2 16.9 Data source: Splunk, Datadog, Elastic, YCharts, and Noonum.ai. However, Datadog had $795 million in cash and short-term securities and zero debt; and Splunk had $1.76 billion in cash and short-term securities and $1.74 billion in debt (in the form of notes that can be converted into stock).
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As a result, shares of analytics software providers Splunk (NASDAQ: SPLK), Datadog (NASDAQ: DDOG), and Elastic (NYSE: ESTC) are up 24%, 123%, and 38%, respectively, year to date. A view from above the clouds The market has given these big data stocks significantly different valuations. Market cap $29.4 billion $24.9 billion $7.22 billion Trailing 12-month revenue $2.37 billion $424 million $428 million YOY revenue growth 16% 59% 57% Gross profit margin (most recent quarter) 70.4% 79.8% 72.3% Trailing 12-month free cash flow ($384 million) $21.0 million ($35.6 million) Price-to-sales ratio 12.4 58.2 16.9 Data source: Splunk, Datadog, Elastic, YCharts, and Noonum.ai.
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0b2aee79-07c1-4838-ab95-89cee95cbd57
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719033.0
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2020-06-19 00:00:00 UTC
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Datadog Earns Coveted FedRAMP Authorization, Permitting Its Use By U.S. Government Agencies
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DDOG
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https://www.nasdaq.com/articles/datadog-earns-coveted-fedramp-authorization-permitting-its-use-by-u.s.-government-agencies
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nan
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nan
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Datadog (NASDAQ: DDOG) announced on Thursday that it had successfully navigated the Federal Risk and Authorization Management Program (FedRAMP) certification process and has achieved its Low-Impact Software-as-a Service (SaaS) Authorization.
Achieving this distinction allows U.S. federal government departments and agencies to adopt and use Datadog's cloud monitoring platform, which became available in the FedRAMP marketplace on May 14, 2020.
Image source: Getty Images.
"We're excited to bring our cloud monitoring capabilities to government agencies and public sector customers, and will continue to work on further FedRAMP authorizations," said Ilan Rabinovitch, Datadog's vice president of product and community. "Datadog's authorization for low-impact SaaS in the FedRAMP marketplace reflects our commitment to privacy, security, and compliance."
Avoiding critical downtime
Datadog's tools and services not only help customers scale their cloud-computing operations, it also monitors activity across client's cloud-based systems, notifying them of any critical issues that might result in costly downtime. Once a problem has been identified, Datadog sends out an alert to the appropriate technician, not only reporting the issue, but also providing helpful suggestions about how to resolve the problem.
The system even works for customers that have data strewn across a multi-cloud network, helping breakdown silos that exist within organizations. Datadog also gathers data that provides useful analytics that can help customers prevent similar issues from occurring in the future.
The technologies that Datadog provides "are invaluable to federal, state, and local governments as they modernize their digital operations and bring their services to the public through the cloud," the company said in a statement.
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 June 2, 2020
Danny Vena 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.
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Datadog (NASDAQ: DDOG) announced on Thursday that it had successfully navigated the Federal Risk and Authorization Management Program (FedRAMP) certification process and has achieved its Low-Impact Software-as-a Service (SaaS) Authorization. Achieving this distinction allows U.S. federal government departments and agencies to adopt and use Datadog's cloud monitoring platform, which became available in the FedRAMP marketplace on May 14, 2020. "We're excited to bring our cloud monitoring capabilities to government agencies and public sector customers, and will continue to work on further FedRAMP authorizations," said Ilan Rabinovitch, Datadog's vice president of product and community.
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Datadog (NASDAQ: DDOG) announced on Thursday that it had successfully navigated the Federal Risk and Authorization Management Program (FedRAMP) certification process and has achieved its Low-Impact Software-as-a Service (SaaS) Authorization. "We're excited to bring our cloud monitoring capabilities to government agencies and public sector customers, and will continue to work on further FedRAMP authorizations," said Ilan Rabinovitch, Datadog's vice president of product and community. "Datadog's authorization for low-impact SaaS in the FedRAMP marketplace reflects our commitment to privacy, security, and compliance."
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Datadog (NASDAQ: DDOG) announced on Thursday that it had successfully navigated the Federal Risk and Authorization Management Program (FedRAMP) certification process and has achieved its Low-Impact Software-as-a Service (SaaS) Authorization. "We're excited to bring our cloud monitoring capabilities to government agencies and public sector customers, and will continue to work on further FedRAMP authorizations," said Ilan Rabinovitch, Datadog's vice president of product and community. See the 10 stocks *Stock Advisor returns as of June 2, 2020 Danny Vena owns shares of Datadog.
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Datadog (NASDAQ: DDOG) announced on Thursday that it had successfully navigated the Federal Risk and Authorization Management Program (FedRAMP) certification process and has achieved its Low-Impact Software-as-a Service (SaaS) Authorization. Achieving this distinction allows U.S. federal government departments and agencies to adopt and use Datadog's cloud monitoring platform, which became available in the FedRAMP marketplace on May 14, 2020. "Datadog's authorization for low-impact SaaS in the FedRAMP marketplace reflects our commitment to privacy, security, and compliance."
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4c195554-318f-4bb1-b412-63fa67135d13
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719034.0
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2020-06-13 00:00:00 UTC
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Elastic Stock Looks Like a Value as Digital Transformation Demand Remains Strong
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DDOG
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https://www.nasdaq.com/articles/elastic-stock-looks-like-a-value-as-digital-transformation-demand-remains-strong-2020-06
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nan
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nan
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After a nearly year-long tumble culminating with the market meltdown in March 2020, shares of data analytics firm Elastic (NYSE: ESTC) are homing back in on all-time highs. Digital transformation got forced into high gear this year with the onset of the pandemic, as organizations slow to adapt to modern digital operating models scramble to keep the doors open. Shelter-in-place may not continue as it has the last few months, but it's becoming increasingly clear that remote work and digital systems supported by the cloud are fast becoming the norm.
The trend was already a good one for big data and analytics companies, but the thesis strengthened amid the coronavirus crisis. Elastic has now rallied nearly 30% this year -- including a 90% run since the lows in mid-March -- but this cloud stock is a relative value compared to its peers as it continues to post impressive growth.
Image source: Getty Images.
The transition to SaaS continues
Elastic builds self-service big data tools that allow users to search for and organize information, monitor digital operations, and detect cyber threats. Some of Elastic's competitors include legacy industry leader Splunk (NASDAQ: SPLK) as well as fellow upstart Datadog (NASDAQ: DDOG).
The last couple of years have been a great run for big data and analytics firms. Not only is digital transformation picking up steam, so is a transition to cloud-based software offered on a software-as-a-service (SaaS) model (think renewable licensing deals). It's meant big increases in business for small Datadog and Elastic -- although our company of focus here has also been undergoing a bit of a transformation from legacy service billing methods to en vogue SaaS. It's meant rapid growth, with SaaS business in fourth-quarter fiscal 2020 (the three months ended April 30, 2020) accelerating to a 110% year-over-year rate and capping an excellent year for the software firm.
METRIC
12 MONTHS ENDED APRIL 30, 2020
12 MONTHS ENDED APRIL 30, 2019
CHANGE
SaaS revenue
$45.8 million
$92.3 million
101%
Total revenue
$428 million
$272 million
57%
Gross profit margin
71.3%
71.3%
0%
Free cash flow
($35.6 million)
($27.4 million)
N/A
Data source: Elastic.
It's also worth noting that the stellar conclusion to fiscal 2020 occurred during the start of the economic meltdown hastened by the pandemic. Clearly, all things related to helping an organization bridge the gap to digital-first are getting a boost, Elastic included.
But what of the guidance? After all, for a high-growth software outfit like Elastic, it's all about the future -- especially considering cash is getting aggressively reinvested to promote expansion, pushing resulting free cash flow (revenue less cash operating and capital expenses) into negative territory. For Q1 fiscal 2021, management forecast revenue to be up 34% from a year ago, and full-year 2021 revenue to be up 25%. New business is tapping the brakes, as a slow recovery for the global economy lies ahead and many potential customers are being cautious with new spending projects.
Far cheaper than the average analytics firm
Of course, growth is growth, and anything north of 20% given the current economic environment is hard to get too upset about. If the slowdown persists into next year and Elastic's losses continue to mount, it's worth reevaluating, but in the meantime the cloud software company is in good shape.
Cash and equivalents on the balance sheet at the end of April were $297 million, and there was no debt. That gives Elastic plenty of room to continue investing during this downturn. The company also trades for 12.5 times expected fiscal 2021 revenue. That compares with 12.3 forward sales for Splunk, which is temporarily stuck in neutral as it makes its cloud transition, and a whopping 41.9 for Datadog, which expects full-fiscal year revenue growth of 54%, not to mention that it just raised $634 million in fresh cash via a recent convertible debt offering. Thus, a premium of some amount is warranted for Datadog, but Elastic seems to have been left in the dog house while Datadog has been brought in by a warm and cozy fire.
I therefore think Elastic looks like a value -- albeit a relative one compared to its peers. Its valuation most certainly implies it will continue to expand, but the outlook for the year ahead as the global economy begins to patch itself back together leaves plenty to be happy about.
10 stocks we like better than Elastic N V
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 Elastic N V wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of June 2, 2020
Nicholas Rossolillo and his clients own shares of Splunk. The Motley Fool owns shares of and recommends Datadog, Elastic N V, 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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Some of Elastic's competitors include legacy industry leader Splunk (NASDAQ: SPLK) as well as fellow upstart Datadog (NASDAQ: DDOG). The transition to SaaS continues Elastic builds self-service big data tools that allow users to search for and organize information, monitor digital operations, and detect cyber threats. It's meant big increases in business for small Datadog and Elastic -- although our company of focus here has also been undergoing a bit of a transformation from legacy service billing methods to en vogue SaaS.
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Some of Elastic's competitors include legacy industry leader Splunk (NASDAQ: SPLK) as well as fellow upstart Datadog (NASDAQ: DDOG). After a nearly year-long tumble culminating with the market meltdown in March 2020, shares of data analytics firm Elastic (NYSE: ESTC) are homing back in on all-time highs. SaaS revenue $45.8 million $92.3 million 101% Total revenue $428 million $272 million 57% Gross profit margin 71.3% 71.3% 0% Free cash flow ($35.6 million) ($27.4 million)
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Some of Elastic's competitors include legacy industry leader Splunk (NASDAQ: SPLK) as well as fellow upstart Datadog (NASDAQ: DDOG). Elastic has now rallied nearly 30% this year -- including a 90% run since the lows in mid-March -- but this cloud stock is a relative value compared to its peers as it continues to post impressive growth. SaaS revenue $45.8 million $92.3 million 101% Total revenue $428 million $272 million 57% Gross profit margin 71.3% 71.3% 0% Free cash flow ($35.6 million) ($27.4 million)
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Some of Elastic's competitors include legacy industry leader Splunk (NASDAQ: SPLK) as well as fellow upstart Datadog (NASDAQ: DDOG). Elastic has now rallied nearly 30% this year -- including a 90% run since the lows in mid-March -- but this cloud stock is a relative value compared to its peers as it continues to post impressive growth. The last couple of years have been a great run for big data and analytics firms.
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3876f5a8-cadd-4e83-9940-12eb56470076
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719035.0
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2020-06-12 00:00:00 UTC
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Investors Should Root for a Dip in Shopify Stock
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DDOG
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https://www.nasdaq.com/articles/investors-should-root-for-a-dip-in-shopify-stock-2020-06-12
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nan
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Shopify (NYSE:SHOP) has stalled out. A rally to all-time highs last month reversed quickly. SHOP stock has now traded flat over the past five-plus weeks.
Source: justplay1412 / Shutterstock.com
That’s not bad news, however. With a name like Shopify, which has gained a staggering 693% in the last three years, it’s almost tempting to assume that flat trading means something has gone wrong.
But SHOP stock has seen these patterns before. The stock consolidated toward the end of last year after a summer swoon. Within three months it had doubled to an all-time high. Shares flattened in the second half of April; new highs again followed. Investors can go back to the second half of 2018 — when SHOP declined — or the quiet summer of 2017. The story has always ended the same way.
To put it simply, we’ve been here before. Each time, SHOP stock simply needed a pause before resuming its upward march. I expect the same pattern will repeat.
In the meantime, investors taking the long view should be rooting hard for another short-term stumble to create an even better buying opportunity.
The Shopify Debate
At this point, I don’t believe there’s much debate over the quality of Shopify as a business. Back in 2017, short seller Citron Research alleged that Shopify was using aggressive tactics in affiliate marketing to create an unsustainable burst in users and revenues. Citron has had some hits — most notably on Valeant Pharmaceuticals, now known as Bausch Health (NYSE:BHC) — but its short case for Shopify was a clear miss.
7 Great Biotech Stocks to Buy and Hold Now
With those allegations falling flat, there’s simply not much to dislike here. Shopify’s turnkey platform for small and medium businesses is absolutely dominant. The company is moving upmarket to larger customers as well. In a world where small, unique and online are all positive attributes, Shopify is perfectly positioned.
The debate for the most part comes down to valuation. SHOP stock trades at a staggering 46x trailing twelve-month revenue.
We’ll get to valuation in a moment, but it’s worth staying with the business discussion to make a key point. I actually believe Shopify’s business, at this point, is somewhat underrated.
Expanding Reach
Investor attention focuses on the core platform. But it’s the company’s expanding reach that underpins a growth story that literally has decades to play out.
Shopify’s move into fulfillment last year garnered headlines. But investors should review the news from the company’s Reunite virtual event from last month as well. The announcements Shopify made highlight just how integral the company is becoming to businesses worldwide.
Shopify launched Balance, which provides a business account for entrepreneurs. It includes credit and debit cards, merchant rewards and payment tracking.
The company is enabling “Buy Now, Pay Later” for its merchants. It’s adding a local delivery option. And the event follows the launch of a direct-to-consumer app named Shop.
Investors should understand the totality of these moves. What Shopify is giving merchants — and not just small online retailers — is essentially the ability to act like a much larger company.
Put another way, these efforts, combined with the core platform and fulfillment, bring the benefits of scale to entrepreneurs and businesses who lack that scale.
That is a truly transformative offering. Without exaggeration, Shopify is upending the business world.
And that’s why I think the business has become underrated at this point. Investors know Shopify has a great platform. I’m not sure enough investors realize how much the company’s additional efforts matter.
SHOP Stock Is Not Too Expensive
Skeptics will retort that this all might be true, but SHOP stock still is too expensive. With the exception of Zoom Video Communications (NASDAQ:ZM) and Datadog (NASDAQ:DDOG), there isn’t a major tech stock that has a higher price-to-revenue multiple. A forward price-to-earnings multiple over 1,100x seems almost ludicrous.
But there are simple retorts to that concern. First, SHOP stock obviously shouldn’t be cheap. This is a company growing revenue at a 35%-plus clip whose addressable market is absolutely massive. There’s not going to be a market that puts Shopify stock truly “on sale.”
Second, the price-to-earnings multiple is inflated somewhat by thin margins. And those margins are being impacted by investments made in sales, marketing and the new efforts (including fulfillment). Those are precisely the kind of investments Shopify should be making right now.
Finally, its high valuation is not a reason to sell, particularly in this market. Again, good companies are not supposed to be cheap. Given that we’ve seen Tesla (NASDAQ:TSLA), Amazon (NASDAQ:AMZN), Zoom and so many others rally through short-term valuation fears, that lesson should be learned by now.
SHOP stock is not going to get cheap. The only hope at this point is that it might get cheaper. Again, we’ve seen investors sell off the stock in the past, and after rocky trading Thursday that may occur again.
Long-term investors should hope it does, because Shopify’s stock is a buy at the current price. It would be an even better buy if the market makes the same mistake again.
Matthew McCall left Wall Street to actually help investors — by getting them into the world’s biggest, most revolutionary trends BEFORE anyone else. The power of being “first” gave Matt’s readers the chance to bank +2,438% in Stamps.com (STMP), +1,523% in Ulta Beauty (ULTA) and +1,044% in Tesla (TSLA), just to name a few. Click here to see what Matt has up his sleeve now. Matt does not directly own the aforementioned securities.
The post Investors Should Root for a Dip in Shopify Stock 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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With the exception of Zoom Video Communications (NASDAQ:ZM) and Datadog (NASDAQ:DDOG), there isn’t a major tech stock that has a higher price-to-revenue multiple. In the meantime, investors taking the long view should be rooting hard for another short-term stumble to create an even better buying opportunity. Back in 2017, short seller Citron Research alleged that Shopify was using aggressive tactics in affiliate marketing to create an unsustainable burst in users and revenues.
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With the exception of Zoom Video Communications (NASDAQ:ZM) and Datadog (NASDAQ:DDOG), there isn’t a major tech stock that has a higher price-to-revenue multiple. InvestorPlace - Stock Market News, Stock Advice & Trading Tips Shopify (NYSE:SHOP) has stalled out. And those margins are being impacted by investments made in sales, marketing and the new efforts (including fulfillment).
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With the exception of Zoom Video Communications (NASDAQ:ZM) and Datadog (NASDAQ:DDOG), there isn’t a major tech stock that has a higher price-to-revenue multiple. InvestorPlace - Stock Market News, Stock Advice & Trading Tips Shopify (NYSE:SHOP) has stalled out. The Shopify Debate At this point, I don’t believe there’s much debate over the quality of Shopify as a business.
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With the exception of Zoom Video Communications (NASDAQ:ZM) and Datadog (NASDAQ:DDOG), there isn’t a major tech stock that has a higher price-to-revenue multiple. InvestorPlace - Stock Market News, Stock Advice & Trading Tips Shopify (NYSE:SHOP) has stalled out. And those margins are being impacted by investments made in sales, marketing and the new efforts (including fulfillment).
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cfe6c048-6fcc-45fa-b3b8-b698613454b1
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719036.0
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2020-06-11 00:00:00 UTC
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Better Buy: Alphabet vs. Datadog
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DDOG
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https://www.nasdaq.com/articles/better-buy%3A-alphabet-vs.-datadog-2020-06-11
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nan
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nan
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While many "out-of-home" stocks have rallied strongly since the beginning of June, the "stay-at-home" technology space is still looking good going forward. After all, the COVID-19 pandemic has accelerated many technology trends, including e-commerce, work-from-home, remote education, and tele-medicine. And last I checked, COVID-19 is still out there and we don't yet have a vaccine.
All of these trends mean enterprises will have to digitize their organizations as quickly as possible, while also looking to reach consumers even if they're stuck at home. Two leading companies that can help businesses accomplish these feats are Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) and Datadog (NASDAQ: DDOG).
Let's dive in and see which is the better buy today.
Image source: Getty Images.
Google helps organizations digitize infrastructure and marketing
Most people are familiar with Alphabet's Google search engine, as well as its YouTube online video service. With many stuck at home, usage of Google search as well as YouTube surged in the first quarter, with COVID-19-related activity on Google search rivaling that of the Super Bowl. Even YouTube premium subscriptions increased during the quarter, according to management. That also makes sense in light of many people potentially cutting the cord on traditional cable, an existing trend that may have been accelerated by the lack of live sports.
Even with the COVID-19 pandemic hitting the U.S. hard during the final two weeks of the quarter, advertising on YouTube was a notable standout, as YouTube exited March with revenue up 9% year-over-year, thanks to an increase in demand response advertising. With search advertising down mid-teens exiting the quarter and Google's network partner advertising down low double digits, that's really impressive.
Even other non-core Alphabet products and services saw a pickup in demand in Q1, with Chromebook sales spiking 400% over the prior year in the week ending March 21. Obviously, it was also a strong quarter for Google's Meet video conferencing service, which saw a tremendous thirtyfold increase in usage.
The point is, as businesses start to reopen and look to attract or remind customers of their reopening, Google's properties look like prime real estate on which to advertise.
In addition to reaching customers, Alphabet is also helping enterprises digitize their operations. Alphabet has done a great job of growing its Google Cloud Platform into a formidable number three player in the cloud infrastructure sector, where it's only one of three major players that can compete. Realizing the importance of cloud, Google has invested heavily over the past few years to catch up to the cloud leaders, hiring ex-Oracle (NYSE: ORCL) executive Thomas Kurian in 2018 and spending big on data centers to cater to enterprise clients since that time.
That move looks like it's paying off, with the company's cloud segment surging 52% in the first quarter, and that was in a quarter marred by the outbreak of COVID-19. Even better, management said that the underlying Google infrastructure-as-a-service platform grew at an even higher rate. According to a recent report from research firm Canalys, Google Cloud grew its infrastructure service by 87.8% in 2019, increasing its market share from 4.2% to 5.8%.
Datadog keeps tabs on all your tech
Unlike Alphabet, which has been a public company since 2004, Datadog has only been a public company for less than a year, with its recent IPO just in September of 2019. However, Datadog was founded in 2010, and has deliberately built up a very powerful platform of its own.
Datadog's platform helps organizations track and manage the myriad clouds, data centers, databases, applications, and other corporate IT elements that have been expanding at a breakneck pace over the last 10 years. Datadog also now has over 400 different third-party integrations, making it a very important unifying platform for any organization.
While there are many other competitors that offer infrastructure monitoring, cloud monitoring, application monitoring, or log management, Datadog incorporates all of these in an easy-to-use interface -- a powerful combination. Apparently, customers are thrilled, as Datadog has amassed 11,500 customers in just 10 years. And a decade into its existence, the company is still growing at a breakneck pace. Last quarter, revenue surged 87%, even in a COVID-19-affected quarter, while management also raised full-year guidance on the recent surprising strength.
Two very different types of stocks
While both Datadog and Alphabet help corporations digitize their infrastructures, in terms of financial characteristics, they're very different. Alphabet is huge, with a market cap of nearly $1 trillion, and is highly diversified among its core digital advertising, cloud computing, hardware and app store, and moonshot projects it's seeding under its "other bets" segment. Alphabet is also highly profitable, with operating margins of 22% over the past 12 months -- though that included one quarter affected by COVID-19 ad slowdown.
Meanwhile, Datadog is more of a one-product platform, making it less diversified, and much more risky to own than Alphabet. Still, Datadog actually showed a slight operating profit in its recent quarter, which is somewhat rare for such a high-growth software-as-a-service company, many of which are posting operating losses as they invest in growth. Impressively, Datadog expanded its gross margins from 73% to 80% over the past year, suggesting big profits could be down the road as the company continues to scale.
Of course, Datadog's breakneck growth is reflected in its valuation, which is, predictably, much higher than Alphabet's. Looking at each company's pre-COVID "normal" growth rates from last year, along with their current valuations, you can see that investors are paying up heavily for Datadog's outperforming growth.
COMPANY
2019 REVENUE GROWTH (CONSTANT CURRENCY)
PRICE-TO-EARNINGS RATIO (TTM)
PRICE-TO-SALES RATIO (TTM)
Alphabet
20%
29.4
5.9
Datadog
83%
N/A
53.9
Data source: Company fourth quarter 2019 earnings release and Yahoo! Finance. TTM=trailing 12 months.
You're paying a pretty penny for Datadog's growth
To my eyes, Alphabet is a much better value today, especially for the risk-off investor. Alphabet has an enormous cash pile over $110 billion, is highly profitable, and is growing fast enough that its 29.4 PE ratio seems like a solid value. Meanwhile, Datadog's 53.9 price-to-sales ratio is very expensive.
That being said, companies growing as fast as Datadog often trade at seemingly high valuations, yet can still be winning stocks over the long-term. Thus, for those willing to make a riskier bet in return for higher growth potential, Datadog would make a fine candidate. Just be prepared to weather some serious volatility in the meantime.
Make no mistake, Datadog is a very good company that I'd love to have in my portfolio -- just at a lower valuation. That makes the choice between the two a question of style, with older investors probably leaning toward Alphabet. Yet for younger twentysomethings, it's not crazy to bet on Datadog, even at these levels, though Alphabet also seems like a solid pick for investors of any age, thanks to its growth and value combination.
10 stocks we like better than Alphabet (A shares)
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 Alphabet (A shares) wasn't one of them! That's right -- they think these 10 stocks are even better buys.
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*Stock Advisor returns as of June 2, 2020
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Billy Duberstein owns shares of Alphabet (C shares) and has the following options: short August 2020 $1000 puts on Alphabet (C shares). His clients may own shares of the companies mentioned. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), 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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Two leading companies that can help businesses accomplish these feats are Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) and Datadog (NASDAQ: DDOG). That also makes sense in light of many people potentially cutting the cord on traditional cable, an existing trend that may have been accelerated by the lack of live sports. Datadog's platform helps organizations track and manage the myriad clouds, data centers, databases, applications, and other corporate IT elements that have been expanding at a breakneck pace over the last 10 years.
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Two leading companies that can help businesses accomplish these feats are Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) and Datadog (NASDAQ: DDOG). Google helps organizations digitize infrastructure and marketing Most people are familiar with Alphabet's Google search engine, as well as its YouTube online video service. Datadog's platform helps organizations track and manage the myriad clouds, data centers, databases, applications, and other corporate IT elements that have been expanding at a breakneck pace over the last 10 years.
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Two leading companies that can help businesses accomplish these feats are Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) and Datadog (NASDAQ: DDOG). Datadog keeps tabs on all your tech Unlike Alphabet, which has been a public company since 2004, Datadog has only been a public company for less than a year, with its recent IPO just in September of 2019. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), and Datadog.
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Two leading companies that can help businesses accomplish these feats are Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) and Datadog (NASDAQ: DDOG). Datadog's platform helps organizations track and manage the myriad clouds, data centers, databases, applications, and other corporate IT elements that have been expanding at a breakneck pace over the last 10 years. Of course, Datadog's breakneck growth is reflected in its valuation, which is, predictably, much higher than Alphabet's.
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9284bfb9-2719-4d1c-9a37-8a8c07cf82dd
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719037.0
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2020-06-03 00:00:00 UTC
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Why Datadog Stock Skyrocketed 58% in May
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DDOG
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https://www.nasdaq.com/articles/why-datadog-stock-skyrocketed-58-in-may-2020-06-03
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nan
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nan
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What happened
Shares of Datadog (NASDAQ: DDOG) rose a stunning 58% in May, according to data from S&P Global Market Intelligence, as the cloud application monitoring company reported blockbuster revenue growth in its first-quarter earnings report.
Cloud software stocks have been all the rage over the past few years and especially during the COVID-19 pandemic, as investors anticipate accelerated adoption of these next-generation platforms to enable work, medical care, and education from home. Add Datadog's confirming financial results on top of that, and the powerful combo sent shares vertical during May.
Image source: Getty Images.
So what
During its quarterly earnings report, released on May 11, Datadog saw 87% revenue growth, with the number of customers spending over $100,000 nearly doubling to 960, up from just 508 one year ago. The company also released its new security monitoring product that integrates security, developer, and operations personnel into a single monitoring app.
Importantly, management noted that Datadog had surpassed 400 different third-party integrations. These are key, as the value proposition for Datadog's service is that it seamlessly monitors a wide variety of IT equipment, applications, and software.
Not only did Datadog smash expectations for the quarter, but management also guided to revenue of $134 million to $136 million for the current quarter, well ahead of analyst estimates for $126.3 million. Over the full year, Datadog expects adjusted operating profits between breakeven and $10 million, which is impressive for high-growth cloud software companies, many of which are putting up losses in order to fuel growth.
Now what
After the recent run-up in its stock price, Datadog is raising money, having sold $650 million of 0.125% convertible notes due 2025 at the end of May, with a conversion price of $92.30, or about 30% above today's share price. Normally, I don't like to buy a stock when it is effectively selling shares to the public after a big run. On the other hand, there have been many cases of high-growth cloud software companies issuing shares and then continuing to climb anyway in recent years.
If anything, Datadog's management appears to be making a shrewd move after May's meteoric 58% run and 162% rise since its September IPO, bolstering the company's war chest at attractive prices so it can double down on innovation. While the stock remains very expensive, Datadog's future appears quite bright, and shares could still make for a good buy with a long-enough time horizon. With all-star growth and rising margins, Datadog should be at the top of any tech investor's buy list on any pullbacks.
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 April 16, 2020
Billy Duberstein has no position in any of the stocks mentioned. His clients may own shares of the companies 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) rose a stunning 58% in May, according to data from S&P Global Market Intelligence, as the cloud application monitoring company reported blockbuster revenue growth in its first-quarter earnings report. Cloud software stocks have been all the rage over the past few years and especially during the COVID-19 pandemic, as investors anticipate accelerated adoption of these next-generation platforms to enable work, medical care, and education from home. Over the full year, Datadog expects adjusted operating profits between breakeven and $10 million, which is impressive for high-growth cloud software companies, many of which are putting up losses in order to fuel growth.
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What happened Shares of Datadog (NASDAQ: DDOG) rose a stunning 58% in May, according to data from S&P Global Market Intelligence, as the cloud application monitoring company reported blockbuster revenue growth in its first-quarter earnings report. So what During its quarterly earnings report, released on May 11, Datadog saw 87% revenue growth, with the number of customers spending over $100,000 nearly doubling to 960, up from just 508 one year ago. On the other hand, there have been many cases of high-growth cloud software companies issuing shares and then continuing to climb anyway in recent years.
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What happened Shares of Datadog (NASDAQ: DDOG) rose a stunning 58% in May, according to data from S&P Global Market Intelligence, as the cloud application monitoring company reported blockbuster revenue growth in its first-quarter earnings report. Now what After the recent run-up in its stock price, Datadog is raising money, having sold $650 million of 0.125% convertible notes due 2025 at the end of May, with a conversion price of $92.30, or about 30% above today's share price. While the stock remains very expensive, Datadog's future appears quite bright, and shares could still make for a good buy with a long-enough time horizon.
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What happened Shares of Datadog (NASDAQ: DDOG) rose a stunning 58% in May, according to data from S&P Global Market Intelligence, as the cloud application monitoring company reported blockbuster revenue growth in its first-quarter earnings report. On the other hand, there have been many cases of high-growth cloud software companies issuing shares and then continuing to climb anyway in recent years. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.
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f250f18a-5e4f-402e-9165-93d5dab8b7a4
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719038.0
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2020-05-30 00:00:00 UTC
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$10,000 Invested in These 5 Top Stocks Could Make You a Fortune in 10 Years
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DDOG
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https://www.nasdaq.com/articles/%2410000-invested-in-these-5-top-stocks-could-make-you-a-fortune-in-10-years-2020-05-30
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nan
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nan
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The stock market has recovered about two-thirds of the value it lost in the historic, coronavirus-induced plunge it took in late February and early March, leaving many investors with a case of whiplash and wondering how they missed the buying opportunities that were created as the major indexes plummeted more than 30% in less than five weeks.
It's important to remember that one of the most tried-and-true ways to accumulate wealth is investing in high-quality companies with strong growth prospects, and holding them through thick and thin. This even holds true for investors whose caution kept them on the sidelines amid a once-in-a-generation bargain-shopping opportunity.
Assuming you have an adequate emergency fund and $10,000 (or less) in disposable cash you don't expect to need for at least the next three to five years, here are five companies that could make you a small fortune over the coming decade.
Image source: Getty Images.
1. PayPal: A digital payments powerhouse
One long-term trend that has been accelerated by the pandemic is the shift toward the use of digital payment systems, and no company is better positioned in that space than PayPal (NASDAQ: PYPL). While overall transaction volume experienced a precipitous downturn late in the first quarter, the payment processor saw a significant rebound over the past two months, driving "unprecedented demand for our products and services" according to CEO Dan Schulman.
Touchless payments and person-to-person fund transfers via Venmo are leading the charge, and Schulman argues that "April was probably the strongest month for PayPal since we became a public company." The trend continued into May, as the fintech leader experienced the largest single day of transactions in its history, exceeding 2019's Black Friday and Cyber Monday.
The company now boasts more than 325 million total active accounts after record increases in both new customer accounts and transactions in the first quarter.
Image source: Getty Images.
2. Datadog: Empowering the cloud-computing revolution
Vast numbers of U.S. businesses suffered setbacks in the first quarter, but software-as-a-service provider Datadog (NASDAQ: DDOG) actually saw demand accelerate. The company's tools monitor customers' cloud-based systems, notifying them of critical issues that might result in downtime while also providing analytics that could help them prevent these problems in the future.
For many companies in our pandemic-reshaped world, remote work is here to stay, which will require a lot of them to bolster their cloud capabilities. That explains why Datadog experienced a surge in account additions, and its robust growth continued even after the end of the first quarter. Datadog's Q1 revenue grew 87% year over year, accelerating a bit from 85% in Q4, and the company turned profitable for the first time. Total customers grew 40%, and enterprise customers contributing annual recurring revenue of more than $100,000 grew 89%.
With metrics like those, investors should take this dog for a walk.
Image source: Getty Images.
3. Shopify: Democratizing e-commerce
Retailers that had been getting by without online stores were in for a rude awakening when the pandemic forced the vast majority of brick-and-mortar stores in the U.S. (and many other countries) to shut their doors.
Those merchants were left scrambling to establish their digital presences, and for a large swath of them, Shopify (NYSE: SHOP) was there to answer the call. The company's bread-and-butter is providing easy templates that businesses large and small can use to create online stores quickly. It also offers those clients a host of tools to help them navigate the e-commerce landscape -- everything from payments processing and inventory control to shipping.
The e-commerce economy was already growing at a fairly impressive clip, but the pace was accelerated by the pandemic. In a post on Twitter in mid-April, Shopify Chief Technology Officer Jean-Michel Lemieux said the company was helping "thousands of businesses to move online" and that its platform was experiencing "Black Friday level traffic every day!" That translated into strong first-quarter results, with revenue up 47% year over year, while adjusted net income more than tripled.
Investors looking to benefit from the paradigm shift to e-commerce should be shopping for shares of Shopify.
Image source: Getty Images.
4. NVIDIA: This chipmaker's not playing games
Shares of graphics processing unit (GPU) powerhouse NVIDIA (NASDAQ: NVDA) were already setting fresh all-time highs prior to the pandemic, and just a couple of months after they joined the rest of the market's plunge, they are doing so again. The company's industry-leading GPUs help computers generate the realistic images in video games, but it's the opportunities in artificial intelligence (AI) and data centers that have investors most excited. The parallel processing capabilities of its GPUs have made them the workhorses powering a host of new, high-tech applications.
As the pandemic unfolded, GPUs flew off the virtual shelves, driving NVIDIA's revenue up 39% in the first quarter while net income soared 133%. Revenues in the gaming segment jumped 27% while the data center segment -- which includes cloud computing and artificial intelligence applications -- had a record-setting quarter, with its top line soaring 80% year over year.
The move to cloud computing is still ongoing, and AI is still in its infancy. Buying NVIDIA stock is definitely the way to play the game.
Image source: Livongo.
5. Livongo Health: A better chronic care alternative
At least 60% of U.S. adults are dealing with at least one chronic condition, and for those patients, behavioral changes and proper disease management can result not only in a better quality of life, but also an improved long-term outlook. That's where Livongo Health (NASDAQ: LVGO) comes in.
The company developed a platform dubbed Applied Health Signals that uses artificial intelligence to gather and analyze data from member patients, then uses that information to provide them with feedback, coaching, and actionable insights, helping people to better manage their health. While this approach initially targeted diabetes patients, it has since been expanded to include weight management, hypertension, and behavioral health, with more applications on the drawing board.
The company's strategy is not only working, but also lucrative. First-quarter revenue was up 115% year over year, and while Livongo is still unprofitable, it reduced its losses by nearly two-thirds and edged closer to profitability. Clients grew 76% year over year, and 44% from Q4, while the number of members managing diabetes on the platform doubled. The estimated dollar value of agreements signed with new clients in the quarter also surged by 85% year over year.
Adding Livongo Health to a portfolio could provide a better quality of returns.
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 April 16, 2020
Danny Vena owns shares of Datadog, Livongo Health Inc, NVIDIA, PayPal Holdings, and Shopify and has the following options: long January 2022 $75 calls on PayPal Holdings. The Motley Fool owns shares of and recommends Datadog, Livongo Health Inc, NVIDIA, PayPal Holdings, Shopify, and Twitter 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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Datadog: Empowering the cloud-computing revolution Vast numbers of U.S. businesses suffered setbacks in the first quarter, but software-as-a-service provider Datadog (NASDAQ: DDOG) actually saw demand accelerate. The stock market has recovered about two-thirds of the value it lost in the historic, coronavirus-induced plunge it took in late February and early March, leaving many investors with a case of whiplash and wondering how they missed the buying opportunities that were created as the major indexes plummeted more than 30% in less than five weeks. While overall transaction volume experienced a precipitous downturn late in the first quarter, the payment processor saw a significant rebound over the past two months, driving "unprecedented demand for our products and services" according to CEO Dan Schulman.
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Datadog: Empowering the cloud-computing revolution Vast numbers of U.S. businesses suffered setbacks in the first quarter, but software-as-a-service provider Datadog (NASDAQ: DDOG) actually saw demand accelerate. Revenues in the gaming segment jumped 27% while the data center segment -- which includes cloud computing and artificial intelligence applications -- had a record-setting quarter, with its top line soaring 80% year over year. *Stock Advisor returns as of April 16, 2020 Danny Vena owns shares of Datadog, Livongo Health Inc, NVIDIA, PayPal Holdings, and Shopify and has the following options: long January 2022 $75 calls on PayPal Holdings.
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Datadog: Empowering the cloud-computing revolution Vast numbers of U.S. businesses suffered setbacks in the first quarter, but software-as-a-service provider Datadog (NASDAQ: DDOG) actually saw demand accelerate. Revenues in the gaming segment jumped 27% while the data center segment -- which includes cloud computing and artificial intelligence applications -- had a record-setting quarter, with its top line soaring 80% year over year. *Stock Advisor returns as of April 16, 2020 Danny Vena owns shares of Datadog, Livongo Health Inc, NVIDIA, PayPal Holdings, and Shopify and has the following options: long January 2022 $75 calls on PayPal Holdings.
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Datadog: Empowering the cloud-computing revolution Vast numbers of U.S. businesses suffered setbacks in the first quarter, but software-as-a-service provider Datadog (NASDAQ: DDOG) actually saw demand accelerate. The company's industry-leading GPUs help computers generate the realistic images in video games, but it's the opportunities in artificial intelligence (AI) and data centers that have investors most excited. Revenues in the gaming segment jumped 27% while the data center segment -- which includes cloud computing and artificial intelligence applications -- had a record-setting quarter, with its top line soaring 80% year over year.
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361a869a-5726-4ecf-9898-de11f16cd9c8
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719039.0
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2020-05-29 00:00:00 UTC
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Where Will Datadog Be in 5 Years?
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DDOG
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https://www.nasdaq.com/articles/where-will-datadog-be-in-5-years-2020-05-29
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nan
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nan
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Shares of data analytics firm Datadog (NASDAQ: DDOG) have surged nearly 150% since their IPO last autumn. Organizations have loads of digital data that needs to be parsed through and made sense of, and as digital transformation accelerates because of the coronavirus lockdown, data creation and the need to manage it are set to get a big bump.
As a leader in cloud-based software for managing big data and cloud operations, Datadog has a bright future, although much of that future has been priced into its shares at this point.
A large pie that keeps getting bigger
According to tech researcher Gartner, spending on IT operations management is expected to reach $37 billion by 2023. Datadog says it believes this figure doesn't capture the additional spend on cloud and hybrid-cloud operations management, which is a double-digit growth industry at this point. The company helps businesses crunch data in both the legacy IT and modern cloud world. And since Datadog itself was born as a cloud-computing business, picking up market share as organizations migrate to newer systems works in its favor.
Image source: Getty Images.
Besides its core business, Datadog has been expanding the use of its data monitoring suite to address adjacent IT needs. For example, it launched security monitoring to help IT teams detect unauthorized tampering and orchestrate a response. With a unified software platform, Datadog is trying to break down the barriers between software development, operations, and security.
Thus, its addressable market is massive and still growing. And the company's development of new tools means it should be able to scoop up plenty of new business over the next few years. Based on its easy-to-implement subscription model, the company often signs up new customers using a feature or two, then expands the relationship from there. The beauty of many cloud software providers like Datadog is that they grow as their customers grow -- or in this case, as those customers increase use of cloud-based operations.
The strategy has worked exceptionally well so far. After full-year 2019 revenue increased 83% to $363 million, first quarter 2020 revenue grew another 87% year over year to $131 million. Expected full-year 2020 results imply 54% revenue growth at the midpoint of guidance. Datadog is growing fast, but its slice of the IT management pie is still small. There's plenty of room for the company to keep growing. Margins are thin as the company invests for further expansion, but Datadog is free-cash-flow positive (revenue less cash operating and capital expenses), generating $21 million over the last year.
Not totally risk free
A number of trends are intersecting that could keep the data analytics industry riding higher for years. But the recent pandemic has caused another trend that could work against Datadog: Some organizations are looking to simplify and consolidate the number of IT vendors they use. Legacy firms like Splunk and Palo Alto Networks have already been addressing that possibility the last few years via acquisition and internal development of new tools to address markets adjacent to their original services.
Thus, if Datadog is to maintain its momentum, development of its data analytics platform will need to continue. The company itself acknowledges its sizable competition, including IBM, Microsoft, and even chipmaker Broadcom, which has added infrastructure software management to diversify its hardware business the last few years. Then, there are other firms focused on data analytics, like the aforementioned Splunk, as well as Elastic.
And on the cloud monitoring front are the three biggest names in the business. Amazon Web Services, Alphabet's Google Cloud, and Microsoft Azure each have their own similar offering as well as integration to third-party services like Datadog.
Put simply, with Datadog and its industry growing so fast, plenty of companies have piled onto the bandwagon. For now, this small upstart has been one of the best-performing companies in its segment. But eventually all of the competition will take its toll. Expect its growth trajectory to decelerate over the next five years.
Premium business, ultra-premium stock
Nevertheless, its cloud-native software should serve it well in the coming years. But don't think that Datadog's potential will automatically equate to further share price increases like in the last few quarters. This is a stock priced for exceptional business growth. As profits are plowed back into the business right now, investors are left with the price-to-sales ratio to stick a valuation on the company. And at 40 times trailing 12-month revenue, investors are pricing in at least a couple years' more of performance on par with the recent past. For comparison, here's what Splunk and Elastic go for on a price-to-trailing-revenue basis.
Data by YCharts.
To be fair, Datadog fetches a higher premium because of its higher growth. But Elastic wasn't too shabby, putting up 60% revenue growth in its last reported quarter. And while Splunk's revenue was only up 2% according to its most recent report, annual recurring revenue grew 52% as it makes its transition to cloud-based software service.
With its hefty premium at the moment, Datadog will need to continue outpacing its industry peers by a wide margin to justify its valuation -- let alone continue growing at the rate they have been since the IPO last year. And the keys will be continual innovation of new services and picking up new customers it can expand relationships with, especially as larger peers already provide many of those features.
Datadog has experienced early success and has already established itself as a leader in the IT monitoring industry. I think its business will be much larger in five years than it is today, although I'm not buying at the moment because of the steep price tag.
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 April 16, 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. Nicholas Rossolillo owns shares of Alphabet (C shares), Broadcom Ltd, Microsoft, Palo Alto Networks, and Splunk. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Datadog, Elastic N V, Microsoft, Palo Alto Networks, and Splunk. The Motley Fool recommends Broadcom Ltd and Gartner 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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Shares of data analytics firm Datadog (NASDAQ: DDOG) have surged nearly 150% since their IPO last autumn. Datadog says it believes this figure doesn't capture the additional spend on cloud and hybrid-cloud operations management, which is a double-digit growth industry at this point. Margins are thin as the company invests for further expansion, but Datadog is free-cash-flow positive (revenue less cash operating and capital expenses), generating $21 million over the last year.
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Shares of data analytics firm Datadog (NASDAQ: DDOG) have surged nearly 150% since their IPO last autumn. Nicholas Rossolillo owns shares of Alphabet (C shares), Broadcom Ltd, Microsoft, Palo Alto Networks, and Splunk. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Datadog, Elastic N V, Microsoft, Palo Alto Networks, and Splunk.
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Shares of data analytics firm Datadog (NASDAQ: DDOG) have surged nearly 150% since their IPO last autumn. As a leader in cloud-based software for managing big data and cloud operations, Datadog has a bright future, although much of that future has been priced into its shares at this point. The beauty of many cloud software providers like Datadog is that they grow as their customers grow -- or in this case, as those customers increase use of cloud-based operations.
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Shares of data analytics firm Datadog (NASDAQ: DDOG) have surged nearly 150% since their IPO last autumn. The beauty of many cloud software providers like Datadog is that they grow as their customers grow -- or in this case, as those customers increase use of cloud-based operations. This is a stock priced for exceptional business growth.
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719040.0
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2020-05-28 00:00:00 UTC
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Technology Sector Update for 05/28/2020: KOPN,LHX,DDOG,WDAY,MSFT,CRM,CMTL
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DDOG
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https://www.nasdaq.com/articles/technology-sector-update-for-05-28-2020%3A-kopnlhxddogwdaymsftcrmcmtl-2020-05-28
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Technology stocks lost significant ground this afternoon, with the SPDR Technology Select Sector ETF Thursday hanging on for a 0.4% advance while the Philadelphia Semiconductor Index was sinking 1.4%.
In company news, Kopin (KOPN) raced 7.4% higher after the wearable computing technologies company Thursday said it was selected to supply liquid crystal display modules to L3Harris (LHX) for a weapons program. The modules will be part of an integrated rifle scope for a next-generation fire control device. Financial terms of the contract were not disclosed.
Datadog (DDOG) was ending little changed, giving back most of a 5% gain that followed the company Thursday announcing plans for a $550 million private placement of convertible senior notes maturing in 2025. A portion of the net proceeds will be used for capped call transactions, with the remaining funds going to working capital and other general corporate purposes, including potential acquisitions or other strategic transactions.
Workday (WDAY) rose over 7% after the cloud software firm reported a 23.4% increase in Q1 revenue, rising to $1.02 billion and beating the Capital IQ consensus expecting just over $1 billion in total revenue for the three months ended April 30. The company also said it was partnering with Microsoft (MSFT) and Salesforce (CRM) to help businesses reopen and adapt to conditions during the ongoing COVID-19 pandemic.
Comtech Telecommunications (CMTL) was more than 3% lower on Thursday after saying it recently received a $1.7 million contract for components and cyber-security services as part of a broader project to upgrade satellite communications for the US Army's Gray Eagle unmanned aircraft program.
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) was ending little changed, giving back most of a 5% gain that followed the company Thursday announcing plans for a $550 million private placement of convertible senior notes maturing in 2025. The company also said it was partnering with Microsoft (MSFT) and Salesforce (CRM) to help businesses reopen and adapt to conditions during the ongoing COVID-19 pandemic. Comtech Telecommunications (CMTL) was more than 3% lower on Thursday after saying it recently received a $1.7 million contract for components and cyber-security services as part of a broader project to upgrade satellite communications for the US Army's Gray Eagle unmanned aircraft program.
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Datadog (DDOG) was ending little changed, giving back most of a 5% gain that followed the company Thursday announcing plans for a $550 million private placement of convertible senior notes maturing in 2025. In company news, Kopin (KOPN) raced 7.4% higher after the wearable computing technologies company Thursday said it was selected to supply liquid crystal display modules to L3Harris (LHX) for a weapons program. Comtech Telecommunications (CMTL) was more than 3% lower on Thursday after saying it recently received a $1.7 million contract for components and cyber-security services as part of a broader project to upgrade satellite communications for the US Army's Gray Eagle unmanned aircraft program.
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Datadog (DDOG) was ending little changed, giving back most of a 5% gain that followed the company Thursday announcing plans for a $550 million private placement of convertible senior notes maturing in 2025. In company news, Kopin (KOPN) raced 7.4% higher after the wearable computing technologies company Thursday said it was selected to supply liquid crystal display modules to L3Harris (LHX) for a weapons program. Comtech Telecommunications (CMTL) was more than 3% lower on Thursday after saying it recently received a $1.7 million contract for components and cyber-security services as part of a broader project to upgrade satellite communications for the US Army's Gray Eagle unmanned aircraft program.
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Datadog (DDOG) was ending little changed, giving back most of a 5% gain that followed the company Thursday announcing plans for a $550 million private placement of convertible senior notes maturing in 2025. Technology stocks lost significant ground this afternoon, with the SPDR Technology Select Sector ETF Thursday hanging on for a 0.4% advance while the Philadelphia Semiconductor Index was sinking 1.4%. In company news, Kopin (KOPN) raced 7.4% higher after the wearable computing technologies company Thursday said it was selected to supply liquid crystal display modules to L3Harris (LHX) for a weapons program.
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0d9fef54-31bb-44a6-9b6d-e50bc188f4ef
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719041.0
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2020-05-28 00:00:00 UTC
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Technology Sector Update for 05/28/2020: DDOG,WDAY,MSFT,CRM,CMTL
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DDOG
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https://www.nasdaq.com/articles/technology-sector-update-for-05-28-2020%3A-ddogwdaymsftcrmcmtl-2020-05-28
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nan
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nan
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Technology stocks were helping carry the broader US markets higher, with the SPDR Technology Select Sector ETF Thursday posting a 1.4% advance while the Philadelphia Semiconductor Index was rising 0.5%.
In company news, Datadog (DDOG) climbed almost 5% after Thursday announcing plans for a $550 million private placement of convertible senior notes maturing in 2025. A portion of the net proceeds will be used for capped call transactions, with the remaining funds going to working capital and other general corporate purposes, including potential acquisitions or other strategic transactions.
Workday (WDAY) rose 9.5% after the cloud software firm reported a 23.4% increase in Q1 revenue, rising to $1.02 billion and beating the Capital IQ consensus expecting just over $1 billion in total revenue for the three months ended April 30. The company also said it was partnering with Microsoft (MSFT) and Salesforce (CRM) to help businesses reopen and adapt to conditions during the ongoing COVID-19 pandemic.
Comtech Telecommunications (CMTL) was narrowly lower Thursday. It said it recently received a $12.5 million contract for components and cyber-security services as part of a broader project to upgrade satellite communications for the US Army's Gray Eagle unmanned aircraft program.
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 company news, Datadog (DDOG) climbed almost 5% after Thursday announcing plans for a $550 million private placement of convertible senior notes maturing in 2025. The company also said it was partnering with Microsoft (MSFT) and Salesforce (CRM) to help businesses reopen and adapt to conditions during the ongoing COVID-19 pandemic. It said it recently received a $12.5 million contract for components and cyber-security services as part of a broader project to upgrade satellite communications for the US Army's Gray Eagle unmanned aircraft program.
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In company news, Datadog (DDOG) climbed almost 5% after Thursday announcing plans for a $550 million private placement of convertible senior notes maturing in 2025. Technology stocks were helping carry the broader US markets higher, with the SPDR Technology Select Sector ETF Thursday posting a 1.4% advance while the Philadelphia Semiconductor Index was rising 0.5%. Workday (WDAY) rose 9.5% after the cloud software firm reported a 23.4% increase in Q1 revenue, rising to $1.02 billion and beating the Capital IQ consensus expecting just over $1 billion in total revenue for the three months ended April 30.
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In company news, Datadog (DDOG) climbed almost 5% after Thursday announcing plans for a $550 million private placement of convertible senior notes maturing in 2025. Technology stocks were helping carry the broader US markets higher, with the SPDR Technology Select Sector ETF Thursday posting a 1.4% advance while the Philadelphia Semiconductor Index was rising 0.5%. Workday (WDAY) rose 9.5% after the cloud software firm reported a 23.4% increase in Q1 revenue, rising to $1.02 billion and beating the Capital IQ consensus expecting just over $1 billion in total revenue for the three months ended April 30.
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In company news, Datadog (DDOG) climbed almost 5% after Thursday announcing plans for a $550 million private placement of convertible senior notes maturing in 2025. Technology stocks were helping carry the broader US markets higher, with the SPDR Technology Select Sector ETF Thursday posting a 1.4% advance while the Philadelphia Semiconductor Index was rising 0.5%. A portion of the net proceeds will be used for capped call transactions, with the remaining funds going to working capital and other general corporate purposes, including potential acquisitions or other strategic transactions.
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9c75f0e8-ef34-4bc9-8bd0-8e24a0195dc4
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719042.0
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2020-05-27 00:00:00 UTC
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Why Many Cloud Computing Stocks Crashed Today
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DDOG
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https://www.nasdaq.com/articles/why-many-cloud-computing-stocks-crashed-today-2020-05-27
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nan
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nan
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What happened
Many cloud computing companies that benefit from work-from-home policies enacted in the wake of the COVID-19 pandemic saw their share prices fall on Wednesday. Several states have started to reopen stores and send workers back to the office, undermining the remote-work trends that have been lifting a select handful of tech specialists over the past three months.
COMPANY
BUSINESS FOCUS
STEEPEST DROP TODAY
RETURN SINCE MARCH 16, 2020
Datadog (NASDAQ: DDOG)
Monitoring of cloud computing services
12%
125%
Appian (NASDAQ: APPN)
Cloud-based app development
11.4%
81%
Shopify (NYSE: SHOP)
Cloud-based e-commerce tools
10.7%
125%
Twilio (NYSE: TWLO)
Cloud-based communications
9.7%
162%
Okta (NASDAQ: OKTA)
Cloud-based sign-on and identity management
9.5%
83%
Data sources: Google Finance and YCharts. As of May 27, 2020.
So what
JPMorgan CEO Jamie Dimon sparked a bullish market run on Wednesday morning by claiming that America has "some pretty good odds" of achieving a strong market recovery in the second half of 2020. Hands-on financial help from Congress and the Federal Reserve should be able to keep the market afloat until the health crisis ends, Dimon said.
"You could see a fairly rapid recovery," he stated at a remote industry conference. "I think that's got a good chance."
Image source: Getty Images.
Now what
The cloud computing specialists listed above would perhaps prefer a slower return to business as usual. Meetings held over digital video connections -- such as the virtual fireside chat where Dimon made these observations -- play into the hands of each and every one of the services I mentioned. Okta manages login processes, Twilio sets up the actual voice and video streams, Appian can help your company build the custom applications that manage the whole process, and Datadog's monitoring tools can help you ensure that the presentation runs smoothly. If it's a premium event, Shopify would gladly handle the virtual ticket payments.
These companies aren't going away by any means, but investors are worried that the coronavirus-related boost from this spring might run out of rocket fuel in a quick recovery. It's no surprise to see their stocks falling when there are bullish rumblings around the COVID-19 situation. Don't cry for Datadog and Twilio investors, though -- the stocks above are still crushing the market in 2020, with year-to-date gains of at least 50%.
DDOG data by YCharts.
That being said, Dimon doesn't own a perfect crystal ball. America and the world may have to deal with the COVID-19 pandemic for a long time, putting more stress on the financial system and making it more difficult to power through the challenge via financial assistance alone. We ordinary investors should be prepared for another sharp correction if it turns out that the reopening process started too early, triggering a new wave of coronavirus infections.
10 stocks we like better than Shopify
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 Shopify 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 April 16, 2020
Anders Bylund owns shares of Twilio. The Motley Fool owns shares of and recommends Appian, Datadog, Okta, Shopify, and Twilio. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Datadog (NASDAQ: DDOG) Monitoring of cloud computing services 12% 125% Appian (NASDAQ: APPN) Cloud-based app development 11.4% 81% Shopify (NYSE: SHOP) Cloud-based e-commerce tools 10.7% 125% Twilio (NYSE: TWLO) Cloud-based communications 9.7% 162% Okta (NASDAQ: OKTA) Cloud-based sign-on and identity management 9.5% 83% Data sources: Google Finance and YCharts. DDOG data by YCharts. What happened Many cloud computing companies that benefit from work-from-home policies enacted in the wake of the COVID-19 pandemic saw their share prices fall on Wednesday.
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Datadog (NASDAQ: DDOG) Monitoring of cloud computing services 12% 125% Appian (NASDAQ: APPN) Cloud-based app development 11.4% 81% Shopify (NYSE: SHOP) Cloud-based e-commerce tools 10.7% 125% Twilio (NYSE: TWLO) Cloud-based communications 9.7% 162% Okta (NASDAQ: OKTA) Cloud-based sign-on and identity management 9.5% 83% Data sources: Google Finance and YCharts. DDOG data by YCharts. See the 10 stocks *Stock Advisor returns as of April 16, 2020 Anders Bylund owns shares of Twilio.
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Datadog (NASDAQ: DDOG) Monitoring of cloud computing services 12% 125% Appian (NASDAQ: APPN) Cloud-based app development 11.4% 81% Shopify (NYSE: SHOP) Cloud-based e-commerce tools 10.7% 125% Twilio (NYSE: TWLO) Cloud-based communications 9.7% 162% Okta (NASDAQ: OKTA) Cloud-based sign-on and identity management 9.5% 83% Data sources: Google Finance and YCharts. DDOG data by YCharts. So what JPMorgan CEO Jamie Dimon sparked a bullish market run on Wednesday morning by claiming that America has "some pretty good odds" of achieving a strong market recovery in the second half of 2020.
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Datadog (NASDAQ: DDOG) Monitoring of cloud computing services 12% 125% Appian (NASDAQ: APPN) Cloud-based app development 11.4% 81% Shopify (NYSE: SHOP) Cloud-based e-commerce tools 10.7% 125% Twilio (NYSE: TWLO) Cloud-based communications 9.7% 162% Okta (NASDAQ: OKTA) Cloud-based sign-on and identity management 9.5% 83% Data sources: Google Finance and YCharts. DDOG data by YCharts. So what JPMorgan CEO Jamie Dimon sparked a bullish market run on Wednesday morning by claiming that America has "some pretty good odds" of achieving a strong market recovery in the second half of 2020.
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04676624-38c5-4e8b-af68-0ebc3ea18413
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719043.0
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2020-05-18 00:00:00 UTC
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Investing $3,000 in These 3 Cloud Computing Stocks Makes Sense
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DDOG
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https://www.nasdaq.com/articles/investing-%243000-in-these-3-cloud-computing-stocks-makes-sense-2020-05-18
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nan
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nan
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One of the better performing sectors since the growth stocks bottomed out in mid-March is cloud computing. If you want a little more tech stock exposure in your portfolio, putting some new money to work in the next wave of market darlings could be a smart call.
If you have $3,000 to invest, taking positions in CrowdStrike (NASDAQ: CRWD), Datadog (NASDAQ: DDOG), and MongoDB (NASDAQ: MDB) makes sense right now. Let's go over what the these three cloud computing stocks are doing right these days.
Image source: Getty Images.
CrowdStrike
Security is everything in the tech world, and CrowdStrike is there offering cloud-native endpoint protection. CrowdStrike's Falcon platform is a breach-thwarting suite of protection modules that use big data and AI to provide visibility and protection in tackling the entire threat lifecycle.
CrowdStrike's growth is impressive. Revenue rose 93% in its fiscal 2020 year, which ended in January, with revenue up 89% in its most recent quarter. Subscription revenue -- the main way CrowdStrike makes money through its platform at more than 90% of its top-line results -- grew 90% in its latest quarter.
Companies keep flocking to CrowdStrike. It had 5,431 subscription customers at the end of January, more than doubling over the past year. It added 870 net new subscription accounts in just its latest quarter. With annual recurring revenue clocking in 92% higher than it was a year earlier, gross margin improving, net losses finally starting to shrink, and CrowdStrike turning free cash flow positive last year, what isn't there to like?
CrowdStrike tackles a growing number of endpoint protection issues, so it's not a surprise that once clients get their foot in the door, they quickly engage with the entire ecosystem. The number of subscribers leaning on at least five of the Falcon modules has risen by 33% over the past year.
Obviously, CrowdStrike won't be growing at a 90% clip forever. Its own guidance back in mid-March was calling for 50% to 52% growth this new fiscal year. It could update that when it reports early next month, but it's comforting to know that CrowdStrike outlooks have historically proved conservative.
Even cloud computing companies can't escape the threat of the new coronavirus-inspired normal, but it's easy to see CrowdStrike holding up better than other enterprise solution providers. Companies will be scaling back on expenses, but you don't skimp on cybersecurity. With more people working from home, the addressable market for CrowdStrike is probably expanding instead of contracting. The adoption of cloud-based platforms is likely accelerating during this shelter-in-place phase of the pandemic.
Datadog
You can never have too much information, and that's where Datadog, a fast-growing provider of cloud monitoring and analytics tools, comes in. It was one of last week's biggest winners, soaring to new all-time highs after posting blowout financial results.
Revenue is accelerating, soaring 87% in its latest quarter. This is the third time in a row that Datadog has surprised analysts by posting a small quarterly profit when a loss was expected. I guess you can't teach the old Wall Street dogs new Datadog tricks.
Companies seeking silo-busting insight are hungry for actionable information, and they have no problem trusting Datadog with more and more of their money. The number of customers generating annual recurring revenue greater than $100,000 has soared from 508 a year earlier to 960 today.
In this topsy-turvy earnings season where most companies are either suspending their outlooks or slashing their full-year targets, Datadog is actually jacking up its guidance. Management is lifting its full-year revenue forecast to a range of $555 million to $565 million, up $20 million on both ends of that range.
MongoDB
Another hot computing stock that just happened to hit another all-time high on Friday was MongoDB, the provider of an open source database built for the cloud. Revenue rose 58% in its fiscal year ending in January, slowing to 44% in its latest quarter. Atlas -- its cloud-based platform, which has grown from 32% to 41% of the revenue mix over the past year -- saw its revenue soar 80% in its latest quarter.
MongoDB's database has been downloaded more than 90 million times, tripling its tally from just two years ago. MongoDB has a free online university to get developers up to speed, and there have been more than a million registrations for that learning platform.
Of the three cloud computing darlings on this investing hit list, MongoDB might be the one that's the most vulnerable to the COVID-19 disruption. The $510 to $530 million it was targeting in revenue for all of fiscal 2021 in mid-March did include a $15 million to $25 million reduction as a result of the pandemic. We'll see how that forecast gets updated when MongoDB reports early next month, but for now it's fair to say that investors are as excited about the stock as developers are about the database platform that's easy to scale and built for the future.
The past two months have been great for most tech stock investors. CrowdStrike, Datadog, and MongoDB have strong and growing platforms that should keep the gains coming.
10 stocks we like better than MongoDB
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 MongoDB 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 April 16, 2020
Rick Munarriz owns shares of Datadog. The Motley Fool owns shares of and recommends Datadog and MongoDB. The Motley Fool owns shares of CrowdStrike Holdings, 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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If you have $3,000 to invest, taking positions in CrowdStrike (NASDAQ: CRWD), Datadog (NASDAQ: DDOG), and MongoDB (NASDAQ: MDB) makes sense right now. CrowdStrike tackles a growing number of endpoint protection issues, so it's not a surprise that once clients get their foot in the door, they quickly engage with the entire ecosystem. Even cloud computing companies can't escape the threat of the new coronavirus-inspired normal, but it's easy to see CrowdStrike holding up better than other enterprise solution providers.
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If you have $3,000 to invest, taking positions in CrowdStrike (NASDAQ: CRWD), Datadog (NASDAQ: DDOG), and MongoDB (NASDAQ: MDB) makes sense right now. Its own guidance back in mid-March was calling for 50% to 52% growth this new fiscal year. The Motley Fool owns shares of CrowdStrike Holdings, Inc.
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If you have $3,000 to invest, taking positions in CrowdStrike (NASDAQ: CRWD), Datadog (NASDAQ: DDOG), and MongoDB (NASDAQ: MDB) makes sense right now. With annual recurring revenue clocking in 92% higher than it was a year earlier, gross margin improving, net losses finally starting to shrink, and CrowdStrike turning free cash flow positive last year, what isn't there to like? MongoDB Another hot computing stock that just happened to hit another all-time high on Friday was MongoDB, the provider of an open source database built for the cloud.
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If you have $3,000 to invest, taking positions in CrowdStrike (NASDAQ: CRWD), Datadog (NASDAQ: DDOG), and MongoDB (NASDAQ: MDB) makes sense right now. Its own guidance back in mid-March was calling for 50% to 52% growth this new fiscal year. Even cloud computing companies can't escape the threat of the new coronavirus-inspired normal, but it's easy to see CrowdStrike holding up better than other enterprise solution providers.
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25cbaf50-6045-432a-a243-fc4264f36a86
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719044.0
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2020-05-18 00:00:00 UTC
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3 Stocks That Could Help You Send Your Kids to College
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DDOG
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https://www.nasdaq.com/articles/3-stocks-that-could-help-you-send-your-kids-to-college-2020-05-18
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nan
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nan
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The month of May means it's graduation season -- though this graduation season is shaping up to be the weirdest ever, thanks to the COVID-19 pandemic. While today's graduating classes will have to attend virtual celebrations, today's new parents may be wondering how they're going to invest and save for their kids' college tuition a decade or more from now, especially as the economy hurtles toward a recession.
Fortunately, the younger your children are, the more time you have to prepare. And the more time you have to prepare, the more the miracle of compounding can work in your favor. That means investing just a little bit in high-powered growth stocks today could grow your money by many multiples over the next decade or more.
What's the key to spotting these winners early on? Judging from past multi-bagger stocks, they usually have a few things in common:
A leadership position in a new growth product or type of service
An overall market opportunity that is very large and growing
A "winner-take-all" business model with the potential to take most of the market share within that large opportunity
The following three stocks have all these characteristics, and thus the potential to fund a good part of that big future expense.
Image source: Getty Images.
CrowdStrike
If you had to bet, would you bet cyber attacks will continue to grow for the next 10 years and beyond? I would. That's why CrowdStrike Holdings (NASDAQ: CRWD) could be a huge money-making opportunity. That's not only because cyberthreats are bound to proliferate in the years ahead, and with them, effective cybersecurity solutions, but also because CrowdStrike takes a novel approach to cybersecurity that has the potential to lead that market.
CrowdStrike's system uses the power of cloud computing, artificial intelligence, and big data. The beauty of its solution is that its effectiveness gets better and better the more and more customers it acquires -- a textbook case of the network effect at work. The company's Falcon platform allows for security at customer endpoints, yet all threat data is eventually transmitted back to the company's centralized, cloud-native Threat Graph. The more customers CrowdStrike racks up, the more data it collects, and the more sophisticated its Threat Graph becomes. That means CrowdStrike's approach has a great chance of honing its algorithms in real time to combat the latest and most sophisticated cyber attacks.
Despite having just gone public one year ago in June of 2019, CrowdStrike has more than doubled its $34 IPO price. Still, the stock remains far below its 52-week highs of $101, currently residing around $77 per share.
The stock is not cheap by any means, trading at a whopping 23.7 times sales; however, CrowdStrike is posting the explosive revenue growth to back that up. The company grew revenue 110% in its fiscal 2019 and 93% in fiscal 2020, with the most recent quarter's revenue growth clocking in at 89%. The company's annual recurring revenue has surged to $600 million, up a whopping 92% from the prior year.
Clearly, CrowdStrike's offerings are catching on in a big way with customers, and its asset-light cloud-based model could prove highly profitable in the future. Though the company is currently reinvesting all profits into growth, thus generating net losses, CrowdStrike's adjusted gross margins climbed to 77%, up from 70% a year ago, making a strong case for future profitability.
The combination of explosive revenue growth, expanding margins, and an industry set to grow by leaps and bounds over the coming years means CrowdStrike could turn a small amount of money today into a sizable nest egg more than 10 years out.
Datadog
Another recent IPO is Datadog (NASDAQ: DDOG), which just went public in September of last year but is already up 150% from its initial IPO price. Datadog was founded in 2010, a year before CrowdStrike, and like CrowdStrike, it got an early jump on the cloud revolution. While CrowdStrike does cybersecurity, Datadog helps companies monitor and fix problems in their cloud infrastructure and applications across their entire IT environment.
Datadog had the foresight to anticipate today's much more agile yet complex IT environment, as companies shift workloads to public clouds, private clouds, and on-premise IT centers, with the need for "always on" applications to serve customers, employees, and other parties in real-time. That means if something isn't working correctly, developers and operations personnel need to be able to locate the problem and fix it quickly. And with today's IT stack complexity, it's a tough job that Datadog does. Furthermore, Datadog is cloud-agnostic and helps businesses digitize faster and solve problems quicker, which in the end saves companies time and money.
That's enabled Datadog to acquire 11,500 total customers in just 10 years, with 960 customers who pay Datadog more than $100,000 per year, up from just 508 in the year-ago quarter. In its recently reported quarter, Datadog's revenue surged a whopping 87%, as companies rushed to digitize as fast as possible amid the coronavirus. In fact, Datadog seems to be benefiting from the downturn, not suffering from it: Management just raised full-year guidance to $555 million to $565 million, up from $535 million to $545 million, and now predicts an adjusted operating profit this year, as opposed to the slight losses it had previously forecast.
Importantly, the company also expanded its gross margin over the past year from 73% to 80%, showing the scalability of the business model and the potential for big profits down the road. That piece is key, since the stock is quite expensive, at a whopping 49 times sales.
The high valuation could mean a pullback is in the cards, or at least significant volatility for this young growth stock. Still, looking out 10 years and beyond, Datadog seems poised to eventually grow into this valuation and then some, making it another strong candidate to seed your college tuition portfolio.
OneConnect
Finally, while many might shy away from Chinese stocks, especially amid U.S.-China tensions and some recent scandals at specific Chinese start-ups, OneConnect Financial Technology (NYSE: OCFT) appears to be a high-growth cloud software platform that's the real deal. The "start-up" just went public on the New York Stock Exchange in December, but OneConnect was actually incubated under Chinese financial giant Ping An (OTC: PNGAY), a $200 billion market cap company that has been around more than 30 years, and which still holds a significant stake in the company.
That seems to take some of the fraud risk off the table. And when one does that, OneConnect's business looks downright impressive. OneConnect is a portfolio of cloud-based digital solutions specifically geared toward China's financial and insurance industries, but the company has also landed big-time customers in other east Asian countries outside China as well. OneConnect's cloud-based modules span sales and marketing, financial product development, risk management models informed by big data, AI-powered customer service and operations, and technology infrastructure.
OneConnect has the advantage of Ping An's 30 years of financial data, which it uses to inform its AI-based tools across Ping An's large customer base. In addition, much of the Chinese financial and insurance industries haven't been digitized as much as their American counterparts, so there is a huge runway for growth for OneConnect.
Of course, the first quarter in China was hit hard by the coronavirus, with much of the country locked down from mid-January to mid-March. That not only interrupted OneConnect's own business, but that of its customers. Since OneConnect gets paid for many services according to usage, that crimped growth in a big way.
Still, OneConnect managed to grow revenue an impressive 29.6% last quarter, with revenue from third-party customers -- in other words, customers outside of Ping An or its Lufax fintech subsidiary -- growing an even higher 50.4%. And while OneConnect continues to rack up big net losses, remember that it has a strong "anchor customer" and investor in Ping An, and like the two companies mentioned above, OneConnect's gross margin expanded greatly from 28.5% to 34.8% over the past year.
Of course, this was an abnormally slow quarter. In the full year of 2019, OneConnect had grown revenue 64.7%, with third-party customers up 107%, and premium customers -- or, those that pay OneConnect more than RMB 100,000 per year -- up an even greater 114%.
OneConnect should see things reaccelerate as the Chinese economy recovers. With the competitive advantage of having Ping An behind it and a strong leadership position, OneConnect seems poised to dominate the financial software-as-a-service industry in Asia. That could make the company a massive winner over the next decade.
10 stocks we like better than CrowdStrike Holdings, 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 CrowdStrike Holdings, 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 April 16, 2020
Billy Duberstein owns shares of OneConnect Financial Technology Co., Ltd. and PING AN INS CO OF CHINA. His clients may own shares of the companies mentioned. The Motley Fool owns shares of and recommends Datadog. The Motley Fool owns shares of CrowdStrike Holdings, Inc. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Datadog Another recent IPO is Datadog (NASDAQ: DDOG), which just went public in September of last year but is already up 150% from its initial IPO price. Judging from past multi-bagger stocks, they usually have a few things in common: A leadership position in a new growth product or type of service An overall market opportunity that is very large and growing A "winner-take-all" business model with the potential to take most of the market share within that large opportunity The following three stocks have all these characteristics, and thus the potential to fund a good part of that big future expense. Importantly, the company also expanded its gross margin over the past year from 73% to 80%, showing the scalability of the business model and the potential for big profits down the road.
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Datadog Another recent IPO is Datadog (NASDAQ: DDOG), which just went public in September of last year but is already up 150% from its initial IPO price. While CrowdStrike does cybersecurity, Datadog helps companies monitor and fix problems in their cloud infrastructure and applications across their entire IT environment. OneConnect is a portfolio of cloud-based digital solutions specifically geared toward China's financial and insurance industries, but the company has also landed big-time customers in other east Asian countries outside China as well.
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Datadog Another recent IPO is Datadog (NASDAQ: DDOG), which just went public in September of last year but is already up 150% from its initial IPO price. The "start-up" just went public on the New York Stock Exchange in December, but OneConnect was actually incubated under Chinese financial giant Ping An (OTC: PNGAY), a $200 billion market cap company that has been around more than 30 years, and which still holds a significant stake in the company. And while OneConnect continues to rack up big net losses, remember that it has a strong "anchor customer" and investor in Ping An, and like the two companies mentioned above, OneConnect's gross margin expanded greatly from 28.5% to 34.8% over the past year.
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Datadog Another recent IPO is Datadog (NASDAQ: DDOG), which just went public in September of last year but is already up 150% from its initial IPO price. Judging from past multi-bagger stocks, they usually have a few things in common: A leadership position in a new growth product or type of service An overall market opportunity that is very large and growing A "winner-take-all" business model with the potential to take most of the market share within that large opportunity The following three stocks have all these characteristics, and thus the potential to fund a good part of that big future expense. In its recently reported quarter, Datadog's revenue surged a whopping 87%, as companies rushed to digitize as fast as possible amid the coronavirus.
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719045.0
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2020-05-16 00:00:00 UTC
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$2,400 Invested in These 3 Stocks Could Make You a Fortune in 10 Years
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DDOG
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https://www.nasdaq.com/articles/%242400-invested-in-these-3-stocks-could-make-you-a-fortune-in-10-years-2020-05-16
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In late March, the Coronavirus Aid, Relief, and Economic Security (CARES) Act -- which many are calling the stimulus package -- was signed into law, allocating a massive $2.2 trillion in economic relief. Tens of millions of taxpayers have already seen stimulus payments hit their bank accounts, and millions more will receive a direct deposit or a check in the months and weeks to come.
While some American consumers will need the payout to fund grocery purchases or to pay bills, some recipients are fortunate enough to have weathered this economic storm with their financial stability largely intact. Married couples that received the maximum stimulus payment of $2,400, and don't need the money to beef up their emergency fund or for essential expenditures, should consider investing in these three top stocks, which could provide a much greater windfall over the next 10 years.
Image source: Getty Images.
1. Fastly: Faster than a speeding bullet
Fastly (NYSE: FSLY) may not be a household name, yet consumers are benefiting from the company's services without even knowing it. As its name implies, Fastly helps businesses speed up their internet traffic via its content delivery network (CDN). The company's system of strategically placed data centers forms an edge cloud platform that helps supercharge the response time and delivery of customer websites, photos, videos, and other information.
While the average website user may not even be aware of Fastly's presence, the company is quickly gaining a stellar reputation among developers and IT professionals alike, giving it a huge competitive advantage. Its customer list is a who's-who of service providers like Shopify, Pinterest, and The New York Times, just to name a few.
Fastly's recent earnings results give investors a glimpse of what the future could hold. For the first quarter, Fastly delivered revenue that grew 38% year over year. This was driven by its customer count that grew 13%, while its dollar-based net expansion rate clocked in at 133% -- demonstrating that existing customers are spending more.
But, it's the growth of large enterprise customers that's really paying the bills, growing 22% year over year and nearly 6% sequentially. Spending by the average enterprise customer increased by 21%, and these big businesses now represent 88% of total revenue.
The necessity for speedy connections isn't going anywhere, and the need will likely increase as the number of complex connections with customers increases. Fastly estimates its addressable market at nearly $36 billion. Considering the $200 million in revenue it generated last year, Fastly has a long runway for growth.
Image source: Getty Images.
2. Datadog: This cloud provider's no dog
There's little doubt that knowledge is power, and as more and more companies join the cloud-computing revolution, that phrase becomes increasingly relevant. That's where Datadog (NASDAQ: DDOG) comes in. The platform-as-a-service provider monitors activity on a customer's cloud, not only alerting the customer to problems or issues that may result in downtime but also providing developers with useful analytics that help improve their cloud-computing operations.
Much like Fastly, Datadog doesn't have much in the way of name recognition, but it serves an equally high-profile customer set, including the likes of Wayfair, Activision Blizzard, and Twitter.
As many companies sent their employees home to work remotely in the face of the pandemic, the need for visibility into their cloud operations became even more critical. Datadog was there to answer the call, a factor that was readily apparent in the company's first-quarter results. Revenue grew 87% year over year -- accelerating from 85% gains in the fourth quarter. The company also generated a first-time profit, a rarity for such a young, high-growth company.
The results were driven higher by an expanding number of customers with annual recurring revenue (ARR) of $100,000 or more, which grew 89%. Datadog also continued to expand its relationships with existing customers, getting them to increase spending over time, delivering a dollar-based retention rate above 130% for the 11th consecutive quarter.
Datadog's business was already thriving prior to the pandemic, but the need for remote work has supercharged its current results -- as well as its future potential.
Image source: Getty Images.
3. Twilio: Getting the word out
Filling out our trio of low-name-recognition companies is Twilio (NYSE: TWLO), which provides developers with the building blocks to help businesses embed communication tools in their customer-facing apps. The company provides behind the scenes know-how to process calls, text messages, and video, as well as providing a host of notification and authentication services.
While that might sound confusing, it's really quite simple. The real-time alert from your Uber driver, the order confirmation about your recently purchased Dell computer, or the text message with your favorite restaurant via Yelp are all powered by Twilio's platform.
With the onset of the COVID-19 pandemic, it quickly became apparent that every business needed the ability to communicate with customers where they lived -- which played right into Twilio's wheelhouse -- and it showed in the company's recent results.
In the first quarter, Twilio grew revenue 57% year over year, on top of 75% growth in 2019. The company's ability to add new accounts while leveraging its existing customer base was clear. Twilio's active customer accounts grew 23% year over year, while its dollar-based net expansion accelerated to 143%, up from 124% in the fourth quarter.
On a conference call to discuss the results, CEO Jeff Lawson gave investors even more reason to be bullish. "Our platform provides three things the world needs right now: digital engagement, software agility and cloud-scale," he said.
Management estimates that the company's addressable market is about $40 billion, a far cry from the $1 billion it generated in 2019, so the sky's the limit for Twilio.
A common thread
Eagle-eyed investors may have detected a common theme between these cloud-centric recommendations, aside from not being household names. Each is something of a high-risk, high-reward proposition. Like many high-growth young companies, these are by no means cheap. Fastly, Datadog, and Twilio are selling at 13, 18, and 37 times forward sales, respectively -- when a good price-to-sales (P/S) ratio is between 1 and 2.
Additionally, only Datadog is currently profitable, as each of these companies is spending heavily to gain market share, having determined that the lifetime value of each new customer far outweighs the current cost of acquisition.
The potential for continued robust growth increases the likelihood that these stocks could make investors a fortune over the coming decade.
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 April 16, 2020
Danny Vena owns shares of Activision Blizzard, Datadog, Fastly, MercadoLibre, Pinterest, Shopify, and Twilio and has the following options: long January 2021 $22.50 calls on Activision Blizzard. The Motley Fool owns shares of and recommends Activision Blizzard, Datadog, Fastly, MercadoLibre, Pinterest, Shopify, Twilio, Twitter, and Wayfair. The Motley Fool recommends The New York Times, Uber Technologies, and Yelp. 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. Married couples that received the maximum stimulus payment of $2,400, and don't need the money to beef up their emergency fund or for essential expenditures, should consider investing in these three top stocks, which could provide a much greater windfall over the next 10 years. The company's system of strategically placed data centers forms an edge cloud platform that helps supercharge the response time and delivery of customer websites, photos, videos, and other information.
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That's where Datadog (NASDAQ: DDOG) comes in. Twilio's active customer accounts grew 23% year over year, while its dollar-based net expansion accelerated to 143%, up from 124% in the fourth quarter. See the 10 stocks *Stock Advisor returns as of April 16, 2020 Danny Vena owns shares of Activision Blizzard, Datadog, Fastly, MercadoLibre, Pinterest, Shopify, and Twilio and has the following options: long January 2021 $22.50 calls on Activision Blizzard.
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That's where Datadog (NASDAQ: DDOG) comes in. Twilio's active customer accounts grew 23% year over year, while its dollar-based net expansion accelerated to 143%, up from 124% in the fourth quarter. See the 10 stocks *Stock Advisor returns as of April 16, 2020 Danny Vena owns shares of Activision Blizzard, Datadog, Fastly, MercadoLibre, Pinterest, Shopify, and Twilio and has the following options: long January 2021 $22.50 calls on Activision Blizzard.
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That's where Datadog (NASDAQ: DDOG) comes in. Datadog also continued to expand its relationships with existing customers, getting them to increase spending over time, delivering a dollar-based retention rate above 130% for the 11th consecutive quarter. With the onset of the COVID-19 pandemic, it quickly became apparent that every business needed the ability to communicate with customers where they lived -- which played right into Twilio's wheelhouse -- and it showed in the company's recent results.
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719046.0
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2020-05-14 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-2020-05-14
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nan
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Datadog (NASDAQ: DDOG) had first-quarter results that smashed expectations, and management raised its full-year guidance. But since the stock is at all-time highs after having more than recovered from the coronavirus-induced market sell-off in March, is it still a buy?
A high-growth profitable SaaS player
The software-as-a-service (SaaS) company should profit from the secular growth of cloud computing since it offers cloud monitoring capabilities.
Over the last several years, enterprises have been moving some of their infrastructure and applications to the cloud to have them accessible from anywhere. And recently, many employees were asked to work from home on short notice to try to limit the spread of COVID-19, which highlighted the benefits of cloud computing.
But even before the coronavirus-induced stay-at-home policies were enforced, Datadog was already growing at a fast clip. Last year, its revenue increased by 83.2% to $362.8 million.
And during the first quarter, that impressive growth accelerated to 87.4% as revenue jumped to $131.2 million, way above management's guidance range of $117 million to $119 million.
CEO Olivier Pomel said during theearnings callthat the impact of the coronavirus on the company's results remained uncertain since Datadog is exposed to both troubled sectors (travel and hospitality) and stronger categories (streaming media, gaming).
In fact, the company's impressive performance is due to its frictionless products that customers can easily evaluate at a small scale as they move their applications and infrastructure to the cloud. As a result, the number of customers increased to 11,500 at the end of last quarter, up 40% year over year.
These customers then expand their use of Datadog's solutions as they become persuaded about the value proposition. Also, Datadog offers multiple products to monitor different components of cloud infrastructures -- such as applications, networks, and more recently security -- which trigger cross-selling opportunities.
Thus, 63% of the company's customers were using two or more products at the end of last quarter, up from 32% last year. And for the 11th consecutive quarter, existing customers increased their spending by more than 30% compared with the year before.
In addition to that impressive revenue growth, Datadog posted a positive net income under generally accepted accounting principles (GAAP) for the second consecutive quarter thanks to its increasing scale.
And despite management's forecast of meaningful investments in data centers, research and development, and sales and marketing, it raised its full-year guidance and now expects positive adjusted earnings. In contrast, many high-growth SaaS players have been posting heavy losses due to their high sales and marketing expenses as a percentage of revenue.
METRIC PREVIOUS FULL-YEAR GUIDANCE RANGE UPDATED FULL-YEAR GUIDANCE RANGE
Revenue $535 million to $545 million $555 million to $565 million
Adjusted operating income (loss) ($20 million to $30 million) Up to $10 million
Adjusted net income per share ($0.03 to $0.07) $0.02 to $0.06
Data source: Datadog.
Image source: Getty Images.
Does the lofty valuation justify a buy?
With $798 million of cash, cash equivalents, restricted cash, marketable securities, and no debt, Datadog won't face any financial difficulty if a prolonged recession materializes. And given the company's stellar results, you can expect a high valuation.
After some coronavirus-induced volatility over the last couple of months, the stock price has increased by more than 48% since its first trading day eight months ago. It has even more than doubled from its IPO price of $27.
DDOG data by YCharts.
Taking into account management's full-year guidance, the price-to-earnings ratio reaches 1,392.
Granted, this lofty ratio is due to the slightly positive forecast on earnings per share. But even if you value the company based on the midpoint of its revenue forecast, the enterprise-value-to-sales ratio of 23.6 remains elevated.
With such valuation ratios, the market expects spectacular growth over the long term, which will become more and more challenging as Datadog's revenue base is increasing. As an illustration, even if management raised its full-year revenue guidance range, the midpoint corresponds to a decrease in the revenue growth rate to 54.4%, down from 83.2% the year before.
Thus, there's no doubt the company is delivering exceptional results in a cloud market that is poised to grow over the long term. But its rich valuation doesn't leave much margin of safety, and prudent investors should stay on the sidelines.
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 April 16, 2020
Herve Blandin 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 (NASDAQ: DDOG) had first-quarter results that smashed expectations, and management raised its full-year guidance. DDOG data by YCharts. CEO Olivier Pomel said during theearnings callthat the impact of the coronavirus on the company's results remained uncertain since Datadog is exposed to both troubled sectors (travel and hospitality) and stronger categories (streaming media, gaming).
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Datadog (NASDAQ: DDOG) had first-quarter results that smashed expectations, and management raised its full-year guidance. DDOG data by YCharts. A high-growth profitable SaaS player The software-as-a-service (SaaS) company should profit from the secular growth of cloud computing since it offers cloud monitoring capabilities.
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Datadog (NASDAQ: DDOG) had first-quarter results that smashed expectations, and management raised its full-year guidance. DDOG data by YCharts. And during the first quarter, that impressive growth accelerated to 87.4% as revenue jumped to $131.2 million, way above management's guidance range of $117 million to $119 million.
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Datadog (NASDAQ: DDOG) had first-quarter results that smashed expectations, and management raised its full-year guidance. DDOG data by YCharts. Last year, its revenue increased by 83.2% to $362.8 million.
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6f222968-14b6-48e5-bf3e-a845f7ba061b
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719047.0
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2020-05-12 00:00:00 UTC
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Why Datadog Stock Soared on Tuesday
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DDOG
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https://www.nasdaq.com/articles/why-datadog-stock-soared-on-tuesday-2020-05-12
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nan
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What happened
Shares of Datadog (NASDAQ: DDOG), which provides a monitoring and analytics platform for cloud-based systems, soared by as much as 24% Tuesday morning, and was up 22.4% as of 1:15 p.m. EDT.
The stock's sharp rise came on the heels of an impressive first-quarter report that featured skyrocketing revenue and an expanding gross profit margin.
Image source: Getty Images.
So what
Datadog's revenue jumped 87% year over year to $131 million, fueled by rapid growth in the number of customers providing it with annual recurring revenue greater than $100,000. The tech company ended the quarter with 960 of these customers, up from 508 in the year-ago period.
This torrid revenue growth generated leverage in the company's business model, and Datadog's gross profit margin expanded from 73% in the year-ago quarter to 80%. This translated to a huge improvement in the company's bottom line. The bottom line improved from a loss of $0.12 per share in the year-ago period to a profit of $0.02. Non-GAAP (adjusted) earnings per share swung from a loss of $0.09 to a profit of $0.06.
Analysts, on average, were expecting revenues of $118 million and an adjusted loss per share of $0.01.
Now what
With so much business momentum, it wasn't surprising to see management provide an optimistic outlook. Management now expects full-year revenue to be between $555 million and $565 million, up from the previous forecast range of $535 million to $545 million.
"[The coronavirus pandemic] has demonstrated the need to be digital-first and agile, has underscored the importance of observability into cloud environments, and reaffirmed the long-term opportunity for Datadog," said CEO Olivier Pomel in the 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 April 16, 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 Datadog (NASDAQ: DDOG), which provides a monitoring and analytics platform for cloud-based systems, soared by as much as 24% Tuesday morning, and was up 22.4% as of 1:15 p.m. EDT. This torrid revenue growth generated leverage in the company's business model, and Datadog's gross profit margin expanded from 73% in the year-ago quarter to 80%. "[The coronavirus pandemic] has demonstrated the need to be digital-first and agile, has underscored the importance of observability into cloud environments, and reaffirmed the long-term opportunity for Datadog," said CEO Olivier Pomel in the earnings release.
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What happened Shares of Datadog (NASDAQ: DDOG), which provides a monitoring and analytics platform for cloud-based systems, soared by as much as 24% Tuesday morning, and was up 22.4% as of 1:15 p.m. EDT. This torrid revenue growth generated leverage in the company's business model, and Datadog's gross profit margin expanded from 73% in the year-ago quarter to 80%. The bottom line improved from a loss of $0.12 per share in the year-ago period to a profit of $0.02.
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What happened Shares of Datadog (NASDAQ: DDOG), which provides a monitoring and analytics platform for cloud-based systems, soared by as much as 24% Tuesday morning, and was up 22.4% as of 1:15 p.m. EDT. So what Datadog's revenue jumped 87% year over year to $131 million, fueled by rapid growth in the number of customers providing it with annual recurring revenue greater than $100,000. This torrid revenue growth generated leverage in the company's business model, and Datadog's gross profit margin expanded from 73% in the year-ago quarter to 80%.
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What happened Shares of Datadog (NASDAQ: DDOG), which provides a monitoring and analytics platform for cloud-based systems, soared by as much as 24% Tuesday morning, and was up 22.4% as of 1:15 p.m. EDT. This torrid revenue growth generated leverage in the company's business model, and Datadog's gross profit margin expanded from 73% in the year-ago quarter to 80%. The bottom line improved from a loss of $0.12 per share in the year-ago period to a profit of $0.02.
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719048.0
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2020-05-12 00:00:00 UTC
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Datadog (DDOG) Is a Winner, but the Stock Is Fairly Valued Here, Says 5-Star Analyst
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DDOG
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https://www.nasdaq.com/articles/datadog-ddog-is-a-winner-but-the-stock-is-fairly-valued-here-says-5-star-analyst-2020-05
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Fate is a cruel mistress, the saying goes. But how about turning the phrase on its head? Might fate be a welcoming friend, too? That’s certainly the case during COVID-19. As some companies’ unfortunate line of business has dictated a struggle to make it through the pandemic, some are inherently well set up to benefit.
Cloud based services and data focused companies, for example. Or specifically, Datadog (DDOG). The SaaS data analytics specilaist’s performance has been impressive. Since the turn of year, DDOG shares have appreciated by 82%, whilst successfully navigating through the pandemic storm. And unlike many companies struggling with recent Q1 reports, DDOG just delivered the goods. So, where has it all gone right for DDOG?
As befits a data crunching platform, it’s all in the numbers. In the first quarter, the company reported revenue of $131.25 million, up by 87.4% year-over-year and easily beating the Street's call for $117.7 million. Q1 Non-GAAP EPS of $0.06 came ahead of the estimates by $0.07, turning a profit against expectations.
Bucking the trend to shy away from guidance, in Q2, DDOG expects revenue to come in between $134 to $136 million (consensus calls for $126.31 million) and for FY20 , the company projects revenue in the range of $555 to $565 million, again ahead of consensus, which calls for $534.50 million.
Even though they've yet to encounter any pressure, anticipating COVID-19 headwinds, management is preparing for some 2Q/3Q retention rate pressure and deal slippage.
Oppenheimer analyst Ittai Kidron expressed great satisfaction with the results and steady execution, and said, “Even with management budgeting for some 2Q/3Q COVID-19 pressure on retention rate/churn, they were still comfortable raising CY20 guidance given the robustness of the existing deal pipeline. Management's also doubling down on aggressive investment, positioning for long-term gains.”
Despite the strong report, though, Kidron argues the upside is “fairly reflected in Datadog's premium valuation.” However, the 5-star analyst believes “investors with longer investment horizons (+18 months) can buy into the story.”
Accordingly, Kidron keeps his Perform (i.e. Hold) rating as is, though has not set a price target. Kidron is one of the top analysts on Wall Street covering technology. His picks average a 32% one-year return, and he's ranked in the top 10 out of over 6,500 analysts, according to TipRanks database.
When evaluating DDOG’s prospects, the Street is almost split down the middle. 7 Buys and 6 Holds add up to a Moderate Buy consensus rating. However, the company’s on-going share appreciation means the current average price target of $61.50, implies downside of 11%.
Read more:
3 “Strong Buy” Dividend Stocks That Look Great After Earnings Beat
2 Cruise Line Stocks to Bet on After the Coronavirus Crisis (And 1 to Avoid)
3 Stocks Needham’s Top Analysts Are Raving About
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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Or specifically, Datadog (DDOG). Since the turn of year, DDOG shares have appreciated by 82%, whilst successfully navigating through the pandemic storm. And unlike many companies struggling with recent Q1 reports, DDOG just delivered the goods.
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Bucking the trend to shy away from guidance, in Q2, DDOG expects revenue to come in between $134 to $136 million (consensus calls for $126.31 million) and for FY20 , the company projects revenue in the range of $555 to $565 million, again ahead of consensus, which calls for $534.50 million. Or specifically, Datadog (DDOG). Since the turn of year, DDOG shares have appreciated by 82%, whilst successfully navigating through the pandemic storm.
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Bucking the trend to shy away from guidance, in Q2, DDOG expects revenue to come in between $134 to $136 million (consensus calls for $126.31 million) and for FY20 , the company projects revenue in the range of $555 to $565 million, again ahead of consensus, which calls for $534.50 million. Or specifically, Datadog (DDOG). Since the turn of year, DDOG shares have appreciated by 82%, whilst successfully navigating through the pandemic storm.
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So, where has it all gone right for DDOG? Bucking the trend to shy away from guidance, in Q2, DDOG expects revenue to come in between $134 to $136 million (consensus calls for $126.31 million) and for FY20 , the company projects revenue in the range of $555 to $565 million, again ahead of consensus, which calls for $534.50 million. Or specifically, Datadog (DDOG).
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43f91e59-baac-4a3f-80fd-b660c70fc578
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719049.0
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2020-05-12 00:00:00 UTC
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Why Fastly Stock Jumped Tuesday
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DDOG
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https://www.nasdaq.com/articles/why-fastly-stock-jumped-tuesday-2020-05-12
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nan
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nan
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What happened
Shares of edge computing infrastructure-as-a-service (IaaS) company Fastly (NYSE: FSLY) surged on Tuesday. The stock was up 12.6% as of 2:50 p.m. EDT.
The stock's gain extends a huge run higher since the company's earnings report last week. The stock's gain on Tuesday likely reflected continued optimism following the company's strong first quarter and a bullish day in the market for many high-growth tech stocks.
Image source: Getty Images.
So what
Last week, Fastly announced 38% revenue growth and provided an outlook for the second quarter that was far ahead of analysts' expectations. Furthermore, management said it expected second-quarter revenue to be between $70 million and $72 million and non-GAAP (adjusted) earnings per share to be between a loss of $0.02 and breakeven. Analysts, on average, were expecting revenue of $60 million and an adjusted loss per share of $0.11.
Trends from COVID-19, including consumers staying at home and using the internet more, are positively impacting the tech company since its business model is usage-based. But many of the drivers for Fastly's business are organic, including strong growth in enterprise customers and the impact of its marketing efforts paying off as companies realize that if they want to innovate rapidly, they need more control on the edge of the internet, where Fastly's value proposition shines.
Also helping give Fastly's stock a boost, many high-growth SaaS stocks rose a few percentage points or even more on Tuesday as investors continue to favor these companies for their recession-resistant recurring revenue. Datadog, a monitoring and analytics platform for cloud-based systems, led the way. Its shares soared more than 20% on Tuesday, fueled by strong first-quarter results.
Now what
The few analysts that commented on Fastly's recent quarterly update have all responded optimistically, raising their price targets and reiterating buy ratings for the stock.
Going forward, investors will be looking for Fastly's strong momentum to persist. Fastly's second-quarter revenue guidance implies 57% revenue growth based on the midpoint of the company's forecast.
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 April 16, 2020
Daniel Sparks owns shares of 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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What happened Shares of edge computing infrastructure-as-a-service (IaaS) company Fastly (NYSE: FSLY) surged on Tuesday. Trends from COVID-19, including consumers staying at home and using the internet more, are positively impacting the tech company since its business model is usage-based. Now what The few analysts that commented on Fastly's recent quarterly update have all responded optimistically, raising their price targets and reiterating buy ratings for the stock.
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The stock's gain on Tuesday likely reflected continued optimism following the company's strong first quarter and a bullish day in the market for many high-growth tech stocks. Furthermore, management said it expected second-quarter revenue to be between $70 million and $72 million and non-GAAP (adjusted) earnings per share to be between a loss of $0.02 and breakeven. The Motley Fool owns shares of and recommends Datadog and Fastly.
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The stock's gain on Tuesday likely reflected continued optimism following the company's strong first quarter and a bullish day in the market for many high-growth tech stocks. Also helping give Fastly's stock a boost, many high-growth SaaS stocks rose a few percentage points or even more on Tuesday as investors continue to favor these companies for their recession-resistant recurring revenue. See the 10 stocks *Stock Advisor returns as of April 16, 2020 Daniel Sparks owns shares of Fastly.
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The stock's gain on Tuesday likely reflected continued optimism following the company's strong first quarter and a bullish day in the market for many high-growth tech stocks. That's right -- they think these 10 stocks are even better buys. The Motley Fool owns shares of and recommends Datadog and Fastly.
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fed3e868-3847-4b13-81fb-cdd9f1bd16cc
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719050.0
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2020-05-12 00:00:00 UTC
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Technology Sector Update for 05/12/2020: IIVI,DDOG,GNSS
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DDOG
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https://www.nasdaq.com/articles/technology-sector-update-for-05-12-2020%3A-iividdoggnss-2020-05-12
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nan
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nan
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Technology stocks were climbing on Tuesday, with the SPDR Technology Select Sector ETF advancing 0.4% while the Philadelphia Semiconductor Index was rising 0.7%.
In company news, II-VI (IIVI) rose 23% after the opto-electronic components company late Monday reported non-GAAP net income for its fiscal Q3 beating analyst estimates and also forecast better-than-expected Q4 results. Excluding one-time items,it earned $0.47 per share during the three months ended March 31, down compared with a $0.60 per share adjusted profit during the year-ago period but still exceeding the Capital IQ consensus expecting $0.14 per share.
Datadog (DDOG) raced nearly 22% higher after reporting Q1 results exceeding Wall Street expectations and also projecting surprise profits and above-consensus revenue for the current quarter and FY20. It earned $0.06 per share during the three months ended March 31 on $131.2 million in revenue, topping the Capital IQ consensus expecting a Q1 net loss of $0.02 per share and $117.7 million in quarterly revenue.
Genasys Inc. (GNSS) climbed almost 10% after the multidirectional sound technologies company said it received more than $1.4 million in orders from several US government agencies, including the Army, Air Force, Coast Guard, State Department and the departments of Agriculture and Homeland Security.
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) raced nearly 22% higher after reporting Q1 results exceeding Wall Street expectations and also projecting surprise profits and above-consensus revenue for the current quarter and FY20. In company news, II-VI (IIVI) rose 23% after the opto-electronic components company late Monday reported non-GAAP net income for its fiscal Q3 beating analyst estimates and also forecast better-than-expected Q4 results. Genasys Inc. (GNSS) climbed almost 10% after the multidirectional sound technologies company said it received more than $1.4 million in orders from several US government agencies, including the Army, Air Force, Coast Guard, State Department and the departments of Agriculture and Homeland Security.
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Datadog (DDOG) raced nearly 22% higher after reporting Q1 results exceeding Wall Street expectations and also projecting surprise profits and above-consensus revenue for the current quarter and FY20. Excluding one-time items,it earned $0.47 per share during the three months ended March 31, down compared with a $0.60 per share adjusted profit during the year-ago period but still exceeding the Capital IQ consensus expecting $0.14 per share. It earned $0.06 per share during the three months ended March 31 on $131.2 million in revenue, topping the Capital IQ consensus expecting a Q1 net loss of $0.02 per share and $117.7 million in quarterly revenue.
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Datadog (DDOG) raced nearly 22% higher after reporting Q1 results exceeding Wall Street expectations and also projecting surprise profits and above-consensus revenue for the current quarter and FY20. Excluding one-time items,it earned $0.47 per share during the three months ended March 31, down compared with a $0.60 per share adjusted profit during the year-ago period but still exceeding the Capital IQ consensus expecting $0.14 per share. It earned $0.06 per share during the three months ended March 31 on $131.2 million in revenue, topping the Capital IQ consensus expecting a Q1 net loss of $0.02 per share and $117.7 million in quarterly revenue.
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Datadog (DDOG) raced nearly 22% higher after reporting Q1 results exceeding Wall Street expectations and also projecting surprise profits and above-consensus revenue for the current quarter and FY20. Technology stocks were climbing on Tuesday, with the SPDR Technology Select Sector ETF advancing 0.4% while the Philadelphia Semiconductor Index was rising 0.7%. In company news, II-VI (IIVI) rose 23% after the opto-electronic components company late Monday reported non-GAAP net income for its fiscal Q3 beating analyst estimates and also forecast better-than-expected Q4 results.
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90e0764a-1c29-4e36-9a9b-faebe3981cf2
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719051.0
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2020-05-12 00:00:00 UTC
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Stock Alert: Datadog Climbs 13% On Upbeat Q1 Results
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DDOG
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https://www.nasdaq.com/articles/stock-alert%3A-datadog-climbs-13-on-upbeat-q1-results-2020-05-12
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nan
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nan
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(RTTNews) - Shares of Datadog Inc. (DDOG) are gaining more than 13 percent or $7.50 in Tuesday's morning trade at $63.19 after the company reported a turnaround to profit in the first quarter on strong revenue growth. The stock has traded in a range of $27.55 to $64.34 in the past 52 weeks.
New York-based Datadog is a provider of monitoring and analytics platform for software developers, IT operations teams, and business users in the cloud.
Monday, Datadog reported net income for the first quarter of $6.48 million or $0.02 per share, compared to net loss of $9.49 million or $0.12 per share in the year-ago period. Adjusted earnings for the quarter were $0.06 per share. Revenue for the quarter grew 87 percent to $131.25 million from $70.05 million in the year-ago period.
As of March 31, 2020, the company had 960 customers with annualized revenue run-rate or ARR of $100,000 or more, representing an increase of 89 percent from 508 as of March 31, 2019. It also surpassed 400 out-of-the-box supported integrations.
For the second quarter, Datadog forecasts revenue between $134 million and $136 million and adjusted earnings between $0.00 and $0.01 per share. For fiscal 2020, the company projects revenue between $555 million and $565 million as well as adjusted earnings between $0.02 and $0.06 per share.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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(RTTNews) - Shares of Datadog Inc. (DDOG) are gaining more than 13 percent or $7.50 in Tuesday's morning trade at $63.19 after the company reported a turnaround to profit in the first quarter on strong revenue growth. New York-based Datadog is a provider of monitoring and analytics platform for software developers, IT operations teams, and business users in the cloud. Monday, Datadog reported net income for the first quarter of $6.48 million or $0.02 per share, compared to net loss of $9.49 million or $0.12 per share in the year-ago period.
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(RTTNews) - Shares of Datadog Inc. (DDOG) are gaining more than 13 percent or $7.50 in Tuesday's morning trade at $63.19 after the company reported a turnaround to profit in the first quarter on strong revenue growth. Monday, Datadog reported net income for the first quarter of $6.48 million or $0.02 per share, compared to net loss of $9.49 million or $0.12 per share in the year-ago period. Revenue for the quarter grew 87 percent to $131.25 million from $70.05 million in the year-ago period.
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(RTTNews) - Shares of Datadog Inc. (DDOG) are gaining more than 13 percent or $7.50 in Tuesday's morning trade at $63.19 after the company reported a turnaround to profit in the first quarter on strong revenue growth. Monday, Datadog reported net income for the first quarter of $6.48 million or $0.02 per share, compared to net loss of $9.49 million or $0.12 per share in the year-ago period. For the second quarter, Datadog forecasts revenue between $134 million and $136 million and adjusted earnings between $0.00 and $0.01 per share.
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(RTTNews) - Shares of Datadog Inc. (DDOG) are gaining more than 13 percent or $7.50 in Tuesday's morning trade at $63.19 after the company reported a turnaround to profit in the first quarter on strong revenue growth. Monday, Datadog reported net income for the first quarter of $6.48 million or $0.02 per share, compared to net loss of $9.49 million or $0.12 per share in the year-ago period. For the second quarter, Datadog forecasts revenue between $134 million and $136 million and adjusted earnings between $0.00 and $0.01 per share.
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065de374-8ec1-4111-bfe0-66e61a13c7a5
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719052.0
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2020-05-12 00:00:00 UTC
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Technology Sector Update for 05/12/2020: SQNS,IIVI,DDOG,GNSS
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DDOG
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https://www.nasdaq.com/articles/technology-sector-update-for-05-12-2020%3A-sqnsiividdoggnss-2020-05-12
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nan
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nan
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Technology stocks were falling heading into Tuesday's close, with the SPDR Technology Select Sector ETF sinking 0.7% while the Philadelphia Semiconductor Index was dropping 1.0%.
In company news, Sequans Communications (SQNS) fell 13% after the 4G and 5G chipmaker Tuesday priced a $25 million public offering of more than 4.85 million of its American depositary shares at $5.15 apiece, or about 13% below Monday's closing price for the stock. The company also said it was terminating its at-market stock issue sales agreement with B Riley FBR announced March 31.
II-VI (IIVI) rose more than 23% after the opto-electronic components company late Monday reported non-GAAP net income for its fiscal Q3 beating analyst estimates and also forecast better-than-expected Q4 results. Excluding one-time items,it earned $0.47 per share during the three months ended March 31, down compared with a $0.60 per share adjusted profit during the year-ago period but still exceeding the Capital IQ consensus expecting $0.14 per share.
Datadog (DDOG) raced over 22% higher after reporting Q1 results exceeding Wall Street expectations and also projecting surprise profits and above-consensus revenue for the current quarter and FY20. It earned $0.06 per share during the three months ended March 31 on $131.2 million in revenue, topping the Capital IQ consensus expecting a Q1 net loss of $0.02 per share and $117.7 million in quarterly revenue.
Genasys Inc. (GNSS) climbed 8.8% after the multidirectional sound technologies company said it received more than $1.4 million in orders from several US government agencies, including the Army, Air Force, Coast Guard, State Department and the departments of Agriculture and Homeland Security.
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) raced over 22% higher after reporting Q1 results exceeding Wall Street expectations and also projecting surprise profits and above-consensus revenue for the current quarter and FY20. The company also said it was terminating its at-market stock issue sales agreement with B Riley FBR announced March 31. II-VI (IIVI) rose more than 23% after the opto-electronic components company late Monday reported non-GAAP net income for its fiscal Q3 beating analyst estimates and also forecast better-than-expected Q4 results.
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Datadog (DDOG) raced over 22% higher after reporting Q1 results exceeding Wall Street expectations and also projecting surprise profits and above-consensus revenue for the current quarter and FY20. In company news, Sequans Communications (SQNS) fell 13% after the 4G and 5G chipmaker Tuesday priced a $25 million public offering of more than 4.85 million of its American depositary shares at $5.15 apiece, or about 13% below Monday's closing price for the stock. Excluding one-time items,it earned $0.47 per share during the three months ended March 31, down compared with a $0.60 per share adjusted profit during the year-ago period but still exceeding the Capital IQ consensus expecting $0.14 per share.
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Datadog (DDOG) raced over 22% higher after reporting Q1 results exceeding Wall Street expectations and also projecting surprise profits and above-consensus revenue for the current quarter and FY20. In company news, Sequans Communications (SQNS) fell 13% after the 4G and 5G chipmaker Tuesday priced a $25 million public offering of more than 4.85 million of its American depositary shares at $5.15 apiece, or about 13% below Monday's closing price for the stock. Excluding one-time items,it earned $0.47 per share during the three months ended March 31, down compared with a $0.60 per share adjusted profit during the year-ago period but still exceeding the Capital IQ consensus expecting $0.14 per share.
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Datadog (DDOG) raced over 22% higher after reporting Q1 results exceeding Wall Street expectations and also projecting surprise profits and above-consensus revenue for the current quarter and FY20. Technology stocks were falling heading into Tuesday's close, with the SPDR Technology Select Sector ETF sinking 0.7% while the Philadelphia Semiconductor Index was dropping 1.0%. The company also said it was terminating its at-market stock issue sales agreement with B Riley FBR announced March 31.
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e4403e5c-4c33-4c98-acad-46a22101b593
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719053.0
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2020-05-12 00:00:00 UTC
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Stock Market News: 2 Cloud Contenders Reported Earnings, But Only 1 Is Soaring
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DDOG
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https://www.nasdaq.com/articles/stock-market-news%3A-2-cloud-contenders-reported-earnings-but-only-1-is-soaring-2020-05-12
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nan
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nan
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Stocks remained in a holding pattern on Tuesday morning, with investors still torn about what the future is likely to bring. Earnings reports for the first quarter haven't been as bad as many had feared, but there's almost no visibility about what the second quarter is likely to bring, and that has some market participants reluctant to put too much faith in the economy's resiliency in the face of the coronavirus pandemic. Just before 11 a.m. EDT today, the Dow Jones Industrial Average (DJINDICES: ^DJI) was up 36 points to 24,258. The S&P 500 (SNPINDEX: ^GSPC) fell 1 point to 2,929, but the Nasdaq Composite (NASDAQINDEX: ^IXIC) gained ground, rising 16 points to 9,209.
Many investors have turned to cloud computing stocks as a refuge from the coronavirus bear market, and there have been a lot of success stories in the space. Companies like Datadog (NASDAQ: DDOG) and Eventbrite (NYSE: EB) have taken different paths toward trying to tap the power of the cloud, but they've both brought innovative solutions to their respective industries. Unfortunately, only one of those companies gave investors the good news they'd hoped to see in its latest earnings report.
Image source: Getty Images.
All bark and no bite? Not Datadog
Shares of Datadog soared 20% Tuesday morning, adding to impressive gains over the past month. Many investors have been impressed with the reliable growth that subscription-as-a-service stocks have continued to provide even under the pressure of the coronavirus outbreak, and Datadog's latest numbers confirmed the hopes of its shareholders.
Revenue jumped 87% in the first quarter of 2020 compared with the year-ago period. The company saw a huge rise in the number of big clients signing up for its data monitoring and analytics platform, as Datadog now boasts 960 customers generating $100,000 or more in annual recurring revenue.
The big jump in customers interested in making better use of their data led Datadog not just to offer guidance for the full 2020 year but also to make it look extremely promising. The company sees full-year revenue coming in between $555 million and $565 million, which would imply a growth rate of 53% to 56% from 2019 levels. That's roughly $30 million more in sales than investors were looking to see.
Datadog is showing that top businesses can prosper even in tough times. Shareholders are willing to pay premium prices for that kind of growth, and the emerging tech company shows no signs of lying down and rolling over anytime soon.
Eventbrite dims
The news wasn't nearly as good for Eventbrite, whose shares moved in the opposite direction. The event-planning software company's stock dropped almost 20% Tuesday morning following its earnings report.
Eventbrite has taken a huge hit from the restrictions associated with the COVID-19 outbreak. Revenue plunged 40% from year-ago levels, due largely to refunded ticket sales from events that were canceled due to the pandemic. That drop in sales caused losses to soar, as the company had to set aside more than $76 million in anticipation of additional refunds and charge-backs.
CEO Julia Hartz tried to put a long-term spin on Eventbrite's situation. "While the world may not be gathering today, the desire for human connection is stronger than ever," Hartz said, "and we see this desire matched every day by the entrepreneurialism of event creators."
The good news for Eventbrite is that it secured an extra $225 million in short-term financing in order to give it liquidity to get through the toughest part of the pandemic. Nevertheless, with so much uncertainty about what post-coronavirus life is going to look like, shareholders are justifiably cautious about whether Eventbrite will return to its former growth trajectory.
10 stocks we like better than Eventbrite, 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 Eventbrite, 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 April 16, 2020
Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Datadog. The Motley Fool recommends Eventbrite, 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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Companies like Datadog (NASDAQ: DDOG) and Eventbrite (NYSE: EB) have taken different paths toward trying to tap the power of the cloud, but they've both brought innovative solutions to their respective industries. Many investors have been impressed with the reliable growth that subscription-as-a-service stocks have continued to provide even under the pressure of the coronavirus outbreak, and Datadog's latest numbers confirmed the hopes of its shareholders. The company saw a huge rise in the number of big clients signing up for its data monitoring and analytics platform, as Datadog now boasts 960 customers generating $100,000 or more in annual recurring revenue.
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Companies like Datadog (NASDAQ: DDOG) and Eventbrite (NYSE: EB) have taken different paths toward trying to tap the power of the cloud, but they've both brought innovative solutions to their respective industries. Not Datadog Shares of Datadog soared 20% Tuesday morning, adding to impressive gains over the past month. Many investors have been impressed with the reliable growth that subscription-as-a-service stocks have continued to provide even under the pressure of the coronavirus outbreak, and Datadog's latest numbers confirmed the hopes of its shareholders.
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Companies like Datadog (NASDAQ: DDOG) and Eventbrite (NYSE: EB) have taken different paths toward trying to tap the power of the cloud, but they've both brought innovative solutions to their respective industries. Many investors have been impressed with the reliable growth that subscription-as-a-service stocks have continued to provide even under the pressure of the coronavirus outbreak, and Datadog's latest numbers confirmed the hopes of its shareholders. * David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Eventbrite, Inc. wasn't one of them!
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Companies like Datadog (NASDAQ: DDOG) and Eventbrite (NYSE: EB) have taken different paths toward trying to tap the power of the cloud, but they've both brought innovative solutions to their respective industries. Eventbrite dims The news wasn't nearly as good for Eventbrite, whose shares moved in the opposite direction. The event-planning software company's stock dropped almost 20% Tuesday morning following its earnings report.
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81dfde1b-3bb0-407e-a8c7-9e7b89665905
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719054.0
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2020-05-12 00:00:00 UTC
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BUZZ-U.S. STOCKS ON THE MOVE-Datadog, Novavax, Cymabay Therapeutics
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DDOG
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https://www.nasdaq.com/articles/buzz-u.s.-stocks-on-the-move-datadog-novavax-cymabay-therapeutics-2020-05-12
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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
The S&P 500 slipped in choppy trading on Tuesday as the risks of reopening the economy too soon overshadowed hopes of a jump-start to a battered global economy, following an easing of virus-led business shutdowns..N
At 10:57 ET, the Dow Jones Industrial Average .DJI was up 0.11% at 24,248.2. The S&P 500 .SPX was down 0.08% at 2,928.06 and the Nasdaq Composite .IXIC was up 0.14% at 9,205.537. The top three S&P 500 .PG.INX percentage gainers: ** Amcor Plc , up 6.8% ** ONEOK Inc , up 4.8% ** Simon Property Group Inc , up 3.9% The top three S&P 500 .PL.INX percentage losers: ** Blackrock Inc , down 5.7% ** Healthpeak Properties Inc , down 5.5% ** Extra Space Storage Inc , down 5.4% The top three NYSE .PG.N percentage gainers: ** FTS International Inc , up 1,630.4% ** Babcock & Wilcox Enterprises Inc , up 50.6% ** Invesco S&P MidCap Quality ETF , up 35.8% The top three NYSE .PL.N percentage losers: ** Eventbrite Inc , down 18.9% ** Arlo Tchnologies Inc , down 17.1% ** Chesapeake Energy Corp , down 17% The top three Nasdaq .PG.O percentage gainers: ** CymaBay Therapeutics Inc , up 149% ** Novavax Inc , up 56.1% ** Gamida Cell Ltd , up 41.2% The top three Nasdaq .PL.O percentage losers: ** Genfit SA , down 65.2% ** Advanced Emissions Solutions Inc , down 28.7% ** Axcla Health Inc , down 20.3% ** Guardion Health Sciences Inc GHSI.O: down 0.4%
BUZZ-Guardion Health: Rises after eye drug shows promise in study ** Simon Property Group Inc SPG.N: up 4.0%
BUZZ-Street View: Significant uncertainties remain for Simon Property Group ** Enzo Biochem Inc ENZ.N: down 3.6%
BUZZ-Rises on U.S. patent for bone treatment ** Datadog Inc DDOG.O: up 21.4%
BUZZ-Datadog Inc hits record high on strong Q1 results, higher outlook ** Alexion Pharmaceuticals Inc ALXN.O: up 2.5%
BUZZ-Rises after Elliott renews push for sale ** II-VI Inc IIVI.O: up 28.0%
BUZZ-Jumps on better-than-expected Q3 profit ** Casper Sleep Inc CSPR.N: down 10.8%
BUZZ-Falls on Q1 loss, plans to reduce new store openings
** Novavax Inc NVAX.O: up 56.1% BUZZ-Surges on $384 mln COVID-19 vaccine development funding ** Hertz Global Holdings Inc HTZ.N: down 4.4% BUZZ-Car rental firm Hertz skids on going concern doubts ** Gamida Cell Ltd GMDA.O: up 41.2% BUZZ- Soars on positive data from bone marrow transplant study ** Akebia Therapeutics Inc AKBA.O: down 3.2% BUZZ-Falls on upsized stock offering ** California Resources Corp CRC.N: down 29.0% BUZZ- Plunges on going-concern doubts ** YRC Worldwide Inc YRCW.O : up 13.9% BUZZ- Jumps on surprise Q1 profit ** Tesla Inc TSLA.O: up 3.2% BUZZ-Rises as Musk reopens Fremont factory against local order ** Cymabay Therapeutics Inc CBAY.O: up 149.0% BUZZ- Set for best day on plans to revive liver disease drug ** Laboratory Corporation of America Holdings LH.N: up 0.7% ** Quest Diagnostics Inc DGX.N: up 0.6% BUZZ-Demand for LabCorp, Quest's COVID-19 tests to rise as hospitals open up - Jefferies BUZZ-LabCorp: Up on expanding access to COVID-19 at-home test kit ** Lexington Realty Trust LXP.N: down 5.7% ** Rexford Industrial Realty Inc REXR.N: down 2.0% BUZZ-Industrial REITs Lexington, Rexford down on stock deals ** Simon Property Group Inc SPG.N: up 4.0% ** Macerich Co MAC.N: up 1.8% BUZZ-Simon Property, Macerich jump on plans to reopen malls ** Nabriva Therapeutics Plc NBRV.O: down 14.3% BUZZ-Down on likely delay in approval for antibiotic ** Brighthouse Financial Inc BHF.O: up 1.9% BUZZ- Jumps on Q1 profit beat ** Sunoco LP SUN.N: down 1.5% BUZZ- Sunoco LP: Slips as it swings to quarterly loss, scraps outlook ** Moderna Inc MRNA.O: down 4.8% BUZZ-Rises on FDA 'fast track' status for COVID-19 vaccine candidate ** HCA Healthcare Inc HCA.N: down 2.5% ** Tenet Healthcare Corp THC.N: down 0.3% ** Universal Health Services UHS.N: down 2.0% BUZZ-JPM says new U.S. long-term care hospital payment rules unlikely to change medtech outlook ** Lyft Inc LYFT.O: up 0.6% BUZZ- Slips on planned $650 mln convertible debt deal ** CytoSorbents Corp CTSO.O: up 3.5% BUZZ- Rises after blood purification device gets EU nod ** Intercept Pharmaceuticals Inc ICPT.O: up 1.1% BUZZ-Citi downgrades, sees lower likelihood of liver drug's success ** Fluent Inc FLNT.O: down 12.8% BUZZ- Rises on upbeat Q1 revenue, in-line profit ** Livent Corp LTHM.N: down 11.0% BUZZ- Tumbles after lower-than-expected Q1 earnings on weak prices
The 11 major S&P 500 sectors:
Communication Services
.SPLRCL
flat
Consumer Discretionary
.SPLRCD
up 0.07%
Consumer Staples
.SPLRCS
up 0.63%
Energy
.SPNY
down 1.07%
Financial
.SPSY
down 1.04%
Health
.SPXHC
up 0.36%
Industrial
.SPLRCI
down 0.34%
Information Technology
.SPLRCT
up 0.12%
Materials
.SPLRCM
up 0.50%
Real Estate
.SPLRCR
down 2.33%
Utilities
.SPLRCU
down 0.16%
(Compiled by Amal S in Bengaluru)
((Amal.S@thomsonreuters.com; within U.S.+1 646 223 8780; outside U.S. +91 80 6749 3677;))
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: ** Amcor Plc , up 6.8% ** ONEOK Inc , up 4.8% ** Simon Property Group Inc , up 3.9% The top three S&P 500 .PL.INX percentage losers: ** Blackrock Inc , down 5.7% ** Healthpeak Properties Inc , down 5.5% ** Extra Space Storage Inc , down 5.4% The top three NYSE .PG.N percentage gainers: ** FTS International Inc , up 1,630.4% ** Babcock & Wilcox Enterprises Inc , up 50.6% ** Invesco S&P MidCap Quality ETF , up 35.8% The top three NYSE .PL.N percentage losers: ** Eventbrite Inc , down 18.9% ** Arlo Tchnologies Inc , down 17.1% ** Chesapeake Energy Corp , down 17% The top three Nasdaq .PG.O percentage gainers: ** CymaBay Therapeutics Inc , up 149% ** Novavax Inc , up 56.1% ** Gamida Cell Ltd , up 41.2% The top three Nasdaq .PL.O percentage losers: ** Genfit SA , down 65.2% ** Advanced Emissions Solutions Inc , down 28.7% ** Axcla Health Inc , down 20.3% ** Guardion Health Sciences Inc GHSI.O: down 0.4% BUZZ-Guardion Health: Rises after eye drug shows promise in study ** Simon Property Group Inc SPG.N: up 4.0% BUZZ-Street View: Significant uncertainties remain for Simon Property Group ** Enzo Biochem Inc ENZ.N: down 3.6% BUZZ-Rises on U.S. patent for bone treatment ** Datadog Inc DDOG.O: up 21.4% BUZZ-Datadog Inc hits record high on strong Q1 results, higher outlook ** Alexion Pharmaceuticals Inc ALXN.O: up 2.5% BUZZ-Rises after Elliott renews push for sale ** II-VI Inc IIVI.O: up 28.0% BUZZ-Jumps on better-than-expected Q3 profit ** Casper Sleep Inc CSPR.N: down 10.8% BUZZ-Falls on Q1 loss, plans to reduce new store openings ** Novavax Inc NVAX.O: up 56.1% BUZZ-Surges on $384 mln COVID-19 vaccine development funding ** Hertz Global Holdings Inc HTZ.N: down 4.4% BUZZ-Car rental firm Hertz skids on going concern doubts ** Gamida Cell Ltd GMDA.O: up 41.2% BUZZ- Soars on positive data from bone marrow transplant study ** Akebia Therapeutics Inc AKBA.O: down 3.2% BUZZ-Falls on upsized stock offering ** California Resources Corp CRC.N: down 29.0% BUZZ- Plunges on going-concern doubts ** YRC Worldwide Inc YRCW.O : up 13.9% BUZZ- Jumps on surprise Q1 profit ** Tesla Inc TSLA.O: up 3.2% BUZZ-Rises as Musk reopens Fremont factory against local order ** Cymabay Therapeutics Inc CBAY.O: up 149.0% BUZZ- Set for best day on plans to revive liver disease drug ** Laboratory Corporation of America Holdings LH.N: up 0.7% ** Quest Diagnostics Inc DGX.N: up 0.6% BUZZ-Demand for LabCorp, Quest's COVID-19 tests to rise as hospitals open up - Jefferies BUZZ-LabCorp: Up on expanding access to COVID-19 at-home test kit ** Lexington Realty Trust LXP.N: down 5.7% ** Rexford Industrial Realty Inc REXR.N: down 2.0% BUZZ-Industrial REITs Lexington, Rexford down on stock deals ** Simon Property Group Inc SPG.N: up 4.0% ** Macerich Co MAC.N: up 1.8% BUZZ-Simon Property, Macerich jump on plans to reopen malls ** Nabriva Therapeutics Plc NBRV.O: down 14.3% BUZZ-Down on likely delay in approval for antibiotic ** Brighthouse Financial Inc BHF.O: up 1.9% BUZZ- Jumps on Q1 profit beat ** Sunoco LP SUN.N: down 1.5% BUZZ- Sunoco LP: Slips as it swings to quarterly loss, scraps outlook ** Moderna Inc MRNA.O: down 4.8% BUZZ-Rises on FDA 'fast track' status for COVID-19 vaccine candidate ** HCA Healthcare Inc HCA.N: down 2.5% ** Tenet Healthcare Corp THC.N: down 0.3% ** Universal Health Services UHS.N: down 2.0% BUZZ-JPM says new U.S. long-term care hospital payment rules unlikely to change medtech outlook ** Lyft Inc LYFT.O: up 0.6% BUZZ- Slips on planned $650 mln convertible debt deal ** CytoSorbents Corp CTSO.O: up 3.5% BUZZ- Rises after blood purification device gets EU nod ** Intercept Pharmaceuticals Inc ICPT.O: up 1.1% BUZZ-Citi downgrades, sees lower likelihood of liver drug's success ** Fluent Inc FLNT.O: down 12.8% BUZZ- Rises on upbeat Q1 revenue, in-line profit ** Livent Corp LTHM.N: down 11.0% BUZZ- Tumbles after lower-than-expected Q1 earnings on weak prices 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 The S&P 500 slipped in choppy trading on Tuesday as the risks of reopening the economy too soon overshadowed hopes of a jump-start to a battered global economy, following an easing of virus-led business shutdowns..N At 10:57 ET, the Dow Jones Industrial Average .DJI was up 0.11% at 24,248.2. down 0.16% (Compiled by Amal S in Bengaluru) ((Amal.S@thomsonreuters.com; within U.S.+1 646 223 8780; outside U.S. +91 80 6749 3677;)) 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: ** Amcor Plc , up 6.8% ** ONEOK Inc , up 4.8% ** Simon Property Group Inc , up 3.9% The top three S&P 500 .PL.INX percentage losers: ** Blackrock Inc , down 5.7% ** Healthpeak Properties Inc , down 5.5% ** Extra Space Storage Inc , down 5.4% The top three NYSE .PG.N percentage gainers: ** FTS International Inc , up 1,630.4% ** Babcock & Wilcox Enterprises Inc , up 50.6% ** Invesco S&P MidCap Quality ETF , up 35.8% The top three NYSE .PL.N percentage losers: ** Eventbrite Inc , down 18.9% ** Arlo Tchnologies Inc , down 17.1% ** Chesapeake Energy Corp , down 17% The top three Nasdaq .PG.O percentage gainers: ** CymaBay Therapeutics Inc , up 149% ** Novavax Inc , up 56.1% ** Gamida Cell Ltd , up 41.2% The top three Nasdaq .PL.O percentage losers: ** Genfit SA , down 65.2% ** Advanced Emissions Solutions Inc , down 28.7% ** Axcla Health Inc , down 20.3% ** Guardion Health Sciences Inc GHSI.O: down 0.4% BUZZ-Guardion Health: Rises after eye drug shows promise in study ** Simon Property Group Inc SPG.N: up 4.0% BUZZ-Street View: Significant uncertainties remain for Simon Property Group ** Enzo Biochem Inc ENZ.N: down 3.6% BUZZ-Rises on U.S. patent for bone treatment ** Datadog Inc DDOG.O: up 21.4% BUZZ-Datadog Inc hits record high on strong Q1 results, higher outlook ** Alexion Pharmaceuticals Inc ALXN.O: up 2.5% BUZZ-Rises after Elliott renews push for sale ** II-VI Inc IIVI.O: up 28.0% BUZZ-Jumps on better-than-expected Q3 profit ** Casper Sleep Inc CSPR.N: down 10.8% BUZZ-Falls on Q1 loss, plans to reduce new store openings ** Novavax Inc NVAX.O: up 56.1% BUZZ-Surges on $384 mln COVID-19 vaccine development funding ** Hertz Global Holdings Inc HTZ.N: down 4.4% BUZZ-Car rental firm Hertz skids on going concern doubts ** Gamida Cell Ltd GMDA.O: up 41.2% BUZZ- Soars on positive data from bone marrow transplant study ** Akebia Therapeutics Inc AKBA.O: down 3.2% BUZZ-Falls on upsized stock offering ** California Resources Corp CRC.N: down 29.0% BUZZ- Plunges on going-concern doubts ** YRC Worldwide Inc YRCW.O : up 13.9% BUZZ- Jumps on surprise Q1 profit ** Tesla Inc TSLA.O: up 3.2% BUZZ-Rises as Musk reopens Fremont factory against local order ** Cymabay Therapeutics Inc CBAY.O: up 149.0% BUZZ- Set for best day on plans to revive liver disease drug ** Laboratory Corporation of America Holdings LH.N: up 0.7% ** Quest Diagnostics Inc DGX.N: up 0.6% BUZZ-Demand for LabCorp, Quest's COVID-19 tests to rise as hospitals open up - Jefferies BUZZ-LabCorp: Up on expanding access to COVID-19 at-home test kit ** Lexington Realty Trust LXP.N: down 5.7% ** Rexford Industrial Realty Inc REXR.N: down 2.0% BUZZ-Industrial REITs Lexington, Rexford down on stock deals ** Simon Property Group Inc SPG.N: up 4.0% ** Macerich Co MAC.N: up 1.8% BUZZ-Simon Property, Macerich jump on plans to reopen malls ** Nabriva Therapeutics Plc NBRV.O: down 14.3% BUZZ-Down on likely delay in approval for antibiotic ** Brighthouse Financial Inc BHF.O: up 1.9% BUZZ- Jumps on Q1 profit beat ** Sunoco LP SUN.N: down 1.5% BUZZ- Sunoco LP: Slips as it swings to quarterly loss, scraps outlook ** Moderna Inc MRNA.O: down 4.8% BUZZ-Rises on FDA 'fast track' status for COVID-19 vaccine candidate ** HCA Healthcare Inc HCA.N: down 2.5% ** Tenet Healthcare Corp THC.N: down 0.3% ** Universal Health Services UHS.N: down 2.0% BUZZ-JPM says new U.S. long-term care hospital payment rules unlikely to change medtech outlook ** Lyft Inc LYFT.O: up 0.6% BUZZ- Slips on planned $650 mln convertible debt deal ** CytoSorbents Corp CTSO.O: up 3.5% BUZZ- Rises after blood purification device gets EU nod ** Intercept Pharmaceuticals Inc ICPT.O: up 1.1% BUZZ-Citi downgrades, sees lower likelihood of liver drug's success ** Fluent Inc FLNT.O: down 12.8% BUZZ- Rises on upbeat Q1 revenue, in-line profit ** Livent Corp LTHM.N: down 11.0% BUZZ- Tumbles after lower-than-expected Q1 earnings on weak prices 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 The S&P 500 slipped in choppy trading on Tuesday as the risks of reopening the economy too soon overshadowed hopes of a jump-start to a battered global economy, following an easing of virus-led business shutdowns..N At 10:57 ET, the Dow Jones Industrial Average .DJI was up 0.11% at 24,248.2. down 0.16% (Compiled by Amal S in Bengaluru) ((Amal.S@thomsonreuters.com; within U.S.+1 646 223 8780; outside U.S. +91 80 6749 3677;)) 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: ** Amcor Plc , up 6.8% ** ONEOK Inc , up 4.8% ** Simon Property Group Inc , up 3.9% The top three S&P 500 .PL.INX percentage losers: ** Blackrock Inc , down 5.7% ** Healthpeak Properties Inc , down 5.5% ** Extra Space Storage Inc , down 5.4% The top three NYSE .PG.N percentage gainers: ** FTS International Inc , up 1,630.4% ** Babcock & Wilcox Enterprises Inc , up 50.6% ** Invesco S&P MidCap Quality ETF , up 35.8% The top three NYSE .PL.N percentage losers: ** Eventbrite Inc , down 18.9% ** Arlo Tchnologies Inc , down 17.1% ** Chesapeake Energy Corp , down 17% The top three Nasdaq .PG.O percentage gainers: ** CymaBay Therapeutics Inc , up 149% ** Novavax Inc , up 56.1% ** Gamida Cell Ltd , up 41.2% The top three Nasdaq .PL.O percentage losers: ** Genfit SA , down 65.2% ** Advanced Emissions Solutions Inc , down 28.7% ** Axcla Health Inc , down 20.3% ** Guardion Health Sciences Inc GHSI.O: down 0.4% BUZZ-Guardion Health: Rises after eye drug shows promise in study ** Simon Property Group Inc SPG.N: up 4.0% BUZZ-Street View: Significant uncertainties remain for Simon Property Group ** Enzo Biochem Inc ENZ.N: down 3.6% BUZZ-Rises on U.S. patent for bone treatment ** Datadog Inc DDOG.O: up 21.4% BUZZ-Datadog Inc hits record high on strong Q1 results, higher outlook ** Alexion Pharmaceuticals Inc ALXN.O: up 2.5% BUZZ-Rises after Elliott renews push for sale ** II-VI Inc IIVI.O: up 28.0% BUZZ-Jumps on better-than-expected Q3 profit ** Casper Sleep Inc CSPR.N: down 10.8% BUZZ-Falls on Q1 loss, plans to reduce new store openings ** Novavax Inc NVAX.O: up 56.1% BUZZ-Surges on $384 mln COVID-19 vaccine development funding ** Hertz Global Holdings Inc HTZ.N: down 4.4% BUZZ-Car rental firm Hertz skids on going concern doubts ** Gamida Cell Ltd GMDA.O: up 41.2% BUZZ- Soars on positive data from bone marrow transplant study ** Akebia Therapeutics Inc AKBA.O: down 3.2% BUZZ-Falls on upsized stock offering ** California Resources Corp CRC.N: down 29.0% BUZZ- Plunges on going-concern doubts ** YRC Worldwide Inc YRCW.O : up 13.9% BUZZ- Jumps on surprise Q1 profit ** Tesla Inc TSLA.O: up 3.2% BUZZ-Rises as Musk reopens Fremont factory against local order ** Cymabay Therapeutics Inc CBAY.O: up 149.0% BUZZ- Set for best day on plans to revive liver disease drug ** Laboratory Corporation of America Holdings LH.N: up 0.7% ** Quest Diagnostics Inc DGX.N: up 0.6% BUZZ-Demand for LabCorp, Quest's COVID-19 tests to rise as hospitals open up - Jefferies BUZZ-LabCorp: Up on expanding access to COVID-19 at-home test kit ** Lexington Realty Trust LXP.N: down 5.7% ** Rexford Industrial Realty Inc REXR.N: down 2.0% BUZZ-Industrial REITs Lexington, Rexford down on stock deals ** Simon Property Group Inc SPG.N: up 4.0% ** Macerich Co MAC.N: up 1.8% BUZZ-Simon Property, Macerich jump on plans to reopen malls ** Nabriva Therapeutics Plc NBRV.O: down 14.3% BUZZ-Down on likely delay in approval for antibiotic ** Brighthouse Financial Inc BHF.O: up 1.9% BUZZ- Jumps on Q1 profit beat ** Sunoco LP SUN.N: down 1.5% BUZZ- Sunoco LP: Slips as it swings to quarterly loss, scraps outlook ** Moderna Inc MRNA.O: down 4.8% BUZZ-Rises on FDA 'fast track' status for COVID-19 vaccine candidate ** HCA Healthcare Inc HCA.N: down 2.5% ** Tenet Healthcare Corp THC.N: down 0.3% ** Universal Health Services UHS.N: down 2.0% BUZZ-JPM says new U.S. long-term care hospital payment rules unlikely to change medtech outlook ** Lyft Inc LYFT.O: up 0.6% BUZZ- Slips on planned $650 mln convertible debt deal ** CytoSorbents Corp CTSO.O: up 3.5% BUZZ- Rises after blood purification device gets EU nod ** Intercept Pharmaceuticals Inc ICPT.O: up 1.1% BUZZ-Citi downgrades, sees lower likelihood of liver drug's success ** Fluent Inc FLNT.O: down 12.8% BUZZ- Rises on upbeat Q1 revenue, in-line profit ** Livent Corp LTHM.N: down 11.0% BUZZ- Tumbles after lower-than-expected Q1 earnings on weak prices The 11 major S&P 500 sectors: Communication Services up 0.07% Consumer Staples down 0.34% Information Technology
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The top three S&P 500 .PG.INX percentage gainers: ** Amcor Plc , up 6.8% ** ONEOK Inc , up 4.8% ** Simon Property Group Inc , up 3.9% The top three S&P 500 .PL.INX percentage losers: ** Blackrock Inc , down 5.7% ** Healthpeak Properties Inc , down 5.5% ** Extra Space Storage Inc , down 5.4% The top three NYSE .PG.N percentage gainers: ** FTS International Inc , up 1,630.4% ** Babcock & Wilcox Enterprises Inc , up 50.6% ** Invesco S&P MidCap Quality ETF , up 35.8% The top three NYSE .PL.N percentage losers: ** Eventbrite Inc , down 18.9% ** Arlo Tchnologies Inc , down 17.1% ** Chesapeake Energy Corp , down 17% The top three Nasdaq .PG.O percentage gainers: ** CymaBay Therapeutics Inc , up 149% ** Novavax Inc , up 56.1% ** Gamida Cell Ltd , up 41.2% The top three Nasdaq .PL.O percentage losers: ** Genfit SA , down 65.2% ** Advanced Emissions Solutions Inc , down 28.7% ** Axcla Health Inc , down 20.3% ** Guardion Health Sciences Inc GHSI.O: down 0.4% BUZZ-Guardion Health: Rises after eye drug shows promise in study ** Simon Property Group Inc SPG.N: up 4.0% BUZZ-Street View: Significant uncertainties remain for Simon Property Group ** Enzo Biochem Inc ENZ.N: down 3.6% BUZZ-Rises on U.S. patent for bone treatment ** Datadog Inc DDOG.O: up 21.4% BUZZ-Datadog Inc hits record high on strong Q1 results, higher outlook ** Alexion Pharmaceuticals Inc ALXN.O: up 2.5% BUZZ-Rises after Elliott renews push for sale ** II-VI Inc IIVI.O: up 28.0% BUZZ-Jumps on better-than-expected Q3 profit ** Casper Sleep Inc CSPR.N: down 10.8% BUZZ-Falls on Q1 loss, plans to reduce new store openings ** Novavax Inc NVAX.O: up 56.1% BUZZ-Surges on $384 mln COVID-19 vaccine development funding ** Hertz Global Holdings Inc HTZ.N: down 4.4% BUZZ-Car rental firm Hertz skids on going concern doubts ** Gamida Cell Ltd GMDA.O: up 41.2% BUZZ- Soars on positive data from bone marrow transplant study ** Akebia Therapeutics Inc AKBA.O: down 3.2% BUZZ-Falls on upsized stock offering ** California Resources Corp CRC.N: down 29.0% BUZZ- Plunges on going-concern doubts ** YRC Worldwide Inc YRCW.O : up 13.9% BUZZ- Jumps on surprise Q1 profit ** Tesla Inc TSLA.O: up 3.2% BUZZ-Rises as Musk reopens Fremont factory against local order ** Cymabay Therapeutics Inc CBAY.O: up 149.0% BUZZ- Set for best day on plans to revive liver disease drug ** Laboratory Corporation of America Holdings LH.N: up 0.7% ** Quest Diagnostics Inc DGX.N: up 0.6% BUZZ-Demand for LabCorp, Quest's COVID-19 tests to rise as hospitals open up - Jefferies BUZZ-LabCorp: Up on expanding access to COVID-19 at-home test kit ** Lexington Realty Trust LXP.N: down 5.7% ** Rexford Industrial Realty Inc REXR.N: down 2.0% BUZZ-Industrial REITs Lexington, Rexford down on stock deals ** Simon Property Group Inc SPG.N: up 4.0% ** Macerich Co MAC.N: up 1.8% BUZZ-Simon Property, Macerich jump on plans to reopen malls ** Nabriva Therapeutics Plc NBRV.O: down 14.3% BUZZ-Down on likely delay in approval for antibiotic ** Brighthouse Financial Inc BHF.O: up 1.9% BUZZ- Jumps on Q1 profit beat ** Sunoco LP SUN.N: down 1.5% BUZZ- Sunoco LP: Slips as it swings to quarterly loss, scraps outlook ** Moderna Inc MRNA.O: down 4.8% BUZZ-Rises on FDA 'fast track' status for COVID-19 vaccine candidate ** HCA Healthcare Inc HCA.N: down 2.5% ** Tenet Healthcare Corp THC.N: down 0.3% ** Universal Health Services UHS.N: down 2.0% BUZZ-JPM says new U.S. long-term care hospital payment rules unlikely to change medtech outlook ** Lyft Inc LYFT.O: up 0.6% BUZZ- Slips on planned $650 mln convertible debt deal ** CytoSorbents Corp CTSO.O: up 3.5% BUZZ- Rises after blood purification device gets EU nod ** Intercept Pharmaceuticals Inc ICPT.O: up 1.1% BUZZ-Citi downgrades, sees lower likelihood of liver drug's success ** Fluent Inc FLNT.O: down 12.8% BUZZ- Rises on upbeat Q1 revenue, in-line profit ** Livent Corp LTHM.N: down 11.0% BUZZ- Tumbles after lower-than-expected Q1 earnings on weak prices 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 The S&P 500 slipped in choppy trading on Tuesday as the risks of reopening the economy too soon overshadowed hopes of a jump-start to a battered global economy, following an easing of virus-led business shutdowns..N At 10:57 ET, the Dow Jones Industrial Average .DJI was up 0.11% at 24,248.2. The S&P 500 .SPX was down 0.08% at 2,928.06 and the Nasdaq Composite .IXIC was up 0.14% at 9,205.537.
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719055.0
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2020-05-12 00:00:00 UTC
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Datadog, Inc. (DDOG) Q1 2020 Earnings Call Transcript
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DDOG
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https://www.nasdaq.com/articles/datadog-inc.-ddog-q1-2020-earnings-call-transcript-2020-05-12
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nan
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nan
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Image source: The Motley Fool.
Datadog, Inc. (NASDAQ: DDOG)
Q1 2020 Earnings Call
May 11, 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 Q1 2020 Datadog Earnings Conference Call. [Operator Instructions] After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions]
I would now like to hand the conference over to your speaker today Mr. A.J. Ljubich Director of IR. Thank you. Please go ahead.
A.J. Ljubich -- Director of Investor Relations
Thank you, Jimmy. Good afternoon and thank you for joining us today to review Datadog's first 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. This is our first time conducting ourearnings callfrom separate locations. So, we appreciate your understanding if we encounter any technical glitches.
During this call, we will make statements related to our business that are forward-looking under federal securities laws and 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 second quarter and for the full year of 2020, our strategy the potential benefits of our products, the potential contribution of customers with annual run rate or ARR of $100,000 or greater, R&D and go-to-market investments, expected capital expenditures, anticipated hiring the size of our market opportunity, as well as the impact of COVID-19 pandemic on our customers, their usage of our products, our market, and our business, and operating results.
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 annual report on Form 10-K for the year ended December 31, 2019 filed with the SEC on February 25, 2020 and current report on Form 8-K filed with the SEC on May 11, 2020.
Additional information will be made available in our quarterly report on Form 10-Q for the quarterly period ended March 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 available there for a limited time. Additional information may also be made available in our other filings and reports that we may file from time to time with the SEC.
Additionally non-GAAP financial measures will be discussed on this conference call. Please refer to the table 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 measures.
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. Before reviewing the quarter, I'd like to take some time to address the situation we're all facing with the COVID pandemic and in particular our internal response to the crisis, the ways in which the pandemic intersects with our business but also some of the data we've seen in March and April as well as our stance for the year and our perspective on the future.
So, starting with our response. We communicated three objectives internally. First, to keep our employees safe, healthy and sane; second to be good citizens and members of our communities and contribute to our collective health and economic success; and last, but not least, to serve our customers level down innovation and be the best at what we do for challenging times as well as good.
In keeping with those objectives, we have mandated work from home since March 12. In addition to that we have allocated a grant to each of our employees to support their productivity and safety. And at discretion employees could elect to donate all or a portion of their grant to charities that help with COVID relief.
I'm very proud to say that this program has already resulted in $1 million of donations from our employees and reflects the generosity and our commitment to go through this crisis together with the communities in which we operate. I also have to say that I've been extremely impressed with Datadog employees' resilience, continued productivity, and innovation through this time. Our success in pivoting to operate remotely does demonstrate the advantage of being a digital-first cloud-based business.
Regarding the way the pandemic may affect Datadog, there are a few important structural points to understand about our business. First, we have a very diverse customer base. We estimate that less than 10% of our ARR comes from categories most negatively impacted by COVID such as hospitality and travel, airlines and in personal entertainment. On the other hand we also have exposure to categories that have experienced increasing traffic such as streaming media, gaming, food delivery, e-commerce and collaboration.
Second, we also have a great diversity of customer sizes. We have low concentration and approximately 75% of our ARR comes from customers that pay us $100,000 or more. Also less than 15% of our ARR comes from a long tail of small businesses. Third, we price according to our customers' infrastructure footprint and not per seat. So, our product usage is not directly affected by reductions in the workforce.
Fourth our business model is low-friction land and expand and our platform is adopted bottom up. We often land fast and small as enterprises begin their cloud migration and then we frictionlessly expand from there as more workloads move to the cloud. This makes our sales effort less dependent on physical meetings and makes our model extremely efficient and less reliant on larger front deals.
Lastly, we are pure SaaS and require no professional services or hand-on-keyboard implementation. Now, turning to what we've seen in March and April. First of all, the COVID escalation happened late enough in the first quarter to not materially affect our financial results. Throughout the quarter, we saw consumption continue to increase across the platform and growth of the number of hosts, containers metrics traces and logs, for example, have remained consistent with historical trends.
We started to see some negative effects in impacted industries such as travel, hospitality and airlines. But we've also seen substantially increased usage from other categories such as streaming media, gaming, food delivery and collaboration, as these customers scaled up their operations in this environment.
We also saw a surge of usage and surge in accounts in March in response to COVID that we expect could be more transitory in nature and may normalize over time. In terms of new deals, we did have a strong end of the quarter with limited impact from COVID.
As far as Q2 goals, our pipeline is robust and relatively consistent with prior quarters, but it is still too early to know the impact COVID could have on the road. Because of that and given the macro uncertainty, it is prudent to expect delay of some new cloud migration projects as well as some impact on churn. As David will discuss, the effect of COVID has been incorporated in our guidance.
To close on the COVID pandemic, let's step back and look at our stance for the rest of the year and perspective on the future. While there is a lot more certainty across the industry and the broader economy in the very near term, we believe it is more important than ever for businesses to operate online, and that the trends of digital transformation and cloud migration remain very much intact over the long-term and may even be accelerated or amplified.
We believe we are well positioned to be a primary beneficiary of this trend and continue to win in the market. And we also believe that the efficiency of our business, whether it is our unit economics or balance sheet, our ability to innovate will be an advantage in a difficult market.
As such our plans remain clear, we are investing across the board. We're investing in the development of existing and new products including aggressive R&D recruiting targets and taking advantage of the opportunity to attract talent that would otherwise not be on the market. We're investing in the growth of our go-to-market team across segments and geographies. We're investing in our relationship with customers as some of them go through difficult times and it is more important than ever for them to operate digitally. And we're investing in our existing employees to keep them safe and sane through this crisis.
To conclude on this point, I would say that while I can't promise for macro reasons that we'll see the same incredibly fast return on these investments as we have historically. We are very confident in the mid and long-term opportunities in front of us and in our strategic plan to live up to it.
Now on to Q1, we are very pleased with our performance in the quarter. Results were once again driven by broad-based trends across new logos and expansions as well as across customer segments and sales channels. To summarize Q1, revenue was $131 million, an increase of 87% year-over-year. We ended the quarter with 960 customers with ARR of $100,000 or more, which is an increase of 89% from last year. These customers generate approximately 75% of our ARR. We also continue to be capital efficient with free cash flow of $19 million and a tax payback that is still around a year or less.
We ended the quarter with about 11,500 customers, which is about 40% growth from 8,200 last year, which means we added about 1,000 net new customers in the quarter, which was twice the number we added last year. And as in past quarters, our dollar-based net retention rate was over 130% as customers increased their usage and adopted our newer products.
From an R&D perspective, we continued a rapid pace of innovation. We recently announced the general availability of our Security Monitoring products to unify visibility across security dev and ops teams. As with all our products, it is available in the same integrated simple-to-use SaaS platform. We are pleased with the initial response to this product, and it has been the most demanded beta in company history. But I'll remind you that we are just beginning on the journey to break the silos between security dev and ops, and we plan for continued innovation in this category.
Additionally, we recently crossed 400 out of the box integrations and among a number of new and improved, I'd like to call out Tenable, Nessus and VMware Carbon Black, which support our new security use cases. Looking at product usage, our platform strategy continues to resonate with customers. As of the end of Q1, 63% of our customers were using two or more products, up from 58% in Q4 and 32% last year.
In Q1, approximately 75% sorry of our new logos landed with two or more products. And our success in both landing and cross-selling our platform has resulted in the number of customers using two or more products nearly tripling year-over-year. We are very pleased with this continued adoption of our platform, which includes strong initial uptake of our newest products, Network Performance Monitoring and Real User Monitoring. And as I mentioned earlier, we do continue to believe we have a significant opportunity to further expand our product portfolio and grow our addressable market.
Now, let's move on to the go-to-market. I have been personally very impressed with our continued productivity across teams during this time. Enterprise sales teams in particular, who are serving companies of more than 5,000 employees, have successfully adapted to selling by phone and video.
And as you know, tradeshows and marketing events have been canceled or going virtual. So, we have been redeploying those investments into online advertising, webinars and other activities. Our own user conference Dash is going virtual likely in Q3. Now, let's review some of our key wins in the quarter. First, we had an exciting seven-figure new logo win from a Fortune 100 pharmaceutical company, embarking on a migration to a container-based hybrid cloud. The incumbent legacy tools didn't keep up with their new dynamic stack and Datadog allows for mass adoption across DevOps and executive teams through a single observability platform that all teams can use every day.
Next, we signed a six-figure new logo deal to provide monitoring for a large health insurance company, embarking on a multi-cloud migration. What's really interesting about this deal is that it was won through a new partnership with one of the world's largest system integrators. This is a great example of success after we announced Datadog Partner Network in January, though, of course, it is still early days for our channel and alliances go-to-market. By the way, both of the new logo deals I just mentioned were closed at the very end of March.
Next we had a sizable upsell to a mid-market on-demand logistics company which now spends more than $1 million a year with us. This company has been a customer since 2018, started with infrastructure monitoring and then adopted both APM and log management in 2019. Today this customer is also using Synthetics, NPM and Security Monitoring.
What's really interesting in this case is that this customer partnered with us to build out security products and has quickly found value in scanning logs to detect security threats. It is also worth noting that this logistics company has experienced dramatically increased demand with COVID and it has successfully scaled up its operations, avoided performance issues and enabled all its engineers to collaborate remotely all with support from Datadog.
Lastly, I'd note a large six-figure upsell to one of the world's largest global financial institutions. This customer plans to migrate thousands of applications over the coming years, with Datadog being the standard across multiple public and private clouds. This is an interesting customer to single out for both its extremely stringent security requirements and its adoption of our serverless monitoring capabilities.
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 were very pleased with our first quarter results. I will now review Q1 results in detail. Revenue was $131.2 million, up 87% year-over-year. The quarter's strength was broad-based, driven by new and existing customers, success across segments and sales channels, as well as driven by continued platform adoption.
To provide some more context. First, in Q1, we saw strong new logo additions with contributions across sales channels and regions. Additionally, we saw strong continued expansion of existing customers. In the first quarter, our dollar-based net retention rate was above 130% for the 11th consecutive quarter.
Our robust retention rate is driven primarily by increased usage of existing products, as well as cross-selling to newer products. As Olivier mentioned, we are pleased with the initial uptake of our newest solutions NPM and RUM. However, I would note that these newest products were immaterial to the results of the first quarter.
Lastly, we saw strength across segments, with similar growth rates across enterprise, mid-market and SMB. We were encouraged to see this broad-based strength, including many large enterprise deals which closed in March, as well as strength from our SMB customer base. In the quarter, we saw continued robust dollar rates -- net and gross retention in each of these segments.
Now turning to billings, which was $137.9 million and up 55% year-over-year. There are two dynamics here I'd like to call out. First, while we saw billings duration come in a bit in some of our renewals and upsells in the quarter, as some of our clients move to quarterly or semiannual payment terms from prior annual terms, I want to note that this did not result in reduced duration of contract length, merely the payment terms.
This was due to customers' cash flow planning amid COVID and our accommodation to their billing preferences. The impact of shorter duration on the quarter was approximately $10 million to billings. Given our very efficient land-and-expand model, however, we are still not dependent on large upfront payments for multi-year deals.
Next, there was a smaller impact from the invoice timing of a sizable existing customer, that was invoiced $4 million in Q1 last year and then due to growth was invoiced a second time in 2019, but was not invoiced in Q1 this year. Normalizing for these two impacts, calculated billings growth would have been approximately 70% year-over-year.
In addition, as of the end of Q1, our Remaining Performance Obligations or RPO was $256 million and grew 82% year-over-year. RPO measures commitments rather than billing terms. The higher growth of RPO indicates increases in longer-term commitments even when billing terms may be altered.
As discussed previously, we discourage the use of billings as a gauge of our momentum as it does not accurately portray the growth of our business. Revenue is a better indicator of growth given that our revenue is directly tied to consumption and due to the tight relationship between revenue and ARR.
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 $105.2 million representing a gross margin of 80%. This compares to a gross margin of 78% last quarter and 73% in the year ago period. Improvement in gross margin was driven by efficient use of our cloud hosting.
As we said before, 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 was $35 million or 27% of revenue compared to 31% in the year ago quarter. We have continued to invest significantly in R&D including high growth in our engineering headcount. However, the growth of revenue has outpaced even our substantial investments. We continue to see meaningful opportunity to innovate and expand our platform and therefore plan to continue making meaningful investments in R&D.
Sales and marketing expense was $42.1 million or 32% of revenues compared to 42% 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 has also outpaced this investment. While we have experienced cancellation of marketing events due to COVID, we have successfully redeployed much of the events budget to advertising and other lead generation activities, but not quite on a one-for-one basis.
G&A expense was $12 million in the quarter or 9% of revenue slightly lower than 10% in the year ago period. Operating income was $16.1 million with a 12% operating margin compared to an operating loss of $7 million or a negative 10% margin in the year ago period. Beyond the improvement in gross margin and the other factors discussed above, I'd also like -- I'd also note that reduction in T&E and facilities overhead related to COVID contributed slightly to the operating margin improvement.
Net income in the quarter was $18.8 million or $0.06 per share based on 328 million weighted average diluted shares. We have a highly efficient business model and experienced a high return on our investments in sales and marketing and R&D. While we have delivered three consecutive quarters of breakeven to 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.
We have been very successful in interviewing hiring and onboarding remotely. As a result, our plans for hiring and investing remain largely the same as before the corona outbreak. We are investing across the board and believe we are well-positioned to execute on our plans of growth.
Turning to the balance sheet and cash flow. We ended the quarter with $799 million of cash, cash equivalents, restricted cash and marketable securities. Cash flow from operations was a positive $24.3 million in the quarter. After taking into consideration capital expenditures and capitalized software free cash flow was a positive $19.3 million in the quarter or a free cash flow margin of 15%.
I would now like to turn to our outlook for the second quarter and the full year 2020. Given our recurring revenue model, we have not yet felt the effect of COVID-19 on our top line results. It is early in the quarter and we expect that we will see some deal slippage particularly in new logos. We also expect that despite a relatively high net retention rate, we may see some downward pressure in net retention rate in the next two quarters.
As Olivier mentioned, the usage of some client surged in March and have adjusted somewhat in April, but remain above pre-COVID levels. It is too soon to know how usage will trend for the remainder of the quarter. Therefore, we believe it is prudent to expect some impact from the above effects most likely in Q2 and Q3 and potentially throughout the rest of the year given our ratable model. And as a result, we have incorporated this into our guidance.
Beginning with our second quarter guidance, we expect revenue to be in the range of $134 million to $136 million which represents a year-over-year growth of 62% at the midpoint. Non-GAAP operating income is expected to be in the range of a loss of $1 million to income of $1 million. Non-GAAP net income per share is expected to be breakeven to $0.01 positive per share based on approximately 329 million weighted average diluted shares.
Turning to the full year. Given our first quarter strength and the drivers of our business, we feel comfortable raising our guidance for 2020 based on what we know today about COVID-19 and the macroeconomic environment. For the full year 2020, revenue is expected to be in the range of $525 million to $565 million, sorry, $555 million to $565 million, which represents a 54% year-over-year growth at the midpoint. Non-GAAP operating income is expected to be in the range of breakeven to $10 million positive. Non-GAAP net income per share is expected to be in the range of $0.02 positive to $0.06 positive per share based on 330 million weighted average shares outstanding.
A few things to take into account in our guidance, while we do not guide to billings and continue to discourage this as a key metric when putting together your models, we would note that the shorter billing duration impact we talked about in Q1 is likely to continue for the next couple of quarters as customers plan for cash flow amid COVID-19, related to cost drivers, while we've seen continued improvement in our gross margins, we are running toward the top of our long-term target. As we prioritize product development and diversifying our cloud hosting vendors and regions, our gross margins may fluctuate within a range of acceptability.
Next, our intention is to invest meaningfully and continue to do so in R&D and sales and marketing. As noted, we have been successful in hiring and on-boarding during COVID. In Q2, we expect an approximately $5.5 million non-cash tax adjustment related to the expiration of a payroll tax liability. Similar to Q2 2019 this will be a benefit to GAAP operating income, but we intend to normalize for it in our non-GAAP results. And, therefore, it is neutral to non-GAAP operating income. Then some notes below operating income. We expect approximately $2 million of interest income per quarter throughout 2020 based on our cash and investments.
Next, we do not expect to be a federal taxpayer but have a tax provision related to our international entity. For the full year, we expect a tax provision of a range of $700,000 to $1.5 million. Note that our share forecast for Q2 and the full year are diluted, given that we expect to be a non-GAAP net income profitable company for both periods.
Lastly, while we're not giving guidance to cash flow a few things to note. Related to our employee stock purchase program, we've realized an inflow of about $3 million in cash flow from operations in both Q4 and Q1. As the first program concludes, there is a change in geography, whereby, cash flow from operations will decline by $6 million and cash flow from financing activities will increase by $6 million, resulting in no net cash effect. In addition, our new ESPP will produce $2 million to $3 million of new positive cash flow from operations in Q2.
Lastly, we expect pressure on billings duration and potentially on DSOs related to COVID, which may cause lower cash generation in the near-term. Given our efficient model, proven cash flow generation, and meaningful cash on the balance sheet this will have no impact on our liquidity.
To summarize we were very pleased with the business performance in the first quarter. We continue to deliver growth at scale a few can match and have demonstrated efficiency in our model. While we recognize the challenges that COVID-19 and the macro environment may present, we continue to believe that we are well-positioned for the long-term and plan for continued investments to capitalize on the large opportunity ahead of us.
With that, we will now open the call for questions. Operator, let's begin the Q&A.
Questions and Answers:
Operator
Thank you. [Operator Instructions] Our first question comes from Sanjit Singh with Morgan Stanley. Your line is now open.
Sanjit Singh -- Morgan Stanley -- Analyst
Thank you for taking the questions, and congratulations on a strong Q1. And I hope everyone in the New York headquarters is doing well, the employees are doing well, just given all the challenges that we've been going through over the last couple of months, so great to see the Q1 results. I had two questions, one more of a short-term -- shorter-term question and one more of a longer-term question for Olivier.
To start with the short term question, I guess what I'm trying to understand is, from what you guys have seen in March and through April and now in early May, the -- what's the sort of the net impact in terms of what you're seeing in the business from the customers that are more impacted the sort of less than 10% of ARR customer -- the spending trends in those customers that are less than 10% of ARR versus some of the increased spending you're seeing in some of the other verticals. So does that sort of net out to neutral in terms of your business plans for the year? Or is it -- are you seeing a net positive effect?
Olivier Pomel -- Co-Founder and Chief Executive Officer
So I'll answer that. So far, what we see in March, April is that, we see growth. April actually is a robust month. And we -- some customers are impacted and are going slower. Some customers have been scaling up. We have some questions on our end as we discussed on the call on which parts of the scale-ups are going to normalize in the future since we've seen some customers that scrambled late in Q1 and then in April to reorganize the operations and may normalize after that.
I would say it's too early to tell where everything nets up. I would think, we need to be prudent in estimating what could happen over the next couple of quarters. But so far from what we can see, we see a lot more reliance on online. We see actually a success story around the cloud. The cloud scaled up. All these companies have been able to move their operations and scale their operations. And we see more investment going on that side. So that's the story so far. And you had a second question?
Sanjit Singh -- Morgan Stanley -- Analyst
Yeah. My follow-up is sort of trying to think about the world post-COVID. And when we look at the product portfolio, it seems like you guys have continued to maintain a rapid pace of innovation. And in terms of coverage, it seems like across security, across the -- I guess now four pillars you have all the products in place that is going to drive really healthy growth for a long time. I'm trying to understand like what the next sort of key buying criteria is going to be.
So as we go from observability, is there going to be an element of taking action right? And beyond just monitoring and alerting, do you have the data? Are the products going to be in a place where you can start -- where customers can start taking prescriptive action in terms of their environment? Or maybe even said more simply, where do you see the product portfolio going as we get past COVID?
Olivier Pomel -- Co-Founder and Chief Executive Officer
Yes. So we -- look we already have a lot on our hands, right? So I should just restate the fact that our more recent products like APM and logs are in hyper growth. The products we've added after that like Synthetics for example are growing very fast. And there's still a lot of investment that goes into all of these products including our core infrastructure monitoring product. So we still have a lot that we're doing there.
When it comes to security, we're still very, very early. What we have is the first product. We're happy that it is in GA. We're happy that it's getting traction. But it's still very early and it has a very long road map. And there's a lot more that we intend to build around it. So now regarding the categories of product you've mentioned like there definitely are some things that are interesting to us in there. And we do have some internal developments in a number of areas. I can't tell you exactly when that is going to be presented to customers and we really have a lot going on.
Sanjit Singh -- Morgan Stanley -- Analyst
Fair enough. I'll leave it there. Congrats on the Q1.
Olivier Pomel -- Co-Founder and Chief Executive Officer
Thank you.
Operator
Thank you. And our next question comes from Chris Merwin with Goldman Sachs. Your line is now open.
Chris Merwin -- Goldman Sachs -- Analyst
Okay. Great. Thanks so much for taking the question and congratulations on the phenomenal results. So in the prepared remarks, you talked about some impact from the delay of projects. But I guess at the same, time there's an opportunity for the pace of digital transformation to actually accelerate in a recovery. And perhaps that's particularly true for customers that were unprepared for a remote workforce. So, can you talk a bit about your customer conversations on that particular topic and how you think about how these trends could impact Datadog post COVID and in recovery?
Olivier Pomel -- Co-Founder and Chief Executive Officer
Yes. So, I mean -- look we see what's happening with our customers that have one foot in the digital world and one foot in the -- I would say physical brick-and-mortar world. They're investing heavily in digital art and they see these parts scaling like crazy right now. So that is not going to slow down. And that is actually going to we think accelerate the transformation for the broader industry. Now, at the same time this is happening it is difficult for companies to transform and modernize and make big investments or new investments at a time where many of them are in trouble and have pretty stern constraints on cash and have to make some very hard choices in the short term.
So this is -- this is not new. Many other companies have discussed that before over the past few weeks. But I think what we're trying to balance here is, the uncertainty in the short term as these companies go past this urgent transformation or urgent survival mode and the fact that the underlying trend that underpin our success of digital transformation and move to the cloud are just going to accelerate and become more prevalent once the world starts recovering. So the balancing act, it would end up in the guidance we've given basically.
Chris Merwin -- Goldman Sachs -- Analyst
Got it. I guess as a related question I think one of the themes we've seen in the space is convergence and that was actually true before COVID. So I mean particularly as customers go through a time when they got to think about perhaps consolidating some of the tools that they have are you seeing actually any benefit from that? I mean could there be a tailwind to the cross-sell motion for specific products? Just curious how you think about.
Olivier Pomel -- Co-Founder and Chief Executive Officer
This is definitely -- like this was appealing to customers before COVID. It's as appealing if not more to customers now. Some customers might look into ways of rationalizing costs in the short term. So these are all opportunities. At this point none of these -- we don't have data on any of these to be -- to tell you whether it's going to be a big factor or not over the rest of the year. Look this is our strategy. We've been building toward that. So obviously in the long term we believe in it.
Chris Merwin -- Goldman Sachs -- Analyst
Got it. Thanks so much.
Operator
Thank you. And our next question comes from Sterling Auty with JPMorgan. Your line is now open.
Sterling Auty -- JPMorgan -- Analyst
Yes, thanks. hi, guys. I'm curious in terms of the net new ARR that you added in the quarter how would you characterize how much of that is coming from kind of high-level CIO large complex transactions versus maybe some more kind of day-to-day orders that you get at a divisional or departmental level?
Olivier Pomel -- Co-Founder and Chief Executive Officer
Well the way we sell in general is always bottom up. Even in large enterprises even when we start the conversation at the CIO level and we end it to the CIO level, the adoption of the product is bottom up. And we start small. Even when we land -- I mentioned earlier on the call like some six or seven figure land deal even when we land those deals these are still a small fraction of what the total opportunity looks like at these customers. And this represent bottom-up adoption and some deals that are going to grow significantly over time. So that's the way it used to work. That's still the way it's working as far as we can tell in Q2.
Sterling Auty -- JPMorgan -- Analyst
That makes sense. And then can you give us maybe some qualitative color on the mix of business in terms of you gave us the 75% that landed with two or more products but just give us some color in terms of the strength of infrastructure versus APM versus logging in the quarter.
Olivier Pomel -- Co-Founder and Chief Executive Officer
Well, I mean look they're all growing. Infrastructure alone would be one of the best SaaS companies around APM and logs. So if we single out those products -- and look we don't really like to do that because as we like to say there's quite a bit of fungibility between the different products and which you attribute to one you could attribute to another. But the -- those products are in hyper growth. They're growing a lot faster than that or used to grow when we were at the scale-up of those products. And that's still the case. That growth hasn't slowed down.
Synthetics is still growing much faster than we thought it would. And it's a great product for us. We're pleased with the initial uptake of NPM but it is still not material to our results. We mentioned it earlier but it's a product that has a higher friction than Synthetics for example to get adopted but it has a very long runway. So we're investing in that product.
We've seen some adoption of RUM. We started charging in March for some portion of it. So we started charging for a part of it that is -- part of our customers' contract is committed as opposed to being usage driven. So it's still also not material to Q1 but we should see more of it in Q2. And the security product we haven't started charging for yet in Q1 we started in Q2. So we don't have anything to say about it yet.
David Obstler -- Chief Financial Officer
Sterling I think the trends have really continued. The net retentions were very consistent in Q1 to what they had been and also the contribution from usage and new products and cross-sell. So much of what we've been saying in the last two quarters has continued in Q1 with really strong contribution to net retention from both those effects of usage and cross-sell.
Sterling Auty -- JPMorgan -- Analyst
Makes sense. Thank you.
Operator
Thank you. Our next question comes from Raimo Lenschow with Barclays. Your line is now open.
Raimo Lenschow -- Barclays -- Analyst
Thank you. The -- if you -- you talked about the net retention and the assumptions that you're making as the crisis kind of continues. Can you remind us -- if there's going to be more churn then it's probably going to be more in the SMB space. Can you talk a little bit about your exposure there and what you're seeing so far? It's my first question.
And then on the billing side, can you remind us David like in terms of what's monthly versus annually versus where the quarterly biannually that you talked about just to get an idea about the mix. Thank you.
Olivier Pomel -- Co-Founder and Chief Executive Officer
Yes. I'll about SMB and maybe David can talk about the billing mix. So we actually -- or ARR is as we discussed before is what split evenly between enterprise mid-market and SMB. But even within SMB we -- most of that revenue comes from companies that are on the larger side and on very solid footing financially.
Some of them are publicly traded and tend to be closer to the 1000-employee limit there. We mentioned on the call that less than 50% of our revenue came from companies that are on the smaller side which is less than 100 employees.
If you look at our SMB customers, they're very diverse. And we're actually less exposed on the SMB side to some of the higher-risk categories around COVID. And so far we haven't seen a big change in trends. I mean, we did see a tiny uptick in churn in SMBs, but it's actually consistent with levels we've seen just a few quarters ago. So there's nothing out of the ordinary. And at the same time, we saw an increase of net retention for that same cohort of SMBs. So it has nothing conclusive there. We don't see anything that we didn't see before.
Now when we try to guide for the future, we have to try and guess where our exposure is going to be and what can be weaker. We'll have to guess that the SMBs are going to feel more pain and are going to be where we'll see more churn. And so that's what we've incorporated in our guidance. David, do you want to take the billing mix?
David Obstler -- Chief Financial Officer
Yes. And in billing two-thirds of our -- of ARR is associated with annual commitments or greater. And three-quarters, when you add in the usage related to that so three-quarters of our billings are associated with annual commitments or longer. What we said before was, our average length of commitment went out slightly in the quarter resulting in an acceleration of RPO. And our average period of billing duration came in a little bit more resulting in the billings discussion. But about three-quarters are related to annual commitments or more. Hello? Raimo?
Operator
Thank you. Our next question comes from Brad Zelnick with Credit Suisse. Your line is now open.
Brad Zelnick -- Credit Suisse -- Analyst
Great. Thanks so much. Congratulations on a strong start to the year. And as well, I hope everybody at Datadog and everyone listening is doing OK these days. My first question I wanted to follow up on what Sanjit has asked and I think Raimo is alluding to as well. Just trying to understand the impact on the business from COVID. Specifically, if I hear your comments about the potential for deal slippage obviously with more pressure on new logo business and the downward pressure that you might see on net expansion to what extent are you seeing it coming versus just preparing for it? And maybe, if you could perhaps can you compare and contrast consumption trends versus pipeline progression and the conversions on that pipeline that you're seeing in March and into April?
David Obstler -- Chief Financial Officer
Do you want to go first Oli and I'll weigh in?
Olivier Pomel -- Co-Founder and Chief Executive Officer
Yes. Yes. So, yeah. So look it's for the most part we're guessing because it's too early in the quarter to actually have a good sense of what may slip or not. At the end of Q1, we did have a few deals that slipped and that were marked. The reason for slippage was uncertainty around COVID. And several of them have closed right after. And I would say it's not like every quarter there are a few deals that slip. And the number of deals that slipped in Q1 was actually not out of the ordinary compared to previous quarters. So we don't have really anything to quantify the effects we might see but we do anticipate that we will see some.
When it comes to usage, again, it's also a little bit more difficult to compare because some of the usage patterns have changed a little bit as companies have scrambled to reorganize. So there's a little bit less predictability in there, which is also why we're baking that into some of our guidance. So overall, look, we do anticipate some uncertainty and some pressure on some fronts in Q2 and Q3. I would be worried, if that didn't happen. But we don't have anything that makes us particularly concerned in front of us right now. David, do you want to add anything?
David Obstler -- Chief Financial Officer
Yeah. Yeah, I agree. Our pipeline remains consistent. We don't know as Oli said is -- what is the harvesting percentage what's going to happen this quarter. So we think that our model given our model of land and expand and usage that were less dependent than other models on going to land in a large three-year deal, but we don't know in new logos particularly what's going to happen as the quarter progresses.
The main request we've gotten so far has been some modest can you chunk our builds up a little bit. That's been probably what we've seen a little more. But again, it hasn't been a significant percentage of our ARR either at this point.
Brad Zelnick -- Credit Suisse -- Analyst
Thanks very much. That's both very helpful. If I can follow up with just a quick housekeeping question for you David, RPO up 82% in the period I think is strong by just about any way you look at it. But to just put a finer point, can you give us a duration-adjusted RPO growth or even a current RPO growth?
David Obstler -- Chief Financial Officer
We don't release that. We're just making comments on the fact that, it was higher than the pro forma billing due to longer contract commitment duration in two and three year deals, but we haven't really commented and broken that up publicly.
Brad Zelnick -- Credit Suisse -- Analyst
Okay, thanks for taking my questions, Dave.
David Obstler -- Chief Financial Officer
You're welcome.
Operator
Our next question comes from Matt Hedberg with RBC Capital Markets. Your line is now open.
Matt Hedberg -- RBC Capital Markets -- Analyst
Hey guys, thanks for taking my questions. I'll echo the strong results this quarter. Your ability to sell two or more products is obviously impressive. I'm wondering if you can share maybe some examples of how some of your largest G2K customers are adopting APM and logging. And in particular when they do, are you seeing these customers migrate off of other vendors' APM and logging solutions? Or are they often run in parallel for a while?
Olivier Pomel -- Co-Founder and Chief Executive Officer
So we do have a number of G2K customers that are adopting APM and our logs. In all of those cases when we start, we don't actually replace whatever they were using on-prem because they're still using that. Their on-prem world is still separate from their cloud world which is the net new which is where we come in.
So we typically land usually with two or more products and we grow in that footprint in the cloud. We're still in most of these cases very early in that growth because those customers are very early in their migration to the cloud which is where we solidify our footprint.
And we basically set ourselves up to later -- much later offer standardization of the whole tool set on us as the majority of their footprint ends up being on the cloud. But we're still not there with most of these customers.
Matt Hedberg -- RBC Capital Markets -- Analyst
That's helpful. And then I just wanted to make sure I understood churn a little bit better Oli. You noted earlier that you're not being impacted by workforce reductions. But when we think of higher level churns embedded in your guidance is that assumption that some customers might go out of business on the smaller side? Or might we see some seat-based contraction inside of existing customers at some point?
Olivier Pomel -- Co-Founder and Chief Executive Officer
So we don't sell per seat. So we don't -- there's no user-driven -- these are account-driven component to 1 billion. So that part doesn't affect us directly. What we might see is some effect from our customers contracting their infrastructure. But in most cases our customers actually have to keep that infrastructure up to serve their own customers. And there's a limit to what they can contract there. So that's not an effect we've seen so far.
I think we don't exactly know where the churn is going to come from if it comes. It's a fair assumption that a number of small businesses are going to disappear. We also see some medium and large businesses that are affected and we'll need some form of help or bailout to survive. We're all aware of that. So some of that might happen. So we want to be cautious. We want to be cognizant of the fact that if the economy as a whole is affected some of it is going to ripple to us considering the fact that we have a very broad-based customer base.
David Obstler -- Chief Financial Officer
And this is David. Yes we said -- as we said in the comments that we do have some new logo accumulation and some lower retention rates implied in the guidance. We said we haven't really seen that materially yet, but we're trying to be prudent relative to what might happen in the world.
Matt Hedberg -- RBC Capital Markets -- Analyst
Well done. Thanks guys.
Operator
Thank you. Our next question comes from Brent Thill with Jefferies. Your line is now open.
Brent Thill -- Jefferies -- Analyst
Thanks. I realize the security SKU is brand new, but just if you can just give us any color initially back from the field? And I have just a quick follow-up after that.
Olivier Pomel -- Co-Founder and Chief Executive Officer
Well we're actually very happy with the uptake there. It's we've had while the product was still in beta we had some customers that wanted to buy and they did buy and some customers that already adopted the product at scale. So that's very good. Now it's still super early both in terms of the -- what's inside the product all of the feature set the integration and everything else also very early in the way we make customers or go to market for it. So for now we should assume that there's going to be a lot more investment and going to take us a lot more time to get these new products to interesting scale.
Brent Thill -- Jefferies -- Analyst
And then just as a quick follow-up. Are you changing any of your hiring plans or product plans from here given everything that's gone on? Or are you still tracking to kind of original plan going into the year?
Olivier Pomel -- Co-Founder and Chief Executive Officer
We're tracking mostly to original plan. We've made a few adjustments for areas where it didn't make sense to hire for example things around organizing local marketing events or office management. Obviously that's not -- that's less of a topic when we don't have an office and you can't meet people in real life. But for everything else we stick to the plan. And we have ambitious plans. And we think it's actually a great time to be hiring and a great time to be building up our team.
The thing I warned about in the call earlier was that, it might take a bit longer for those investments to pay-off because the market might be a bit softer on the customer side. They might be more uncertainty. But we are -- we think for us it's an opportunity to stand on the ground of our strong platform and the efficiency of our business.
Brent Thill -- Jefferies -- Analyst
Great. Thanks.
Operator
Thank you. And our next question comes from Brad Rebeck with Stifel. Your line is now open.
Brad Rebeck -- Stifel -- Analyst
Great. Thanks very much. David, when a customer comes to you and asks, as you said to chunk a payment up in smaller bite-size amounts, do you ask for anything in return, like a longer contract or anything along those lines? Thanks.
David Obstler -- Chief Financial Officer
Yeah. Yeah. We try -- we have a discussion with the contract -- with the customer. And we try to extend contract or do something around products. So we do that. But we're also here to grow with our clients. And what we care about given, what we've seen is keeping our clients and having them, grow with us over time. So we have a discussion. But we try to extend contract or get something else.
Olivier Pomel -- Co-Founder and Chief Executive Officer
Yeah. And I can comment on that. We're doing this on a case-by-case basis really. But we do it in the spirit of partnership with our customers. And that's what I mentioned in the call too, that we're co-investing not only in our product and our team. We're also investing in our customers. We're investing in relationships. We know some of them are going through a very difficult time. And we think there are some two-way partnerships to be built on that.
Brad Rebeck -- Stifel -- Analyst
Excellent, thanks very much.
Operator
Thank you. And our next question comes from Robert Majek with Raymond James. Your line is now open.
Robert Majek -- Raymond James -- Analyst
Hi. Thanks and congrats on the strong results. Can you break out the vertical exposure of your customer base? And perhaps more specifically, what the contribution is from some of the more macro-sensitive sectors, including travel and entertainment? And I have one follow-up question.
Olivier Pomel -- Co-Founder and Chief Executive Officer
Yes. Let me pull up my number. And call back.
David Obstler -- Chief Financial Officer
Yeah. Let me -- while Oli's doing, you're that. Do you want me to go or...
Olivier Pomel -- Co-Founder and Chief Executive Officer
Sure, yes. Go ahead.
David Obstler -- Chief Financial Officer
Yeah. We said, we have 10% or less that are subject to -- that are in the most exposed which are travel hospitality, dining and those types. So, about a 10% exposure and we have exposures on the other side to some of the work-from-home, collaboration and food deliveries and others. So, we're pretty diversified. We've always said we have a diversified customer base. And our concentration is not above 10% in those, impacted industries.
Robert Majek -- Raymond James -- Analyst
Thanks guys. Just perhaps one more, you touched on it earlier in prior questions. But can you just give us some more qualitative insight, into your conversations with new potential customers, and the willingness of these customers to pursue new modern deployments, in an uncertain macroeconomic environment?
Olivier Pomel -- Co-Founder and Chief Executive Officer
Yeah. So actually, I can speak to that. So, so far these conversations are not any different. Obviously, there is some scrutiny on spending and cash outlays. In particular, everybody is careful about cash, in the face of uncertainty, which is why we discussed also some -- in some cases, different payment terms for some customers.
But the conversation so far as I'm saying, we actually see an interesting effect where some customers in very affected industries will reach out now. Because they actually have time to invest and prepare for the future because they are less -- they have less to operate on a day-to-day basis. So we've seen some of that happen.
It is anecdotal. There's not -- we can't tell that if any of that is actually going to come to fruition before the world's fast recovering. But we see some of that happening. In general, we're still early in the cycle still that, we don't really know if there's going to be -- if the impact will be really felt in Q2 and Q3 or not. But we've been careful, in the way we set guidance.
Robert Majek -- Raymond James -- Analyst
Thanks a lot. I appreciate it.
Operator
Thank you. Our next question comes from Bhavan Suri with William Blair. Your line is now open.
Bhavan Suri -- William Blair -- Analyst
Hey guys. Can you hear me OK? Sorry.
Olivier Pomel -- Co-Founder and Chief Executive Officer
Yes.
Bhavan Suri -- William Blair -- Analyst
Thank you and congratulations for a great quarter. I guess I wanted to touch quickly on some of the product stuff. You obviously talked a little bit about the new Security Monitoring product, last quarter. It's fairly early days for that product. You weren't charging for it at the time.
But I'd love to understand. I think became it generally available toward April. Early traction early interest how is that playing out? And obviously security is a big part given remote access given everything else that's happening with COVID, just how that's going.
Olivier Pomel -- Co-Founder and Chief Executive Officer
So far so good, we -- the customers that have been -- part of the beta are using it and some of them have actually turned to paying customers, so some of the beta users are turning to paying customers already. So we're happy with the traction. But again, there's a lot more that needs to happen there.
One thing that's interesting to us is that, we've seen adoption from the -- both sides we were trying to bring together. We've seen adoption from dev and ops in one side, but also some security folks on the other side. So that's very interesting. And that's what we're shooting for. But again, still early, but a lot is going to happen to it. I'm sure we'll talk about it again in future calls.
Bhavan Suri -- William Blair -- Analyst
Okay. And then one quick question on the pricing environment. Obviously, given the conversation with Dynatrace and others AppDynamics, New Relic, et cetera. You view it as kind of the most attractive price point out there. How often would you say pricing is an important driver of the conversation especially in this environment? Like are people -- are customers really thinking about pricing right now? And is that something that comes up as a decision point right now? Would love to understand sort of what the sales guys are seeing in these conversations.
Olivier Pomel -- Co-Founder and Chief Executive Officer
Yes. So in general, we -- the way we differentiate is through the integrated platform and the outcomes we give through our products and less so the pricing that we have. We do have a pricing model that disaggregate certain elements so that our customers can align the price they pay with the value they get, and especially when it comes to matching data and logs and things like that.
I would say, we haven't seen any changes in that environment. The one thing that we think is might be an advantage is that we also -- we operate by starting small and growing with our customers. Our model is not predicated on very large multi-year upfront deals. And that's something that is attractive to customers especially in an environment where they're trying to manage cash.
Bhavan Suri -- William Blair -- Analyst
Yes. Obviously, that's an issue given cash constraints. But you obviously have small SMB exposure as you talked about today. It's interesting you haven't seen those conversations, but appreciate the color. Thank you.
Operator
Thank you. And our next question comes from Pat Walravens with JMP Securities. Your line is now open.
Pat Walravens -- JMP Securities -- Analyst
Great. Thank you very much, and congratulations on running such a tight ship over there. So Oli, you've been doing this for 20 years a little more. I would love to hear your thoughts on how you think this recession is different and maybe similar to 2008, 2009.
Olivier Pomel -- Co-Founder and Chief Executive Officer
Pat, that's a hard question. Well, I think the one thing I remember from the previous one is that you don't really know where they're going until they're over. So that's why we've been prudent. Another thing that we wanted to communicate through this call is that we -- look our business is very healthy. We see growth. We -- from everything we can tell the drivers that made us successful so far are still there and everything is working.
At the same time, we've been growing 80%, 85%, 87% now year-over-year. And for that to work you pretty much need every -- to fire on every single cylinder, right? Everything needs to come together. And this almost guarantee that not everything will come together in the end if part of the world is impacted by COVID. And we're trying to be cognizant of that.
Pat Walravens -- JMP Securities -- Analyst
Great. And then David if I can ask you one RPO growth has been sort of in the same ballpark as revenue the last couple of quarters 3% less in Q4, 5% less in Q1.
David Obstler -- Chief Financial Officer
Yeah.
Pat Walravens -- JMP Securities -- Analyst
Is that a reasonable way for us to think about it going forward? Or should that diverge?
David Obstler -- Chief Financial Officer
Well, as I mentioned we've had extension of average contract. We've had a number of companies who we developed long-term partnerships with and they've wanted to -- and together commit out to two or three years. So I think that's going to depend much like on billings as to the timing of those contract renewals. And I think you'll see in some period that happen and in other periods not mainly because of individual contracts that are up for renewal during that period or extension.
Pat Walravens -- JMP Securities -- Analyst
Okay. Great. Thank you both very much.
Operator
Thank you. And our last question comes from Jack Andrews with Needham. Your line is now open.
Jack Andrews -- Needham -- Analyst
Great. Thanks for squeezing me in the call and congratulations on the results. I just want to ask about what trends you're seeing in terms of Network Performance Monitoring and Real User Monitoring. Do you see these as more displacement opportunities? Or are these greenfield markets? And I was also wondering if you -- how big do you think that the market opportunity is around this given perhaps a different pricing point than your core infrastructure and APM products?
Olivier Pomel -- Co-Founder and Chief Executive Officer
Yes. So the strategy there is the same as with the rest of the products which is we start from cloud environment, which tend to be new. In most cases, our customers are using other products. In some cases, they did. But the vast majority of the cases is net new in cloud environment. And the way we charge for those products is also aligned with the rest of our pricing philosophy, which is -- it's charge per usage, while giving the control back to the customer so they can align the price they pay and the value they get.
Jack Andrews -- Needham -- Analyst
Got it. Okay. Thanks. And then just as a quick follow-up. Are there any international trends that are worthwhile noting in terms of just specific regions, pockets of areas of strength or just other changes that you're thinking about in terms of aligning resources in particular international regions?
Olivier Pomel -- Co-Founder and Chief Executive Officer
No. I mean at this point, we see success -- some success in all regions even though some are fairly recent. Even when you think of impact of COVID, we've had -- I mean that's sort of everywhere, but we don't have any -- we don't have anything that makes us think that any region is going to behave very differently from the other at this point. I'll give you an example. We even closed some new logo deals with large enterprises in Italy, while the whole country was completely locked down. So there's no -- there's really no data point to tell us anything is going to be different in any part of the world today.
Jack Andrews -- Needham -- Analyst
Got it. Thanks very much.
Operator
Thank you. And I'd like to turn the call over to Olivier Pomel for closing remarks.
Olivier Pomel -- Co-Founder and Chief Executive Officer
All right. Well thank you. In closing, I'd like to repeat that we are very pleased with the results for Q1. We continue to invest in our long-term opportunity and we believe we are very well positioned for it. In what has been an unprecedented time for all of us, I want to thank Datadog employees for their dedication and resilience. And of course, I want to thank our customers for their trust in supporting their businesses through a challenging time. Thank you all.
Operator
[Operator Closing Remarks]
Duration: 67 minutes
Call participants:
A.J. Ljubich -- Director of Investor Relations
Olivier Pomel -- Co-Founder and Chief Executive Officer
David Obstler -- Chief Financial Officer
Sanjit Singh -- Morgan Stanley -- Analyst
Chris Merwin -- Goldman Sachs -- Analyst
Sterling Auty -- JPMorgan -- Analyst
Raimo Lenschow -- Barclays -- Analyst
Brad Zelnick -- Credit Suisse -- Analyst
Matt Hedberg -- RBC Capital Markets -- Analyst
Brent Thill -- Jefferies -- Analyst
Brad Rebeck -- Stifel -- Analyst
Robert Majek -- Raymond James -- Analyst
Bhavan Suri -- William Blair -- Analyst
Pat Walravens -- JMP Securities -- Analyst
Jack Andrews -- Needham -- Analyst
More DDOG analysis
All earnings call transcripts
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10 stocks we like better than Datadog
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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 Transcribers 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) Q1 2020 Earnings Call May 11, 2020, 5:00 p.m. Ljubich -- Director of Investor Relations Olivier Pomel -- Co-Founder and Chief Executive Officer David Obstler -- Chief Financial Officer Sanjit Singh -- Morgan Stanley -- Analyst Chris Merwin -- Goldman Sachs -- Analyst Sterling Auty -- JPMorgan -- Analyst Raimo Lenschow -- Barclays -- Analyst Brad Zelnick -- Credit Suisse -- Analyst Matt Hedberg -- RBC Capital Markets -- Analyst Brent Thill -- Jefferies -- Analyst Brad Rebeck -- Stifel -- Analyst Robert Majek -- Raymond James -- Analyst Bhavan Suri -- William Blair -- Analyst Pat Walravens -- JMP Securities -- Analyst Jack Andrews -- Needham -- Analyst More DDOG analysis All earnings call transcripts {%sfr%} 10 stocks we like better than Datadog When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. During this call, we will make statements related to our business that are forward-looking under federal securities laws and 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 second quarter and for the full year of 2020, our strategy the potential benefits of our products, the potential contribution of customers with annual run rate or ARR of $100,000 or greater, R&D and go-to-market investments, expected capital expenditures, anticipated hiring the size of our market opportunity, as well as the impact of COVID-19 pandemic on our customers, their usage of our products, our market, and our business, and operating results.
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Ljubich -- Director of Investor Relations Olivier Pomel -- Co-Founder and Chief Executive Officer David Obstler -- Chief Financial Officer Sanjit Singh -- Morgan Stanley -- Analyst Chris Merwin -- Goldman Sachs -- Analyst Sterling Auty -- JPMorgan -- Analyst Raimo Lenschow -- Barclays -- Analyst Brad Zelnick -- Credit Suisse -- Analyst Matt Hedberg -- RBC Capital Markets -- Analyst Brent Thill -- Jefferies -- Analyst Brad Rebeck -- Stifel -- Analyst Robert Majek -- Raymond James -- Analyst Bhavan Suri -- William Blair -- Analyst Pat Walravens -- JMP Securities -- Analyst Jack Andrews -- Needham -- Analyst More DDOG analysis All earnings call transcripts {%sfr%} 10 stocks we like better than Datadog When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. Datadog, Inc. (NASDAQ: DDOG) Q1 2020 Earnings Call May 11, 2020, 5:00 p.m. During this call, we will make statements related to our business that are forward-looking under federal securities laws and 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 second quarter and for the full year of 2020, our strategy the potential benefits of our products, the potential contribution of customers with annual run rate or ARR of $100,000 or greater, R&D and go-to-market investments, expected capital expenditures, anticipated hiring the size of our market opportunity, as well as the impact of COVID-19 pandemic on our customers, their usage of our products, our market, and our business, and operating results.
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Ljubich -- Director of Investor Relations Olivier Pomel -- Co-Founder and Chief Executive Officer David Obstler -- Chief Financial Officer Sanjit Singh -- Morgan Stanley -- Analyst Chris Merwin -- Goldman Sachs -- Analyst Sterling Auty -- JPMorgan -- Analyst Raimo Lenschow -- Barclays -- Analyst Brad Zelnick -- Credit Suisse -- Analyst Matt Hedberg -- RBC Capital Markets -- Analyst Brent Thill -- Jefferies -- Analyst Brad Rebeck -- Stifel -- Analyst Robert Majek -- Raymond James -- Analyst Bhavan Suri -- William Blair -- Analyst Pat Walravens -- JMP Securities -- Analyst Jack Andrews -- Needham -- Analyst More DDOG analysis All earnings call transcripts {%sfr%} 10 stocks we like better than Datadog When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. Datadog, Inc. (NASDAQ: DDOG) Q1 2020 Earnings Call May 11, 2020, 5:00 p.m. During this call, we will make statements related to our business that are forward-looking under federal securities laws and 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 second quarter and for the full year of 2020, our strategy the potential benefits of our products, the potential contribution of customers with annual run rate or ARR of $100,000 or greater, R&D and go-to-market investments, expected capital expenditures, anticipated hiring the size of our market opportunity, as well as the impact of COVID-19 pandemic on our customers, their usage of our products, our market, and our business, and operating results.
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Ljubich -- Director of Investor Relations Olivier Pomel -- Co-Founder and Chief Executive Officer David Obstler -- Chief Financial Officer Sanjit Singh -- Morgan Stanley -- Analyst Chris Merwin -- Goldman Sachs -- Analyst Sterling Auty -- JPMorgan -- Analyst Raimo Lenschow -- Barclays -- Analyst Brad Zelnick -- Credit Suisse -- Analyst Matt Hedberg -- RBC Capital Markets -- Analyst Brent Thill -- Jefferies -- Analyst Brad Rebeck -- Stifel -- Analyst Robert Majek -- Raymond James -- Analyst Bhavan Suri -- William Blair -- Analyst Pat Walravens -- JMP Securities -- Analyst Jack Andrews -- Needham -- Analyst More DDOG analysis All earnings call transcripts {%sfr%} 10 stocks we like better than Datadog When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. Datadog, Inc. (NASDAQ: DDOG) Q1 2020 Earnings Call May 11, 2020, 5:00 p.m. As of the end of Q1, 63% of our customers were using two or more products, up from 58% in Q4 and 32% last year.
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4 Top Stock Trades for Tuesday: NVDA, TLRY, DDOG, PENN
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DDOG
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https://www.nasdaq.com/articles/4-top-stock-trades-for-tuesday%3A-nvda-tlry-ddog-penn-2020-05-11
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Stocks started off lower on the day, but turned positive and continued higher on Monday as bulls keep pushing up equity prices. With that in mind, let’s look at a few top stock trades for Tuesday.
Top Stock Trades for Tomorrow No. 1: Nvidia (NVDA)
Click to Enlarge
Source: Chart courtesy of StockCharts.com
When I said Nvidia (NASDAQ:NVDA) was a steal at $200, I meant it. But there’s no way I would have thought new all-time highs would be in store less than two months later.
Shares pushed through $280, then found this level as support. It’s also worth pointing out that this level was resistance in 2018. After that, Nvidia stock ran to new all-time highs, clearing the prior 2020 high from February on Monday.
So, now what?
Earnings aren’t for another week and half. So if the stock maintains momentum, it’s possible NVDA will rally into the event. Something like $340 to $350 is not out of the question should the overall market continue higher too — although I wouldn’t necessarily bet on it.
7 of the Best Consumer Stocks to Buy Right Now
On a dip, though, first see if $300 acts as support, then $280. Below puts the 20-week moving average in play.
Top Stock Trades for Tomorrow No. 2: Tilray (TLRY)
Click to Enlarge
Source: Chart courtesy of StockCharts.com
Tilray (NASDAQ:TLRY) reports earnings after the close on Monday. Shares have been acting a bit better lately, but TLRY remains far from the industry favorite.
Back up over its 50-day, though, and TLRY is landing on some investors’ radar.
On a bullish reaction, I want to see a close above $10. That puts the declining 100-day moving average in play, followed by the $15 level.
On a bearish reaction, see if TLRY can close above the 50-day moving average. Below puts the $5 to $6 level in play, while a move below that zone puts the all-time lows on the table. Tilray is too speculative for me to play ahead of earnings, so I prefer to wait until after the event.
Top Stock Trades for Tomorrow No. 3: Datadog (DDOG)
Click to Enlarge
Source: Chart courtesy of StockCharts.com
Datadog (NASDAQ:DDOG) has been a beast from the March lows, almost doubling. However, coming in so hot ahead of earnings on Monday after the close makes this one a tough long.
With shares becoming so overbought, it’s hard to chase into the event. That’s despite all of the stock’s current momentum and 138.2% extension up at $58.23. Should DDOG continue higher, it puts the 150% extension up at $60.74 in play.
As for a pullback, I would love a dip down to $50. This was the prior high from February and a dip to this level that acts as support would be highly tempting for longs. Below opens up the possibility for a larger fall, although a decline to this level would already represent a dip of more than 10%.
7 Discounted Mortgage REITs to Buy For Juicy Yields
However, it may prove to be an excellent post-earnings buying opportunity after some profit-taking.
Top Stock Trades for Tomorrow No. 4: Penn National Gaming (PENN)
Click to Enlarge
Source: Chart courtesy of StockCharts.com
Penn National Gaming (NASDAQ:PENN) has really come back to life, up about five-fold from the March lows. However, it’s running into some resistance here.
Its pushing through prior 2019 range support pretty well, but up at $20 it will fill a major gap from the decline. Further, it has the 100-day and 200-day moving averages just above, near $21 and $22, respectively. In other words, resistance may not be all that far off.
Above those levels though and technically, $28 is in play. Should they act as resistance, look for support between $17 and $18. Below puts the 50-day moving average on the table.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, he is long NVDA.
The post 4 Top Stock Trades for Tuesday: NVDA, TLRY, DDOG, PENN 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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Click to Enlarge Source: Chart courtesy of StockCharts.com Datadog (NASDAQ:DDOG) has been a beast from the March lows, almost doubling. The post 4 Top Stock Trades for Tuesday: NVDA, TLRY, DDOG, PENN appeared first on InvestorPlace. 3: Datadog (DDOG)
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Click to Enlarge Source: Chart courtesy of StockCharts.com Datadog (NASDAQ:DDOG) has been a beast from the March lows, almost doubling. 3: Datadog (DDOG) Should DDOG continue higher, it puts the 150% extension up at $60.74 in play.
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The post 4 Top Stock Trades for Tuesday: NVDA, TLRY, DDOG, PENN appeared first on InvestorPlace. 3: Datadog (DDOG) Click to Enlarge Source: Chart courtesy of StockCharts.com Datadog (NASDAQ:DDOG) has been a beast from the March lows, almost doubling.
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Should DDOG continue higher, it puts the 150% extension up at $60.74 in play. The post 4 Top Stock Trades for Tuesday: NVDA, TLRY, DDOG, PENN appeared first on InvestorPlace. 3: Datadog (DDOG)
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2020-05-11 00:00:00 UTC
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Why Many High-Growth Cloud Computing Stocks Skyrocketed Last Month
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https://www.nasdaq.com/articles/why-many-high-growth-cloud-computing-stocks-skyrocketed-last-month-2020-05-11
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What happened
Shares of many hard-to-value growth stocks in the cloud computing sector surged in April 2020. According to data from S&P Global Market Intelligence, cloud-scale systems monitoring specialist Datadog (NASDAQ: DDOG) rose by 25.4%, just behind a 25.5% gain for cloud communications technologist Twilio (NYSE: TWLO). Online freelancing coordinator Upwork (NASDAQ: UPWK) left them both behind with a gain of 29.2%.
So what
These stocks have a lot in common, beyond working as cloud-based services designed to improve other companies' day-to-day operations.
All three have optimized their business model for top-line growth, spending most of their incoming revenue on research and development, marketing, and other growth-promoting efforts rather than collecting profits.
These net margins are printed in red ink, but the corresponding top-line growth trajectories are impressive. Twilio's quarterly sales rose 57% year over year in the company's latest report, and Datadog's revenue skyrocketed 85%. Upwork trailed the pack at a still-impressive 22% year-over-year growth rate.
The lack of earnings makes it difficult to pin down a reasonable market value for high-powered growth stocks of this caliber. Upwork is trading at 8.4 times the company's book value, which looks downright reasonable next to Twilio (37 times book value) and Datadog (163 times).
None of these companies had any news of market-moving importance to share in April. The closest thing to a significant news nugget came from Twilio, when the company inspired a bullish analyst note on April 15. Other than that, crickets and tumbleweed all around.
These three stocks bounced back from sharp drops in March, ranging from 20.3% for Datadog to Upwork's 25.6% decline. None of them ended April more than 4% away from the prices they saw at the start of March.
Image source: Getty Images.
Now what
Here's another common denominator among these three cloud computing stocks: Their deep plunges in March all looked overdone.
Upwork and Twilio reported earnings in the first week of May, resulting in skyrocketing stock prices the next day. Twilio's stock surged 41% higher in a single day after crushing Wall Street's estimates across the board. Both Datadog and Upwork have gained more than 25% since the end of April. Investors who fled growth stocks for the safety of value investments, gold, or plain old cash in March are returning to these high-quality businesses again.
It's not all blue skies ahead, though. Keep in mind that the high-growth sector remains vulnerable to another round of safety-seeking behavior if a premature return to normal life triggers a second spike in coronavirus infections. Be careful out there.
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 April 16, 2020
Anders Bylund owns shares of Twilio. The Motley Fool owns shares of and recommends Datadog and Twilio. The Motley Fool recommends Upwork. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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According to data from S&P Global Market Intelligence, cloud-scale systems monitoring specialist Datadog (NASDAQ: DDOG) rose by 25.4%, just behind a 25.5% gain for cloud communications technologist Twilio (NYSE: TWLO). All three have optimized their business model for top-line growth, spending most of their incoming revenue on research and development, marketing, and other growth-promoting efforts rather than collecting profits. Keep in mind that the high-growth sector remains vulnerable to another round of safety-seeking behavior if a premature return to normal life triggers a second spike in coronavirus infections.
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According to data from S&P Global Market Intelligence, cloud-scale systems monitoring specialist Datadog (NASDAQ: DDOG) rose by 25.4%, just behind a 25.5% gain for cloud communications technologist Twilio (NYSE: TWLO). Twilio's quarterly sales rose 57% year over year in the company's latest report, and Datadog's revenue skyrocketed 85%. See the 10 stocks *Stock Advisor returns as of April 16, 2020 Anders Bylund owns shares of Twilio.
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According to data from S&P Global Market Intelligence, cloud-scale systems monitoring specialist Datadog (NASDAQ: DDOG) rose by 25.4%, just behind a 25.5% gain for cloud communications technologist Twilio (NYSE: TWLO). Upwork and Twilio reported earnings in the first week of May, resulting in skyrocketing stock prices the next day. 10 stocks we like better than Twilio When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen.
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According to data from S&P Global Market Intelligence, cloud-scale systems monitoring specialist Datadog (NASDAQ: DDOG) rose by 25.4%, just behind a 25.5% gain for cloud communications technologist Twilio (NYSE: TWLO). What happened Shares of many hard-to-value growth stocks in the cloud computing sector surged in April 2020. Upwork and Twilio reported earnings in the first week of May, resulting in skyrocketing stock prices the next day.
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99c0ef85-e633-4027-9ea4-def13b7d53d2
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719058.0
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2020-05-08 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-2020-05-08
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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 $48.80, changing hands for $49.61/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 10 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 $38.00. And then on the other side of the spectrum one analyst has a target as high as $61.00. The standard deviation is $8.702.
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 $48.80/share, investors in DDOG have been given a good signal to spend fresh time assessing the company and deciding for themselves: is $48.80 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: 5 5 4 4
Buy ratings: 1 1 1 1
Hold ratings: 7 6 6 6
Sell ratings: 0 0 0 0
Strong sell ratings: 0 0 0 0
Average rating: 2.15 2.08 2.18 2.18
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 $48.80, changing hands for $49.61/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 $48.80/share, investors in DDOG have been given a good signal to spend fresh time assessing the company and deciding for themselves: is $48.80 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 $48.80, changing hands for $49.61/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 $48.80/share, investors in DDOG have been given a good signal to spend fresh time assessing the company and deciding for themselves: is $48.80 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 $48.80/share, investors in DDOG have been given a good signal to spend fresh time assessing the company and deciding for themselves: is $48.80 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 $48.80, changing hands for $49.61/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 $48.80, changing hands for $49.61/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 $48.80/share, investors in DDOG have been given a good signal to spend fresh time assessing the company and deciding for themselves: is $48.80 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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df3658bb-317b-4419-97c8-f0f6109f9c36
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719059.0
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2020-04-21 00:00:00 UTC
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Forget Splunk, Datadog Is a Better Growth Stock
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DDOG
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https://www.nasdaq.com/articles/forget-splunk-datadog-is-a-better-growth-stock-2020-04-22
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nan
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nan
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How should investors play a volatile market? Do you invest in large-cap stocks that have huge cash reserves and strong cash flows? These companies also have the experience of surviving multiple recessions. With equity markets trading 20% below record highs, do you invest in dividend stocks that have seen their yields shoot up with a decline in stock prices?
I believe that you need to invest in growth stocks as they tend to outperform broader markets in the long-term. It is impossible to time the market and while growth stocks tend to be volatile, they also created massive wealth for investors over the years.
For example, if you invested $1,000 in Splunk's IPO, back in April 2012, it would have returned close to $8,000 right now. Splunk has been one of the most innovative players in the big data and analytics segment. Its enterprise-facing platform helps clients simplify critical functions and monitor a variety of applications. This enables customers to gain valuable insights and measure performance as well as response time, enhancing several aspects of their application lifecycle.
However, there is another company in the data monitoring space- Datadog (NASDAQ: DDOG) that is growing at a faster pace. Datadog went public on September 20 last year at $27 per share and since gained close to 50%.
What does Datadog do?
Datadog provides a monitoring and analytics platform for enterprises. Its SaaS (software-as-a-service) product integrates and automates infrastructure monitoring, application performance monitoring as well as log management services for clients. Datadog and Splunk are leveraging enterprise ability to better understand user behaviour and track key business metrics.
Image source: Getty Images.
Software applications are key to transforming organizations in terms of increasing customer engagement and improving operational efficiencies. Over the years Datadog has created several products and aims to unify these tools into its integrated monitoring and analytics platform.
In 2012, Datadog launched its first infrastructure monitoring platform to handle cloud-native architectures. In 2017, it launched an Application Performance Monitoring (APM) product while in 2018 it launched a log management product. Last year, Datadog added user experience monitoring, security monitoring and network performance monitoring to its product portfolio.
Datadog has now become an end-to-end monitoring and analytics platform and is designed to be cloud-agnostic, making it easy to deploy.
Datadog's platform primarily aims to address the IT Operations Management market. Market research firm Gartner estimated the addressable business opportunity in IT Operations Management at $37 billion. Given Datadog's annual sales of $363 million in 2019, it still accounts for less than 1% of this market and has significant room to grow revenue in the upcoming decade.
What's going right for Datadog?
In the fourth quarter of 2019, Datadog grew sales by 85% year-over-year driven by the company's focus on supporting modern technology architecture. Datadog's total customer base in 2019 stood at 10,500, up from 7,700 in 2018 and 5,400 in 2019.
In 2019, the number of customers with an annual run rate (ARR) of over $100,000 stood at 858, a growth of 89%. The average ARR of enterprise customers rose from $160,000 in 2018 to $230,000 in 2019. Comparatively, the average ARR of mid-market customers rose from $110,000 to $170,000 in this period.
Over 60% of customers are currently using two or more products which increased Datadog's net retention rate to 130%, indicating increased usage and adoption of newer products.
Datadog ended 2019 with an operating cash flow of $24.2 million, up from $10.8 million in 2018 and $13.8 million in 2017. Its cash balance stood at $778 million giving it sufficient room to support working capital and capital expenditure in the next 12 months.
What does Datadog expect in 2020?
Datadog forecast sales between $117 million and $119 million in the March quarter, indicating year-over-year growth of 68.5% at the midpoint. It estimates sales to grow 49% between $535 million and $545 million in 2020.
However, these estimates may be revised downwards due to the ongoing COVID-19 pandemic which will drive enterprise spending lower. Equity markets will remain volatile and investors will gain further insights on the state of the global economy once companies report their earnings.
Datadog is trading at a market cap to forward sales ratio of 22.6 which is far higher than Splunk's ratio of 8.4. However, Datadog is also growing at a far higher pace and commands a premium valuation.
I am not bearish on Splunk. I just think Datadog is a better growth stock. Datadog provides an enviable set of products and services to enterprise customers, making it one of the top stocks to own in the SaaS segment.
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
Aditya Raghunath 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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However, there is another company in the data monitoring space- Datadog (NASDAQ: DDOG) that is growing at a faster pace. This enables customers to gain valuable insights and measure performance as well as response time, enhancing several aspects of their application lifecycle. In the fourth quarter of 2019, Datadog grew sales by 85% year-over-year driven by the company's focus on supporting modern technology architecture.
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However, there is another company in the data monitoring space- Datadog (NASDAQ: DDOG) that is growing at a faster pace. Its SaaS (software-as-a-service) product integrates and automates infrastructure monitoring, application performance monitoring as well as log management services for clients. In 2017, it launched an Application Performance Monitoring (APM) product while in 2018 it launched a log management product.
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However, there is another company in the data monitoring space- Datadog (NASDAQ: DDOG) that is growing at a faster pace. Last year, Datadog added user experience monitoring, security monitoring and network performance monitoring to its product portfolio. Datadog provides an enviable set of products and services to enterprise customers, making it one of the top stocks to own in the SaaS segment.
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However, there is another company in the data monitoring space- Datadog (NASDAQ: DDOG) that is growing at a faster pace. Datadog provides a monitoring and analytics platform for enterprises. It estimates sales to grow 49% between $535 million and $545 million in 2020.
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ec47e4fc-b143-447e-813c-13fd108654c4
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719060.0
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2020-04-19 00:00:00 UTC
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3 Stocks I'm Buying Right Now
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DDOG
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https://www.nasdaq.com/articles/3-stocks-im-buying-right-now-2020-04-19
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nan
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nan
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In March, when the market crashed, it seemed as if nothing was safe.
A few stocks spiked upward. For instance, Novavax has been having a great year. It's up 385% in 2020. Virtual healthcare provider Teladoc is another big winner that's benefiting from the rise in telehealth driven by the pandemic. But this positive news was limited to a small group of stocks.
For most companies, the stock market was a sea of red in March. And the rout affected stocks regardless of how COVID-19 might affect their sales and profits. But now, parts of the market are recovering and certain stocks are doing quite well. Some are actually up for the year.
Image Source: Getty Images
What stocks should you buy now?
Right now, I am seeing a bifurcation in the market. Many of the stocks in the virtual universe -- made up of internet retailers, gaming companies, and software-as-a-service (SaaS) providers -- are doing just fine in 2020. That's because the lockdown isn't hurting their business very much, if at all. People need the internet right now more than ever, so internet stocks are up for the year.
Companies like Amazon.com, Shopify, and Sea Limited are actually spiking in this environment despite the health crisis.
COMPANY STOCK ON JAN. 2 STOCK ON APRIL 16 PERCENTAGE GAIN
Amazon.com $1,875 $2,388 29%
Shopify $403 $517 30%
Sea Limited $41 $53 32%
Data source: Yahoo! Finance.
On the other hand, real-world stocks, like restaurants and movie theaters, are getting cheaper and cheaper. That's because all these businesses are hampered by the COVID-19-driven lockdown, and it's still unclear how extensive the damage will be. The market hates this uncertainty, so the losses have been brutal, and these stocks are trading at historic lows.
For investors who prefer buying cheap stocks, there are options all over the place. Stocks I might start buying next week include IMAX (NYSE: IMAX), Park Hotels & Resorts (NYSE: PK), and Ruth's Hospitality Group (NASDAQ: RUTH). The major reason is that these are fundamentally strong companies and their prices are currently super cheap.
COMPANY STOCK ON JAN. 2 STOCK ON APRIL 16 PERCENTAGE LOSS
IMAX $20 $9 (51%)
Park Hotel & Resorts $26 $7 (71%)
Ruth's Hospitality $21 $7 (67%)
Data source: Yahoo! Finance.
My thinking on this is fairly simple: Here are dominant companies hit hard by the COVID-19 pandemic. Sooner or later, the U.S. will reopen for business. Things will return to normal and the stock prices should revert to the mean.
So should we buy virtual stocks that are doing well in this environment? Or should we start buying the deep value stocks that will likely bounce back down the road?
What I bought this week
I decided to split the difference by buying more shares of virtual companies that are still negative in 2020. So I'm buying growth companies at value prices.
As we are seeing with Shopify, Amazon, and Sea Limited, virtual stocks should be minimally affected by COVID-19 and the widespread lockdowns. Yet there are many virtual stocks that are down in 2020. I found three in my own portfolio. On Monday, I bought more shares of Adaptive Biotechnologies (NASDAQ: ADPT), Carvana (NYSE: CVNA), and Datadog (NASDAQ: DDOG).
COMPANY STOCK ON JAN. 2 STOCK ON APRIL 13 PERCENTAGE LOSS
Adaptive Bio $30 $25 (13%)
Carvana $93 $62 (33%)
Datadog $38 $37 (1%)
All three of these stocks are part of the virtual universe, meaning COVID-19 won't shut down any of these businesses.
Carvana
Of course, Carvana is a consumer-facing business (a retailer!), so you might think COVID-19 would be a disaster for the stock. Certainly, the market thought so at first. The price dropped all the way to $22 a share on March 19. But the important thing to remember is that Carvana is a virtual retailer that conducts its business online.
I don't know how many people are shopping for cars right now, but I do know that if you're shopping, you're doing it online. This health crisis is escalating many of the major trends we've seen over the last couple of decades. Virtual retailers are in a much stronger position than their brick-and-mortar counterparts.
Certainly, COVID-19 might wreak havoc on used car sales this year. This means that mom-and-pop used car lots are in big trouble. Many of those car sales will shift online during this mess, and Carvana will win many of those customers with its ease of use and optionality.
So while the used car market might get battered, I fully expect Carvana to continue to grab market share in any downturn.
Adaptive Biotechnologies
Adaptive is a biotech stock that is working with Microsoft to decipher the immune system. While there are many disruptions in the healthcare industry -- particularly in hospitals and clinical drug trials -- the disruption to Adaptive's business should be minimal.
Indeed, the company is now working with Amgen to find a drug for COVID-19. The company's focus on the immune system gives drug companies additional insights into how the human body responds to germs, viruses, and other biological threats.
Companies fighting COVID-19 should do quite well in these market conditions. It doesn't make sense for a medical growth stock that's battling the illness to be down in this environment. Adaptive has a platform technology that users access online and COVID-19 doesn't post a threat to its business, which is why I'm buying more shares.
Datadog
Like Carvana and Adaptive, Datadog is a virtual company, a platform stock that's open for business around the world. It's a SaaS company that helps large companies track all their data.
Datadog has massive revenue growth. In its most recent quarter, the company reported close to 85% sales growth, year-over-year. While SaaS stocks took a beating due to this health crisis, the truth is that virtual companies with most of their business online should be fine.
Consumers are using the internet more in this environment, not less. Should a company turn off its website now? Or keep it going? And companies that use the internet to help with their business want to keep track of their data. This is another virtual company that should survive this pandemic and outperform in the long-run.
I'm looking for cheap stocks that I believe will recover from COVID-19 and the resulting recession. I don't expect any of these three companies to be harmed by the coronavirus pandemic or a prolonged economic downturn. So I'm using this crisis as an opportunity to buy shares in some of the world's strongest virtual companies.
10 stocks we like better than Carvana Co.
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 Carvana Co. 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 April 16, 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. Taylor Carmichael owns shares of Adaptive Biotechnologies, Amazon, Carvana Co., Datadog, Novavax, Roku, Sea Limited, Shopify, and W&T Offshore, Inc. The Motley Fool owns shares of and recommends Amazon, Datadog, Microsoft, Roku, Shopify, and Teladoc Health. The Motley Fool recommends Amgen and Sea Limited 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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On Monday, I bought more shares of Adaptive Biotechnologies (NASDAQ: ADPT), Carvana (NYSE: CVNA), and Datadog (NASDAQ: DDOG). Adaptive Bio $30 $25 (13%) Carvana $93 $62 (33%) Datadog $38 $37 (1%) All three of these stocks are part of the virtual universe, meaning COVID-19 won't shut down any of these businesses. While SaaS stocks took a beating due to this health crisis, the truth is that virtual companies with most of their business online should be fine.
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On Monday, I bought more shares of Adaptive Biotechnologies (NASDAQ: ADPT), Carvana (NYSE: CVNA), and Datadog (NASDAQ: DDOG). Stocks I might start buying next week include IMAX (NYSE: IMAX), Park Hotels & Resorts (NYSE: PK), and Ruth's Hospitality Group (NASDAQ: RUTH). Taylor Carmichael owns shares of Adaptive Biotechnologies, Amazon, Carvana Co., Datadog, Novavax, Roku, Sea Limited, Shopify, and W&T Offshore, Inc.
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On Monday, I bought more shares of Adaptive Biotechnologies (NASDAQ: ADPT), Carvana (NYSE: CVNA), and Datadog (NASDAQ: DDOG). Datadog Like Carvana and Adaptive, Datadog is a virtual company, a platform stock that's open for business around the world. While SaaS stocks took a beating due to this health crisis, the truth is that virtual companies with most of their business online should be fine.
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On Monday, I bought more shares of Adaptive Biotechnologies (NASDAQ: ADPT), Carvana (NYSE: CVNA), and Datadog (NASDAQ: DDOG). Companies like Amazon.com, Shopify, and Sea Limited are actually spiking in this environment despite the health crisis. So should we buy virtual stocks that are doing well in this environment?
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4b5691ef-06d9-4561-b73f-da7407961f33
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719061.0
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2020-04-16 00:00:00 UTC
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EXCLUSIVE-Apollo readies IPO of cloud company Rackspace -sources
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DDOG
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https://www.nasdaq.com/articles/exclusive-apollo-readies-ipo-of-cloud-company-rackspace-sources-2020-04-16
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nan
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nan
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By Joshua Franklin and Greg Roumeliotis
NEW YORK, April 16 (Reuters) - Private equity firm Apollo Global Management Inc APO.N has registered Rackspace Holding Inc for an initial public offering (IPO) that could value the cloud services firm at more than $10 billion, including debt, people familiar with the matter said.
Apollo has been emboldened by the rally in the shares of Rackspace peers such as Fastly Inc FSLY.N and Datadog Inc DDOG.O in recent weeks, the sources said, as the novel coronavirus outbreak drives more businesses to operate digitally and rely on cloud computing for more of their workflow.
Rackspace has confidentially filed for an IPO with the U.S. Securities and Exchange Commission and is planning to proceed with a stock market debut as soon as the volatility that has been fueled by the pandemic subsides, the sources said.
The sources cautioned that a date for Rackspace's IPO had not yet been set and asked not to be identified because the preparations are confidential. Apollo declined to comment, while Rackspace did not immediately respond to a request for comment.
U.S. listings have come to a near-standstill in the last two months due to coronavirus outbreak-induced stock market swings, which have made it harder to price shares in an IPO and have dampened the valuation that many companies can attain.
There were only two IPOs in the United States in March, compared with seven a year ago, according data provider IPO Boutique. So far in April, there have also only been two new listings. Some 14 companies went public in April 2019.
Rackspace leases server space and helps corporations store and access data in the cloud. The San Antonio-based company had been exploring an IPO for the last two years, but its weak organic growth and large debt pile, accumulated as a result of its $4.3 leveraged buyout by Apollo in 2016 and subsequent acquisitions, had stopped it from pursuing it.
The push by companies to have employees work remotely and make more of their operations "pandemic-proof" has breathed new life into Rackspace's business and brought an IPO within reach, according to the sources.
The global cloud services market generated $264.8 billion in revenue last year and was estimated to exceed $900 billion by 2027, according to Allied Market Research.
(Reporting by Joshua Franklin and Greg Roumeliotis in New York; editing by Jonathan Oatis)
((joshua.franklin@thomsonreuters.com; +1 646-223-6356; Reuters Messaging: joshua.franklin.thomsonreuters.com@reuters.net))
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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Apollo has been emboldened by the rally in the shares of Rackspace peers such as Fastly Inc FSLY.N and Datadog Inc DDOG.O in recent weeks, the sources said, as the novel coronavirus outbreak drives more businesses to operate digitally and rely on cloud computing for more of their workflow. U.S. listings have come to a near-standstill in the last two months due to coronavirus outbreak-induced stock market swings, which have made it harder to price shares in an IPO and have dampened the valuation that many companies can attain. The San Antonio-based company had been exploring an IPO for the last two years, but its weak organic growth and large debt pile, accumulated as a result of its $4.3 leveraged buyout by Apollo in 2016 and subsequent acquisitions, had stopped it from pursuing it.
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Apollo has been emboldened by the rally in the shares of Rackspace peers such as Fastly Inc FSLY.N and Datadog Inc DDOG.O in recent weeks, the sources said, as the novel coronavirus outbreak drives more businesses to operate digitally and rely on cloud computing for more of their workflow. By Joshua Franklin and Greg Roumeliotis NEW YORK, April 16 (Reuters) - Private equity firm Apollo Global Management Inc APO.N has registered Rackspace Holding Inc for an initial public offering (IPO) that could value the cloud services firm at more than $10 billion, including debt, people familiar with the matter said. The global cloud services market generated $264.8 billion in revenue last year and was estimated to exceed $900 billion by 2027, according to Allied Market Research.
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Apollo has been emboldened by the rally in the shares of Rackspace peers such as Fastly Inc FSLY.N and Datadog Inc DDOG.O in recent weeks, the sources said, as the novel coronavirus outbreak drives more businesses to operate digitally and rely on cloud computing for more of their workflow. By Joshua Franklin and Greg Roumeliotis NEW YORK, April 16 (Reuters) - Private equity firm Apollo Global Management Inc APO.N has registered Rackspace Holding Inc for an initial public offering (IPO) that could value the cloud services firm at more than $10 billion, including debt, people familiar with the matter said. Rackspace has confidentially filed for an IPO with the U.S. Securities and Exchange Commission and is planning to proceed with a stock market debut as soon as the volatility that has been fueled by the pandemic subsides, the sources said.
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Apollo has been emboldened by the rally in the shares of Rackspace peers such as Fastly Inc FSLY.N and Datadog Inc DDOG.O in recent weeks, the sources said, as the novel coronavirus outbreak drives more businesses to operate digitally and rely on cloud computing for more of their workflow. By Joshua Franklin and Greg Roumeliotis NEW YORK, April 16 (Reuters) - Private equity firm Apollo Global Management Inc APO.N has registered Rackspace Holding Inc for an initial public offering (IPO) that could value the cloud services firm at more than $10 billion, including debt, people familiar with the matter said. So far in April, there have also only been two new listings.
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3d8288e2-cde9-43e6-ab70-f38eeb8dd04d
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719062.0
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2020-04-16 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-2020-04-16
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nan
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nan
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It's been rough going for stock investors so far this year, but the party came to an end over the summer of 2019 for Elastic (NYSE: ESTC) shareholders. After quickly running higher in the months following its late 2018 IPO, the stock is now down nearly 50% from all-time highs.
What may seem confounding is that the steep and steady decline for over half a year isn't for lack of growth. On the contrary, this small technologist has been expanding by a more-than-respectable rate since its public debut. It certainly isn't a value play at this point, but it's gotten cheap enough that Elastic at least deserves some attention.
A big year for big data
Elastic is known as a digital search company, but this isn't akin to Alphabet's (NASDAQ: GOOGL)(NASDAQ: GOOG) Google web search. It rather falls more into the category of big data analytics, providing search tools for apps and websites, inter-organizational data search tools, data monitoring and visualization, and cybersecurity orchestration.
Data analytics had a big year in 2019. Datadog (NASDAQ: DDOG) had a successful IPO, Google and salesforce.com (NYSE: CRM) both made large analytics firm acquisitions, and revenue for the industry in general surged by double-digit percentages.
Image source: Getty Images.
Elastic was no exception. Through the first three quarters of its 2020 fiscal year (nine months ended January 31, 2020), the small company posted massive growth -- driven by huge increases in its cloud-based subscription services. In its fiscal third quarter alone, subscription-based software-as-a-service revenue grew 114% year over year to $25.1 million.
The company continued to add new customers (total subscription customer count was 10,500, some 800 more from the quarter prior), and existing subscribers continued to spend over 30% more than a year ago (implied by a dollar-based net expansion rate exceeding 130%).
METRIC
9 MONTHS ENDED JAN. 31, 2020
9 MONTHS ENDED JAN. 31, 2019
CHANGE
Revenue
$304 million
$194 million
57%
Gross profit margin
70.9%
71.4%
(0.5 pp)
Operating expenses
$352 million
$206 million
71%
Net income (loss)
($136 million)
($67.5 million)
N/A
Adjusted net income (loss)
($28.9 million)
($6.51 million)
N/A
Data source: Elastic. Pp = percentage point.
Not cheap, but for a reason
After a run like that, what gives with share prices? While the growth is impressive, it's only part of the equation. Since Elastic still operates at a loss (more on that in a moment), investors are left with only the price-to-sales ratio with which to value the company. And at times in early 2019, Elastic was trading for well over 20 times trailing-12-month revenue. That's a steep price tag, even for a company growing as quickly as this.
As of this writing, Elastic still goes for a premium, but a far more reasonable 11.0 times revenue (based on management's forecast for fiscal 2020 sales to be $423 million to $424 million).
Also worth noting is that Elastic operates at a loss. Part of that is by design as it has hired staff and made a handful of acquisitions since going public, but net losses also include non-cash stock-based employee compensation ($42.8 million through the first nine months of fiscal 2020). Adjusting for non-cash items, free cash flow was negative $28.9 million so far in fiscal 2020. With over $294 million in cash and equivalents on the books at the end of the last quarter, Elastic has ample liquidity to navigate the current economic crisis wrought by coronavirus and to keep investing in further growth.
Granted, shares are still priced on the assumption that Elastic's momentum will hold for some time, and that the business will soon begin to reach profitable scale. Nevertheless, shares are a bargain compared to its higher-growth but even higher-priced peers Datadog and Alteryx (NYSE: AYX).
If data analytics investing is your thing, the relative value Elastic now presents is worth a deeper dive. My usual small-cap stock recommendation applies: Make small purchases over time, perhaps monthly or quarterly, to average into a position in what is sure to remain a very volatile but high-growth stock.
10 stocks we like better than Elastic N V
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 Elastic N V 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 March 18, 2020
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Nicholas Rossolillo and his clients own shares of Alphabet (C shares), Alteryx, and Salesforce.com. The Motley Fool owns shares of and recommends Alphabet (A and C shares), Alteryx, Datadog, Elastic N V, 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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Datadog (NASDAQ: DDOG) had a successful IPO, Google and salesforce.com (NYSE: CRM) both made large analytics firm acquisitions, and revenue for the industry in general surged by double-digit percentages. Part of that is by design as it has hired staff and made a handful of acquisitions since going public, but net losses also include non-cash stock-based employee compensation ($42.8 million through the first nine months of fiscal 2020). With over $294 million in cash and equivalents on the books at the end of the last quarter, Elastic has ample liquidity to navigate the current economic crisis wrought by coronavirus and to keep investing in further growth.
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Datadog (NASDAQ: DDOG) had a successful IPO, Google and salesforce.com (NYSE: CRM) both made large analytics firm acquisitions, and revenue for the industry in general surged by double-digit percentages. Revenue $304 million $194 million 57% Gross profit margin 70.9% 71.4% (0.5 pp) Operating expenses $352 million $206 million 71% Net income (loss) ($136 million) ($67.5 million) Adjusted net income (loss) ($28.9 million) ($6.51 million)
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Datadog (NASDAQ: DDOG) had a successful IPO, Google and salesforce.com (NYSE: CRM) both made large analytics firm acquisitions, and revenue for the industry in general surged by double-digit percentages. A big year for big data Elastic is known as a digital search company, but this isn't akin to Alphabet's (NASDAQ: GOOGL)(NASDAQ: GOOG) Google web search. Revenue $304 million $194 million 57% Gross profit margin 70.9% 71.4% (0.5 pp) Operating expenses $352 million $206 million 71% Net income (loss) ($136 million) ($67.5 million)
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Datadog (NASDAQ: DDOG) had a successful IPO, Google and salesforce.com (NYSE: CRM) both made large analytics firm acquisitions, and revenue for the industry in general surged by double-digit percentages. Revenue $304 million $194 million 57% Gross profit margin 70.9% 71.4% (0.5 pp) Operating expenses $352 million $206 million 71% Net income (loss) ($136 million) ($67.5 million) Not cheap, but for a reason After a run like that, what gives with share prices?
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120e3800-e9a7-4c10-8480-7c0acfb6f316
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719063.0
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2020-04-09 00:00:00 UTC
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Analysts Anticipate VV Will Reach $151
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DDOG
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https://www.nasdaq.com/articles/analysts-anticipate-vv-will-reach-%24151-2020-04-09
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nan
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nan
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Looking at the underlying holdings of the ETFs in our coverage universe at ETF Channel, we have compared the trading price of each holding against the average analyst 12-month forward target price, and computed the weighted average implied analyst target price for the ETF itself. For the Vanguard Large-Cap ETF (Symbol: VV), we found that the implied analyst target price for the ETF based upon its underlying holdings is $151.47 per unit.
With VV trading at a recent price near $125.97 per unit, that means that analysts see 20.24% upside for this ETF looking through to the average analyst targets of the underlying holdings. Three of VV's underlying holdings with notable upside to their analyst target prices are Jazz Pharmaceuticals plc (Symbol: JAZZ), Carvana Co (Symbol: CVNA), and Datadog Inc (Symbol: DDOG). Although JAZZ has traded at a recent price of $108.47/share, the average analyst target is 53.25% higher at $166.24/share. Similarly, CVNA has 43.07% upside from the recent share price of $58.48 if the average analyst target price of $83.67/share is reached, and analysts on average are expecting DDOG to reach a target price of $50.78/share, which is 36.68% above the recent price of $37.15. Below is a twelve month price history chart comparing the stock performance of JAZZ, CVNA, and DDOG:
Below is a summary table of the current analyst target prices discussed above:
NAME SYMBOL RECENT PRICE AVG. ANALYST 12-MO. TARGET % UPSIDE TO TARGET
Vanguard Large-Cap ETF VV $125.97 $151.47 20.24%
Jazz Pharmaceuticals plc JAZZ $108.47 $166.24 53.25%
Carvana Co CVNA $58.48 $83.67 43.07%
Datadog Inc DDOG $37.15 $50.78 36.68%
Are analysts justified in these targets, or overly optimistic about where these stocks will be trading 12 months from now? Do the analysts have a valid justification for their targets, or are they behind the curve on recent company and industry developments? A high price target relative to a stock's trading price can reflect optimism about the future, but can also be a precursor to target price downgrades if the targets were a relic of the past. These are questions that require further investor research.
10 ETFs With Most Upside To Analyst Targets »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Vanguard Large-Cap ETF VV $125.97 $151.47 20.24% Jazz Pharmaceuticals plc JAZZ $108.47 $166.24 53.25% Carvana Co CVNA $58.48 $83.67 43.07% Datadog Inc DDOG $37.15 $50.78 36.68% Are analysts justified in these targets, or overly optimistic about where these stocks will be trading 12 months from now? Three of VV's underlying holdings with notable upside to their analyst target prices are Jazz Pharmaceuticals plc (Symbol: JAZZ), Carvana Co (Symbol: CVNA), and Datadog Inc (Symbol: DDOG). Similarly, CVNA has 43.07% upside from the recent share price of $58.48 if the average analyst target price of $83.67/share is reached, and analysts on average are expecting DDOG to reach a target price of $50.78/share, which is 36.68% above the recent price of $37.15.
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Three of VV's underlying holdings with notable upside to their analyst target prices are Jazz Pharmaceuticals plc (Symbol: JAZZ), Carvana Co (Symbol: CVNA), and Datadog Inc (Symbol: DDOG). Similarly, CVNA has 43.07% upside from the recent share price of $58.48 if the average analyst target price of $83.67/share is reached, and analysts on average are expecting DDOG to reach a target price of $50.78/share, which is 36.68% above the recent price of $37.15. Vanguard Large-Cap ETF VV $125.97 $151.47 20.24% Jazz Pharmaceuticals plc JAZZ $108.47 $166.24 53.25% Carvana Co CVNA $58.48 $83.67 43.07% Datadog Inc DDOG $37.15 $50.78 36.68% Are analysts justified in these targets, or overly optimistic about where these stocks will be trading 12 months from now?
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Similarly, CVNA has 43.07% upside from the recent share price of $58.48 if the average analyst target price of $83.67/share is reached, and analysts on average are expecting DDOG to reach a target price of $50.78/share, which is 36.68% above the recent price of $37.15. Three of VV's underlying holdings with notable upside to their analyst target prices are Jazz Pharmaceuticals plc (Symbol: JAZZ), Carvana Co (Symbol: CVNA), and Datadog Inc (Symbol: DDOG). Below is a twelve month price history chart comparing the stock performance of JAZZ, CVNA, and DDOG: Below is a summary table of the current analyst target prices discussed above:
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Vanguard Large-Cap ETF VV $125.97 $151.47 20.24% Jazz Pharmaceuticals plc JAZZ $108.47 $166.24 53.25% Carvana Co CVNA $58.48 $83.67 43.07% Datadog Inc DDOG $37.15 $50.78 36.68% Are analysts justified in these targets, or overly optimistic about where these stocks will be trading 12 months from now? Three of VV's underlying holdings with notable upside to their analyst target prices are Jazz Pharmaceuticals plc (Symbol: JAZZ), Carvana Co (Symbol: CVNA), and Datadog Inc (Symbol: DDOG). Similarly, CVNA has 43.07% upside from the recent share price of $58.48 if the average analyst target price of $83.67/share is reached, and analysts on average are expecting DDOG to reach a target price of $50.78/share, which is 36.68% above the recent price of $37.15.
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13964591-33d5-4c52-9c66-dcc35ebebea9
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719064.0
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2020-04-09 00:00:00 UTC
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Index Ventures raises $2 billion for growth investments
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DDOG
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https://www.nasdaq.com/articles/index-ventures-raises-%242-billion-for-growth-investments-2020-04-09
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nan
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nan
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BERLIN, April 9 (Reuters) - Venture capital firm Index Ventures said on Thursday it had raised $2 billion for growth investments, backing entrepreneurs it reckons will lead the way out of the economic slump caused by the coronavirus pandemic.
Of the bumper fundraising round, $800 million will be invested by its Index Ventures 10 fund and $1.2 billion by Index Growth 5.
Index Ventures, which is based in San Francisco and London, focuses chiefly on early-stage investments. Seven out of 10 of its bets are Series A or earlier.
"Innovation is often born out of adversity," partner Jan Hammer said in a statement. "We take the long view and remain committed to investing in ambitious entrepreneurs at this unprecedented time."
Index Ventures, which focuses mainly on Europe and North America, has floated nine portfolio companies over the past two years including Dutch payments company Adyen ADYEN.AS, data analytics platform Datadog Inc DDOG.O and online collaboration tool Slack WORK.N.
(Reporting by Douglas Busvine Editing by Michelle Martin)
((douglas.busvine@tr.com; +49 30 2888 5084; Reuters Messaging: douglas.busvine.thomsonreuters.com@reuters.net))
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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Index Ventures, which focuses mainly on Europe and North America, has floated nine portfolio companies over the past two years including Dutch payments company Adyen ADYEN.AS, data analytics platform Datadog Inc DDOG.O and online collaboration tool Slack WORK.N. Index Ventures, which is based in San Francisco and London, focuses chiefly on early-stage investments. "We take the long view and remain committed to investing in ambitious entrepreneurs at this unprecedented time."
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Index Ventures, which focuses mainly on Europe and North America, has floated nine portfolio companies over the past two years including Dutch payments company Adyen ADYEN.AS, data analytics platform Datadog Inc DDOG.O and online collaboration tool Slack WORK.N. BERLIN, April 9 (Reuters) - Venture capital firm Index Ventures said on Thursday it had raised $2 billion for growth investments, backing entrepreneurs it reckons will lead the way out of the economic slump caused by the coronavirus pandemic. Of the bumper fundraising round, $800 million will be invested by its Index Ventures 10 fund and $1.2 billion by Index Growth 5.
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Index Ventures, which focuses mainly on Europe and North America, has floated nine portfolio companies over the past two years including Dutch payments company Adyen ADYEN.AS, data analytics platform Datadog Inc DDOG.O and online collaboration tool Slack WORK.N. BERLIN, April 9 (Reuters) - Venture capital firm Index Ventures said on Thursday it had raised $2 billion for growth investments, backing entrepreneurs it reckons will lead the way out of the economic slump caused by the coronavirus pandemic. Of the bumper fundraising round, $800 million will be invested by its Index Ventures 10 fund and $1.2 billion by Index Growth 5.
|
Index Ventures, which focuses mainly on Europe and North America, has floated nine portfolio companies over the past two years including Dutch payments company Adyen ADYEN.AS, data analytics platform Datadog Inc DDOG.O and online collaboration tool Slack WORK.N. BERLIN, April 9 (Reuters) - Venture capital firm Index Ventures said on Thursday it had raised $2 billion for growth investments, backing entrepreneurs it reckons will lead the way out of the economic slump caused by the coronavirus pandemic. Of the bumper fundraising round, $800 million will be invested by its Index Ventures 10 fund and $1.2 billion by Index Growth 5.
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1f8daeb7-3c31-47b6-81c9-2f11179d0b37
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719065.0
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2020-03-25 00:00:00 UTC
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Splunk Stock a Great Pick for Growth Investors on the Dip
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DDOG
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https://www.nasdaq.com/articles/splunk-stock-a-great-pick-for-growth-investors-on-the-dip-2020-03-25
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nan
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nan
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
The sell-off in the broad market over the past five weeks has created opportunities for investors to own some of the best growth stocks at a discount. As investors are starting to figure out, Splunk (NASDAQ:SPLK) stock presents one of those opportunities.
Source: Michael Vi / Shutterstock.com
After gaining almost 7% during Tuesday’s market-wide rally, SPLK stock now has bounced 29% from its lows earlier this month. To some investors, that might suggest the easy money has been made.
That’s not the case. Splunk stock still sits well below recent highs. It remains a perfect example of the market’s ongoing focus on short-term risks instead of long-term potential.
7 Stocks to Buy Once the Market Bottoms
I don’t want to be cavalier and dismiss the human toll of the coronavirus crisis. But the world, and the economy, will persist, and at some point this crisis will fade. The value of Splunk’s transformative business will not.
The Case for SPLK Stock
I discussed Splunk’s business model at length last month. Splunk is a leader in artificial intelligence. Its platform mines machine data — what Splunk calls the “digital exhaust” of a business — for insights that can drive better decision-making and higher profit.
The applications are almost endless. Splunk’s software can identify service problems that are leading to customer losses. It can detect evidence of fraud, or highlight potential gaps in marketing campaigns.
That flexibility and breadth means Splunk isn’t just for tech companies. Clients include Domino’s Pizza (NYSE:DPZ), Porsche (OTCMKTS:POAHY) and, as recently announced, the U.S. Census Bureau.
And Splunk’s capabilities have driven impressive growth. Revenue rose 31% in 2019. This is a company founded only in 2003, which as of this month’s fourth quarter release expected to generate roughly $2.6 billion in sales in 2020.
Outside of some of the best software companies in the world — Salesforce.com (NYSE:CRM) comes to mind — few, if any, firms have been able to drive that kind of revenue less than two decades after their founding.
Earnings Better Than They Look
It’s tempting to look at the decline in SPLK stock over recent weeks and attribute it to fourth quarter earnings on Mar. 4. Results for Q4 were in line. But the company’s outlook for fiscal 2021 (which ends Jan. 31) appeared to be hugely disappointing.
Revenue guidance of $2.6 billion suggests only about 10% revenue growth year-over-year. Wall Street was expecting a 22% increase. Investors initially dumped SPLK stock on the news, believing that the business was decelerating.
But as chief executive officer Doug Merritt explained to Bloomberg, that’s simply not the case. Rather, the company is shifting to cloud-based offerings from license agreements with fixed terms. Revenue from cloud agreements is recognized on a more delayed basis, which pressures the reported top-line figure.
Splunk thus reports ARR (annual recurring revenue), which adjusts for the varying recognition schedules of different contracts. And that figure shows how well the business is performing.
ARR grew 54% in the fourth quarter. And Splunk expects the metric to grow at a 40% annualized rate through the next three years.
That’s one of the best growth rates in the entire market. But at a little over 7x revenue, SPLK stock is not valued as one of the market’s best growth stories.
Buy the Dip
Again, some investors are figuring that out. But there’s little reason why the rally in SPLK has to stop at this point.
As always, there are risks. Competition is intense, with Elastic (NYSE:ESTC) and Datadog (NASDAQ:DDOG) among the better rivals. And SPLK stock looks expensive on an earnings basis: it trades at 81x next year’s consensus earnings per share estimate.
But those risks are worth taking. The market is large enough for multiple winners. (In fact, both ESTC and DDOG look intriguing after their own sell-offs.) And near-term earnings don’t capture the long-term potential. As growth companies should, Splunk is investing now to attract ‘sticky’ long-term customers.
Only a few weeks ago, investors were taking the long view and rewarding the companies that made those investments. But in this panicked time that focus has been lost.
It will return. And when it does, SPLK stock will get back to its winning ways.
Matthew McCall left Wall Street to actually help investors — by getting them into the world’s biggest, most revolutionary trends BEFORE anyone else. The power of being “first” gave Matt’s readers the chance to bank +2,438% in Stamps.com (STMP), +1,523% in Ulta Beauty (ULTA) and +1,044% in Tesla (TSLA), just to name a few. Click here to see what Matt has up his sleeve now. Matt does not directly own the aforementioned securities.
The post Splunk Stock a Great Pick for Growth Investors on the Dip 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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Competition is intense, with Elastic (NYSE:ESTC) and Datadog (NASDAQ:DDOG) among the better rivals. (In fact, both ESTC and DDOG look intriguing after their own sell-offs.) Source: Michael Vi / Shutterstock.com After gaining almost 7% during Tuesday’s market-wide rally, SPLK stock now has bounced 29% from its lows earlier this month.
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Competition is intense, with Elastic (NYSE:ESTC) and Datadog (NASDAQ:DDOG) among the better rivals. (In fact, both ESTC and DDOG look intriguing after their own sell-offs.) InvestorPlace - Stock Market News, Stock Advice & Trading Tips The sell-off in the broad market over the past five weeks has created opportunities for investors to own some of the best growth stocks at a discount.
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Competition is intense, with Elastic (NYSE:ESTC) and Datadog (NASDAQ:DDOG) among the better rivals. (In fact, both ESTC and DDOG look intriguing after their own sell-offs.) InvestorPlace - Stock Market News, Stock Advice & Trading Tips The sell-off in the broad market over the past five weeks has created opportunities for investors to own some of the best growth stocks at a discount.
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Competition is intense, with Elastic (NYSE:ESTC) and Datadog (NASDAQ:DDOG) among the better rivals. (In fact, both ESTC and DDOG look intriguing after their own sell-offs.) It remains a perfect example of the market’s ongoing focus on short-term risks instead of long-term potential.
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edb83080-b901-4bd6-81c4-a743002c1524
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719066.0
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2020-03-13 00:00:00 UTC
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Why These 4 Tech Stocks All Jumped on Friday
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DDOG
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https://www.nasdaq.com/articles/why-these-4-tech-stocks-all-jumped-on-friday-2020-03-14
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nan
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nan
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Just when the week seemed like it couldn't get any more volatile, it did. But at least this time, the big move was upward -- a relief for investors after watching the Dow Jones Industrial Average fall 10% on Thursday. On Friday, the Dow rebounded and roared 9.4% higher.
This broader market gain on Friday unsurprisingly brought a lot of stocks along with it, many tech stocks included. Some notable tech companies that saw significant gains on Friday include website building platform Wix.com (NASDAQ: WIX), monitoring and analytics specialist Datadog (NASDAQ: DDOG), real estate marketing and services company Zillow (NASDAQ: Z) (NASDAQ: ZG), and financial software provider Intuit (NASDAQ: INTU).
These four stocks saw the following gains on Friday.
Image source: Getty Images.
STOCK
INTRADAY HIGH
CHANGE BY MARKET CLOSE
Wix.com
9.7%
7.4%
Datadog
10.6%
6.5%
Zillow
12.6%
2.3%
Intuit
9.9%
9.8%
Data source: Yahoo! Finance.
Trump's address encourages investors
Optimism in the broader market on Friday was evident at market open. Some investors were likely trying to take advantage of what may be viewed as an overreaction to the economic challenges presented by the coronavirus outbreak. Thursday's pullback added to a prolonged sell-off for the market that officially put an end to the longest bull market in history, as market indices sold off more than 20% from a recent high in February.
But the market's gain accelerated toward the end of the day as investors seemed to regain some confidence in the country's ability to curb the coronavirus. During and following Trump's address, which occurred in the last hour that the market was open, the S&P 500 went from approximately a 3.5% gain to a 9.3% gain.
Tech stocks are still way down
While the market's big rise on Friday trimmed back a 27% decline for the S&P 500 since Feb. 19 to a 20% sell-off, many tech stocks are still down more than the market. Indeed, Datadaog, Wix.com, and Zillow are still down 26%, 28%, and 33%, respectively, since Feb. 19. Intuit, however, is the exception to these tech stocks. But it's still down sharply -- just not as badly as the market. Intuit stock has declined 14% since Feb. 19.
It's not surprising to see fast-growing tech companies' stocks fall more than the broader market during a downturn. Growth stocks are often more volatile than market indices because they trade at pricier valuations. Of course, investors should keep in mind that tech stocks can at times also rise more rapidly than the broader market. Tech stocks' high level of volatility goes both ways.
10 stocks we like better than Zillow Group
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 Zillow Group (A shares) 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 December 1, 2019
Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Datadog, Intuit, Wix.com, and Zillow Group (C 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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Some notable tech companies that saw significant gains on Friday include website building platform Wix.com (NASDAQ: WIX), monitoring and analytics specialist Datadog (NASDAQ: DDOG), real estate marketing and services company Zillow (NASDAQ: Z) (NASDAQ: ZG), and financial software provider Intuit (NASDAQ: INTU). But at least this time, the big move was upward -- a relief for investors after watching the Dow Jones Industrial Average fall 10% on Thursday. But the market's gain accelerated toward the end of the day as investors seemed to regain some confidence in the country's ability to curb the coronavirus.
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Some notable tech companies that saw significant gains on Friday include website building platform Wix.com (NASDAQ: WIX), monitoring and analytics specialist Datadog (NASDAQ: DDOG), real estate marketing and services company Zillow (NASDAQ: Z) (NASDAQ: ZG), and financial software provider Intuit (NASDAQ: INTU). Trump's address encourages investors Optimism in the broader market on Friday was evident at market open. It's not surprising to see fast-growing tech companies' stocks fall more than the broader market during a downturn.
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Some notable tech companies that saw significant gains on Friday include website building platform Wix.com (NASDAQ: WIX), monitoring and analytics specialist Datadog (NASDAQ: DDOG), real estate marketing and services company Zillow (NASDAQ: Z) (NASDAQ: ZG), and financial software provider Intuit (NASDAQ: INTU). This broader market gain on Friday unsurprisingly brought a lot of stocks along with it, many tech stocks included. Tech stocks are still way down While the market's big rise on Friday trimmed back a 27% decline for the S&P 500 since Feb. 19 to a 20% sell-off, many tech stocks are still down more than the market.
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Some notable tech companies that saw significant gains on Friday include website building platform Wix.com (NASDAQ: WIX), monitoring and analytics specialist Datadog (NASDAQ: DDOG), real estate marketing and services company Zillow (NASDAQ: Z) (NASDAQ: ZG), and financial software provider Intuit (NASDAQ: INTU). Wix.com 9.7% 7.4% Datadog 10.6% 6.5% Zillow 12.6% 2.3% Intuit 9.9% 9.8% Data source: Yahoo! Tech stocks are still way down While the market's big rise on Friday trimmed back a 27% decline for the S&P 500 since Feb. 19 to a 20% sell-off, many tech stocks are still down more than the market.
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56cd91cd-792f-4696-86ca-cca11bccc472
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719067.0
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2020-03-09 00:00:00 UTC
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Why Datadog Stock Fell 11% on Monday
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DDOG
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https://www.nasdaq.com/articles/why-datadog-stock-fell-11-on-monday-2020-03-09
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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) were slammed on Monday, falling as much as 12.9%. The stock closed the trading day down 11%.
The stock's decline was likely due to the market's continued sell-off on Monday.
Image source: Getty Images.
So what
It's not surprising to see Datadog stock fall as sharply as it did. The S&P 500 declined 7.6% on Monday, and many growth stocks were hit even harder.
Datadog's decline extends the tech stock's recent pullback, with shares down 18% since March 5. But it's worth noting that the stock is still up about 4% year to date -- a time period that the S&P 500 is down 15%.
Now what
When Datadog announced its fourth-quarter results on Feb. 13, management had big expectations for 2020. The company guided for full-year revenue between $535 million and $545 million. This compares to revenue of $364 million in 2019.
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 December 1, 2019
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) were slammed on Monday, falling as much as 12.9%. Datadog's decline extends the tech stock's recent pullback, with shares down 18% since March 5. * 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 monitoring and analytics platform specialist Datadog (NASDAQ: DDOG) were slammed on Monday, falling as much as 12.9%. So what It's not surprising to see Datadog stock fall as sharply as it did. 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 monitoring and analytics platform specialist Datadog (NASDAQ: DDOG) were slammed on Monday, falling as much as 12.9%. Datadog's decline extends the tech stock's recent pullback, with shares down 18% since March 5. 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) were slammed on Monday, falling as much as 12.9%. 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!
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80429e21-9fe2-4e41-a61a-e5704875c8f1
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719068.0
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2020-03-05 00:00:00 UTC
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How The Pieces Add Up: VV Headed For $165
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DDOG
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https://www.nasdaq.com/articles/how-the-pieces-add-up%3A-vv-headed-for-%24165-2020-03-05
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nan
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nan
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Looking at the underlying holdings of the ETFs in our coverage universe at ETF Channel, we have compared the trading price of each holding against the average analyst 12-month forward target price, and computed the weighted average implied analyst target price for the ETF itself. For the Vanguard Large-Cap ETF (Symbol: VV), we found that the implied analyst target price for the ETF based upon its underlying holdings is $165.49 per unit.
With VV trading at a recent price near $144.34 per unit, that means that analysts see 14.66% upside for this ETF looking through to the average analyst targets of the underlying holdings. Three of VV's underlying holdings with notable upside to their analyst target prices are Uber Technologies Inc (Symbol: UBER), Datadog Inc (Symbol: DDOG), and Hyatt Hotels Corp (Symbol: H). Although UBER has traded at a recent price of $34.53/share, the average analyst target is 42.79% higher at $49.31/share. Similarly, DDOG has 17.07% upside from the recent share price of $44.52 if the average analyst target price of $52.12/share is reached, and analysts on average are expecting H to reach a target price of $86.77/share, which is 14.93% above the recent price of $75.50. Below is a twelve month price history chart comparing the stock performance of UBER, DDOG, and H:
Below is a summary table of the current analyst target prices discussed above:
NAME SYMBOL RECENT PRICE AVG. ANALYST 12-MO. TARGET % UPSIDE TO TARGET
Vanguard Large-Cap ETF VV $144.34 $165.49 14.66%
Uber Technologies Inc UBER $34.53 $49.31 42.79%
Datadog Inc DDOG $44.52 $52.12 17.07%
Hyatt Hotels Corp H $75.50 $86.77 14.93%
Are analysts justified in these targets, or overly optimistic about where these stocks will be trading 12 months from now? Do the analysts have a valid justification for their targets, or are they behind the curve on recent company and industry developments? A high price target relative to a stock's trading price can reflect optimism about the future, but can also be a precursor to target price downgrades if the targets were a relic of the past. These are questions that require further investor research.
10 ETFs With Most Upside To Analyst Targets »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Vanguard Large-Cap ETF VV $144.34 $165.49 14.66% Uber Technologies Inc UBER $34.53 $49.31 42.79% Datadog Inc DDOG $44.52 $52.12 17.07% Hyatt Hotels Corp H $75.50 $86.77 14.93% Are analysts justified in these targets, or overly optimistic about where these stocks will be trading 12 months from now? Three of VV's underlying holdings with notable upside to their analyst target prices are Uber Technologies Inc (Symbol: UBER), Datadog Inc (Symbol: DDOG), and Hyatt Hotels Corp (Symbol: H). Similarly, DDOG has 17.07% upside from the recent share price of $44.52 if the average analyst target price of $52.12/share is reached, and analysts on average are expecting H to reach a target price of $86.77/share, which is 14.93% above the recent price of $75.50.
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Three of VV's underlying holdings with notable upside to their analyst target prices are Uber Technologies Inc (Symbol: UBER), Datadog Inc (Symbol: DDOG), and Hyatt Hotels Corp (Symbol: H). Similarly, DDOG has 17.07% upside from the recent share price of $44.52 if the average analyst target price of $52.12/share is reached, and analysts on average are expecting H to reach a target price of $86.77/share, which is 14.93% above the recent price of $75.50. Vanguard Large-Cap ETF VV $144.34 $165.49 14.66% Uber Technologies Inc UBER $34.53 $49.31 42.79% Datadog Inc DDOG $44.52 $52.12 17.07% Hyatt Hotels Corp H $75.50 $86.77 14.93% Are analysts justified in these targets, or overly optimistic about where these stocks will be trading 12 months from now?
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Similarly, DDOG has 17.07% upside from the recent share price of $44.52 if the average analyst target price of $52.12/share is reached, and analysts on average are expecting H to reach a target price of $86.77/share, which is 14.93% above the recent price of $75.50. Three of VV's underlying holdings with notable upside to their analyst target prices are Uber Technologies Inc (Symbol: UBER), Datadog Inc (Symbol: DDOG), and Hyatt Hotels Corp (Symbol: H). Below is a twelve month price history chart comparing the stock performance of UBER, DDOG, and H: Below is a summary table of the current analyst target prices discussed above:
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Vanguard Large-Cap ETF VV $144.34 $165.49 14.66% Uber Technologies Inc UBER $34.53 $49.31 42.79% Datadog Inc DDOG $44.52 $52.12 17.07% Hyatt Hotels Corp H $75.50 $86.77 14.93% Are analysts justified in these targets, or overly optimistic about where these stocks will be trading 12 months from now? Three of VV's underlying holdings with notable upside to their analyst target prices are Uber Technologies Inc (Symbol: UBER), Datadog Inc (Symbol: DDOG), and Hyatt Hotels Corp (Symbol: H). Similarly, DDOG has 17.07% upside from the recent share price of $44.52 if the average analyst target price of $52.12/share is reached, and analysts on average are expecting H to reach a target price of $86.77/share, which is 14.93% above the recent price of $75.50.
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8a0fe2d0-37bf-4e3e-8e77-bd68691c6854
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719069.0
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2020-03-04 00:00:00 UTC
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3 Big Stock Charts for Wednesday: Canopy Growth, Bank of America, and Roku
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DDOG
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https://www.nasdaq.com/articles/3-big-stock-charts-for-wednesday%3A-canopy-growth-bank-of-america-and-roku-2020-03-04
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nan
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nan
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The Federal Reserve tried to ride to the rescue on Tuesday. But a 50 basis point emergency rate cut didnâÂÂt calm investor fears. It seemed to make matters worse.
Source: Shutterstock
U.S. stocks fell nearly 3% on Wednesday and closed near the lows. The 10-year Treasury yield fell below 1% for the first time ever. The optimism from Monday seems erased, even if nearly half that sessionâÂÂs gains remain.
WednesdayâÂÂs big stock charts focus on some of the biggest losers in sectors that saw particular struggles on Tuesday. Some investors will see each of these names as potential opportunities on the dip. But these charts suggest investors should stay patient â advice that might apply to the market as a whole at the moment.
Canopy Growth (CGC)
Source: Provided by Finviz
Cannabis stocks like Canopy Growth (NYSE:) had been struggling long before broader markets turned south. The first of WednesdayâÂÂs big stock charts suggests it could get worse:
To cannabis bulls, that kind of trading might seem too far a decline. But the sector and the stock have been selling off for about ten months now. Investors who have stepped into past dips have been burned. Strong earnings last month did seem to help . The bounce after the report has been erased, and CGC again looks like a falling knife.
Simply put, CGC needs a change in sentiment in a hurry. The stock isnâÂÂt necessarily cheap from a fundamental standpoint. Plunging Treasury yields signal a âÂÂflight to safetyâ and there are few riskier sectors out there right now. Even cannabis bulls would do well to stay patient.
Bank of America (BAC)
Source: Provided by Finviz
Recent trading for Bank of America (NYSE:) has been even worse. But the fundamentals and the second of our big stock charts do suggest the selling may ease:
But there is one fundamental indicator that might strengthen that support level. Bank of AmericaâÂÂs book value sits at $26.78 per share. Investors might see a sub-1x price to book multiple as simply too cheap. ThatâÂÂs where the stock bottomed during the December 2018 sell-off; a sub-1x P/B multiple hasnâÂÂt held consistently since 2017.
Roku (ROKU)
Source: Provided by Finviz
The sharp decline in Roku (NASDAQ:) creates a somewhat interesting test case for the market as a whole. For right now, the third of WednesdayâÂÂs big stock charts suggests some hope:
Meanwhile, thereâÂÂs not much reason to see current fears as affecting RokuâÂÂs business all that much. If anything, U.S. consumers might be more likely to stay indoors. That might help streaming viewership and subscriptions, as well as usage of the Roku Channel. That short-term boost doesnâÂÂt necessarily mean ROKU stock should rise, but an investor certainly could argue that neither the near-term nor long-term outlooks for Roku have changed all that much.
Vince Martin has covered the financial industry for close to a decade for InvestorPlace.com and other outlets. He has no positions in any securities mentioned.
The post 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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But these charts suggest investors should stay patient â advice that might apply to the market as a whole at the moment. The first of WednesdayâÂÂs big stock charts suggests it could get worse: To cannabis bulls, that kind of trading might seem too far a decline. For right now, the third of WednesdayâÂÂs big stock charts suggests some hope: Meanwhile, thereâÂÂs not much reason to see current fears as affecting RokuâÂÂs business all that much.
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Canopy Growth (CGC) Source: Provided by Finviz Cannabis stocks like Canopy Growth (NYSE:) had been struggling long before broader markets turned south. Bank of America (BAC) Source: Provided by Finviz Recent trading for Bank of America (NYSE:) has been even worse. Roku (ROKU) Source: Provided by Finviz The sharp decline in Roku (NASDAQ:) creates a somewhat interesting test case for the market as a whole.
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Canopy Growth (CGC) Source: Provided by Finviz Cannabis stocks like Canopy Growth (NYSE:) had been struggling long before broader markets turned south. The first of WednesdayâÂÂs big stock charts suggests it could get worse: To cannabis bulls, that kind of trading might seem too far a decline. That short-term boost doesnâÂÂt necessarily mean ROKU stock should rise, but an investor certainly could argue that neither the near-term nor long-term outlooks for Roku have changed all that much.
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WednesdayâÂÂs big stock charts focus on some of the biggest losers in sectors that saw particular struggles on Tuesday. The first of WednesdayâÂÂs big stock charts suggests it could get worse: To cannabis bulls, that kind of trading might seem too far a decline. Investors might see a sub-1x price to book multiple as simply too cheap.
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02073095-5bfc-4287-ac70-590d3b0de5aa
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719070.0
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2020-03-03 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-2020-03-03
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nan
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nan
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In today's technology-driven world, businesses grind to a halt if their tech infrastructure experiences a hiccup. Enter monitoring companies like Datadog (NASDAQ: DDOG). Its software keeps tabs on a company's systems and provides the insights to troubleshoot problems.
That's why its software-as-a-service (SaaS) offering is in high demand. That high demand translates into increased revenue and, consequently, it helps the company deliver fourth-quarter results that beat analyst expectations.
And yet, the stock declined on the latest earnings report news. So is now the right time to buy Datadog?
Image source: Datadog.
Datadog's products
The demand for Datadog's solutions lies in the company's focus on supporting a modern technology architecture. Today's businesses employ an array of disparate systems in order to move faster and adapt to business conditions. But that architecture comes at the cost of high fragmentation.
For instance, businesses today leverage microservices, a technique that breaks up large software applications into smaller components for improved control and management, as well as containers, which compartmentalize software to streamline the deployment of changes to that software.
Having worked on multimillion-dollar software platforms that employ microservices and containers, I can tell you that monitoring all of these various systems is challenging. Datadog makes this vital task simple for its customers.
In addition, Datadog's products are designed for the red-hot cloud computing arena. This has allowed Datadog to ride the cloud computing wave to revenue growth. It also recently introduced a security monitoring tool, expanding its suite of products and giving its customers more reasons to stay with the company.
Datadog's stock
The challenge in assessing Datadog is that it's a recent IPO stock, having debuted last September. Therefore, it doesn't have much of a public track record. Although its time as a public company has been short, the results have been impressive. Fourth-quarter earnings revealed an 85% year-over-year revenue increase. In fact, the company has experienced double-digit revenue growth every quarter for the past year.
More importantly, the company has delivered these results while maintaining fiscal responsibility. Many technology stocks this new to the market tend to operate at a loss. Datadog's fourth-quarter results included net income of $891,000. It's not much, but given that the fourth quarter of 2018 delivered a net loss of $6.6 million, this is an impressive achievement. Moreover, the company has steadily grown its total assets from $179.8 million in Q4 2018 to more than $1 billion a year later with over $597 million of that in cash.
Datadog accomplished these results by encouraging existing customers to purchase multiple items with about 60% of its clientele using two or more products. It also achieved a dollar-based net retention rate of 130%, which means that Datadog kept 100% of its subscription revenue from the previous year while adding another 30% of revenue from existing clients. The company intends to continue expanding both its product line and markets serviced, such as growing its international footprint, as a means of increasing revenue.
The final verdict
Certainly, Datadog operates in a growing market, but this boon is also its challenge. Competitors like Splunk and New Relic are battling for the same customers. That's why the company's net retention rate is important, and its strength proves Datadog is keeping clients happy.
CEO Olivier Pomel stated on the last earnings call that Datadog is in the "early stages" of this market opportunity, so there's room to grow. The company backed this up with 2020 full-year revenue guidance of $535 million to $545 million. While this range represents a 49% year-over-year growth at its midpoint, it seems investors were disappointed with that growth rate, and the stock price declined.
Given Datadog's strong asset position, history of fiscal prudence, and continued double-digit revenue growth, the dip in Datadog's stock price from its recent 52-week high of $50.12 provides a reasonable entry point for investors, making Datadog stock a definite buy.
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 December 1, 2019
Robert Izquierdo has no position in any of the stocks mentioned. 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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Enter monitoring companies like Datadog (NASDAQ: DDOG). It also recently introduced a security monitoring tool, expanding its suite of products and giving its customers more reasons to stay with the company. The company intends to continue expanding both its product line and markets serviced, such as growing its international footprint, as a means of increasing revenue.
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Enter monitoring companies like Datadog (NASDAQ: DDOG). Fourth-quarter earnings revealed an 85% year-over-year revenue increase. That's why the company's net retention rate is important, and its strength proves Datadog is keeping clients happy.
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Enter monitoring companies like Datadog (NASDAQ: DDOG). Datadog's products The demand for Datadog's solutions lies in the company's focus on supporting a modern technology architecture. Datadog's stock The challenge in assessing Datadog is that it's a recent IPO stock, having debuted last September.
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Enter monitoring companies like Datadog (NASDAQ: DDOG). It's not much, but given that the fourth quarter of 2018 delivered a net loss of $6.6 million, this is an impressive achievement. Given Datadog's strong asset position, history of fiscal prudence, and continued double-digit revenue growth, the dip in Datadog's stock price from its recent 52-week high of $50.12 provides a reasonable entry point for investors, making Datadog stock a definite buy.
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6b7b243a-f57c-468b-95b9-e99f00e3e29b
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719071.0
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2020-02-20 00:00:00 UTC
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The Evolution of SaaS -- Why Datadog's Growing Umbrella Makes the Stock a "Buy"
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DDOG
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https://www.nasdaq.com/articles/the-evolution-of-saas-why-datadogs-growing-umbrella-makes-the-stock-a-buy-2020-02-20
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nan
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nan
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The story begins in 1999 -- a one-bedroom apartment in the Telegraph Hill neighborhood of San Francisco. That's when a young Marc Benioff founded Salesforce.com (NYSE: CRM).
This was the modern beginning of the software-as-a-service (SaaS) business model. Instead of paying big bucks at a brick-and-mortar location for a software package, customers could pay a much lower monthly fee for access to software via the cloud.
Image source: Getty Images.
It took a long time for the business community to catch on. But over the past five years, few publicly traded companies have seen their stocks skyrocket quite like SaaS players.
But the market is evolving, and it won't be that way forever. A select few SaaS stocks will be emerging from the pack. I suspect Datadog (NASDAQ: DDOG) will be one of them. And I'm putting my money where my mouth is.
The SaaS view from 30,000 feet
Here is a simplified version of the nuts and bolts of the SaaS business:
Frequency: Purchases that were once one-off (think: getting the newest version of Microsoft Windows) became recurring.
Cost: A huge upfront payment was replaced with much smaller monthly subscriptions. Over time, however, this usually leads to more money for the software company.
Updates: Instead of consumers waiting until the next iteration to update software, SaaS allows for instant updates via the cloud.
Profitability: By cutting out the middlemen (brick-and-mortars) and having no need to manufacture physical goods, margins rise substantially.
Optionality: When an entire workforce is subscribed to a cloud software solution, it's vastly easier to upsell management on new tools within that platform.
High switching-costs: When companies are using multiple software tools, the costs of switching -- and retraining entire workforces on a new platform -- become onerous.
Perhaps its not surprising, then, that some of the biggest winners of the past four years have been SaaS players. An ETF that follows the sector -- PowerShares Dynamic Software ETF (NYSEMKT: PSJ) -- has vastly outperformed the S&P 500 index.
PSJ Total Return Price data by YCharts
At one point, it truly seemed that if an SaaS company went public, it meant big gains for investors.
Consolidation is coming
But in the evolution of any business model, shifts occur. That's what I believe will soon start happening within SaaS.
Think of it from the perspective of a chief information or operating officer: You've got all of these different SaaS tools, which are great. But with each passing year, you're adding new ones -- one to monitor security, another to make sure your apps are working as they should, a third to run your website. It's enough to make your head spin.
That's why I think there will soon be consolidation within the sphere. While a CIO could go out and get the best tool for each specific need her company has, I suspect that won't be the standard approach. Instead, the SaaS company that can provide a broad enough umbrella, with "good-enough" services will be the ultimate winner.
The simplification of dealing with a single platform, a single customer-service representative, and a single monthly billing will -- I suspect -- be enough to outweigh any efforts to optimize each individual software code.
Datadog is looking like a long-term winner
That's one reason I'm very bullish on Datadog. The company has tools that can do a wide range of tasks, including:
Infrastructure monitoring
Application performance management (APM)
Log management
User experience management
During the most recent earnings call, management also announced it had released a security monitoring tool -- essentially signaling that it would soon include cybersecurity under its umbrella of tools.
This wide umbrella is paramount only because the company is growing so fast. Datadog isn't just creating tools in an attempt to lure new customers -- it is upselling existing ones in an effort to get them to dump their single-use SaaS providers.
In essence, Datadog is transitioning from an SaaS provider to a PaaS (platform-as-a-service) provider, where users can choose from several software solutions.
The results over the past three years speak for themselves.
METRIC 2017 2018 2019 GROWTH RATE
Revenue $101 million $198 million $363 million 90%
Total customers 5,400 7,700 10,500 39%
Customers with $100K+ ARR 240 453 858 89%
Customers with $1M+ ARR 12 29 50 104%
Data source: SEC filings. ARR = annual recurring revenue. Growth rate = Compounded annual growth rate, or CAGR.
That's stellar growth. One reason for it: Customers not only stick with Datadog for the long haul, they upgrade to include more tools over time. The proof: The company's dollar-based net retention rate has been above 130% for 10 consecutive quarters.
By filtering out the effect of new customers, this metric tells us that existing customers increase their spending by at least 30% every year with Datadog.
That's astounding. It's also what I believe will continue to happen with companies that have enough "good-enough" SaaS tools under one umbrella.
What I'm doing
I already own Datadog shares in my family's portfolio, but given the trends that I see emerging, I will be adding to our position as soon as Motley Fool trading rules apply.
If you're interested in fast-growing cloud companies -- and have the stomach for the volatility that can accompany richly valued stocks like Datadog -- you should consider doing the same.
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 December 1, 2019
Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool's board of directors. Brian Stoffel owns shares of Datadog. The Motley Fool owns shares of and recommends Datadog, Microsoft, and Salesforce.com 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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I suspect Datadog (NASDAQ: DDOG) will be one of them. PSJ Total Return Price data by YCharts At one point, it truly seemed that if an SaaS company went public, it meant big gains for investors. Datadog isn't just creating tools in an attempt to lure new customers -- it is upselling existing ones in an effort to get them to dump their single-use SaaS providers.
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I suspect Datadog (NASDAQ: DDOG) will be one of them. Optionality: When an entire workforce is subscribed to a cloud software solution, it's vastly easier to upsell management on new tools within that platform. Revenue $101 million $198 million $363 million 90% Total customers 5,400 7,700 10,500 39% Customers with $100K+ ARR 240 453 858 89% Customers with $1M+ ARR 12 29 50 104% Data source: SEC filings.
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I suspect Datadog (NASDAQ: DDOG) will be one of them. But over the past five years, few publicly traded companies have seen their stocks skyrocket quite like SaaS players. The company has tools that can do a wide range of tasks, including: Infrastructure monitoring Application performance management (APM) Log management User experience management During the most recent earnings call, management also announced it had released a security monitoring tool -- essentially signaling that it would soon include cybersecurity under its umbrella of tools.
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I suspect Datadog (NASDAQ: DDOG) will be one of them. Optionality: When an entire workforce is subscribed to a cloud software solution, it's vastly easier to upsell management on new tools within that platform. One reason for it: Customers not only stick with Datadog for the long haul, they upgrade to include more tools over time.
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b805246f-7e96-4041-957c-7f4f3283b90c
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719072.0
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2020-02-18 00:00:00 UTC
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Datadog Q4 Earnings: Sniffing Out New Markets
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DDOG
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https://www.nasdaq.com/articles/datadog-q4-earnings%3A-sniffing-out-new-markets-2020-02-18
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nan
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nan
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Cloud-based monitoring software specialist Datadog (NASDAQ: DDOG) reported earnings last Thursday evening. The company crushed Wall Street's estimates and management's guidance, then set up new targets significantly ahead of current analyst projections. Here's a closer look at Datadog's results.
Datadog's fourth-quarter results by the numbers
METRIC
Q4 2019
Q4 2018
CHANGE
ANALYST CONSENSUS
Revenue
$114 million
$61.6 million
84%
$102 million
GAAP net income (loss)
$0.89 million
($6.6 million)
N/A
N/A
Adjusted earnings (loss) per diluted share
$0.03
($0.06)
N/A
($0.14)
Data source: Datadog. GAAP = generally accepted accounting principles.
The reported results compared favorably to Datadog's official guidance, which called for an adjusted net loss of roughly $0.02 per share on top-line sales near $102 million.
The company closed the fourth quarter with 858 customers, whose annualized revenue run rates added up to at least $100,000. That's up from 727 large customers in the third quarter and 453 accounts in the year-ago period. New customers accounted for roughly 40% of Datadog's full-year revenue growth. Larger contracts with existing clients explained the rest of that top-line expansion. By the end of the fourth quarter, approximately 60% of Datadog's clients had bundled two or more of the company's cloud-based monitoring services.
Building the future, one monitoring service at a time
Datadog launched several new monitoring systems in 2019, including new tools for network monitoring hitting the market in the third quarter followed by security analytics in November. These launches were a part of a broader vision, where Datadog's management hopes to expand its operations into new target markets.
"We envision a future where silos continue to break down beyond [development] and [operations] and extended security teams," said CEO Olivier Pomel in the fourth-quarter earnings call. "We believe we have a very significant opportunity to further expand our product portfolio and increase our wallet share with customers. We are a product-driven company and investing in innovation is a core part of our business strategy."
Image source: Getty Images.
What's next for Datadog?
Looking ahead, Datadog expects first-quarter revenue to rise by roughly 69% year over year, landing near $118 million. The company should post an adjusted net loss of $0.02 per share. Your average analyst had been expecting a larger loss and lower revenue. Management also sketched out Street-stumping full-year guidance targets, including a net loss in the neighborhood of $0.05 per share and revenue near $540 million.
Datadog's stock fell 3% on the news despite a strong report and bullish analyst responses. That's life in the fast lane sometimes. As a high-octane growth stock in the red-hot cloud computing sector, Datadog is sometimes held to a higher standard than other stocks. It's not always enough to beat analyst estimates -- sometimes the surprise had to be even larger in order to support the company's skyrocketing 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 December 1, 2019
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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Cloud-based monitoring software specialist Datadog (NASDAQ: DDOG) reported earnings last Thursday evening. The company crushed Wall Street's estimates and management's guidance, then set up new targets significantly ahead of current analyst projections. The reported results compared favorably to Datadog's official guidance, which called for an adjusted net loss of roughly $0.02 per share on top-line sales near $102 million.
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Cloud-based monitoring software specialist Datadog (NASDAQ: DDOG) reported earnings last Thursday evening. Revenue $114 million $61.6 million 84% $102 million GAAP net income (loss) $0.89 million ($6.6 million) The reported results compared favorably to Datadog's official guidance, which called for an adjusted net loss of roughly $0.02 per share on top-line sales near $102 million.
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Cloud-based monitoring software specialist Datadog (NASDAQ: DDOG) reported earnings last Thursday evening. Revenue $114 million $61.6 million 84% $102 million GAAP net income (loss) $0.89 million ($6.6 million) The reported results compared favorably to Datadog's official guidance, which called for an adjusted net loss of roughly $0.02 per share on top-line sales near $102 million.
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Cloud-based monitoring software specialist Datadog (NASDAQ: DDOG) reported earnings last Thursday evening. The reported results compared favorably to Datadog's official guidance, which called for an adjusted net loss of roughly $0.02 per share on top-line sales near $102 million. New customers accounted for roughly 40% of Datadog's full-year revenue growth.
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eb4d43fb-9621-4583-bcbc-786f61a39f8f
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719073.0
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2020-02-09 00:00:00 UTC
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Where Will Datadog Be in 5 Years?
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DDOG
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https://www.nasdaq.com/articles/where-will-datadog-be-in-5-years-2020-02-09
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nan
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nan
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Datadog (NASDAQ: DDOG) was one of 2019's most successful IPOs. Shares were priced at $27 but ended their first day of trading at over $37 per share. Today the stock is up over 20% from where it closed that first day, and up over 40% from where the IPO priced. Considering the company's third-quarter 2019 revenue grew 88% year over year, it's easy to understand why Wall Street loves this company.
Investing is always a forward-looking activity. And looking five years into Datadog's future, business should still be booming.
Image source: Datadog.
First, a look back
Datadog's full-year 2019 revenue is expected to come in at $350 million to $352 million -- good for 77% to 80% growth over 2018. This mind-blowing growth demonstrates how important its product is. Companies these days use many cloud products, from cloud computing services like Amazon's AWS, to communication apps like Slack. The diversity makes enterprise technology complicated, but Datadog, calling itself "cloud agnostic," integrates everything to provide a centralized real-time monitoring platform.
Before it went public, Datadog operated at a smaller loss than it does right now, and was even profitable some quarters. But in the year leading up to its IPO, expenses from research and development outpaced revenue growth, as did sales and marketing expenses. Although this spending makes the company unprofitable, we'll see why it's actually money well spent.
Image source: Getty Images.
Now a look forward
Datadog, while currently unprofitable, isn't burning through an exorbitant amount of cash. Free cash flow in Q3 was negative $3.7 million, and negative $10 million through the first nine months of 2019. However, the proceeds from its IPO put Datadog in a well-capitalized position. The company has $771 million in cash on the balance sheet and no long-term debt. In short, Datadog can pursue its opportunities over the next five years.
According to a report by IDC, sponsored by data-storage company Seagate, 175 zetabytes of data will be created in 2025. Enterprise is expected to create 80% of that data. Not all data will be stored or tracked, but enterprise will certainly see a growing data pile needing to be addressed from a variety of angles, including what Datadog offers. So, the relevance of its service is only increasing.
Further, Datadog still has many potential enterprise customers to pursue. When it went public, only around 35% of Fortune 100 companies used Datadog, and it still has low market penetration overall. The company estimates its current addressable market at $35 billion -- roughly 100 times Datadog's revenue. Therefore, the increased spending in sales and marketing is a solid choice.
Also, Datadog is a software-as-a-service (SaaS) company. When investing in a SaaS company, it's crucial to examine the dollar-based net retention rate. This metric tracks existing customer spending. Datadog is constantly introducing new products, which boosts the dollar-based net retention rate as customers upgrade. When Datadog went public, the dollar-based net retention rate was 146% -- quite high. Not only does this demonstrate how much Datadog's customers love it, it also shows why the increased spending in research and development is another solid choice.
Competition and valuation
While Datadog obviously has a great product and opportunity, investors should consider the competition. Specifically, Splunk (NASDAQ: SPLK) recently announced a $1 billion acquisition of SignalFX -- an application-monitoring company similar to Datadog. An impressive 90 of the Fortune 100 companies are already Splunk customers. As SignalFX integrates into Splunk, those customers could just choose to use Splunk's application monitoring rather than go with Datadog.
Not winning over enough new customers, or even losing customers to the competition, would slow Datadog's revenue growth. And that would likely be devastating to Datadog's stock. It currently trades at 44 times sales -- one of the highest price-to-sales ratios out there. For comparison, Splunk trades at around 12 times sales, but its revenue is only growing 30%. The market justifies Datadog's higher valuation because of its 88% revenue growth. But if the growth rate slows significantly, Datadog's valuation would get adjusted.
That said, competition goes both ways. While investors should assess the risk of Splunk and others, Datadog could likewise introduce products to steal business away from Splunk. The company introduced 15 new products and functionalities in Q3 alone. So it's possible this company will keep punching above its weight class.
Closing thought
The stock isn't without risk, but there's reason to believe Datadog can keep growing at a very high rate. Enormous data creation will keep its product in demand. Low market penetration gives it the opportunity to keep growing. And high net-dollar revenue retention shows current customers like it enough to expand the relationship -- suggesting more companies will like Datadog if they try it.
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 December 1, 2019
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Jon Quast owns shares of Splunk. The Motley Fool owns shares of and recommends Amazon, Datadog, Slack Technologies, 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 (NASDAQ: DDOG) was one of 2019's most successful IPOs. The diversity makes enterprise technology complicated, but Datadog, calling itself "cloud agnostic," integrates everything to provide a centralized real-time monitoring platform. Specifically, Splunk (NASDAQ: SPLK) recently announced a $1 billion acquisition of SignalFX -- an application-monitoring company similar to Datadog.
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Datadog (NASDAQ: DDOG) was one of 2019's most successful IPOs. But in the year leading up to its IPO, expenses from research and development outpaced revenue growth, as did sales and marketing expenses. Not only does this demonstrate how much Datadog's customers love it, it also shows why the increased spending in research and development is another solid choice.
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Datadog (NASDAQ: DDOG) was one of 2019's most successful IPOs. The company estimates its current addressable market at $35 billion -- roughly 100 times Datadog's revenue. Not winning over enough new customers, or even losing customers to the competition, would slow Datadog's revenue growth.
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Datadog (NASDAQ: DDOG) was one of 2019's most successful IPOs. Not winning over enough new customers, or even losing customers to the competition, would slow Datadog's revenue growth. For comparison, Splunk trades at around 12 times sales, but its revenue is only growing 30%.
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42fc4697-0479-4ea8-bd7a-47de4bc96396
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719074.0
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2020-01-30 00:00:00 UTC
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3 Recent IPOs to Add to Your Watchlist
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DDOG
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https://www.nasdaq.com/articles/3-recent-ipos-to-add-to-your-watchlist-2020-01-30
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IPO stocks aren't for the faint of heart.
Most new issues underperform the broad market, a sign of the "creative destruction" of free markets as losers tend to outnumber winners, but that doesn't mean that investors should steer clear of IPOs. After all, stocks that hit it big deliver huge returns for early investors. For instance, you would be a millionaire now had you dropped $1,000 on Home Depot stock at its 1981 IPO.
The last two years have seen a bevy of new stocks hit the market, including a number of "unicorns" (start-ups with billion-dollar valuations). This has given investors plenty of options if they're looking for new stocks to follow. Keep reading to see why IPO investors may want to add Pinterest (NYSE: PINS), Luckin Coffee (NASDAQ: LK), and DataDog (NASDAQ: DDOG) to their watchlist.
Image source: Getty Images.
A sort-of social media company
Though Pinterest functions in many ways like a social media enterprise with people sharing virtual pin-boards and the company reporting similar metrics as other social networks, Pinterest has long maintained that it is not a social media company. CEO Ben Silbermann has argued that people come to Pinterest to work on themselves rather than connect with others.
In other words, Pinterest is unique in the digital world but is still able to generate the same competitive advantages that other social networks can, such as network effects and switching costs. Pinterest is growing quickly. In its most recent quarter, revenue jumped 47% to $280 million on 28% growth in monthly active users, which reached 322 million. The company has also turned profitable on an adjusted basis, posting a profit of $6 million in the third quarter, and management raised guidance in its last two reports. Pinterest is on track to generate between $1.100 billion and $1.115 billion in revenue for 2019.
Pinterest has a long runway for monetizing its user base, as it was only selling ads in seven markets in 2018, and its revenue per user is still significantly lower than some of its peers. It also provides special value to advertisers since many users come to the site with an intent to purchase.
After debuting at $19 per share, Pinterest is only trading near $23 as of this writing, a sign that the market may be overlooking the opportunity in this stock. Over the long term, Pinterest could be a big winner if it can successfully tap the ad market.
A coffee chain growing like a weed
Luckin Coffee opened its first location in December 2017. Today, the company is worth $10 billion, making it the world's second most valuable publicly-traded coffee business, behind Starbucks but ahead of Dunkin'. The Chinese company is targeting a huge opportunity in the world's second-biggest economy, a country with over a billion people, where the average Chinese person drinks just a few cups of coffee a day. Luckin has grown rapidly by focusing on pick-up and delivery rather than the cafe experience and eat-in customers the way Starbucks has.
Revenue jumped a whopping 558% in its most recent quarter to $209 million as Luckin's total store count tripled to 3,680. By the end of 2019, it had reached 4,500 locations, topping Starbucks as the largest coffee chain in the country. The company isn't yet profitable, but its profitability has been improving as it reported a store-level operating profit margin of 12.5%. Its model also seems to be resonating with Chinese consumers as its stores are becoming more efficient and demand has supported its rapid expansion. Meanwhile, Starbucks has imitated Luckin's delivery model with a partnership with Alibaba.
While Luckin's meteoric growth is bound to slow, the company has a long runway ahead of it as coffee truly goes mainstream in China.
Every Datadog has its day
A review of recent IPOs wouldn't be complete without a look at a cloud computing stock, and Datadog, which hit the public markets this past September, fits the bill. Datadog's primary service is giving real-time updates to its clients' technology stacks, keeping them abreast of any issue that may arise across applications or infrastructure and alerting them. It's the kind of platform that is becoming ever more necessary in today's tech-dependent world, and the company sees itself as the leading monitoring and analytics platform.
In its only earnings report as a publicly-traded company, Datadog showed off 88% year-over-year revenue growth to $96 million. There were other promising signs for long-term growth, including the number of customers with annual recurring revenue of more than $100,000 nearly doubling to 727. The company also posted break-even adjusted profits for the quarter, something other cloud stocks have struggled to do, and Datadog said it had dollar-based net retention of more than 140% in its S-1 filing, a sign it's doing an excellent job of retaining customers and scaling up their business.
Like other SaaS stocks, Datadog is trading at a steep premium with a price-to-sales ratio of 40, but that shouldn't be surprising considering its top line will nearly double in 2019 (after doing the same the previous year). With its niche leadership in a fast-growing industry and strong fundamentals, Datadog could certainly be one of the big winners in cloud computing over the coming years.
10 stocks we like better than Pinterest
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 Pinterest 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 December 1, 2019
Jeremy Bowman owns shares of Starbucks. The Motley Fool owns shares of and recommends Datadog, Pinterest, and Starbucks. The Motley Fool owns shares of Luckin Coffee Inc. The Motley Fool recommends Dunkin' Brands Group and Home Depot and recommends the following options: short February 2020 $205 calls on Home Depot and long January 2021 $120 calls on Home Depot. 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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Keep reading to see why IPO investors may want to add Pinterest (NYSE: PINS), Luckin Coffee (NASDAQ: LK), and DataDog (NASDAQ: DDOG) to their watchlist. Datadog's primary service is giving real-time updates to its clients' technology stacks, keeping them abreast of any issue that may arise across applications or infrastructure and alerting them. The company also posted break-even adjusted profits for the quarter, something other cloud stocks have struggled to do, and Datadog said it had dollar-based net retention of more than 140% in its S-1 filing, a sign it's doing an excellent job of retaining customers and scaling up their business.
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Keep reading to see why IPO investors may want to add Pinterest (NYSE: PINS), Luckin Coffee (NASDAQ: LK), and DataDog (NASDAQ: DDOG) to their watchlist. In its most recent quarter, revenue jumped 47% to $280 million on 28% growth in monthly active users, which reached 322 million. The Motley Fool owns shares of and recommends Datadog, Pinterest, and Starbucks.
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Keep reading to see why IPO investors may want to add Pinterest (NYSE: PINS), Luckin Coffee (NASDAQ: LK), and DataDog (NASDAQ: DDOG) to their watchlist. A sort-of social media company Though Pinterest functions in many ways like a social media enterprise with people sharing virtual pin-boards and the company reporting similar metrics as other social networks, Pinterest has long maintained that it is not a social media company. Every Datadog has its day A review of recent IPOs wouldn't be complete without a look at a cloud computing stock, and Datadog, which hit the public markets this past September, fits the bill.
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Keep reading to see why IPO investors may want to add Pinterest (NYSE: PINS), Luckin Coffee (NASDAQ: LK), and DataDog (NASDAQ: DDOG) to their watchlist. A coffee chain growing like a weed Luckin Coffee opened its first location in December 2017. * David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Pinterest wasn't one of them!
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719075.0
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2020-01-29 00:00:00 UTC
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Don't Count Netflix Out Just Yet
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DDOG
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https://www.nasdaq.com/articles/dont-count-netflix-out-just-yet-2020-01-29
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In this week's episode of Motley Fool Money, Fool contributors Jason Moser, Ron Gross, and Andy Cross hit on some of the week's biggest business news. Intel's (NASDAQ: INTC) market cap passed the $300 billion mark on a good report. Netflix (NASDAQ: NFLX) added some 9 million subscribers this quarter, despite the competition. Slowing birth rates affected Procter & Gamble (NYSE: PG) more than you might expect. Plus updates from Comcast (NASDAQ: CMCSA), Atlassian (NASDAQ: TEAM), IBM (NYSE: IBM), Intuitive Surgical (NASDAQ: ISRG), and American Express (NYSE: AXP), some stocks on the radar, and more.
And Chris Hill talks with sports business expert Andrew Brandt about the NFL's relationship with sports betting, the MBA cheating scandal, and, of course, who's going to win the Super Bowl this year. Tune in to hear 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 Netflix
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 Netflix 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 December 1, 2019
This video was recorded on Jan. 24, 2020.
Chris Hill: We begin with a big company hitting a big number. Intel's market cap crossed the $300 billion mark on Friday after Intel shares rose nearly 10% on a strong fourth quarter report. You tell me, Andy, how good was this?
Andy Cross: Yeah, really nice quarter from the giant chipmaker. Record sales, they were up 8% to more than $20 billion. That was $1 billion ahead of their own guidance. Earnings per share was up 9%. They increased the dividend to up by 5% to $1.32. Now, operating margins were a little ahead of estimates. What's really driving the Intel strength is the data center business. The volumes were up 12% for that business. And the price for the chips were up 5%. And now, the data center revenues make up half of the business. So, the data center growth. As we use more and more need for data centers and the explosion of Internet of Things and all the mobile usage, data centers is big growth for Intel and has done a really nice job getting market share in that space.
Ron Gross: Back in my day, semiconductors were always these chips, they weren't that exciting because it basically became a commodity business, right? And everyone could make them, and everyone had the ability to either compete on price or not. Is the innovation driving this big growth wave right now?
Cross: Yeah, across when you look at Intel, AMD, Nvidia, there's still price competition, lots of competition out there. But really, the innovation, when you think about all the demand for all the products that require chips and semiconductors -- I mean, the Internet of Things, the Mobileye acquisition by Intel has done really well from them, still memory chips. The PC, the basic PC business, is relatively flat. It's nice, they can maintain some market share. Maybe not as exciting. Really, the growth is in the bigger enterprise data space, which is fueling the growth for Intel in particular.
Jason Moser: Yeah, I mean, as you see more and more this sort of immersive technology future that we jump into, 3D sensing, stuff like that, I mean, I think a lot of this technology, it becomes more specialized. So, to your point, back in your day, when it was --
Gross: It's still my day, by the way.
Moser: -- all just sort of cookie cutter at all did the same stuff, I mean, now I think you're seeing more specialization there. I think Lumentum is a great example. We talked about that before, and that VSCEL technology for AR, VR, and 3D sensing and whatnot.
Cross: That said, Intel, $300 billion company. All the earnings, they plow back into dividends and share buybacks. The growth is still on the single-digits, so you're not lighting the world on fire here. A lot more growth in some of the more exciting chip players like Nvidia. But pretty stable, and the stock's done really well in the past couple years here.
Hill: Well, and you mentioned AMD. I mean, there was a stretch time where AMD was barely surviving against Intel. And you look, at least from a stock standpoint, AMD has been a much better performer recently.
Cross: I think that speaks a lot of the market opportunity in just the chip business. If you are willing to innovate and change your business a little bit and go more on that side of the exciting chip business, there's some growth there, and it's showing in the stock prices for the chip players.
Gross: I feel like Intel's the kind of company where nobody's sure if they actually own the stock or not. You've got to go back and check your statements. "Oh, I do own some of that."
Cross: That's pretty good. The stock's up like 80% and beating the market over the last five years.
Gross: Not bad.
Hill: Shares of Comcast down a bit this week despite the fact that Comcast's fourth quarter profits and revenue both came in higher than expected. What's going on here, Ron. I've seen these reports of some analysts on Wall Street being worried about how much money Comcast is investing. It doesn't seem like they're looking to invest an unreasonable amount of money in 2020.
Gross: Well, it is certainly a very capital-intensive business. Capital expenditures decreased 10%, however, to $6.9 billion over the year. So, it is a capital-intensive business, but I don't think that's what's going on here. I think what we've seen is, growth in broadband customers was good, but the company lost more cable TV subscribers than people were expecting. Which, actually, I don't think is that surprising in the world we live in. Lost 149,000 cable customers, but added 440,000 high-speed internet customers. That's just the way the world is moving. Streaming and broadband the new cable, if you will. And they're doing a good job of recognizing that. Not a high-growth business net net at this point. Consolidated revenue only up 2% with NBC Universal actually down almost 3%. I don't know if anyone actually saw the movie Cats, but based on these results, I'm sitting thinking the answer is no. On the other hand, cable communications was up about 3%, so they kind of offset that. That led to an earnings per share increase of 10%. So, not too bad at all. Allowed them to actually increase their dividend by 10%.
Hill: We're starting to get more details on Peacock, which is their video streaming service. It seems like they are going to leverage the content that they have, including the Summer Olympics, which they've already sold more than a billion dollars' worth of ads against, rather than go the route of Disney+, Apple+, and really invest tens of billions of dollars in original programming.
Gross: Yeah, I mean, they're holding out really big hope that Peacock is going to be a big deal for them. I think it remains to be seen. The pricing is interesting, everywhere from zero to if you want to pay up for the no-advertising model. We'll see what happens. Certainly, the content is there. As you said, the capex is big in this industry. I misspoke a little bit, $10 billion was their total capex; $6.9 billion was just for their cable communications sector, obviously the more capital-intensive part of this business.
Hill: Netflix added nearly 9 million net global subscribers in the fourth quarter. Shares of Netflix up a bit this week. And, Jason, Reed Hastings and his team don't appear to be worried about Peacock or Disney+ or any competition.
Moser: I tell you, quarter in and quarter out, that guy just pastes a smile on his face. He's like, "Hey, we welcome the competition! This is a great space to be in, join us!" I mean, who knows how genuine that is. I think he's just the smartest guy in the room, personally. But I think, if you look at Netflix, I think down the road, competition may undermine its pricing power at some point, but you can't discount the head start that they have in this space, and this massive user base that they've built up. I mean, subscribers of 160 million plus at this point. And so, I think, yeah, the big challenge for them is to continue to keep a focus off of content costs, because content costs are certainly going up. But we know it's a business that can handle that. They are tapping the debt markets when they need to. Thankfully, interest rates are low. They don't have to really worry about that. I think maybe the market becomes a little bit more concerned with content costs if or when we see the international growth start slowing down, because clearly, U.S. growth is slowing down. I mean, the U.S. market here is very saturated. And it does look like forecasts for subscribers in this quarter were a bit lower than what the market was expecting and what the company lobbed up last year. So, maybe we start to see some scrutiny there if the subscriber numbers start to slow down. But for now, they continue just to churn out a lot of content that just attracts a very broad cross-section of viewers across the world. And clearly, the market is giving it some credit.
Cross: Well, you have also a company with a market cap of, what, $150 billion, versus Comcast's $200 billion. You have a company that, to Jason's point, has a first mover advantage. I think, really, on the international front, that's obviously where the growth is, but there's some real value in all the content programming they're doing. We see it here, the four of us around the table here, in the U.S. mostly. But internationally, they really have a nice advantage there that I think going forward will be a huge boon for the subscriber base, and hopefully, obviously, for the stock as well.
Moser: I think the biggest mistake, I just see it quarter in and quarter out, is this assumption that it's a zero-sum game. It's just not. I mean, it's not Netflix wins and Disney loses. I mean, we're seeing a rising tide in this market. We're going to see some winners. Netflix is going to be one of them, and Disney's probably going to be another one.
Hill: Real quick, right before we came in the studio, saw that David Einhorn, the hedge fund manager, is increasing his short position on Netflix. Really? He looked out across the entire universe of stocks and said, "That's the company I want to bet against"?
Moser: I think that was my initial reaction, too. I respect him as an investor and the things that he's done -- I mean, to me, I put this in the class of Tesla, Netflix, these are cult stocks you just don't want to be shorting. I don't know why you would short that. I mean, his concerns over debt load, cash burn, future content obligations are all correct. I mean, technically that does make sense. But I think his mistake is this perception that it's an earnings story. This is not an earnings story. So, the market is looking at this company today as a subscriber story. And as long as they keep adding subscribers, I just don't think that is a very wise short position to be taking.
Hill: Good week for Atlassian. Second quarter profits and revenue came in higher than expected for the Australian software company. Shares of Atlassian hitting an all-time high on Friday.
Cross: A really nice quarter. Still, this company continues to deliver really these collaborative software tools, JIRA, Trello now crossed 50 million registered users. Sales were up 37% for the quarter. The subscription sales were up 50%. Really nice growth in the earnings per share. It generates a lot of actually healthy cash flow and free cash flow. So, they continue to innovate their marketplace, which is where developers can go and place apps and buy apps. Crossed $1 billion in lifetime sales for the first time. That's been around since 2012. The guidance continues to be in the sales level around like the 30% level. Scott Farquhar and Michael Cannon-Brookes, who are the co-founders and own a large chunk of stock, continue to build this company for the long term. And the stock's obviously reacted not just positively this week, but over the last couple years, and the stock's up more than 300%, 400%.
Hill: IBM's fourth quarter revenue finally went in the right direction for the first time in over a year. IBM had sales growth. It wasn't much growth, Ron, but a win's a win.
Gross: Up 3%, adjusting for divested businesses and currency. As you noted, broke a streak of five consecutive quarterly declines. Listen, it's all about the cloud, and they had to acquire their way to that revenue growth. Red Hat was acquired third quarter of last year. That business was up 24%. The technology services business, which accounts for 30% of revenue, down almost 5%. So, there's really the story of the old business and the new. Company hanging its hat on the cloud. Actually, guidance was pretty strong. They're thinking that this growth will continue. Earnings per share, when all was said and done, was actually down slightly. But the stock's only trading 10X, 11X times earnings. If you think this Red Hat cloud business is sustainable and will continue, the stock's cheap. Based on the history of this company and the ups and the downs, I'm in wait-and-see mode right now.
Hill: See, I'm having flashbacks to 2011 and 2012, when we would talk about a big company in the tech space, and you would say stuff like that. Only back then, the company was Microsoft. And it took a new CEO in Satya Nadella, coming in in 2014. Ginni Rometty has been the CEO of IBM since 2011. And the stock just hasn't done well under her leadership. I don't own IBM, but I look at what happened with Microsoft and I think, boy, maybe lightning could strike twice with a new CEO.
Gross: Perhaps. Or, do you give her credit for recognizing that this business was going nowhere, going out and spending a ton of money on Red Hat? $34 billion, that could have been a big flop. So far, it looks like it's not. So, maybe she gets credit for turning this business. Only time will tell.
Hill: Fourth quarter profits for Intuitive Surgical rose 22%, but was Wall Street impressed with that, Jason? No. Shares down on Friday after this report. What's going on here?
Moser: You keep setting that bar high, I mean, eventually, you just can't do anything right. But, I mean, I think the bigger picture investment case for Intuitive Surgical is very much intact. I think the market is reacting, and appropriately so, to some real competitive factors that I think are going to keep management's attention here in the near future. But if we look at just the numbers, it just remains a very impressive business. I mean, global procedure growth was 19%. In the U.S., it was 18%. They placed 336 new Da Vinci systems, bringing their installed base to almost 5,600. Total recurring revenue in the quarter was closing in on $900 million, up 24%. And that's 70% to 75% of the business, is that recurring revenue. So, there's a lot of certainty and a lot of clarity in the business and the model and the profitability. So, I think the stock is typically priced appropriately. But they did mention in the call, they talked about some elongated negotiation timelines in regard to getting those machines into new hospitals. And it all comes back to competitive pressures. I mean, they are the leader in the robotic surgery space, but they're not the only one that does it. There's a lot of very well-capitalized companies out there that do the same thing. And we're seeing some new ideas and products coming down the pike here. And so, Intuitive is going to have to answer to that. And that's going to cause some margin pressure, I think, this year, and some questions as to profitability. But still, very, very strong business.
Hill: I'm not saying they don't have competition, but given the switching costs that a hospital system would have to go through, doesn't that give Intuitive Surgical a little bit of a moat?
Moser: I think absolutely, it does. And that's a very good point to make. And that's why that 5,600 installed base is such a great advantage. Kind of like Netflix getting that massive base of subscribers. I mean, da Vinci and Intuitive, they really have a massive base of users out there. The switching costs are extremely high, particularly when you consider all that goes into training the physicians on how to use these machines. And to that point, their IRIS augmented reality system entered clinical use this past quarter and is getting a lot of favorable reviews from physicians with boots-on-the-ground experience there.
Gross: I myself have had the opportunity to use a da Vinci machine, not on a patient, but in an operating room. It is unbelievable. But, the amount of training that is required to be good at it and to use it on an actual human being is really quite impressive. It's an impressive machine.
Moser: Were you the guy that stitched up that grape? Was that you?
Gross: [laughs] That was not me, but that's cool.
Hill: Shares of American Express moving higher on Friday after fourth quarter profits and revenue came in a little higher than expected. They didn't crush this quarter, Andy, but this does cap a really strong year for them.
Cross: It does, Chris. And the stock's at an all-time high. I mean, it's been a really nice kind of resurgence here, for a company that many of us just thought just has lost to the competition. Bank of America, Capital One, just other companies that may have been a little bit more progressive than American Express has. But clearly, a very nice quarter. Revenues up 9%. It's the 10th consecutive quarter they've seen revenues grow more than 8% when you account for the foreign exchange situation. Earnings per share up 17%. They added 11.5 million proprietary cards during 2019. 70% now of new card members are choosing the fee-based options. So, they continue to have that stability of earnings. Global consumer sales were up 10%. Global commercial services sales were up 7%. The merchant network business also saw some growth, a little bit. Both of those are very profitable. So, you have a very steady business. Sells at 15X earnings. Very nice profit margin. The stock's done fairly well over the last couple years. And like I said, now sits at an all-time high. Berkshire Hathaway owns 152 million shares, or 18.5%. So, clearly done very nice for Berkshire shareholders as well.
Hill: Procter & Gamble's second quarter revenue was lower than expected. Ron, this is a big company, ton of consumer brands that we all recognize. Is the global birth rate slowing down really why P&G's stock was flat? I mean, yes, they sell diapers. They sell a lot of other stuff, too.
Gross: That really is the reason that sales growth was rather anemic, only up about 5%. Weakness in baby products because of the global birth rate. Also saw some weakness in the feminine care segment as well. But there was some strength here, specifically the healthcare segment, skin and personal care categories were both strong. You did see operating margins widen. Earnings per share actually up 16%. Not a bad quarter at all. Stock has performed really well over the last year.
Hill: Yeah, this is one of those businesses, it's not the sexiest thing in the world, but if you just go to the Procter & Gamble website and just look at the brands, there are so many that are already in your house.
Gross: Yeah, for sure. And many of them are billion-dollar brands. Sometimes these companies accumulate too many, and then they have to start divesting them. But, the company is doing well. They were able to raise guidance. Shares around 24X, which is pretty much in line with Colgate and Kimberly Clark and folks like that. The stock and the company doing a nice job.
Hill: We are days away from Super Bowl 54. To help us dig into the business of pro football and more, we bring in Andrew Brandt. He's the executive director at the Moorad Center for the Study of Sports Law at Villanova University. He's also a columnist at the Monday Morning Quarterback, host of the Business of Sports podcast. Andrew, do you ever sleep? You've got a lot going on!
Andrew Brandt: [laughs] Yeah, good to be with you, Chris. I always say this to people, because they're always figuring out, "What should we call you? You've got all these titles." And I say, "Listen, I have a lot of jobs so I don't have to have a real one." That's really what I do. I left the Packers almost 10 years ago. I don't say this to be arrogant, I just haven't had a nine to five or nine to eight job since. But I've kind of pieced together a lot of deals with academia and media, trying to sort of peel back for people what goes on behind the curtain. And luckily, I've been able to do that.
Hill: Well, let's peel back the curtain on the NFL. When you look broadly -- we'll get more specific in a minute, but broadly -- how is business for the NFL these days?
Brandt: Well, it's the same answer every year. It's booming. The revenues keep going up. And I think the primary driver of revenue always, probably since the start of the turn of this 2000s century, is media. And media includes broadcast, which it always has included, but now we have other forms of media with streaming on the horizon in a big way. And those deals continue to look really well for the future because ratings are always high. And ratings seem to be at a peak this year, where Fox and ESPN and CBS, all setting records. For games, you can pick your category. For top demographics, for top games, for most people watched, for most people tuning in at any time of the game, it's just all up across the board when media is down everywhere else because consumers have so many options. So, just on that metric alone, business seems to be booming.
Hill: I'm sure if I were to ask someone who works in the front offices at the NFL why ratings are up this past year versus the previous year, I'm sure they would give me a line about, "Well, the game is stronger than ever, and it's all about the players," and that sort of thing. As you were talking, I couldn't help but think about the rise of fantasy football. To what extent is that attributable to ratings going up on TV?
Brandt: Well, I'm going to take it a step further, because this is the first year where we've had not fantasy football only, but real gambling on football, legalized. Supreme Court decision, of course, in 2018. And now, we have legalized gambling in 15 states; many, many more to come. And that increases engagement.
But I think fantasy football has really done a service to the NFL, maybe more than any other sport, where you have this incredible fan engagement at an early age. And they're getting engaged with the sport through their fantasy teams, whether it's season-long fantasy or daily fantasy. And that's bringing them up to adulthood, and then through adulthood. I'm sure you know, I know everyone listening knows, people not only in one or two weeks, but in multiple dozens even, where it's just become such a part of their life. Yeah, that engagement is tremendous for the NFL and has extended now to real gambling even beyond fantasy.
Hill: You and I talked on the show back in 2018, when the U.S. Supreme Court had just cleared the way for states to legalize sports betting, and one of the things you said at the time was that out of the four major pro sports in the U.S., the NBA had taken the lead in terms of embracing this legal landscape, and the NFL had not. That was a year and a half ago. Is the NFL starting to make its peace with gambling?
Brandt: Chris, they were brought into it kicking and screaming, as opposed to the NBA, where I think we talked back in 2015, where Adam Silver had just written an unsolicited op ed in The New York Times saying we need to bring legalized gambling out into light and keep it out of the shadows and make it real. And no one ever thought this would happen at the court level, because New Jersey fought to have this done for years and years and lost at every level. But lo and behold, May 14th, 2018, the Supreme Court rules for New Jersey, opening the floodgates to legalize sports gambling around the country, and taking away the monopoly that Nevada had. So, now there are no pretenses.
But, the NFL -- I've said this many times -- they've been very hypocritical. You know, it was only five years ago they shut down a fantasy football convention with Tony Romo and so many other players because it was in Vegas. Two years ago, they put a team in Vegas, which will start playing in September. Yet, the draft will be there in three months in April, as they kick off Las Vegas. So, they established a franchise before the Supreme Court decision in the mecca of gambling in this country. Their mixed messages have really sort of dissolved now. They're all in. Caesars Palace is the official casino sponsor of the NFL. They have training camps every year for different teams at the Greenbrier Resort in West Virginia, whose primary feature is an ornate casino. So, I don't think there's no pretense anymore. You have owners like Jerry Jones and Robert Kraft who are early investors in DraftKings. You walk into AT&T Stadium in Dallas, you walk through the DraftKings Fantasy Lounge. There's no pretense anymore. The lines have now not even blurred.
Hill: Well, you mentioned Las Vegas. Of course, Las Vegas is still the epicenter of gambling in the United States. But it looks like New Jersey's coming up on the outside. There was a report released this week by the New Jersey Division of Gaming. Sports books in New Jersey are closing in on that of Las Vegas in terms of being the most lucrative in the country. Is it really shaping up to be this .... I don't want to say Cold War, but is it really shaping up to be a battle of these two titans? Or do you expect other states to start to rival what's happening in Nevada and New Jersey?
Brandt: Yeah, it's going to be tough for other states, because as much as I talk about sports gambling, that's just a small slice of gambling, as people in that industry know. It's just a very small percentage of the overall handle. And when you talk about Vegas, or New Jersey, which is a distant second, you have the glitz and the glamour and the shows and the table games, and the high roller rooms. And it's so much more than the sports book. That's the added advantage these resort places have that go way beyond. Now, there's some of that in Mississippi, and there's some of that Louisiana and the offshore. But, again, those places have such an advantage.
I think the one thing that people ask all the time is, was the legalization of sports gambling good or bad for Nevada? Bad because they lost their monopoly; but good because it's made it so credible. It's no longer the bookie in the back of the barber shop. And now, sports gaming is credible, and therefore Nevada takes even on a more sort of elevated notion in this world. So, I think good and bad for them.
Hill: I've got to find a new barber shop. I don't have a book in the back of my barber shop.
Brandt: I think my dad does. [laughs]
Hill: [laughs] Let's go back to the NFL. This is something you and I have talked about in the past. It's the health issue. In the past 10, 12 months, the NFL has seen some pretty high-profile retirements from the league. Rob Gronkowski from the New England Patriots, Andrew Luck from the Indianapolis Colts, and most recently, Luke Kuechly from the Carolina Panthers. These are all star players, all under the age of 30. And even though their careers are more than double the length of the average career of the NFL player -- because I think that's somewhere still in the neighborhood of about three years -- it's still noteworthy that these are players who are not in serious decline in terms of their performance on the field, but they have made the decision from a health standpoint and from a financial standpoint, "I'm good in terms of money, I'm walking away from the game while I can still walk away from the game." And I'm curious, what if anything these retirements, and any retirements like them, tell you about the future of the NFL?
Brandt: Yeah, I think these are notable. I have a couple comments. One, you noted that they played more than twice the average career. And, they're walking with the top of the game. You mentioned three players. There's no way on God's green earth that the Colts with Luck, the Patriots with Gronkowski, and the Panthers with Kuechly were walking away from them. But, at some point, they would. At some point, it never ends well. I was with a team that walked away from Brett Farve. I mean, this happens in this sport, and it's never pretty. And they're taking the affirmative step to do it before it's done to them. I think it's news because of that. I pushed back on this notion of early retirements, as I wrote in Sports Illustrated, about, these guys had long careers. It doesn't seem like long in, again, the Tom Brady, Brett Farve, 20-year careers. But in the scheme of things in professional football, it's a long career. And they're financially secure. And they decide they're going to opt out. Now, we don't know how much of it is health and concussion and fears about CTE. That can only get inside the heads of those players. But it's not a trend, but I see this more happening -- I see players that get to 28, 29, and they say, "I'm good. I've got money. I put in a good career. We had a good run. I'm going to get out before the health gets me or the team gets me," because, as I always say, 98% of NFL players don't retire, they are retired by their employer.
Hill: Before we wrap up with your prediction on the Super Bowl, I want to switch sports on you and move to baseball for just a second, because even though it's the offseason for baseball, it is very much in the headlines with the cheating scandal around the Houston Astros, swirling around the Boston Red Sox. We've seen managers and GMs that have lost their jobs. To this point, players have not been directly punished by Major League Baseball. Do you expect that to happen at some point, if enough evidence comes forth? I guess I'm asking you to put on your league executive and your lawyer hats on and tell me where you think this is going, in terms of Major League Baseball players.
Brandt: My first reaction is surprise that it only extended to management. And if it's the scheme that Major League Baseball Commissioner Rob Manfred seemed to be to him, and to the powers that be in baseball, I just don't know why the players aren't disciplined. They were part of the scheme. They were not unwilling actors. They participated in listening for the bang of the drum that a fastball was coming. I don't get it. Because, again, I'm used to the NFL world, where not only players are disciplined; there hasn't been any regard for the status of the player that's disciplined. We've had players like Ben Roethlisberger, Tom Brady, Ezekiel Elliott, etc., disciplined heavily. So, I don't get it. I really don't. I understand the severity of the penalties for the organization, for the GM, for the coach, for the draft picks, but I just don't get it.
You're right, something more could come out to implicate the players. And then we may see player suspensions. Now, it's not players but managers, that the ripples have extended. As people know, the erstwhile coach of the Red Sox, Cora, was involved with the Astros back then. He's gone. The erstwhile coach of the Mets was involved as a player, and he's the only player mentioned. He's now gone as Mets' manager. So, I don't think we've stopped in terms of tentacles that are going to extend from this. It's a major, major scandal.
Hill: Super Bowl 54. Kansas City Chiefs with their prolific offense against the San Francisco 49ers and their great defense. The classic matchup. Where do you see this game going?
Brandt: Gosh, these are two extremely fast teams. It's really the speed that jumps out at you at this at this game. It's going to be so entertaining. As we talked about before, it's going to get boffo ratings. Gun to my head, I'm going to pick the San Francisco 49ers because of defense. I know Patrick Mahomes, and I know the wonderful offense of the Chiefs. I just don't trust their defense as much as I do the 49ers' defense. So, 49ers by a field goal, based on a superior defense.
Hill: You can read him in Sports Illustrated, you can check out the Business of Sports podcast. Andrew Brandt, always good talking to you.
Brandt: Likewise. Always a pleasure, Chris!
Hill: Before we get to the stocks on our radar, and we go to our man behind the glass, Steve Broido, who's going to hit you with a question, as he does -- it is the 20th anniversary of Steve Broido joining The Motley Fool.
[all clap]
Hill: Shout out to our man behind the glass.
Gross: Couldn't do it without him.
Hill: Here's to the next 20!
Steve Broido: Thank you!
Hill: All right, let's get to the stocks on our radar. Ron, you're up first. What are you looking at this week?
Gross: I'm trying to find something that looks cheap, and it ain't easy. So I'm going to go with Tractor Supply (NASDAQ: TSCO), TSCO. The stock has really underperformed over the last year, which is really the main reason why it looks not to be too expensive. There's a large operator of rural lifestyle retail stores in the U.S. They acquired PetSense back in 2016 as an avenue for growth. I think we'll see margin improvements going forward. Sales growth should continue. Recently announced a new CEO who was the former president of Macy's. I'll leave it to you to decide whether that's good or bad. The company has raised their dividend every year for the past eight. Only 18X forward earnings. They report earnings January 30th.
Hill: Steve, question about Tractor Supply?
Broido: Even if you are a rural lifestyle person, can't you just order your stuff on Amazon like everybody else?
Gross: That's what makes them kind of Amazon-proof, because some of this stuff is so big and so heavy that it doesn't really lend itself to online shipping.
Hill: Jason Moser, what are you looking at?
Moser: Yeah, digging more into Live Oak Bank (NASDAQ: LOB), ticker LOB. A little shameless self-promotion here, Chris, but earlier in the week, I had the opportunity to interview the president of the bank, Huntley Garriott, on Industry Focus. So check that interview, if you like. It was very fun, very enlightening. This is an interesting bank. It's based on a tech platform. They have no physical branches. They have a very strong presence in lending to SBA-type companies, small business administration loans. I found out that one of their biggest points of exposure, one of their biggest borrowers, veterinary practices, Chris. This is another way to play into my favorite market in pets! Apparently at least. Just, neat business. I want to learn a little bit more about it. Earnings came out this week and the market seemed to approve. So, going to enjoy digging more into this company.
Hill: Steve, question about Live Oak Bank?
Broido: Sure. How do you compete with somebody like Synchrony Financial or Ally, which seems to have a huge footprint?
Moser: I think that's a very good question. And really, Huntley was telling me, it all boils back down to doing something really well. They consider themselves a niche lender, focusing on businesses that other competitors out there in the space don't really know a heck of a lot about, and their technology, the data that they're able to gather makes them a better lender and a better partner over time.
Hill: Andy Cross, what's on your radar?
Cross: Digging back into the IPO space, Datadog (NASDAQ: DDOG), DDOG. Operates a really fast-growing platform that helps customers monitor their systems, especially tied to the cloud, and look for data insights. The IPO stock price was around $27. Today's around $40, $42. $13 billion market cap. Not making money. Growing exceptionally fast. Revenues growing more than 90%. It's dollar base retention rate is up to above 140%. So, its customers continue to order more and more products. The likes of The Motley Fool Amazon, Twitter, Zendesk, lots of big customers, use their services. So, obviously, very volatile. New stock to the markets. But, exciting growth opportunity. Datadog.
Hill: Steve, question about Datadog?
Broido: What's the value in having a cool name to your company? Datadog is a cool name.
Cross: Well, we work in a place called The Motley Fool, which I think is fairly cool. I'm not a cool person, Steve-O, so I can't really comment on that. But, hey, it sounds cool to me, and the symbol, DDOG, sounds good, too.
Hill: Datadog, Live Oak Bank, Tractor Supply. You got a stock you want to add to your watch list, Steve?
Broido: Jason has made a compelling argument, so I'm going to check out Live Oak Bank.
Moser: That is a wise pick on, clearly, years of experience, Steve. Good call.
Hill: Jason Moser, Ron Gross, Andy Cross, thanks for being here! That'll do it for this week's edition of Motley Fool Money. Our engineer is Steve Broido. Our producer is Mac Greer. I'm Chris Hill. Thanks for listening! We'll see you next week.
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. Andy Cross owns shares of Berkshire Hathaway (B shares), Comcast, and Netflix. Chris Hill owns shares of Amazon and Walt Disney. Jason Moser owns shares of Amazon, Apple, Intel, Twitter, and Walt Disney. Ron Gross owns shares of Amazon, Apple, Berkshire Hathaway (B shares), Microsoft, Walt Disney, and Zendesk. The Motley Fool owns shares of and recommends Amazon, Apple, Atlassian, Berkshire Hathaway (B shares), Datadog, Intuitive Surgical, Live Oak Bancshares, Microsoft, Netflix, NVIDIA, Twitter, Walt Disney, and Zendesk. The Motley Fool recommends Comcast, Lumentum Holdings, and Tractor Supply 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 $60 calls on Walt Disney, long January 2021 $85 calls on Microsoft, short April 2020 $135 calls on Walt Disney, short January 2021 $115 calls on Microsoft, and short March 2020 $225 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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Cross: Digging back into the IPO space, Datadog (NASDAQ: DDOG), DDOG. But, hey, it sounds cool to me, and the symbol, DDOG, sounds good, too. And to that point, their IRIS augmented reality system entered clinical use this past quarter and is getting a lot of favorable reviews from physicians with boots-on-the-ground experience there.
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Cross: Digging back into the IPO space, Datadog (NASDAQ: DDOG), DDOG. But, hey, it sounds cool to me, and the symbol, DDOG, sounds good, too. Plus updates from Comcast (NASDAQ: CMCSA), Atlassian (NASDAQ: TEAM), IBM (NYSE: IBM), Intuitive Surgical (NASDAQ: ISRG), and American Express (NYSE: AXP), some stocks on the radar, and more.
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Cross: Digging back into the IPO space, Datadog (NASDAQ: DDOG), DDOG. But, hey, it sounds cool to me, and the symbol, DDOG, sounds good, too. And Chris Hill talks with sports business expert Andrew Brandt about the NFL's relationship with sports betting, the MBA cheating scandal, and, of course, who's going to win the Super Bowl this year.
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Cross: Digging back into the IPO space, Datadog (NASDAQ: DDOG), DDOG. But, hey, it sounds cool to me, and the symbol, DDOG, sounds good, too. In this week's episode of Motley Fool Money, Fool contributors Jason Moser, Ron Gross, and Andy Cross hit on some of the week's biggest business news.
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2020-01-05 00:00:00 UTC
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3 Recent IPOs to Watch in 2020
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DDOG
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https://www.nasdaq.com/articles/3-recent-ipos-to-watch-in-2020-2020-01-05
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Investing in small new companies is always a gut-wrenching endeavor requiring discipline and patience -- 2019 was proof of that. In a tale of two markets, IPOs could seemingly do no wrong through the first half of the year as investors greeted them with open arms and asked few questions. The resulting inflated valuations on many of these stocks reversed course starting in the autumn, though, with many recent IPOs now back near or under their public debut pricing.
If some of these upstart firms can maintain their growth, though, now would be a good time to test the waters and make some small purchases. Three I have my eye on at the start of 2020 are Datadog (NASDAQ: DDOG), Cloudflare (NYSE: NET), and CrowdStrike (NASDAQ: CRWD).
METRIC (FIRST THREE QUARTERS OF 2019)
DATADOG
CLOUDFLARE
CROWDSTRIKE
Revenue
$249.1 million
$203.1 million
$329.3 million
YOY growth
82.6%
48.1%
94.4%
Gross profit margin
74.6%
77.7%
70.2%
YOY growth
(2.9 pp)
0.0 pp
5.7 pp
Operating expenses
$203.8 million
$235.9 million
$346.0 million
YOY growth
85.0%
35.2%
61.1%
Adjusted net income (loss)
($12.1 million)
($53.1 million)
($58.7 million)
YOY = year over year. PP = percentage point. Crowdstrike data for nine-month period ending Oct. 31, 2019. Data source: Datadog, Cloudflare, and Crowdstrike.
A big year for data analytics
With big data becoming more useful as organizations around the globe make the switch to cloud-computing based operations, data analytics firms have enjoyed resurgent growth and renewed interest from investors in the last year. This trend didn't go unnoticed by Alphabet's Google and salesforce.com, which both made big data analysis acquisitions early in 2019. In the wake of the boom, newcomer Datadog also decided to take itself public to raise some cash as it expands.
While the newly-minted stock did get hit shortly after its debut, shares have since rallied, and it is one of a select group of IPOs from the 2019 class that still trades near or above its opening price when the stock became available to the general public. That is thanks in large part not just to the company's 83% growth rate through the first three quarters of 2019 but also the fact that those results are accelerating. Third-quarter revenue notched an 88% increase, annual customer contracts valued over $100,000 grew to 727 compared with only 377 a year ago, and the company is narrowing in on adjusted profitability (when backing out non-cash expenses like stock-based compensation).
There's a clear path forward as well. Datadog recently announced well over a dozen new capabilities available on its platform, including security monitoring and network performance monitoring. It's also well capitalized to support its growth, with $761 million in cash and short-term investments on the books at the end of the third quarter. Thus, it can sustain its current rate of losses for years as the company maximizes its growth potential in the short term.
Of course, this kind of growth that's already nearing a profitable scale doesn't come cheap. Datadog trades for over 31 times sales based on full-year 2019 revenue expectations. That's the only thing that has held me back from making a purchase so far, as that sky-high valuation implies the company can sustain its momentum for quite some time. With ample competition out there, there's a decent chance Datadog loses some steam. If it does and shares take a tumble, I'm a buyer.
Image source: Getty Images.
A diversified cloud services provider
While going after big contracts has been the strategy for many new tech outfits, diversified cloud company Cloudflare has attacked the market from the other end of the spectrum. During the company's first publicearnings callin Nov. 2019, management discussed Cloudflare going after early adopters and small businesses with new products (some of them offered for free), gathering feedback, and then moving upstream from there. In an increasingly crowded field of software providers, it's a refreshingly different take -- and perhaps a smart one if results thus far can be repeated.
At the end of the third quarter, Cloudflare said it had over two million customers across its free and paid platform. As it further refines its services, it is picking up speed signing on bigger paying customers, reporting a 71% year-over-year increase in that metric. That led to a 48% increase in revenue and an improving gross profit margin of 78.9% -- increasing its full-year total and helping narrow the gap to adjusted profitability.
Those are all good things an investor wants to see in a fast-growing start-up, and results seem primed to continue rolling higher as Cloudflare releases new products and features -- from web content delivery services to security to app development. Therein lies another potential positive in Cloudflare's favor: In a world where options abound and managing digital operations is increasingly complex, simplifying things with fewer vendors makes sense for a lot of businesses. Cloudflare can check a lot of boxes for its customers.
Shares are slightly down from their opening levels when the stock began trading in September, and as of this writing, they command a valuation of about 18 times expected 2019 sales. It's still a hefty premium but not out of the question if Cloudflare's growth momentum can continue.
A fast-changing cybersecurity industry
Speaking of cybersecurity, CrowdStrike was one of the year's hottest IPOs before coming back down to earth again once investors realized triple-digit revenue growth wasn't in the cards anymore. However, the 94% growth reported so far in 2019 is nothing to balk at, nor is the at least 86% rate for the full-year period forecast by management.
Behind CrowdStrike's torrid expansion is the massive proliferation of network-connected devices, which are expected to continue growing by hundreds of millions annually over the next few years. CrowdStrike's security platform can secure those devices -- known as endpoints in industry parlance, and which cover everything from consumer products like smartphones and laptops to enterprise-grade sensors like security cameras and industrial equipment. Additionally, the company is leveraging its runaway success in securing endpoints to get into adjacent cybersecurity markets like its recently announced firewall management application and an investment fund aimed at supporting start-ups utilizing the CrowdStrike platform and security app store.
As with Cloudflare, CrowdStrike's gross profit is on the rise as it adds more customers, and operating expenses are also growing more slowly than revenue is. While net losses are still mounting for now, the company was actually free-cash-flow positive (money left over after basic operating and capital expenses are paid for) in its fiscal third quarter, running a $7 million surplus. While top-line expansion remains priority number one, this security firm's early success in turning the corner on operating in the black is promising.
Of course, just like the other two recent IPOs on this list, investors are really left with price-to-sales metrics to value shares, and based on full-year expectations, CrowdStrike's ratio of 22 still isn't cheap even after the stock backtracked from nearly $100 per share to current levels around $50. However, valuation should continue to moderate over time if it can keep even half of its recent momentum.
Datadog, Cloudflare, and CrowdStrike have all been volatile stocks from the 2019 IPO class, but they could continue to put up solid numbers in 2020. These are three stocks worth watching -- if not worth nibbling on -- in the year ahead.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Nicholas Rossolillo owns shares of Alphabet (C shares) and Salesforce.com. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Datadog, and Salesforce.com. The Motley Fool owns shares of CrowdStrike Holdings, 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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Three I have my eye on at the start of 2020 are Datadog (NASDAQ: DDOG), Cloudflare (NYSE: NET), and CrowdStrike (NASDAQ: CRWD). Third-quarter revenue notched an 88% increase, annual customer contracts valued over $100,000 grew to 727 compared with only 377 a year ago, and the company is narrowing in on adjusted profitability (when backing out non-cash expenses like stock-based compensation). Those are all good things an investor wants to see in a fast-growing start-up, and results seem primed to continue rolling higher as Cloudflare releases new products and features -- from web content delivery services to security to app development.
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Three I have my eye on at the start of 2020 are Datadog (NASDAQ: DDOG), Cloudflare (NYSE: NET), and CrowdStrike (NASDAQ: CRWD). Revenue $249.1 million $203.1 million $329.3 million YOY growth 82.6% 48.1% 94.4% Gross profit margin 74.6% 77.7% 70.2% YOY growth (2.9 pp) 0.0 pp 5.7 pp Operating expenses $203.8 million $235.9 million $346.0 million YOY growth 85.0% 35.2% 61.1% Adjusted net income (loss) ($12.1 million) ($53.1 million) ($58.7 million) YOY = year over year. Datadog trades for over 31 times sales based on full-year 2019 revenue expectations.
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Three I have my eye on at the start of 2020 are Datadog (NASDAQ: DDOG), Cloudflare (NYSE: NET), and CrowdStrike (NASDAQ: CRWD). Revenue $249.1 million $203.1 million $329.3 million YOY growth 82.6% 48.1% 94.4% Gross profit margin 74.6% 77.7% 70.2% YOY growth (2.9 pp) 0.0 pp 5.7 pp Operating expenses $203.8 million $235.9 million $346.0 million YOY growth 85.0% 35.2% 61.1% Adjusted net income (loss) ($12.1 million) ($53.1 million) ($58.7 million) YOY = year over year. Of course, just like the other two recent IPOs on this list, investors are really left with price-to-sales metrics to value shares, and based on full-year expectations, CrowdStrike's ratio of 22 still isn't cheap even after the stock backtracked from nearly $100 per share to current levels around $50.
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Three I have my eye on at the start of 2020 are Datadog (NASDAQ: DDOG), Cloudflare (NYSE: NET), and CrowdStrike (NASDAQ: CRWD). Revenue $249.1 million $203.1 million $329.3 million YOY growth 82.6% 48.1% 94.4% Gross profit margin 74.6% 77.7% 70.2% YOY growth (2.9 pp) 0.0 pp 5.7 pp Operating expenses $203.8 million $235.9 million $346.0 million YOY growth 85.0% 35.2% 61.1% Adjusted net income (loss) ($12.1 million) ($53.1 million) ($58.7 million) YOY = year over year. Data source: Datadog, Cloudflare, and Crowdstrike.
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a1093ace-4a0c-429d-8baf-f131d67736fe
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719077.0
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2019-12-24 00:00:00 UTC
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The 5 Best Tech Stocks to Buy for 2020
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DDOG
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https://www.nasdaq.com/articles/the-5-best-tech-stocks-to-buy-for-2020-2019-12-24
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nan
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nan
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Software as a service (SaaS) is the dominant tech trend over the last several years, and it's likely to continue dominating over the next several years.
We're in the midst of a changing of the guard, when many of the big software companies are being replaced by young, fast-growing upstarts. This is happening across the software gauntlet, including customer relationship management software, database software, collaborative software, analytical software, procurement software, security software, and more.
The five tech stocks on this list are all fast-rising SaaS companies. While megacaps Amazon and Microsoft have had very nice growth providing web service platforms for SaaS, neither of these companies is on the list. Rather, the stronger plays are smaller internet companies that are using their platforms to provide software cheaply and easily to enterprise clients.
SaaS, arguably the strongest of all sectors, is a wonderful place for investors to be. Without further ado, here are the top five SaaS stocks to buy for 2020, in alphabetical order.
Image source: Getty Images.
Datadog
Datadog (NASDAQ: DDOG) is the most expensive stock on this list, and with good reason. The analytics and monitoring company trades for 35 times its sales. While that's a very high price, the company had $96 million in revenue for the quarter, up 88% from this time last year. And its gross margin was 76%. As for profitability, the company broke even on a non-GAAP (adjusted) basis.
While the astounding sales growth number is what gets headlines, perhaps the coolest financial number is one specific to SaaS companies: Datadog's dollar-based net retention rate was 130%. That means that the company kept 100% of its subscription revenue from the previous year, and added another 30% of revenue from existing clients.
MongoDB
MongoDB (NASDAQ: MDB) is the giant-killer that's taking on Oracle, and is winning. Mongo specializes in providing database software for unstructured data, which is a huge category many times larger than traditional SQL databases that just hold spreadsheets (Oracle's domain). MongoDB's NoSQL database software organizes spreadsheets, yes, but also all the data that's not in spreadsheet form -- in other words, most of the data in the world.
Mongo's numbers are quite good, but what's really stellar is its SaaS offering, Atlas. The company introduced the cloud offering three years ago. Now it's a business with a $175 million annual run rate, growing revenue 185% in the most recent quarter. This fantastic growth is quite promising, as MongoDB is taking market share in the huge ($64 billon) database market. It's also the cheapest SaaS stock on this list, trading at 19 times sales.
Shopify
Shopify (NYSE: SHOP) is in a class by itself: What other company has taken on Amazon and won? Shopify provides software services to retailers that want to become online merchants. Amazon tried to enter this business, but in 2016 the internet giant surrendered and ceded the field to Shopify. Yes, the $45 billion SaaS juggernaut vanquished the $884 billion e-tailing giant.
Consider how vast the market is for internet retail. Shopify recently celebrated its one millionth customer win. The company has an entire ecosystem of subscribers, and it's still growing (revenue is up 44% year over year). Shopify is almost as expensive as fast-growing Datadog, with a price-to-sales ratio of almost 32. Yet this high multiple is probably warranted: Shopify enjoys a near-monopoly in what it does, and the company still has a huge runway of growth ahead, with a market opportunity of $70 billion.
Smartsheet
Smartsheet (NYSE: SMAR) is a fascinating SaaS company that has a collaborative software offering. Collaborative software has always been a niche market; in the old days, everybody had to install the software in order to collaborate. Those days are gone. Now, individuals can download the software and try it out; people who don't subscribe to Smartsheet's offerings can collaborate with people who do.
Like most SaaS companies, Smartsheet has a "land and expand" strategy -- if a few people in an enterprise try the software, the number of subscribers multiplies from there. Smartsheet's dollar-based net retention rate is 134%, and its revenue is growing by 54% year over year. The company is creating a new market, replacing some of the myriad ways people communicate and share information on a project. What used to be a mishmash of emails, phone calls, whiteboards, and face-to-face meetings now takes place on a collaborative platform.
Zoom Video Communications
Zoom Video Communications (NASDAQ: ZM) rivals Datadog for both the fastest-growing SaaS stock, and the most expensive. In the most recent quarter, sales jumped 85% to $167 million. Gross margin was almost 83%. Maybe the most amazing thing about Zoom is that it achieves these growth rates while remaining profitable.
Zoom is competing with legacy players like Cisco and Microsoft, and is taking market share from them with its best-of-breed offering. So far, videoconferencing has been a disappointing market opportunity, with buggy systems that annoy the people who try to use them. But Zoom's motto is: "It just works." This market opportunity is at least $43 billion, but probably higher, as videoconferencing is far more popular when the technology works.
10 stocks we like better than Shopify
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 Shopify 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 December 1, 2019
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. Taylor Carmichael owns shares of Amazon, Datadog, MongoDB, Shopify, and Smartsheet. The Motley Fool owns shares of and recommends Amazon, Datadog, Microsoft, MongoDB, Shopify, Smartsheet, and Zoom Video Communications and recommends the following options: long January 2021 $85 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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Datadog Datadog (NASDAQ: DDOG) is the most expensive stock on this list, and with good reason. Rather, the stronger plays are smaller internet companies that are using their platforms to provide software cheaply and easily to enterprise clients. Yet this high multiple is probably warranted: Shopify enjoys a near-monopoly in what it does, and the company still has a huge runway of growth ahead, with a market opportunity of $70 billion.
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Datadog Datadog (NASDAQ: DDOG) is the most expensive stock on this list, and with good reason. This is happening across the software gauntlet, including customer relationship management software, database software, collaborative software, analytical software, procurement software, security software, and more. While the astounding sales growth number is what gets headlines, perhaps the coolest financial number is one specific to SaaS companies: Datadog's dollar-based net retention rate was 130%.
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Datadog Datadog (NASDAQ: DDOG) is the most expensive stock on this list, and with good reason. This is happening across the software gauntlet, including customer relationship management software, database software, collaborative software, analytical software, procurement software, security software, and more. Smartsheet Smartsheet (NYSE: SMAR) is a fascinating SaaS company that has a collaborative software offering.
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Datadog Datadog (NASDAQ: DDOG) is the most expensive stock on this list, and with good reason. This is happening across the software gauntlet, including customer relationship management software, database software, collaborative software, analytical software, procurement software, security software, and more. While that's a very high price, the company had $96 million in revenue for the quarter, up 88% from this time last year.
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1029ffb3-85e3-4f5f-8703-975a4119cb38
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719078.0
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2019-12-21 00:00:00 UTC
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2 Hypergrowth Stocks I'm Buying Before the End of 2019
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DDOG
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https://www.nasdaq.com/articles/2-hypergrowth-stocks-im-buying-before-the-end-of-2019-2019-12-21
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nan
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nan
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We are less than two weeks away from the end of 2019, and many investors are already celebrating a great year. As of this writing (Dec. 18), the S&P 500 has delivered almost 30% in total returns. That's not only a strong bounce back from a 2018 that saw stocks fall more than 4%, but it's also one of the best years we've seen in the past decade.
But I think savvy investors willing to take on some risk can still find incredible growth stocks. There are plenty of industries going through significant change, and most companies need help managing the technologies of the 21st century to remain competitive.
Before the calendar switches to 2020, I plan to buy Datadog (NASDAQ: DDOG) and Telaria (NYSE: TLRA). I'll be buying the former for the first time, and adding shares to my existing -- albeit small -- position in Telaria. Both of these companies are positioned for big profits in the years to come as demand for their services skyrockets.
These two stocks could rocket much higher. Image source: Getty Images.
Making sense (and eventually money) of mountains of data
Companies now generate and have access to massive amounts of data. The problem for many businesses is that very often, managing and utilizing all that data is outside their core skills, and that can create all kinds of additional problems that limit a company's success.
This is where Datadog comes in. In short, the company provides a range of services to help companies better utilize and manage data, as well as find the valuable information from that data that can be used to improve the business. And so far, Datadog has proven very appealing to a growing base of customers. As my Fool.com colleague Brian Stoffel recently noted, Datadog's customer base is growing at an enormous rate, particularly among clients who spend more than $100,000 per year with the company.
Taken another step further, Datadog is appealing because of its leadership. The two co-founders -- they founded Datadog based on real-world problems they experienced at other companies -- are its CEO and CTO (chief technology officer), and they own almost one-fourth of the company between them.
Datadog made its debut on the public markets in September. It's still consuming cash and reporting losses, making it harder to value, and my expectation is that management will continue pouring cash into the business to support its incredible rate of growth. And that's almost certain to result in big volatility for the stock price as investors try to project its performance -- and its path to profitability.
So this isn't a business for the faint of heart. But if you're looking for a great growth stock that could double or even triple in value over the next five years, Datadog looks like a solid candidate. That's why I intend to buy shares before the end of December.
An important player in the future of TV advertising
The way people use their televisions is changing. The days of flipping channels on the remote aren't gone, but they're steadily making up less and less of how people watch TV as more viewers use streaming apps to consume what they want, when they want.
Advertisers are taking notice, and starting to shift their spending to where the eyeballs are. Telaria is a key player in helping publishers make the most of their digital advertising inventory in what remains a very fragmented space -- and a high-growth one at that. Being a big player in a high-growth, fragmented industry gives Telaria an enviable position.
Potentially the biggest opportunity for the company is in connected TVs, which represent less than 10% of TV advertising dollars. That number is expected to rise at double-digit rates for years to come as more viewers shift away from traditional TV or cable and the need for marketers to advertise on connected TVs grows. Connected TV revenue increased 44% in Telaria's third quarter alone.
Moreover, Telaria's value proposition looks set to get a lot stronger, thanks to its agreement to merge with Rubicon Project (NYSE: RUBI) in early 2020. Rubicon Project is a major player in programmatic advertising, and combining that strength with Telaria's connected TV ad platform will make it the biggest company on the sell-side of programmatic advertising.
This combined scale should prove an enormous advantage for the company as digital content producers look to maximize their ad inventory.
The risk? Mergers don't always go well, and rarely exactly as planned. But my expectation is that this is a case of two good companies combining into what could be a truly great one. Their strengths complement one another, and should lead to significant competitive advantages that help content producers selling ad space, as well as marketers looking to get the most out of their spend.
But even with that risk, the market-beating prospects look too good to ignore. The trend is decidedly in favor of rapid growth in programmatic ad spending, particularly on connected TVs, and Telaria is set to be a leader in this high-growth segment 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 December 1, 2019
Jason Hall owns shares of Telaria, Inc. The Motley Fool owns shares of and recommends Datadog and Telaria, 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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Before the calendar switches to 2020, I plan to buy Datadog (NASDAQ: DDOG) and Telaria (NYSE: TLRA). As my Fool.com colleague Brian Stoffel recently noted, Datadog's customer base is growing at an enormous rate, particularly among clients who spend more than $100,000 per year with the company. That number is expected to rise at double-digit rates for years to come as more viewers shift away from traditional TV or cable and the need for marketers to advertise on connected TVs grows.
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Before the calendar switches to 2020, I plan to buy Datadog (NASDAQ: DDOG) and Telaria (NYSE: TLRA). Rubicon Project is a major player in programmatic advertising, and combining that strength with Telaria's connected TV ad platform will make it the biggest company on the sell-side of programmatic advertising. The trend is decidedly in favor of rapid growth in programmatic ad spending, particularly on connected TVs, and Telaria is set to be a leader in this high-growth segment for years to come.
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Before the calendar switches to 2020, I plan to buy Datadog (NASDAQ: DDOG) and Telaria (NYSE: TLRA). Rubicon Project is a major player in programmatic advertising, and combining that strength with Telaria's connected TV ad platform will make it the biggest company on the sell-side of programmatic advertising. * 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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Before the calendar switches to 2020, I plan to buy Datadog (NASDAQ: DDOG) and Telaria (NYSE: TLRA). But I think savvy investors willing to take on some risk can still find incredible growth stocks. This is where Datadog comes in.
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595e7b3f-f88a-4cee-943d-5e82d0083921
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719079.0
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2019-12-12 00:00:00 UTC
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How to Pick the Best Stocks to Buy
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DDOG
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https://www.nasdaq.com/articles/how-to-pick-the-best-stocks-to-buy-2019-12-12
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nan
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nan
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If you've followed the Motley Fool at all, you probably know David Gardner.
David's one of the Fool's co-founders. He's also the guy that picked:
Amazon (NASDAQ: AMZN) in 2002 (up over 11,000%)
MercadoLibre (NASDAQ: MELI) in 2009 (up over 4,000%)
Intuitive Surgical (NASDAQ: ISRG) in 2005 (up over 3,500%)
Perhaps most famously, he picked Netflix (NASDAQ: NFLX) back in 2004, and those that followed him into the stock are up over 16,000%!
Safe to say, the guy knows a thing or two about how to pick great stocks.
In this special on our YouTube channel, David shares how he spots life-changing investments before anyone else, and how you can use his approach to pick winners for yourself.
After the broadcast, a full transcript will be added.
10 stocks we like better than Amazon
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 Amazon 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 December 1, 2019
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Chris Hill owns shares of Amazon, PayPal Holdings, and Walt Disney. David Gardner owns shares of Amazon, Intuitive Surgical, MercadoLibre, Netflix, and Walt Disney. The Motley Fool owns shares of and recommends Amazon, Datadog, Etsy, Intuitive Surgical, MercadoLibre, Netflix, PayPal Holdings, and Walt Disney and recommends the following options: long January 2021 $60 calls on Walt Disney, short January 2020 $130 calls on Walt Disney, and short January 2020 $97 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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In this special on our YouTube channel, David shares how he spots life-changing investments before anyone else, and how you can use his approach to pick winners for yourself. David Gardner owns shares of Amazon, Intuitive Surgical, MercadoLibre, Netflix, and Walt Disney. The Motley Fool owns shares of and recommends Amazon, Datadog, Etsy, Intuitive Surgical, MercadoLibre, Netflix, PayPal Holdings, and Walt Disney and recommends the following options: long January 2021 $60 calls on Walt Disney, short January 2020 $130 calls on Walt Disney, and short January 2020 $97 calls on PayPal Holdings.
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Chris Hill owns shares of Amazon, PayPal Holdings, and Walt Disney. David Gardner owns shares of Amazon, Intuitive Surgical, MercadoLibre, Netflix, and Walt Disney. The Motley Fool owns shares of and recommends Amazon, Datadog, Etsy, Intuitive Surgical, MercadoLibre, Netflix, PayPal Holdings, and Walt Disney and recommends the following options: long January 2021 $60 calls on Walt Disney, short January 2020 $130 calls on Walt Disney, and short January 2020 $97 calls on PayPal Holdings.
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He's also the guy that picked: Amazon (NASDAQ: AMZN) in 2002 (up over 11,000%) MercadoLibre (NASDAQ: MELI) in 2009 (up over 4,000%) Intuitive Surgical (NASDAQ: ISRG) in 2005 (up over 3,500%) Perhaps most famously, he picked Netflix (NASDAQ: NFLX) back in 2004, and those that followed him into the stock are up over 16,000%! See the 10 stocks *Stock Advisor returns as of December 1, 2019 John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. The Motley Fool owns shares of and recommends Amazon, Datadog, Etsy, Intuitive Surgical, MercadoLibre, Netflix, PayPal Holdings, and Walt Disney and recommends the following options: long January 2021 $60 calls on Walt Disney, short January 2020 $130 calls on Walt Disney, and short January 2020 $97 calls on PayPal Holdings.
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If you've followed the Motley Fool at all, you probably know David Gardner. He's also the guy that picked: Amazon (NASDAQ: AMZN) in 2002 (up over 11,000%) MercadoLibre (NASDAQ: MELI) in 2009 (up over 4,000%) Intuitive Surgical (NASDAQ: ISRG) in 2005 (up over 3,500%) Perhaps most famously, he picked Netflix (NASDAQ: NFLX) back in 2004, and those that followed him into the stock are up over 16,000%! 10 stocks we like better than Amazon When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen.
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f76227b8-4f4a-4600-aeed-8259f8e7813f
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719080.0
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2019-12-09 00:00:00 UTC
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Cisco Stock May Be a Great Value Name
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DDOG
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https://www.nasdaq.com/articles/cisco-stock-may-be-a-great-value-name-2019-12-09
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nan
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nan
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Is Cisco (NASDAQ:) an underappreciated value stock or just a dog? That’s probably the question many Cisco stock owners are asking after another disappointing year from the networking giant. CSCO stock is now down 6% over the past year and has posted a surprising 23% decline over the past six months. That’s a huge disparity from the broader tech stock market; the Nasdaq 100 (NASDAQ:) is up 12% over the past six months and has climbed 35% in 2019.
Source: Ken Wolter / Shutterstock.com
Cisco had been faring better in recent years, with CSCO stock price doubling between 2015 and its 2018 peak of nearly $60 per share.
Since then, however, Cisco stock has fallen back to $45 while tech continues to power higher. Traders have sold CSCO stock off yet again following the company’s recent weak forward guidance. Not surprisingly, the trade war and the delays of the 5G rollout are having a negative impact on Cisco’s momentum.
More generally, however, broader fundamental questions linger around Cisco stock. What’s next for the company? Will it ever become a tech growth company again? Is there life after networking equipment for Cisco stock?
Cisco Hopes That Software and Services Can Bring Back Its Growth
The obvious problem with the bullish thesis on Cisco stock now is that CSCO hasn’t grown much. In 2013, for example, Cisco reported $48 billion of revenue. Over the past 12 months, its top line came in at $51 billion. Less than 10% revenue growth over the past six years trails inflation and leaves investors wondering if and when Cisco will be able to find a second act.
However, Cisco has a plan. It’s moving into businesses beyond vanilla networking. For example, CEO Chuck Robbins noted that the company’s secure user identity access platform, Duo, continues to grow nicely. Cisco bought Duo for last year and can help ramp up its growth with its unparalleled size and customer base.
Not only is Cisco investing more heavily in recurring revenue fields such as security, but it’s changing its pricing strategy. It’s allowing its customers to pay for some of its new high-end switches, such as the Catalyst 9000 series, through long-term, multi-year licensing deals rather than one-time payments.
As more of Cisco’s business moves to this sort of subscription business model, its earnings will become more predictable. Furthermore, its susceptibility to short-term hits such as the current trade war and 5G delays will decline. Wall Street absolutely loves recurring service revenues, so the company’s decision to embrace that model should be very positive for Cisco stock.
Slumbering Tech Giants Can Turn Things Around
Other giant tech companies have managed to return to growth after long periods of slumber. Look at Microsoft (NASDAQ:), whose cloud business has made it very successful after years of missing other emerging tech trends. MSFT stock went from a dead money stock with very low valuations to the world’s most valuable company. Intel’s (NASDAQ:) fortunes have also rebounded over the past couple of years as its growth initiatives are starting to outshine the drag from its no-growth central processing unit business.
Like Intel and Microsoft earlier this decade, Cisco is facing substantial doubts about its long-term outlook. The move to the cloud is clearly moving tech spending away from Cisco’s dominant network equipment solutions. Cisco itself seems to realize this. That’s why it’s focusing on obtaining the majority of its revenue from software and services going forward.
Also, Cisco is trying to use M&A to enter more growth-focused spaces. Look at its reported effort to buy hyper-growth, software-as-a-service play Datadog (NASDAQ:) for around $7 billion recently. Datadog, however, turned Cisco down and went public instead.
But Cisco’s fantastic balance sheet and stable cash flows give it tons of time to gradually evolve its business toward changing technology trends. Such moves don’t always work; IBM (NYSE:), for example, has struggled to find a path back to organic growth. But when it comes to companies with strong balance sheets and time, the odds are generally in investors’ favor, and that should be the case for the owners of Cisco stock.
The Verdict on CSCO Stock
Cisco stock certainly isn’t in bad shape. It may feel like the trade war is going to drag on forever, but it will be resolved sooner or later. And the owners of Cisco stock aren’t paying much for the possibility of a brighter future.
Trading at just 13 times its forward earnings, CSCO stock is one of the cheaper big tech names out there today. Cisco stock also offers investors a of over 3%. With Cisco’s $15 billion a year or so in cash flow, it has plenty left over after the dividend.
That has allowed the company to buy back lots of Cisco stock and acquire dozens of companies in recent years. With this sort of capital allocation strategy, patient owners of CSCO stock have multiple ways to win.
At the time of this writing, Ian Bezek owned DDOG, IBM, and INTC stock. You can reach him on Twitter at @irbezek.
The post 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 the time of this writing, Ian Bezek owned DDOG, IBM, and INTC stock. Wall Street absolutely loves recurring service revenues, so the company’s decision to embrace that model should be very positive for Cisco stock. Intel’s (NASDAQ:) fortunes have also rebounded over the past couple of years as its growth initiatives are starting to outshine the drag from its no-growth central processing unit business.
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At the time of this writing, Ian Bezek owned DDOG, IBM, and INTC stock. Source: Ken Wolter / Shutterstock.com Cisco had been faring better in recent years, with CSCO stock price doubling between 2015 and its 2018 peak of nearly $60 per share. Slumbering Tech Giants Can Turn Things Around Other giant tech companies have managed to return to growth after long periods of slumber.
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At the time of this writing, Ian Bezek owned DDOG, IBM, and INTC stock. Cisco Hopes That Software and Services Can Bring Back Its Growth The obvious problem with the bullish thesis on Cisco stock now is that CSCO hasn’t grown much. The Verdict on CSCO Stock Cisco stock certainly isn’t in bad shape.
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At the time of this writing, Ian Bezek owned DDOG, IBM, and INTC stock. That’s probably the question many Cisco stock owners are asking after another disappointing year from the networking giant. What’s next for the company?
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fb968936-85d2-415e-a22b-2fc487f3d401
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719081.0
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2019-12-05 00:00:00 UTC
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Why Is Datadog Stock Up About 20% Over The Last Month?
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DDOG
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https://www.nasdaq.com/articles/why-is-datadog-stock-up-about-20-over-the-last-month-2019-12-05-0
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nan
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nan
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Datadog (NASDAQ: DDOG), a software as a service company that provides monitoring and analytics for cloud applications, has seen its stock price rise by about 20% over the last month to about $41 per share. The stock is up 51% from its IPO price of $27 per share. There are a couple of factors driving the rally. Firstly, the company posted strong Q3 results, as it broke even on an adjusted basis, while the markets were projecting a loss of about $0.14 per share. Revenue growth was also strong, with revenues expanding by 88% year-over-year to $96 million. Moreover, the company is witnessing increasing adoption of its new products. At the end of Q3, it indicated that 50% of its customers were using two or more of its products, up from 40% in Q2 and 15% a year ago.
We ‘step back’ from these recent swings to review Datadog’s performance over the last few years, as a context for what might come next. Our Interactive dashboard, What’s Driving The Rally In Datadog Stock? reviews the near term reasons and the big picture.
The context for the last few years:
A closer look At Datadog’s Total Revenues over the last few years and the outlook
Total Revenues for Datadog increased from $101 million in 2017 to $198 million in 2018, a growth of 97%. We expect revenues to grow to about $350 million in 2019, an increase of 77%
A closer look At Datadog’s Total Expenses over the last few years and the outlook
Total Expense for Datadog increased from $103 Mil in 2017 to about $208 Mil in 2018, an increase of 103%. We expect Total Expense growth to be 72% in 2019.
How has Datadog’s EBT trended?
EBT for Datadog decreased from -$2 million in 2017 to -$10.2 million in 2018, as Operating Expenses grew faster than Revenues. We expect EBT to increase to -$9 million in 2019.
How has Datadog’s Net Income and EPS trended?
For more details on Datadog’s Net Income, view our interactive dashboard analysis.
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
More Trefis Data
Like our charts? Explore example interactive dashboards and create your own.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Datadog (NASDAQ: DDOG), a software as a service company that provides monitoring and analytics for cloud applications, has seen its stock price rise by about 20% over the last month to about $41 per share. Firstly, the company posted strong Q3 results, as it broke even on an adjusted basis, while the markets were projecting a loss of about $0.14 per share. We ‘step back’ from these recent swings to review Datadog’s performance over the last few years, as a context for what might come next.
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Datadog (NASDAQ: DDOG), a software as a service company that provides monitoring and analytics for cloud applications, has seen its stock price rise by about 20% over the last month to about $41 per share. The context for the last few years: A closer look At Datadog’s Total Revenues over the last few years and the outlook Total Revenues for Datadog increased from $101 million in 2017 to $198 million in 2018, a growth of 97%. We expect revenues to grow to about $350 million in 2019, an increase of 77% A closer look At Datadog’s Total Expenses over the last few years and the outlook Total Expense for Datadog increased from $103 Mil in 2017 to about $208 Mil in 2018, an increase of 103%.
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Datadog (NASDAQ: DDOG), a software as a service company that provides monitoring and analytics for cloud applications, has seen its stock price rise by about 20% over the last month to about $41 per share. The context for the last few years: A closer look At Datadog’s Total Revenues over the last few years and the outlook Total Revenues for Datadog increased from $101 million in 2017 to $198 million in 2018, a growth of 97%. We expect revenues to grow to about $350 million in 2019, an increase of 77% A closer look At Datadog’s Total Expenses over the last few years and the outlook Total Expense for Datadog increased from $103 Mil in 2017 to about $208 Mil in 2018, an increase of 103%.
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Datadog (NASDAQ: DDOG), a software as a service company that provides monitoring and analytics for cloud applications, has seen its stock price rise by about 20% over the last month to about $41 per share. Our Interactive dashboard, What’s Driving The Rally In Datadog Stock? The context for the last few years: A closer look At Datadog’s Total Revenues over the last few years and the outlook Total Revenues for Datadog increased from $101 million in 2017 to $198 million in 2018, a growth of 97%.
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9e7b5002-3d77-4cad-b314-78f7b7f322da
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719082.0
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2019-12-05 00:00:00 UTC
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Why Is Datadog Stock Up About 20% Over The Last Month?
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DDOG
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https://www.nasdaq.com/articles/why-is-datadog-stock-up-about-20-over-the-last-month-2019-12-05
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nan
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nan
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Datadog (NASDAQ: DDOG), a software as a service company that provides monitoring and analytics for cloud applications, has seen its stock price rise by about 20% over the last month to about $41 per share. The stock is up 51% from its IPO price of $27 per share. There are a couple of factors driving the rally. Firstly, the company posted strong Q3 results, as it broke even on an adjusted basis, while the markets were projecting a loss of about $0.14 per share. Revenue growth was also strong, with revenues expanding by 88% year-over-year to $96 million. Moreover, the company is witnessing increasing adoption of its new products. At the end of Q3, it indicated that 50% of its customers were using two or more of its products, up from 40% in Q2 and 15% a year ago.
We âstep backâ from these recent swings to review Datadogâs performance over the last few years, as a context for what might come next. Our Interactive dashboard, What’s Driving The Rally In Datadog Stock? reviews the near term reasons and the big picture.
The context for the last few years:
A closer look At Datadogâs Total Revenues over the last few years and the outlook
 Total Revenues for Datadog increased from $101 million in 2017 to $198 million in 2018, a growth of 97%. We expect revenues to grow to about $350 million in 2019, an increase of 77%
A closer look At Datadogâs Total Expenses over the last few years and the outlook
Total Expense for Datadog increased from $103 Mil in 2017 to about $208 Mil in 2018, an increase of 103%. We expect Total Expense growth to be 72% in 2019.
How has  Datadogâs EBT trended?
EBT for Datadog decreased from -$2 million in 2017 to -$10.2 million in 2018, as Operating Expenses grew faster than Revenues. We expect EBT to increase to -$9 million in 2019.
How has Datadogâs Net Income and EPS trended?
For more details on Datadogâs Net Income, view our interactive dashboard analysis.
Whatâs behind Trefis? See How itâs Powering New Collaboration and What-Ifs
For CFOs and Finance Teams | Product, R&D, and Marketing Teams
More Trefis Data
Like our charts? Explore example interactive dashboards and create your own.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Datadog (NASDAQ: DDOG), a software as a service company that provides monitoring and analytics for cloud applications, has seen its stock price rise by about 20% over the last month to about $41 per share. Firstly, the company posted strong Q3 results, as it broke even on an adjusted basis, while the markets were projecting a loss of about $0.14 per share. See How itâs Powering New Collaboration and What-Ifs For CFOs and Finance Teams | Product, R&D, and Marketing Teams More Trefis Data Like our charts?
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Datadog (NASDAQ: DDOG), a software as a service company that provides monitoring and analytics for cloud applications, has seen its stock price rise by about 20% over the last month to about $41 per share. Our Interactive dashboard, What’s Driving The Rally In Datadog Stock? The context for the last few years: A closer look At Datadogâs Total Revenues over the last few years and the outlook  Total Revenues for Datadog increased from $101 million in 2017 to $198 million in 2018, a growth of 97%.
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Datadog (NASDAQ: DDOG), a software as a service company that provides monitoring and analytics for cloud applications, has seen its stock price rise by about 20% over the last month to about $41 per share. The context for the last few years: A closer look At Datadogâs Total Revenues over the last few years and the outlook  Total Revenues for Datadog increased from $101 million in 2017 to $198 million in 2018, a growth of 97%. We expect revenues to grow to about $350 million in 2019, an increase of 77% A closer look At Datadogâs Total Expenses over the last few years and the outlook Total Expense for Datadog increased from $103 Mil in 2017 to about $208 Mil in 2018, an increase of 103%.
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Datadog (NASDAQ: DDOG), a software as a service company that provides monitoring and analytics for cloud applications, has seen its stock price rise by about 20% over the last month to about $41 per share. Our Interactive dashboard, What’s Driving The Rally In Datadog Stock? The context for the last few years: A closer look At Datadogâs Total Revenues over the last few years and the outlook  Total Revenues for Datadog increased from $101 million in 2017 to $198 million in 2018, a growth of 97%.
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8262ea8d-1c69-49d3-b5b3-4acc2791cef4
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719083.0
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2019-11-21 00:00:00 UTC
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Why I Bought Shares of This Newly Public SaaS Company
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DDOG
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https://www.nasdaq.com/articles/why-i-bought-shares-of-this-newly-public-saas-company-2019-11-21
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nan
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nan
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You don't have to look far to find someone singing the praises of big data -- and I'm one of them. In today's connected world, we have more of it than at any point in human history. Imagine the possibilities!
But there's a dark downside to this bounty of information. It's increasingly easy to be fooled by, led astray by, and act with false confidence because of ... data. Trader and author Nassim Taleb put it best when he said:
More data means more information, but it also means more false information.
Let's say there's a 1-in-100 chance of getting a false positive when analyzing a set of data -- having the appearance of a pattern emerge that's really a random artifact or no pattern at all. If you have a limited quantity of data to work with, you might get one "false positive" per year. But once your data set becomes exponentially larger -- as it has for many businesses -- then you will find yourself awash in such false positives.
A software-as-a-service (SaaS) company that I recently invested in -- Datadog (NASDAQ: DDOG) -- is helping people make sense of all this data.
Image source: Getty Images
The company, in one short story
Olivier Pomel and Alexis Le-Quoc worked at Wireless Generation, which aimed to help K-12 teachers make better decisions with the help of data. Olivier worked on the development side (building things), while Alexis was head of operations (making sure they worked).
In their time there, they realized something: It was almost impossible to communicate with different departments without a shared set of data and a common vocabulary. That motivated them to found Datadog with a simple but profound mission: "to bring sanity to IT management."
The company does this by offering four broad subscriptions, each of which shares a common goal: to provide a single, real-time, unified data platform everyone can see.
Infrastructure: Monitors how your cloud operations are performing.
Application performance management (APM): Monitors how the individual apps running on your infrastructure are doing.
Log management: Keeps track of all the information being collected.
User experience (UX): Measures what is the experience like for customers navigating your websites.
Those are oversimplifications of what those tools do, but they're a sufficient foundation to give you an understanding of what the company does.
Pomel and Le-Quoc are still at the helm as CEO and CTO, respectively -- nine years after founding Datadog. Though they took it public in September, they still have significant skin in the game, owning a combined 22% of shares outstanding.
Providing the data guidance customers want
There are lots of ways to measure how successfully a company is accomplishing its mission. When it comes to Datadog, beyond the obvious metric of revenue levels, I like to monitor these four statistics:
Total customers: I want to know if new companies are finding Datadog and using it.
Customers with annual recurring revenue (ARR) over $100,000: This lets me know if users really like Datadog. If they didn't, they wouldn't fork over so much for its services.
Customers with ARR over $1 million: Same as above, with higher threshold.
Dollar-based net retention (DBNR): This monitors how much a specific cohort of customers spends from one year to the next. If it's well above 100%, that's a strong sign that the company has a competitive moat, possibly due to high switching costs.
Here's what the numbers look like for Datadog:
Data source: SEC filings. *These figures are accurate as of July 31, 2019, and were not updated at the end of the third quarter. **These growth rates calculated over 18 months instead of 21 months. Growth rate = compounded annual growth rate, or CAGR
My thinking here is pretty straightforward: Datadog couldn't achieve these kinds of results unless its technology was providing value to its customers. As companies start using more and more of Datadog's technology, they come to rely on it more, creating the aforementioned moat due to high switching costs.
Given the ever-growing quantities of data being collected by businesses, I have little doubt that Datadog will continue to come out with new tools. In their IPO prospectus, they mentioned a plan for a fifth broad subscription: network performance monitoring. Such an option provides additional opportunities for Datadog to fulfill its mission of providing sanity in IT management.
The takeaway for investors
Of course, investing in newly public companies like Datadog isn't for the faint of heart. Such stocks can often rise or fall by double-digit percentages on the slightest hint of news. That's why -- when I bought shares -- I managed my allocation appropriately: it currently accounts for just 2.5% of my holdings.
If you're interested in owning a piece of a fast-growing SaaS company that's helping make sense of the world's data -- and have the stomach to cope with volatility -- I'd suggest you consider doing the same.
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 quadrupled 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 June 1, 2019
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.
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A software-as-a-service (SaaS) company that I recently invested in -- Datadog (NASDAQ: DDOG) -- is helping people make sense of all this data. The company does this by offering four broad subscriptions, each of which shares a common goal: to provide a single, real-time, unified data platform everyone can see. If you're interested in owning a piece of a fast-growing SaaS company that's helping make sense of the world's data -- and have the stomach to cope with volatility -- I'd suggest you consider doing the same.
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A software-as-a-service (SaaS) company that I recently invested in -- Datadog (NASDAQ: DDOG) -- is helping people make sense of all this data. If it's well above 100%, that's a strong sign that the company has a competitive moat, possibly due to high switching costs. If you're interested in owning a piece of a fast-growing SaaS company that's helping make sense of the world's data -- and have the stomach to cope with volatility -- I'd suggest you consider doing the same.
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A software-as-a-service (SaaS) company that I recently invested in -- Datadog (NASDAQ: DDOG) -- is helping people make sense of all this data. When it comes to Datadog, beyond the obvious metric of revenue levels, I like to monitor these four statistics: Total customers: I want to know if new companies are finding Datadog and using it. Growth rate = compounded annual growth rate, or CAGR My thinking here is pretty straightforward: Datadog couldn't achieve these kinds of results unless its technology was providing value to its customers.
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A software-as-a-service (SaaS) company that I recently invested in -- Datadog (NASDAQ: DDOG) -- is helping people make sense of all this data. If you have a limited quantity of data to work with, you might get one "false positive" per year. Customers with annual recurring revenue (ARR) over $100,000: This lets me know if users really like Datadog.
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724a23df-1316-4351-9dfa-9798d1457039
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719084.0
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2019-11-18 00:00:00 UTC
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Datadog's Stellar Earnings Come With a Stiff Valuation
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DDOG
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https://www.nasdaq.com/articles/datadogs-stellar-earnings-come-with-a-stiff-valuation-2019-11-18
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nan
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nan
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Datadog's (NASDAQ: DDOG) first earnings report after its initial public offering in September didn't disappoint investors, to say the least. The cloud-based monitoring and analytics vendor released third-quarter results last week that were above ambitious expectations, and it's likely to outperform its market over the medium term.
Given these positive developments, the company's market capitalization increased by more than $1.9 billion overnight, which suggests investors expect Datadog to deliver stellar results over the long term without pricing any risk.
Impressive third-quarter results
During the third quarter, Datadog posted revenue of $95.9 million, up 87.8% year over year and way above analysts' expectations of $87.73 million. This performance represents a solid acceleration compared to the first-half strong revenue growth of 79.5%.
Image source: Getty Images.
Taking into account the midpoint of next-quarter revenue guidance, the company's lower year-over-year expected revenue growth of 65.6% remains outstanding compared to the forecasted growth of its markets.
For instance, a study estimates the market for application performance management (granular monitoring of applications) will grow annually by 11.84% over the next several years. And the IT infrastructure monitoring market, which consists of monitoring and analyzing IT infrastructure components such as servers and network devices, is forecasted to grow annually by 6.6%, according to another study.
During theearnings call Datadog CEO Olivier Pomel explained that the company's outperformance was mostly due to the opportunities the growing cloud computing market represents:
So the business is still mostly greenfield and it's mostly net new and it's mostly cloud environments, which by definition are new for our customers. ... When you talk about large customers and large enterprise customers, they have existing solutions for their legacy environments, but they make new decisions for the cloud environment. We do see also a few competitive displacement, but that's not the majority of what we do.
Also, Datadog's offering differentiates from other cloud-based monitoring and analytics vendors that could profit from that tailwind. For instance, Datadog competitor New Relic (NYSE: NEWR) offers flexible and programmable monitoring and analytics capabilities. But, in contrast with Datadog's simpler solutions, New Relics' advanced features involve a steeper learning curve and require consultancy or professional services, which may explain a part of the much slower 26.9% revenue growth New Relic posted during its latest quarter.
Medium-term tailwinds
Management gave its guidance for the next quarter only, but I expect Datadog's strong performance to continue over the medium term. Besides the tailwind from the growing cloud computing market, a couple of positive developments should support the company's revenue growth over the next several quarters.
During theearnings call Pomel mentioned Datadog wasn't yet charging its customers for using the new products it announced at its Dash conference in July this year. These new features include server-less and mobile monitoring capabilities, for instance. And given the company's high retention rate above 130%, which indicates existing customers have been increasing their consumption of Datadog's products, cross-selling opportunities are likely to contribute to the revenue growth when the company decides to charge for its new products.
Also, the CEO confirmed the process of achieving FedRAMP certification, which would expand the company's addressable market to U.S. federal departments and agencies. The $10 billion Department of Defense's cloud contract shows the large potential market these U.S. federal entities represent when they consider using more cloud-based services.
Investors don't price any risk
Given its impressive revenue growth and its strong potential over the medium term, the company's market capitalization increased by more than $1.9 billion (from $10.1 billion to $12.0 billion), which represents 34.2 times the midpoint of its full-year revenue guidance of $351 million. Besides, management forecasted non-GAAP (adjusted) losses in the range of $18 million to $20 million in 2019. Such a lofty valuation indicates investors expect the company to deliver stellar results over the long term.
Given its tailwinds, Datadog isn't likely to disappoint investors during the next several quarters. But with its increasing revenue base, sustaining a high revenue growth rate over the long term will become challenging. Also, Datadog reduced its losses during the third quarter, but the intensifying competition could have a negative impact on its margins.
Thus, Datadog's solid performance makes it an attractive tech stock, but prudent investors should keep in mind the company's sky-high valuation corresponds to a flawless execution over the long term.
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 quadrupled 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 June 1, 2019
Herve Blandin has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Datadog and New Relic. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Datadog's (NASDAQ: DDOG) first earnings report after its initial public offering in September didn't disappoint investors, to say the least. The cloud-based monitoring and analytics vendor released third-quarter results last week that were above ambitious expectations, and it's likely to outperform its market over the medium term. Given these positive developments, the company's market capitalization increased by more than $1.9 billion overnight, which suggests investors expect Datadog to deliver stellar results over the long term without pricing any risk.
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Datadog's (NASDAQ: DDOG) first earnings report after its initial public offering in September didn't disappoint investors, to say the least. Given these positive developments, the company's market capitalization increased by more than $1.9 billion overnight, which suggests investors expect Datadog to deliver stellar results over the long term without pricing any risk. Impressive third-quarter results During the third quarter, Datadog posted revenue of $95.9 million, up 87.8% year over year and way above analysts' expectations of $87.73 million.
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Datadog's (NASDAQ: DDOG) first earnings report after its initial public offering in September didn't disappoint investors, to say the least. Given these positive developments, the company's market capitalization increased by more than $1.9 billion overnight, which suggests investors expect Datadog to deliver stellar results over the long term without pricing any risk. And given the company's high retention rate above 130%, which indicates existing customers have been increasing their consumption of Datadog's products, cross-selling opportunities are likely to contribute to the revenue growth when the company decides to charge for its new products.
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Datadog's (NASDAQ: DDOG) first earnings report after its initial public offering in September didn't disappoint investors, to say the least. Impressive third-quarter results During the third quarter, Datadog posted revenue of $95.9 million, up 87.8% year over year and way above analysts' expectations of $87.73 million. Investors don't price any risk Given its impressive revenue growth and its strong potential over the medium term, the company's market capitalization increased by more than $1.9 billion (from $10.1 billion to $12.0 billion), which represents 34.2 times the midpoint of its full-year revenue guidance of $351 million.
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bb386455-3fa8-4785-ae60-310540e961b3
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719085.0
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2019-11-14 00:00:00 UTC
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There Are Challenges Behind New Relic's Encouraging Q2 Earnings
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DDOG
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https://www.nasdaq.com/articles/there-are-challenges-behind-new-relics-encouraging-q2-earnings-2019-11-14
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nan
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nan
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After underwhelming results over the last couple of quarters, software analytics company New Relic (NYSE: NEWR) released encouraging fiscal second-quarter earnings thanks to its new cloud-based monitoring and logging solutions. Management also expressed its confidence in reaching $1 billion of revenue by 2023. But significant uncertainties remain on the way to this ambitious goal.
Encouraging fiscal second-quarter results
Over the last several years, New Relic's strong revenue growth was due to its application performance monitoring (APM) solution. However, the company's year-over-year revenue growth has been decelerating from 113% in 2014 to 27% over the last quarter. The higher revenue base explains a part of this growth deceleration, but intensifying competition also contributed to the negative trend. For instance, rival Datadog (NASDAQ: DDOG) has developed an integrated broader monitoring offering that includes logging and infrastructure monitoring in addition to APM capabilities.
In May, New Relic released its New Relic One platform to catch up with its competitors. The platform integrates the three key monitoring components (infrastructure, logging, and application), and its programmability allows customers to develop their applications based on New Relic's solution.
As a result, fiscal second-quarter revenue increased to $145.8 million, up 27% year over year and above the high end of management's guidance range. Besides the contribution from new customers, the increase in dollar-based net expansion rate from 109% during the previous quarter to 112% indicates existing customers' consumption of New Relic's products is increasing faster than the previous quarter, which was not the case one quarter ago.
Image source: Getty Images.
Challenges against an ambitious goal
With the strong second-quarter results, management indicated the company would reach the symbolic threshold of $1 billion of annual sales in 2023, which corresponds to 19.2% annual revenue growth, based on the midpoint of the fiscal 2020 revenue guidance range of $590.5 million.
This multiyear revenue forecast seems strong, but it remains below the revenue growth some competitors have been reporting. For instance, during their latest quarters, Datadog and Elastic N.V. (NYSE: ESTC) grew their revenue by 82.2% and 58.4%, respectively, compared to the year before. Given its much lower revenue growth, New Relic is unlikely to gain market share against these competitors even if their revenue growth decelerates over the next several years.
Besides, New Relic's competitors aren't idling. For example, Elastic announced last month its expansion into the endpoint security market, and Splunk entered the APM market in August with its acquisition of SignalFx.
Also, New Relic's improved net expansion rate of 112% compared to the previous quarter still pales in comparison to its competitors. Elastic and Datadog have reported expansion rates above 130%, which indicates New Relic is not capturing the full growth potential from its existing customers.
In addition, New Relic's fiscal second-quarter deferred revenue -- a leading indicator of revenue -- came in below expectations, up 22% year over year but down 9% sequentially. During theearnings call management explained some customers were reluctant to pay one year in advance for the company's services, which contrasts with previous three-year contracts. Despite management's confidence in retaining these customers anyway, this development reduces incentives for them to stick to New Relic's solutions.
Cheaper than competitors but still risky
Based on the last 12 months, New Relic's enterprise value-to-sales ratio of 6.6 seems low compared to Elastic's and Datadog's ratios of 17.3 and 36.7, respectively.
Even taking into account New Relic's lower revenue growth, the company looks cheap compared to its competitors. Yet given its challenges, investing in this tech stock at this price remains risky. Besides, the company has yet to post a profit under generally accepted accounting principles (GAAP). And during the last quarter, its GAAP losses increased from $5.5 million one year ago to $16.9 million because of its increasing sales and marketing and research and development expenses as a percentage of revenue.
Management will provide more details about the company's long-term potential during its analyst and investor day on Dec. 12. But prudent investors should stay on the sidelines until the New Relic One platform leads to strong growth and improved financial results.
10 stocks we like better than New Relic
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 quadrupled the market.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and New Relic wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of June 1, 2019
Herve Blandin has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Datadog, Elastic N V, 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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For instance, rival Datadog (NASDAQ: DDOG) has developed an integrated broader monitoring offering that includes logging and infrastructure monitoring in addition to APM capabilities. After underwhelming results over the last couple of quarters, software analytics company New Relic (NYSE: NEWR) released encouraging fiscal second-quarter earnings thanks to its new cloud-based monitoring and logging solutions. Encouraging fiscal second-quarter results Over the last several years, New Relic's strong revenue growth was due to its application performance monitoring (APM) solution.
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For instance, rival Datadog (NASDAQ: DDOG) has developed an integrated broader monitoring offering that includes logging and infrastructure monitoring in addition to APM capabilities. As a result, fiscal second-quarter revenue increased to $145.8 million, up 27% year over year and above the high end of management's guidance range. Besides the contribution from new customers, the increase in dollar-based net expansion rate from 109% during the previous quarter to 112% indicates existing customers' consumption of New Relic's products is increasing faster than the previous quarter, which was not the case one quarter ago.
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For instance, rival Datadog (NASDAQ: DDOG) has developed an integrated broader monitoring offering that includes logging and infrastructure monitoring in addition to APM capabilities. Encouraging fiscal second-quarter results Over the last several years, New Relic's strong revenue growth was due to its application performance monitoring (APM) solution. Challenges against an ambitious goal With the strong second-quarter results, management indicated the company would reach the symbolic threshold of $1 billion of annual sales in 2023, which corresponds to 19.2% annual revenue growth, based on the midpoint of the fiscal 2020 revenue guidance range of $590.5 million.
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For instance, rival Datadog (NASDAQ: DDOG) has developed an integrated broader monitoring offering that includes logging and infrastructure monitoring in addition to APM capabilities. For instance, during their latest quarters, Datadog and Elastic N.V. (NYSE: ESTC) grew their revenue by 82.2% and 58.4%, respectively, compared to the year before. Given its much lower revenue growth, New Relic is unlikely to gain market share against these competitors even if their revenue growth decelerates over the next several years.
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b40086f1-8601-43ca-9a82-057f24ec25df
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719086.0
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2019-11-13 00:00:00 UTC
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Why Energizer Holdings, Luckin Coffee, and Datadog Jumped Today
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DDOG
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https://www.nasdaq.com/articles/why-energizer-holdings-luckin-coffee-and-datadog-jumped-today-2019-11-13
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nan
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nan
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Wednesday was a topsy-turvy day for the major benchmarks, with early losses giving way to a more optimistic outlook by the end of the session. Investors still aren't sure what to expect from the Federal Reserve or from trade negotiations between the U.S. and China, but they're hopeful that positive economic trends can continue to carry stocks further into record territory. Some companies saw particularly good news that helped lift market sentiment. Energizer Holdings (NYSE: ENR), Luckin Coffee (NASDAQ: LK), and Datadog (NASDAQ: DDOG) were among the top performers. Here's why they did so well.
Energizer keeps on going
Shares of Energizer Holdings climbed 15% after the battery maker reported favorable fiscal fourth-quarter financial results. Acquisitions helped to lift revenue dramatically for the company, but even Energizer's core organic growth was strong. Earnings climbed by double-digit percentages from year-ago levels. Investors also seemed pleased with Energizer's expectations for the coming 2020 fiscal year, including low-single-digit organic revenue growth and flat to moderately higher adjusted earnings per share. Energizer has made huge strides in diversifying its business to embrace car-related products, and that should help make it a stronger company in 2020 and beyond.
Image source: Energizer Holdings.
Luckin serves up a hot quarter
Luckin Coffee saw its stock perk up by 13% following the Chinese company's release of third-quarter financials. Revenue was more than six times higher than it had been in the previous year's Q3, with gains in items sold and customer counts that were almost as impressive. Luckin has started to branch out beyond regular coffee drinks, adding tea and juice products to its lineup and also looking at selling coffee cups and related merchandise. Investors are excited about Luckin's plans to expand beyond China, and that could power even more growth for the coffee chain going forward.
Datadog fetches great results
Finally, shares of Datadog climbed 17%. The newly public data monitoring and analytics specialist saw revenue jump 88% in the third quarter of 2019, and it managed to break even on the bottom line on an adjusted basis. Datadog reported 727 customers with annual recurring revenue of $100,000 or more, which was up from 377 a year ago. Guidance for the fourth quarter featured similarly ambitious sales growth projections, and any losses should remain much more subdued than initially feared. Datadog's shares had a rich valuation even before today's gains, but at least for now, its pace of growth is keeping investors happy.
Offer from The Motley Fool: The 10 best stocks to buy now
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Tom and David just revealed their ten top stock picks for investors to buy right now.
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*Stock Advisor returns as of June 1, 2019.
Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Datadog. The Motley Fool owns shares of Luckin Coffee 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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Energizer Holdings (NYSE: ENR), Luckin Coffee (NASDAQ: LK), and Datadog (NASDAQ: DDOG) were among the top performers. Investors still aren't sure what to expect from the Federal Reserve or from trade negotiations between the U.S. and China, but they're hopeful that positive economic trends can continue to carry stocks further into record territory. Investors also seemed pleased with Energizer's expectations for the coming 2020 fiscal year, including low-single-digit organic revenue growth and flat to moderately higher adjusted earnings per share.
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Energizer Holdings (NYSE: ENR), Luckin Coffee (NASDAQ: LK), and Datadog (NASDAQ: DDOG) were among the top performers. 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. The Motley Fool owns shares of Luckin Coffee Inc.
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Energizer Holdings (NYSE: ENR), Luckin Coffee (NASDAQ: LK), and Datadog (NASDAQ: DDOG) were among the top performers. Investors also seemed pleased with Energizer's expectations for the coming 2020 fiscal year, including low-single-digit organic revenue growth and flat to moderately higher adjusted earnings per share. 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.
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Energizer Holdings (NYSE: ENR), Luckin Coffee (NASDAQ: LK), and Datadog (NASDAQ: DDOG) were among the top performers. The Motley Fool owns shares of and recommends Datadog. The Motley Fool owns shares of Luckin Coffee Inc.
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8b5e8d80-56ce-4252-90d4-9e99d1b23523
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719087.0
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2019-11-13 00:00:00 UTC
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Technology Sector Update for 11/13/2019: ARLO,DDOG,IIVI,CSIQ
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DDOG
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https://www.nasdaq.com/articles/technology-sector-update-for-11-13-2019%3A-arloddogiivicsiq-2019-11-13
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nan
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nan
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Top Tech Stocks
MSFT +0.06%
AAPL +0.98%
IBM -0.90%
CSCO +0.56%
GOOG +0.02%
Technology stocks still were edging higher in late trade, with the shares of tech stocks in the S&P 500 climbing almost 0.3% while the Philadelphia Semiconductor Index was rising nearly 0.1%.
Among technology stocks moving on news:
(+) Arlo Technologies (ARLO) rose 2% after a new regulatory filing showed CEO Matthew McRae Monday bought 36,600 shares of the company's stock at a volume-weighted average price of $2.73 apiece, increasing his total stake in the maker of internet-connected monitors to 319,799 shares. A separate Form 4 filing showed board member Ralph Faison also purchased 36,000 shares on Monday at $2.88 each, boosting his ownership position to 182,725 shares.
In other sector news:
(+) Datadog (DDOG) climbed 16% after the cloud-monitoring software firm late Tuesday surprised analysts by reporting adjusted breakeven results and revenue exceeding Wall Street estimates in Q3 as well as projecting Q4 financial results also topping consensus views. The company Wednesday also said it was expanding its corporate footprint in Japan by establishing a new subsidiary, DataDog Japan GK.
(-) II-VI (IIVI) slid over 6% on Wednesday after Deutsche Bank cut its price target on the company's shares by $8 to $40 apiece while Needham & Co trimmed its price target by $6 to $40 a share. The moves follow II-VI Tuesday projecting adjusted profit and revenue for its fiscal Q2 ending Dec. 31 trailing Wall Street forecasts.
(-) Canadian Solar (CSIQ) dropped more than 16% after the photovoltaic products company late Tuesday reported Q3 financial results and issued revenue projections for the current quarter trailing Wall Street expectations. Adjusted EPS was $0.66 per share on $759.9 million in revenue, lagging the Capital IQ consensus by $0.02 per share and $39.7 million, respectively.
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 other sector news: (+) Datadog (DDOG) climbed 16% after the cloud-monitoring software firm late Tuesday surprised analysts by reporting adjusted breakeven results and revenue exceeding Wall Street estimates in Q3 as well as projecting Q4 financial results also topping consensus views. Among technology stocks moving on news: (+) Arlo Technologies (ARLO) rose 2% after a new regulatory filing showed CEO Matthew McRae Monday bought 36,600 shares of the company's stock at a volume-weighted average price of $2.73 apiece, increasing his total stake in the maker of internet-connected monitors to 319,799 shares. The moves follow II-VI Tuesday projecting adjusted profit and revenue for its fiscal Q2 ending Dec. 31 trailing Wall Street forecasts.
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In other sector news: (+) Datadog (DDOG) climbed 16% after the cloud-monitoring software firm late Tuesday surprised analysts by reporting adjusted breakeven results and revenue exceeding Wall Street estimates in Q3 as well as projecting Q4 financial results also topping consensus views. Among technology stocks moving on news: (+) Arlo Technologies (ARLO) rose 2% after a new regulatory filing showed CEO Matthew McRae Monday bought 36,600 shares of the company's stock at a volume-weighted average price of $2.73 apiece, increasing his total stake in the maker of internet-connected monitors to 319,799 shares. (-) Canadian Solar (CSIQ) dropped more than 16% after the photovoltaic products company late Tuesday reported Q3 financial results and issued revenue projections for the current quarter trailing Wall Street expectations.
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In other sector news: (+) Datadog (DDOG) climbed 16% after the cloud-monitoring software firm late Tuesday surprised analysts by reporting adjusted breakeven results and revenue exceeding Wall Street estimates in Q3 as well as projecting Q4 financial results also topping consensus views. Among technology stocks moving on news: (+) Arlo Technologies (ARLO) rose 2% after a new regulatory filing showed CEO Matthew McRae Monday bought 36,600 shares of the company's stock at a volume-weighted average price of $2.73 apiece, increasing his total stake in the maker of internet-connected monitors to 319,799 shares. (-) II-VI (IIVI) slid over 6% on Wednesday after Deutsche Bank cut its price target on the company's shares by $8 to $40 apiece while Needham & Co trimmed its price target by $6 to $40 a share.
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In other sector news: (+) Datadog (DDOG) climbed 16% after the cloud-monitoring software firm late Tuesday surprised analysts by reporting adjusted breakeven results and revenue exceeding Wall Street estimates in Q3 as well as projecting Q4 financial results also topping consensus views. Top Tech Stocks Among technology stocks moving on news: (+) Arlo Technologies (ARLO) rose 2% after a new regulatory filing showed CEO Matthew McRae Monday bought 36,600 shares of the company's stock at a volume-weighted average price of $2.73 apiece, increasing his total stake in the maker of internet-connected monitors to 319,799 shares.
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d6f9d5a8-05b5-4ecd-b717-29ae2d82d9ef
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719088.0
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2019-11-13 00:00:00 UTC
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Technology Sector Update for 11/13/2019: DDOG,IIVI,CSIQ
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DDOG
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https://www.nasdaq.com/articles/technology-sector-update-for-11-13-2019%3A-ddogiivicsiq-2019-11-13
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nan
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nan
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Top Tech Stocks
MSFT +0.06%
AAPL +0.79%
IBM -0.83%
CSCO +0.67%
GOOG +0.27%
Technology stocks were edging higher this afternoon, with the shares of tech stocks in the S&P 500 climbing about 0.2% while the Philadelphia Semiconductor Index was rising over 0.1%.
Among technology stocks moving on news:
(+) Datadog (DDOG) climbed 16% after the cloud-monitoring software firm late Tuesday surprised analysts by reporting adjusted breakeven results and revenue exceeding Wall Street estimates in Q3 as well as projecting Q4 financial results also topping consensus views. The company Wednesday also said it was expanding its corporate footprint by establishing a new subsidiary in Japan, DataDog Japan GK.
In other sector news:
(-) II-VI (IIVI) slid 4% on Wednesday after Deutsche Bank cut its price target on the company's shares by $8 to $40 apiece while Needham & Co trimmed its price target by $6 to $40 a share. The moves follow II-VI Tuesday projecting adjusted profit and revenue for its fiscal Q2 ending Dec. 31 trailing Wall Street forecasts.
(-) Canadian Solar (CSIQ) dropped more than 13% after the photovoltaic products company late Tuesday reported Q3 financial results and issued revenue projections for the current quarter trailing Wall Street expectations. Adjusted EPS was $0.66 per share on $759.9 million in revenue, lagging the Capital IQ consensus by $0.02 per share and $39.7 million, respectively.
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 technology stocks moving on news: (+) Datadog (DDOG) climbed 16% after the cloud-monitoring software firm late Tuesday surprised analysts by reporting adjusted breakeven results and revenue exceeding Wall Street estimates in Q3 as well as projecting Q4 financial results also topping consensus views. The moves follow II-VI Tuesday projecting adjusted profit and revenue for its fiscal Q2 ending Dec. 31 trailing Wall Street forecasts. (-) Canadian Solar (CSIQ) dropped more than 13% after the photovoltaic products company late Tuesday reported Q3 financial results and issued revenue projections for the current quarter trailing Wall Street expectations.
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Among technology stocks moving on news: (+) Datadog (DDOG) climbed 16% after the cloud-monitoring software firm late Tuesday surprised analysts by reporting adjusted breakeven results and revenue exceeding Wall Street estimates in Q3 as well as projecting Q4 financial results also topping consensus views. The moves follow II-VI Tuesday projecting adjusted profit and revenue for its fiscal Q2 ending Dec. 31 trailing Wall Street forecasts. (-) Canadian Solar (CSIQ) dropped more than 13% after the photovoltaic products company late Tuesday reported Q3 financial results and issued revenue projections for the current quarter trailing Wall Street expectations.
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Among technology stocks moving on news: (+) Datadog (DDOG) climbed 16% after the cloud-monitoring software firm late Tuesday surprised analysts by reporting adjusted breakeven results and revenue exceeding Wall Street estimates in Q3 as well as projecting Q4 financial results also topping consensus views. In other sector news: (-) II-VI (IIVI) slid 4% on Wednesday after Deutsche Bank cut its price target on the company's shares by $8 to $40 apiece while Needham & Co trimmed its price target by $6 to $40 a share. (-) Canadian Solar (CSIQ) dropped more than 13% after the photovoltaic products company late Tuesday reported Q3 financial results and issued revenue projections for the current quarter trailing Wall Street expectations.
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Among technology stocks moving on news: (+) Datadog (DDOG) climbed 16% after the cloud-monitoring software firm late Tuesday surprised analysts by reporting adjusted breakeven results and revenue exceeding Wall Street estimates in Q3 as well as projecting Q4 financial results also topping consensus views. The company Wednesday also said it was expanding its corporate footprint by establishing a new subsidiary in Japan, DataDog Japan GK. In other sector news: (-) II-VI (IIVI) slid 4% on Wednesday after Deutsche Bank cut its price target on the company's shares by $8 to $40 apiece while Needham & Co trimmed its price target by $6 to $40 a share.
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fe65c61c-0406-430e-a0d0-3f178f106dc1
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719089.0
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2019-11-13 00:00:00 UTC
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Why Shares of Datadog Are Surging Today
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DDOG
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https://www.nasdaq.com/articles/why-shares-of-datadog-are-surging-today-2019-11-13
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nan
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nan
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What happened
Shares of Datadog (NASDAQ: DDOG) jumped on Wednesday after the data analytics company reported its third-quarter results. Datadog beat analyst estimates across the board, and it provided guidance that was ahead of expectations. The stock was up about 16.1% at 11:45 a.m. EST.
So what
Datadog reported third-quarter revenue of $95.9 million, up 88% year over year and $11.2 million above the average analyst estimate. The company now has 727 customers with an annualized revenue run rate of at least $100,000, up 93% year over year.
Image source: Getty Images.
Non-GAAP (adjusted) earnings per share came in at $0.00, up from a loss of $0.04 in the prior-year period and $0.14 higher than analysts were expecting. Datadog lost $0.04 per share on a GAAP basis.
"We believe we are still in the early innings of a very large market opportunity, and we remain focused on solving our customers' pain points," said Datadog CEO Olivier Pomel.
Now what
Datadog expects to produce fourth-quarter revenue between $101 million and $103 million and full-year revenue between $350 million and $352 million. Both ranges are above analyst expectations of $92.3 million and $330.2 million, respectively.
The company expects to report an adjusted net loss between $0.01 and $0.02 per share in the fourth quarter and a loss between $0.11 and $0.12 per share for the full year. Analysts were expecting a fourth-quarter loss of $0.05 per share and a full-year loss of $0.30 per share.
Including Wednesday's rally, Datadog is now valued at about $11.8 billion, or 33 times the midpoint of the company's full-year revenue guidance. Datadog will need to keep up its impressive growth rate to justify such a lofty 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 quadrupled 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 June 1, 2019
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) jumped on Wednesday after the data analytics company reported its third-quarter results. "We believe we are still in the early innings of a very large market opportunity, and we remain focused on solving our customers' pain points," said Datadog CEO Olivier Pomel. Including Wednesday's rally, Datadog is now valued at about $11.8 billion, or 33 times the midpoint of the company's full-year revenue guidance.
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What happened Shares of Datadog (NASDAQ: DDOG) jumped on Wednesday after the data analytics company reported its third-quarter results. So what Datadog reported third-quarter revenue of $95.9 million, up 88% year over year and $11.2 million above the average analyst estimate. Now what Datadog expects to produce fourth-quarter revenue between $101 million and $103 million and full-year revenue between $350 million and $352 million.
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What happened Shares of Datadog (NASDAQ: DDOG) jumped on Wednesday after the data analytics company reported its third-quarter results. So what Datadog reported third-quarter revenue of $95.9 million, up 88% year over year and $11.2 million above the average analyst estimate. Now what Datadog expects to produce fourth-quarter revenue between $101 million and $103 million and full-year revenue between $350 million and $352 million.
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What happened Shares of Datadog (NASDAQ: DDOG) jumped on Wednesday after the data analytics company reported its third-quarter results. So what Datadog reported third-quarter revenue of $95.9 million, up 88% year over year and $11.2 million above the average analyst estimate. The company now has 727 customers with an annualized revenue run rate of at least $100,000, up 93% year over year.
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513a9f03-6da7-482c-9e81-a5d2f4e280d6
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719090.0
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2019-11-13 00:00:00 UTC
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Datadog Delivers in Its First Quarter as a Public Company
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DDOG
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https://www.nasdaq.com/articles/datadog-delivers-in-its-first-quarter-as-a-public-company-2019-11-13
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nan
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nan
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You only get one chance to make a first impression, and Datadog (NASDAQ: DDOG) apparently nailed it in its first financial report as a public company. The provider of cloud monitoring and analytics tools moved sharply higher after posting better-than-expected third-quarter results shortly after Tuesday's close.
Revenue soared 88% to hit a record $95.9 million for the three months ending in September, an impressive feat since investors saw Datadog's top line slow to 79% growth through the first half of this year after last year's 97% surge in revenue. Investors were betting on continued deceleration, as analysts were forecasting a mere 66% year-over-year top-line increase. The good news didn't stop there.
Image source: Datadog.
This dog could be an investor's best friend
Datadog isn't expected to be profitable for a couple more years, but it surprised analysts by reporting a narrowing deficit -- and actually breaking even on an adjusted basis. The popularity of its platform that keeps tabs on a cloud's uptime as well as general cloud health keeps growing.
The ideal client for Datadog is a large company with a cloud presence, and one in which the different developers, IT operations teams, and business users need to be on the same page with visibility across all of an organization's silos. Datadog customers tend to be big spenders on the platform, with 727 customers generating an annual revenue run rate of at least $100,000 (nearly doubling over the past year).
Datadog didn't divulge its dollar-based net retention rate in its earnings release or during the subsequent conference call, a surprising move for a company that turned heads when it went public with its prospectus boasting a rate of 146% at the midpoint of 2019. The metric is likely holding up just fine given Datadog's explosive growth for the quarter.
Guidance is another highlight in Datadog's first financial report as a public company, even if revenue will slow sharply in the current quarter. The company expects to crack into the nine figures for the fourth quarter. The $101 million to $103 million that Datadog is modeling is just a 64% to 67% year-over-year advance, but analysts were settling for just $91.5 million on the top line, or 49% growth. Datadog also sees a much smaller adjusted deficit than what Wall Street pros were expecting.
The company's full-year outlook is even more impressive. It sees $350 million to $352 million in revenue for all of 2019, more than $20 million above the $330.2 million that analysts were projecting. If there were any concerns that Datadog went public two months ago as an exit strategy because its business was peaking, those fears can now be laid to rest.
Investing in IPO stocks isn't for the risk-averse, and Datadog's valuation isn't cheap at an enterprise value that is more than 30 times its trailing revenue. However, a blowout quarterly report out of the gate sets the right tone. Datadog's bite is as strong as its bark.
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 quadrupled 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 June 1, 2019
Rick Munarriz 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.
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You only get one chance to make a first impression, and Datadog (NASDAQ: DDOG) apparently nailed it in its first financial report as a public company. The provider of cloud monitoring and analytics tools moved sharply higher after posting better-than-expected third-quarter results shortly after Tuesday's close. This dog could be an investor's best friend Datadog isn't expected to be profitable for a couple more years, but it surprised analysts by reporting a narrowing deficit -- and actually breaking even on an adjusted basis.
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You only get one chance to make a first impression, and Datadog (NASDAQ: DDOG) apparently nailed it in its first financial report as a public company. Revenue soared 88% to hit a record $95.9 million for the three months ending in September, an impressive feat since investors saw Datadog's top line slow to 79% growth through the first half of this year after last year's 97% surge in revenue. Guidance is another highlight in Datadog's first financial report as a public company, even if revenue will slow sharply in the current quarter.
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You only get one chance to make a first impression, and Datadog (NASDAQ: DDOG) apparently nailed it in its first financial report as a public company. Revenue soared 88% to hit a record $95.9 million for the three months ending in September, an impressive feat since investors saw Datadog's top line slow to 79% growth through the first half of this year after last year's 97% surge in revenue. Guidance is another highlight in Datadog's first financial report as a public company, even if revenue will slow sharply in the current quarter.
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You only get one chance to make a first impression, and Datadog (NASDAQ: DDOG) apparently nailed it in its first financial report as a public company. Revenue soared 88% to hit a record $95.9 million for the three months ending in September, an impressive feat since investors saw Datadog's top line slow to 79% growth through the first half of this year after last year's 97% surge in revenue. Guidance is another highlight in Datadog's first financial report as a public company, even if revenue will slow sharply in the current quarter.
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c6b162c8-e83b-4696-b1e9-f8c0e4fec0ea
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719091.0
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2019-11-10 00:00:00 UTC
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With Its Data Analytics Engine, Alteryx Keeps Its Foot on the Gas in Q3 2019
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DDOG
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https://www.nasdaq.com/articles/with-its-data-analytics-engine-alteryx-keeps-its-foot-on-the-gas-in-q3-2019-2019-11-10
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nan
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nan
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The data analytics industry has been big news this year, and for good reason. Businesses are spending hundreds of billions of dollars, possibly trillions, to update their operations for the digital age. Tools that make sense of all that new digital data are thus in high demand. Google parent Alphabet and salesforce.com have both spent billions to acquire analytics firms, and a new firm, Datadog, recently hit the market toting a valuation of $10 billion.
Not to be left out of the conversation is the (relatively speaking) old dog Alteryx (NYSE: AYX). Alteryx stock is up 76% over the trailing 12-month stretch, which includes a recent tumble along with other high-flying software companies late in the summer. Growth reaccelerated during the company's 2019 third quarter, though, and management sees plenty left in the tank in the years ahead.
2019 keeps getting better
The company's Q3 revenue grew 65% year over year to $103 million. Alteryx landed 335 new customers in the quarter, bringing its total count up to 5,613. Management said that only 683 of those relationships are in the Global 2000 (a list of the world's largest publicly-traded companies), leading to the belief that there's plenty of room to keep adding big new customer contracts.
Besides new clients, Alteryx has also been able to steadily grow its relationship with existing ones. Its dollar-based net expansion rate came in at 132%, implying that the average existing customer spent 32% more in the last quarter than it did a year ago.
The bottom line adjusted for one-time items and stock-based compensation also improved from the year prior, rising 38% to $16.4 million. Alteryx is all about growth now and maximum profits later, still, it's heartening to find a high-growth technology outfit that's operating in the black. All told, pairing Q3 with the first half of 2019 yields some impressive results for this data analytics outfit.
Data source: Alteryx. Pp = percentage point.
Alteryx on growth, acquisitions, and the future of data
It's been an impressive run for the software company, especially considering that Alteryx isn't a new kid on the block. The company was founded over two decades ago in 1997, but the torrid pace of digital data creation and the digital transformation movement of the past couple of years has supersized its expansion as of late. CEO Dean Stoecker cited a report from tech researcher IDC during the lastearnings callthat predicts organizations could spend $2 trillion on digital upgrades in 2019 alone. That's been a powerful tailwind for Alteryx and the broader big data industry, and Stoecker explained that he sees his company's software platform as a means to drive that digital transformation.
Image source: Getty Images.
Specifically, one of the themes Alteryx is being tapped for is automation. Data scientists have moved beyond just putting together charts and graphs -- that's what the computer does now. Instead, they're spending their time helping make business decisions and making complex assumptions with data sets. To aid with the automation of lower-level tasks, Alteryx announced in October that it has acquired Feature Labs, a machine learning start-up that originated out of MIT.
In its acquisition press release, citing data from Gartner, Alteryx said that 40% of data science tasks will be automated by next year. Feature Labs uses artificial intelligence to help train digital systems and collect the right data, leaving data scientists and business analysts to make sense of the information to drive better outcomes. With automation on the rise, the tiny firm should be a natural fit for what Alteryx is already trying to do.
As for the outlook, management did forecast a slowdown during Q4. Revenue should be $128 million to $131 million, marking an improvement of 44% over a year ago and good for $0.27 to $0.30 in adjusted earnings per share. It's a sharp drop in growth rate from what was just posted in Q3, but management has been conservative with guidance recently, so another surprise to the upside could be in store. Either way, it's clear that this data software company is still going strong and is worth keeping an eye on.
10 stocks we like better than Alteryx
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 quadrupled the market.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Alteryx wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of June 1, 2019
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Nicholas Rossolillo and his clients own shares of Alphabet (C shares), Alteryx, and Salesforce.com. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Alteryx, Datadog, and Salesforce.com. 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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Management said that only 683 of those relationships are in the Global 2000 (a list of the world's largest publicly-traded companies), leading to the belief that there's plenty of room to keep adding big new customer contracts. CEO Dean Stoecker cited a report from tech researcher IDC during the lastearnings callthat predicts organizations could spend $2 trillion on digital upgrades in 2019 alone. That's been a powerful tailwind for Alteryx and the broader big data industry, and Stoecker explained that he sees his company's software platform as a means to drive that digital transformation.
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Google parent Alphabet and salesforce.com have both spent billions to acquire analytics firms, and a new firm, Datadog, recently hit the market toting a valuation of $10 billion. In its acquisition press release, citing data from Gartner, Alteryx said that 40% of data science tasks will be automated by next year. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Alteryx, Datadog, and Salesforce.com.
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Alteryx on growth, acquisitions, and the future of data It's been an impressive run for the software company, especially considering that Alteryx isn't a new kid on the block. In its acquisition press release, citing data from Gartner, Alteryx said that 40% of data science tasks will be automated by next year. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Alteryx, Datadog, and Salesforce.com.
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Growth reaccelerated during the company's 2019 third quarter, though, and management sees plenty left in the tank in the years ahead. Alteryx on growth, acquisitions, and the future of data It's been an impressive run for the software company, especially considering that Alteryx isn't a new kid on the block. Feature Labs uses artificial intelligence to help train digital systems and collect the right data, leaving data scientists and business analysts to make sense of the information to drive better outcomes.
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657e8d94-d492-4d7f-8a94-66d6710683fc
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719092.0
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2019-11-05 00:00:00 UTC
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Stocks to Watch in November
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DDOG
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https://www.nasdaq.com/articles/stocks-to-watch-in-november-2019-11-05
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nan
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nan
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November is a month of cranberry sauce and gratitude, but it often means more than that for investors. We're wrapping up earnings season now. Holiday shopping will kick off near the end of the month, leaving investors with more knowledge than they had when the month began.
Datadog (NASDAQ: DDOG), Activision Blizzard (NASDAQ: ATVI), and Amazon.com (NASDAQ: AMZN) are some of the companies that will be making moves this month. Let's see why these are stocks to watch in November.
The Datadog mascot. Image source: Datadog.
Activision Blizzard: Nov. 6
Die-hard gamers can be fickle, and this isn't Activision Blizzard at its best. Analysts are bracing for a 29% year-over-year plunge in quarterly revenue when it reports financial results on Thursday afternoon, with profits being slashed by more than half. Expectations are low, and recent tensions in China, where Activision Blizzard's move to suspend a prolific esports personality for making comments in support of the Hong Kong protests polarized gamers and investors alike.
Investors will be hanging on for hope when it comes to guidance this week. The company rolled out Call of Duty: Modern Warfare -- the latest installment of its combat franchise that peaked in 2011 -- as well as Call of Duty: Mobile for smartphone players last month. Between the new releases and a better handle on the fallout from its esports suspension, any insight that Activision Blizzard offers on its near-term prospects will go a long way to dictating the stock's direction.
Datadog: Nov. 12
The last few months have been rough for the IPO market. We've seen prolific offerings come undone before the opening bell, and even many of the big names to make it to the trading floor have buckled below their IPO prices. Investing in IPO stocks isn't easy these days.
Datadog is one of the few recent debutantes to still have its head above water. The cloud monitoring and analytics specialist went public at $27 in mid-September, and it's currently trading 28% higher.
The first big test for any IPO is its initial earnings report as a public company, and for Datadog that will come next week. It has a lot of growth momentum heading into next Tuesday's report. Revenue nearly doubled last year, and it has risen almost 80% through the first half of 2019. With more large companies hopping onto the cloud and uptime reigning supreme, Datadog's been growing its client base, and the same can be said for how much those customers are willing to pay for the platform's crucial insight.
A strong report will keep the party going for Datadog, naturally. If things don't go swimmingly -- if the top line decelerates sharply or its impressive dollar-based net retention rate takes a breather -- it wouldn't be a surprise to see the stock become the latest broken IPO. It's hard to regain the market's confidence if you burn investors in your first earnings report as a public company.
Amazon.com: Nov. 22
The timing of this year's Thanksgiving holiday is going to pinch some retailers. The holiday that officially kicks off the telltale shopping season is on the fourth Thursday of the month, and since it falls on Nov. 28 this time, it's the latest possible start for a season that always ends on Christmas.
Amazon is trying to make its own luck. Instead of following the calendar into Black Friday on Nov. 29, the world's largest online retailer is launching an eight-day Black Friday sale that starts a week earlier. Kicking off sales on Nov. 22 is brilliant, giving it a jump on the brick-and-mortar competition that's already reeling from the e-tail challenge. With the company continuing to speed up its fulfillment and lowering the minimum for free shipping on Amazon-warehoused goods, things are shaping up nicely again during this crucial time of year.
10 stocks we like better than Amazon
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 quadrupled the market.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Amazon wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of June 1, 2019
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Rick Munarriz owns shares of Datadog. The Motley Fool owns shares of and recommends Activision Blizzard and Amazon. The Motley Fool recommends Datadog. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Datadog (NASDAQ: DDOG), Activision Blizzard (NASDAQ: ATVI), and Amazon.com (NASDAQ: AMZN) are some of the companies that will be making moves this month. Expectations are low, and recent tensions in China, where Activision Blizzard's move to suspend a prolific esports personality for making comments in support of the Hong Kong protests polarized gamers and investors alike. With more large companies hopping onto the cloud and uptime reigning supreme, Datadog's been growing its client base, and the same can be said for how much those customers are willing to pay for the platform's crucial insight.
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Datadog (NASDAQ: DDOG), Activision Blizzard (NASDAQ: ATVI), and Amazon.com (NASDAQ: AMZN) are some of the companies that will be making moves this month. The Motley Fool owns shares of and recommends Activision Blizzard and Amazon. The Motley Fool recommends Datadog.
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Datadog (NASDAQ: DDOG), Activision Blizzard (NASDAQ: ATVI), and Amazon.com (NASDAQ: AMZN) are some of the companies that will be making moves this month. The first big test for any IPO is its initial earnings report as a public company, and for Datadog that will come next week. See the 10 stocks *Stock Advisor returns as of June 1, 2019 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), Activision Blizzard (NASDAQ: ATVI), and Amazon.com (NASDAQ: AMZN) are some of the companies that will be making moves this month. The first big test for any IPO is its initial earnings report as a public company, and for Datadog that will come next week. Amazon.com: Nov. 22 The timing of this year's Thanksgiving holiday is going to pinch some retailers.
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5d0cc754-2698-4127-a353-acbc9e3f37d8
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719093.0
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2019-10-24 00:00:00 UTC
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Why Datadog Stock Jumped Thursday
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DDOG
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https://www.nasdaq.com/articles/why-datadog-stock-jumped-thursday-2019-10-24
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nan
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nan
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What happened
Shares of monitoring and analytics platform Datadog (NASDAQ: DDOG) jumped on Thursday. The stock closed the trading day up 13%.
The stock's gain comes as a Morgan Stanley analyst predicted the company is well set up heading into its third-quarter results next month.
Image source: Getty Images.
So what
Datadog is one of the best-positioned companies in the infrastructure software market going into third-quarter updates, said Morgan Stanley analyst Sanjit Singh about the growth stock in a note to clients (via TheFly) on Thursday morning. He also said that Datadog has strong business momentum and could see accelerating year-over-year growth.
The analyst has an equal-weight rating on the stock and a $39 12-month price target.
Now what
On Nov. 12, Datadog will report its inaugural earnings report since going public in September. The market has high expectations for the company.
Datadog has garnered a $9.6 billion market capitalization despite having less than $300 million in revenue. But the company is growing at a wild pace. Revenue for the trailing-12-month period ending June 30 increased 82% year over year.
10 stocks we like better than Datadog 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 quadrupled the market.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Datadog Inc wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of June 1, 2019
Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool 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 Datadog (NASDAQ: DDOG) jumped on Thursday. The stock's gain comes as a Morgan Stanley analyst predicted the company is well set up heading into its third-quarter results next month. So what Datadog is one of the best-positioned companies in the infrastructure software market going into third-quarter updates, said Morgan Stanley analyst Sanjit Singh about the growth stock in a note to clients (via TheFly) on Thursday morning.
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What happened Shares of monitoring and analytics platform Datadog (NASDAQ: DDOG) jumped on Thursday. The stock's gain comes as a Morgan Stanley analyst predicted the company is well set up heading into its third-quarter results next month. So what Datadog is one of the best-positioned companies in the infrastructure software market going into third-quarter updates, said Morgan Stanley analyst Sanjit Singh about the growth stock in a note to clients (via TheFly) on Thursday morning.
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What happened Shares of monitoring and analytics platform Datadog (NASDAQ: DDOG) jumped on Thursday. So what Datadog is one of the best-positioned companies in the infrastructure software market going into third-quarter updates, said Morgan Stanley analyst Sanjit Singh about the growth stock in a note to clients (via TheFly) on Thursday morning. 10 stocks we like better than Datadog Inc 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 Datadog (NASDAQ: DDOG) jumped on Thursday. So what Datadog is one of the best-positioned companies in the infrastructure software market going into third-quarter updates, said Morgan Stanley analyst Sanjit Singh about the growth stock in a note to clients (via TheFly) on Thursday morning. The market has high expectations for the company.
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d765c972-e72e-4b93-9b8b-32c80fccff67
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719094.0
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2019-10-23 00:00:00 UTC
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How Did Venture Capital and Private Equity Perform in the IPO Market Last Quarter?
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DDOG
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https://www.nasdaq.com/articles/how-did-venture-capital-and-private-equity-perform-in-the-ipo-market-last-quarter-2019-10
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nan
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nan
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Out of 39 IPOs in the 3Q19, venture capital brought 16 deals to market, or 40% of 3Q19 IPO activity, mostly healthcare (8) and tech (6). Activity declined due to a pullback in tech multiples, along with fewer biotechs and Chinese issuers. Yet VC IPOs still raised $5.1 billion, double the five-year median.
Eight VC IPOs went public with billion-dollar valuations, including Index Ventures: Datadog (DDOG) and NEA-backed Cloudflare (NET). Peloton (PTON) raised over $1 billion in the largest VC consumer IPO in 20 years.
The overall group averaged a 6% return thanks to the US tech names.
Private equity averaged a 9% gain in the 3Q19, as diverse group of eight PE-backed IPOs raised $2.9 billion.
SmileDirectClub (SDC) represented almost half of PE proceeds, and it was both the fastest grower and worst performer. TPG/Goldman-backed insurer ProSight (PROS) was the top-performer, finishing the quarter with a 38% gain. PE also backed two software providers: Vista Equity’s Ping Identity (PING) and Thoma Bravo’s Dynatrace (DT).
Read more about VC/PE performance in our
3Q19 IPO Market Review.
IPO Pro gives hundreds of business professionals an edge by providing reliable IPO data to help find their next big opportunity. Access the IPO Pro Platform (including our Venture Capital and Private Equity Screens) now with a free trial.
The article How Did Venture Capital and Private Equity Perform in the IPO Market Last Quarter? originally appeared on IPO investment manager Renaissance Capital's web site renaissancecapital.com.
Investment Disclosure: The information and opinions expressed herein were prepared by Renaissance Capital's research analysts and do not constitute an offer to buy or sell any security. Renaissance Capital's Renaissance IPO ETF (symbol: IPO), Renaissance International ETF (symbol: IPOS), or separately managed institutional accounts may have investments in securities of companies mentioned.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Eight VC IPOs went public with billion-dollar valuations, including Index Ventures: Datadog (DDOG) and NEA-backed Cloudflare (NET). Access the IPO Pro Platform (including our Venture Capital and Private Equity Screens) now with a free trial. Investment Disclosure: The information and opinions expressed herein were prepared by Renaissance Capital's research analysts and do not constitute an offer to buy or sell any security.
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Eight VC IPOs went public with billion-dollar valuations, including Index Ventures: Datadog (DDOG) and NEA-backed Cloudflare (NET). The article How Did Venture Capital and Private Equity Perform in the IPO Market Last Quarter? originally appeared on IPO investment manager Renaissance Capital's web site renaissancecapital.com.
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Eight VC IPOs went public with billion-dollar valuations, including Index Ventures: Datadog (DDOG) and NEA-backed Cloudflare (NET). Out of 39 IPOs in the 3Q19, venture capital brought 16 deals to market, or 40% of 3Q19 IPO activity, mostly healthcare (8) and tech (6). The article How Did Venture Capital and Private Equity Perform in the IPO Market Last Quarter?
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Eight VC IPOs went public with billion-dollar valuations, including Index Ventures: Datadog (DDOG) and NEA-backed Cloudflare (NET). Out of 39 IPOs in the 3Q19, venture capital brought 16 deals to market, or 40% of 3Q19 IPO activity, mostly healthcare (8) and tech (6). Private equity averaged a 9% gain in the 3Q19, as diverse group of eight PE-backed IPOs raised $2.9 billion.
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fc86e52b-f70a-4ff6-a5c1-aef9c83467bf
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719095.0
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2019-10-21 00:00:00 UTC
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Monday's ETF with Unusual Volume: VOT
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DDOG
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https://www.nasdaq.com/articles/mondays-etf-with-unusual-volume%3A-vot-2019-10-21
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nan
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nan
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The Vanguard Mid-Cap Growth ETF (VOT) is seeing unusually high volume in afternoon trading Monday, with over 356,000 shares traded versus three month average volume of about 142,000. Shares of VOT were up about 0.8% on the day.
Components of that ETF with the highest volume on Monday were Advanced Micro Devices (AMD), trading up about 3.6% with over 36.5 million shares changing hands so far this session, and Snap (SNAP), up about 7.8% on volume of over 26.6 million shares. Seattle Genetics (SGEN) is the component faring the best Monday, higher by about 17% on the day, while Datadog (DDOG) is lagging other components of the Vanguard Mid-Cap Growth ETF, trading lower by about 5%.
VIDEO: Monday's ETF with Unusual Volume: VOT
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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Seattle Genetics (SGEN) is the component faring the best Monday, higher by about 17% on the day, while Datadog (DDOG) is lagging other components of the Vanguard Mid-Cap Growth ETF, trading lower by about 5%. The Vanguard Mid-Cap Growth ETF (VOT) is seeing unusually high volume in afternoon trading Monday, with over 356,000 shares traded versus three month average volume of about 142,000. Components of that ETF with the highest volume on Monday were Advanced Micro Devices (AMD), trading up about 3.6% with over 36.5 million shares changing hands so far this session, and Snap (SNAP), up about 7.8% on volume of over 26.6 million shares.
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Seattle Genetics (SGEN) is the component faring the best Monday, higher by about 17% on the day, while Datadog (DDOG) is lagging other components of the Vanguard Mid-Cap Growth ETF, trading lower by about 5%. The Vanguard Mid-Cap Growth ETF (VOT) is seeing unusually high volume in afternoon trading Monday, with over 356,000 shares traded versus three month average volume of about 142,000. VIDEO: Monday's ETF with Unusual Volume: VOT 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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Seattle Genetics (SGEN) is the component faring the best Monday, higher by about 17% on the day, while Datadog (DDOG) is lagging other components of the Vanguard Mid-Cap Growth ETF, trading lower by about 5%. The Vanguard Mid-Cap Growth ETF (VOT) is seeing unusually high volume in afternoon trading Monday, with over 356,000 shares traded versus three month average volume of about 142,000. Components of that ETF with the highest volume on Monday were Advanced Micro Devices (AMD), trading up about 3.6% with over 36.5 million shares changing hands so far this session, and Snap (SNAP), up about 7.8% on volume of over 26.6 million shares.
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Seattle Genetics (SGEN) is the component faring the best Monday, higher by about 17% on the day, while Datadog (DDOG) is lagging other components of the Vanguard Mid-Cap Growth ETF, trading lower by about 5%. Components of that ETF with the highest volume on Monday were Advanced Micro Devices (AMD), trading up about 3.6% with over 36.5 million shares changing hands so far this session, and Snap (SNAP), up about 7.8% on volume of over 26.6 million shares. VIDEO: Monday's ETF with Unusual Volume: VOT 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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50b45126-e753-4cbe-98f3-ee466b8a27f8
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719096.0
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2019-10-17 00:00:00 UTC
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Sum Up The Parts: VV Could Be Worth $151
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DDOG
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https://www.nasdaq.com/articles/sum-up-the-parts%3A-vv-could-be-worth-%24151-2019-10-17
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nan
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nan
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Looking at the underlying holdings of the ETFs in our coverage universe at ETF Channel, we have compared the trading price of each holding against the average analyst 12-month forward target price, and computed the weighted average implied analyst target price for the ETF itself. For the Vanguard Large-Cap ETF (Symbol: VV), we found that the implied analyst target price for the ETF based upon its underlying holdings is $151.20 per unit.
With VV trading at a recent price near $137.06 per unit, that means that analysts see 10.32% upside for this ETF looking through to the average analyst targets of the underlying holdings. Three of VV's underlying holdings with notable upside to their analyst target prices are GoDaddy Inc (Symbol: GDDY), Cabot Oil & Gas Corp. (Symbol: COG), and Datadog Inc (Symbol: DDOG). Although GDDY has traded at a recent price of $64.24/share, the average analyst target is 34.58% higher at $86.45/share. Similarly, COG has 30.05% upside from the recent share price of $17.85 if the average analyst target price of $23.21/share is reached, and analysts on average are expecting DDOG to reach a target price of $41.33/share, which is 28.36% above the recent price of $32.20. Below is a twelve month price history chart comparing the stock performance of GDDY, COG, and DDOG:
Below is a summary table of the current analyst target prices discussed above:
Are analysts justified in these targets, or overly optimistic about where these stocks will be trading 12 months from now? Do the analysts have a valid justification for their targets, or are they behind the curve on recent company and industry developments? A high price target relative to a stock's trading price can reflect optimism about the future, but can also be a precursor to target price downgrades if the targets were a relic of the past. These are questions that require further investor research.
10 ETFs With Most Upside To Analyst Targets »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Below is a twelve month price history chart comparing the stock performance of GDDY, COG, and DDOG: Below is a summary table of the current analyst target prices discussed above: Are analysts justified in these targets, or overly optimistic about where these stocks will be trading 12 months from now? Three of VV's underlying holdings with notable upside to their analyst target prices are GoDaddy Inc (Symbol: GDDY), Cabot Oil & Gas Corp. (Symbol: COG), and Datadog Inc (Symbol: DDOG). Similarly, COG has 30.05% upside from the recent share price of $17.85 if the average analyst target price of $23.21/share is reached, and analysts on average are expecting DDOG to reach a target price of $41.33/share, which is 28.36% above the recent price of $32.20.
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Three of VV's underlying holdings with notable upside to their analyst target prices are GoDaddy Inc (Symbol: GDDY), Cabot Oil & Gas Corp. (Symbol: COG), and Datadog Inc (Symbol: DDOG). Similarly, COG has 30.05% upside from the recent share price of $17.85 if the average analyst target price of $23.21/share is reached, and analysts on average are expecting DDOG to reach a target price of $41.33/share, which is 28.36% above the recent price of $32.20. Below is a twelve month price history chart comparing the stock performance of GDDY, COG, and DDOG: Below is a summary table of the current analyst target prices discussed above: Are analysts justified in these targets, or overly optimistic about where these stocks will be trading 12 months from now?
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Similarly, COG has 30.05% upside from the recent share price of $17.85 if the average analyst target price of $23.21/share is reached, and analysts on average are expecting DDOG to reach a target price of $41.33/share, which is 28.36% above the recent price of $32.20. Below is a twelve month price history chart comparing the stock performance of GDDY, COG, and DDOG: Below is a summary table of the current analyst target prices discussed above: Are analysts justified in these targets, or overly optimistic about where these stocks will be trading 12 months from now? Three of VV's underlying holdings with notable upside to their analyst target prices are GoDaddy Inc (Symbol: GDDY), Cabot Oil & Gas Corp. (Symbol: COG), and Datadog Inc (Symbol: DDOG).
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Three of VV's underlying holdings with notable upside to their analyst target prices are GoDaddy Inc (Symbol: GDDY), Cabot Oil & Gas Corp. (Symbol: COG), and Datadog Inc (Symbol: DDOG). Similarly, COG has 30.05% upside from the recent share price of $17.85 if the average analyst target price of $23.21/share is reached, and analysts on average are expecting DDOG to reach a target price of $41.33/share, which is 28.36% above the recent price of $32.20. Below is a twelve month price history chart comparing the stock performance of GDDY, COG, and DDOG: Below is a summary table of the current analyst target prices discussed above: Are analysts justified in these targets, or overly optimistic about where these stocks will be trading 12 months from now?
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3efb7fe0-5473-4ba2-a8b1-c73d410152f4
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719097.0
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2019-10-16 00:00:00 UTC
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Splunk Stock Actually Is Cheap, But Why Is That?
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DDOG
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https://www.nasdaq.com/articles/splunk-stock-actually-is-cheap-but-why-is-that-2019-10-16
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nan
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nan
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To many investors, the idea that Splunk (NASDAQ:) stock is cheap seems ludicrous. Splunk’s guidance calls for negative operating cash flow this year. And Splunk stock trades at roughly eight times its sales (excluding its net cash) and 50 times analysts’ average 2020 earnings per share estimate.
Source: Michael Vi / Shutterstock.com
Splunk stock hardly seems like a value play. But it does look at least inexpensive compared with its peers. Its price-sales ratio is one of the lowest of any company whose revenues are growing at a 30%+ clip.
In recent quarters, Workday (NASDAQ:) and Paycom Software (NYSE:) posted similar revenue increases as SPLK. WDAY trades at over 11 times its revenue, and PAYC’s price-sales ratio is 17. Other software companies are growing at rates similar to SPLK and have higher valuations.
But why is SPLK stock trading at a discount to some of its peers and why has that situation persisted? SPLK stock has gained roughly 20% over the past year, but that figure is skewed by timing. Splunk stock actually sits below where it was after its fiscal Q2 results which were released back in August 2018.
There are interesting arguments for why the relatively low valuation of Splunk stock has created a buying opportunity. There are also interesting arguments as to why SPLK stock deserves the discount. Overall, I’d lean towards the bullish argument. But investors who are considering buying Splunk stock need to consider multiple points.
The Case for Splunk Stock
Splunk stock is not necessarily cheap. Its valuation is still higher than that of the average stock, and for good reason.
Splunk’s log-management offerings are a direct play . And the company’s growth has been impressive. Its revenue increased 41% in fiscal 2017 and jumped 38%+ in the following two years. Its sales are expected to increase roughly 28% in FY20.
Meanwhile, as noted earlier, SPLK stock has stalled out, trading sideways for the last 13+ months. That performance, combined with the company’s revenue and profit growth, has caused the multiples of Splunk stock to fall. And bulls would argue that some of the relative weakness has come from a misunderstanding surrounding the company’s cash flow guidance.
After all, Splunk stock fell after its Q2 results partly because of its cash flow guidance. Splunk’s guidance went from $250 million to -$300 million, a seemingly huge change. But bulls would argue that the shift was caused by the company’s transition to a subscription model. That transition creates uneven sales growth, meaning the guidance change indicates little, if any, alteration of Splunk’s long-term cash flow.
That guidance overshadowed a strong report, as SPLK’s software revenue jumped 46% year-over-year. The bull case is that the company’s growth outlook remains intact, while short-term concerns have moved SPLK stock to a lower and more attractive valuation.
Wall Street analysts seem to agree; their average price target on SPLK stock is about 25% above its current price. Last month, Raymond James said the company’s could boost Splunk stock in the near-term.
The Case Against SPLK Stock
The bull case on SPLK is intriguing, and I wouldn’t be surprised to see SPLK stock break out at some point. But the shares pose some risks as well.
For one, SPLK might well be cheap on a relative basis, but that doesn’t guarantee that the shares will rise. Eight times revenue, even with Splunk’s attractive gross margins, still prices in quite a bit of growth. Moreover, Splunk stock lost about a third of its value during last year’s Q4 stock-market selloff. If the stock market tumbles again, SPLK stock will fall further.
The other considerable risk is on the competitive front. Splunk is the leader in log management, but it has some tough competitors. Elastic (NYSE:), for example, offers an open-source ELK Stack which allows customers to build their own log management systems, as opposed to buying them from Splunk.
Datadog (NASDAQ:), which recently launched its IPO, is another competitor. Datadog offers a unified platform that includes log management, but also infrastructure, cloud, and application-performance monitoring. DDOG is trading at roughly 20 times its revenue, suggesting that investors are bullish on its outlook.Both Datadog and Elastic have posted stronger revenue growth than Splunk of late, although both are doing so from lower revenue bases than SPLK.
Hope for a Better Entry Point?
For software-as-a-service (SaaS) investors, then, SPLK probably is at the top of the list. Its valuation might be questionable, but it is quite attractive relative to what investors have been willing to pay for growth stocks in recent years.
But I’m not sure Splunk stock quite gets to the point of being compelling for those investors who aren’t focused on growth stocks.
SPLK is facing risks. The shares probably can grow into their forward price-earnings multiple of 40+. But it only takes one earnings miss for competitive risks to move to the forefront of investors’ minds.
Given the performance of Splunk stock over the past 12+ months, it does seem worth staying on the sidelines and hoping for a better entry point. SPLK probably is cheap, but it’s a little too cheap. And there are reasons why it could get even cheaper.
As of this writing, Vince Martin has no positions in any securities mentioned.
The post 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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DDOG is trading at roughly 20 times its revenue, suggesting that investors are bullish on its outlook.Both Datadog and Elastic have posted stronger revenue growth than Splunk of late, although both are doing so from lower revenue bases than SPLK. That transition creates uneven sales growth, meaning the guidance change indicates little, if any, alteration of Splunk’s long-term cash flow. The bull case is that the company’s growth outlook remains intact, while short-term concerns have moved SPLK stock to a lower and more attractive valuation.
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DDOG is trading at roughly 20 times its revenue, suggesting that investors are bullish on its outlook.Both Datadog and Elastic have posted stronger revenue growth than Splunk of late, although both are doing so from lower revenue bases than SPLK. And Splunk stock trades at roughly eight times its sales (excluding its net cash) and 50 times analysts’ average 2020 earnings per share estimate. In recent quarters, Workday (NASDAQ:) and Paycom Software (NYSE:) posted similar revenue increases as SPLK.
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DDOG is trading at roughly 20 times its revenue, suggesting that investors are bullish on its outlook.Both Datadog and Elastic have posted stronger revenue growth than Splunk of late, although both are doing so from lower revenue bases than SPLK. The Case for Splunk Stock Splunk stock is not necessarily cheap. The Case Against SPLK Stock The bull case on SPLK is intriguing, and I wouldn’t be surprised to see SPLK stock break out at some point.
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DDOG is trading at roughly 20 times its revenue, suggesting that investors are bullish on its outlook.Both Datadog and Elastic have posted stronger revenue growth than Splunk of late, although both are doing so from lower revenue bases than SPLK. But investors who are considering buying Splunk stock need to consider multiple points. That transition creates uneven sales growth, meaning the guidance change indicates little, if any, alteration of Splunk’s long-term cash flow.
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af4db3fd-2c10-4fee-bc3a-5986c9d6b2c3
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719098.0
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2019-10-10 00:00:00 UTC
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Buy These 7 Mid-Cap Stocks to Make a Profit
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DDOG
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https://www.nasdaq.com/articles/buy-these-7-mid-cap-stocks-to-make-a-profit-2019-10-10
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nan
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nan
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It’s a mess out there. Investors started off the month of October by dumping their stocks. Last week brought heavy selling as investors contemplated weak manufacturing data, the possibility of impeachment, the trade war, and more. All in all, folks are starting to price in the possibility of another ruinous Q4, such as what we suffered to end last year.
With the panic comes opportunity, however. In particular, there are some great growth names in the mid-cap stocks space to look at now. As so many IPOs have crashed and burned recently, everything is getting tossed aside. This has given investors the best chance this year to get into high growth stocks at solid prices. And if those sorts of names aren’t your cup of tea, we’ve got some mid-cap stocks focused on dividends and income to consider as well.
Here are seven mid-cap stocks you need to have on your radar today.
Mid-Cap Stocks to Buy: Alteryx (AYX)
If you want to go hunting for mid-cap stocks that can turn into dominant giants over the next decade, you need to be looking in cloud software right now. With the crash of Uber (NYSE:), WeWork, and other so-called unicorn stocks, investors are dumping anything that is heavily focused on growth and which doesn’t generate many profits yet. As such, there has been no better time this year to load up on cloud and SaaS stocks as people take the whole sector out to the woodshed.
Enter our first stock to buy, Alteryx (NYSE:). Weighing in at a $7 billion market cap, Alteryx is arguably the most successful pureplay data analytics company out there. The company’s products make advanced data analysis techniques available to the lay worker. Alteryx started out of a company that turned complex map data into useful information, and has expanded dramatically from there.
Why buy AYX stock now? For one thing, the company is significantly profitable on an EPS basis; it’s set to earn about 50 cents per share this year. That’s not much for a $1o5 stock, but it’s far ahead of the average loss-making SaaS company. Second, AYX stock is down nearly 30% over the past few weeks as part of the general cloud bloodbath. Finally, Alteryx is one of the fastest-growing firms in its field, with year-over-year revenues up an astonishing 55%.
Datadog (DDOG)
Source: Shutterstock
If you haven’t heard of Datadog (NASDAQ:) yet, you’re not alone. The company provides analysis and monitoring services for cloud applications. By using Datadog, a customer can track various tools, services, databases, and applications and detect problems and outages more quickly. Datadog puts an IT department’s full infrastructure in one place, reducing friction and improving efficiency.
Not surprisingly, as the cloud continues to expand, companies have rushed to sign up for Datadog’s services. In fact, the company is approaching the 10,000 client mark now. Revenues have topped $300 million annualized and are growing at 85% year over year. This makes Datadog one of the fastest growing IPOs of recent years. And with a TAM of $35 billion, Datadog has plenty of room to run.
The thing that makes Datadog most fascinating is that there is a solid floor under its valuation. That’s because, Bloomberg , Cisco (NASDAQ:) attempted to acquire Datadog before the IPO. Bloomberg said that Cisco was willing to pay “significantly” more than the $7 billion valuation that Datadog IPOed at. Datadog dropped 20% last week along with other falling unicorn stocks, bringing its market cap down to less than $10 billion. Thus, we can now buy Datadog for seemingly near the same price that Cisco was willing to acquire it at.
PacWest Bancorp (PACW)
Source: Shutterstock
Want a mid-cap stock with a serious dividend yield? Check out PacWest Bancorp (NASDAQ:). The $4.1 billion bank is currently paying a 6.7% yield, making it one of my preferred stocks to buy for a growth and income investor.
As you can guess from the name, PacWest is based out of California. It has generated a far more profitable-than-average lending model there. PACW has done so by taking advantage of the robust tech environment, offering niche products such as financial offerings for venture capital firms. More broadly, PacWest has established a high margin line of lending focused on smaller businesses.
Not surprisingly, given the current worries around the economy in general and Silicon Valley in particular, investors have dumped PACW stock. However, the company’s earnings results have shown no reason for panic. Profits remain high, while the bank’s loans are performing well. If you think the economy is heading for a recession, PACW stock would be a poor choice. But if you see the economy picking up some steam in coming months, PacWest is way too cheap here. Shares could rally from $35 now back up to $55, where they traded last year, while paying that huge dividend along the way.
First American Financial (FAF)
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Our next mid-cap stock to buy may be literally set to join the big leagues. What do I mean? Right now, the threshold for being large enough to make the S&P 500 index is around a $6 billion market cap. First American Financial’s (NYSE:) market cap is now up to $6.7 billion. That makes it larger than roughly three dozen of the firms that are currently in the index.
When the S&P 500 index’s managers recalibrate the index, they will kick out the firms that have sunk below the market cap threshold, and bring in new replacements such as First American. This, in turn, should cause FAF stock to surge as index funds are forced to purchase the stock.
That’s all well and good, but what does First American do? They offer title insurance, which you need to get a home mortgage. Almost no bank will lend money against a house unless you have title insurance. There are three major national players in title insurance, of which First American is second in market share.
FAF stock has surged this year, as investors have realized that lower interest rates will lead to a hotter housing market. First American makes money both off outright home sales and also with mortgage refinancings. Refis are getting more popular again as interest rates decline. Even with the company’s run so far this year, FAF stock is trading at less than 12x forward earnings while paying a 3% dividend yield. That’s cheap in this market.
If and when FAF stock is added to the S&P 500, it could shoot up to at least a 16x P/E ratio, causing the stock to jump 30% over the next year.
Grupo Aeroportuario del Pacifico (PAC)
Source: Shutterstock
You don’t have to stop your search for mid-cap stocks to buy at America’s borders. Why not hop on a southbound flight and land at one of Grupo Aeroportuario del Pacifico’s (NYSE:) 12 Mexican airports? The company operates numerous leading Mexican airports including the tourist hotspots of Puerto Vallarta and Cabos along with the airport for Mexico’s second-largest city, Guadalajara.
Pacifico has been highly successful. Since its 2006 IPO, PAC stock is up almost 300%, along with paying huge dividends along the way. The stock yields nearly 5% at the moment, as the company pays out most of its operating cash flow to shareholders every year.
Why has the airport operator been so successful? Fundamentally, it’s a great business. There is no competition, as each city it serves has just one airport. The company doesn’t have to spend much cash, once an airport is built, profit margins rise as more and more passengers use it. Additionally, the company is able to raise the fees it charges per passenger every year.
PAC stock has underperformed over the past couple of years thanks to between the U.S. and Mexico. But the company’s underlying business continues to grow at a double-digit rate and shares have 50% upside over the next couple of years as political worries fade.
A.O. Smith (AOS)
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Unlike PAC, A.O. Smith (NYSE:) is a U.S.-based company. However, like our previous mid-cap stock to buy, A.O. Smith also has a major exposure to international politics and trade. In fact, it’s one of the most affected stocks by the ongoing trade war. Why’s that?
Because A.O. Smith is a global leader in hot water heaters. This is a mature, slow-growing market in the U.S. and other developed countries. However, the hot water space has been booming in emerging markets such as China. Not surprisingly, AOS stock has lost a ton of momentum since the trade war heated up; shares are down 30% from their 2018 highs.
AOS stock could easily recover and rejoin its bigger-cap brethren in coming months. Once the trade war is settled, A.O. Smith’s earnings should surge again. At 17x earnings, investors aren’t paying too steep a price for AOS stock in the meantime. Meanwhile, they get one of the country’s Dividend Aristocrats. That’s right, A.O. Smith has grown its annual dividend for more than 25 years in a row and is currently on a hot streak; they’ve grown the dividend from 19 cents annually to 88 cents over the past decade.
Eastman Chemical (EMN)
At a $9.9 billion market cap, Eastman Chemical (NYSE:) is right on the threshold between being a mid-cap and a large-cap stock. And given its deeply discounted valuation — it’s currently at just 8x forward earnings — arguably it should have a market cap way north of $10 billion. But that leaves you the opportunity to grab this mid-cap stock on sale before it ascends to the highest tier in coming months.
Eastman Chemical was a spin-off from Eastman Kodak; in this case, the former subsidiary ended up being much more successful than its corporate parent. While analog photography is no longer a big business, Eastman Chemical has evolved to provide dozens of specialty chemicals, fibers, adhesives and so on for a wide range of industries.
As you might expect, the combination of the trade war and economic worries has not been kind to EMN stock. Shares are trading down at $70 — that’s back to 2013 levels and a far cry from the $110 peak it hit a couple years ago. That said, actual profits have remained robust, and EMN stock is now selling for 11x trailing and 8x forward earnings.
Analysts see a path to solid earnings growth despite the economic conditions. Throw in any improvement in the economic outlook or a trade deal and Eastman could surge. If Eastman trades up to 12x next year’s earnings, instead of the current 8x price, that’d result in a 50% gain on the share price. While you wait, EMN stock currently offers a 3.5% dividend yield as well.
At the time of this writing, Ian Bezek owned AYX, DDOG, PACW, FAF, PAC, AOS, and EMN stock. You can reach him on Twitter at @irbezek.
The post 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 (DDOG) Source: Shutterstock If you haven’t heard of Datadog (NASDAQ:) yet, you’re not alone. At the time of this writing, Ian Bezek owned AYX, DDOG, PACW, FAF, PAC, AOS, and EMN stock. With the crash of Uber (NYSE:), WeWork, and other so-called unicorn stocks, investors are dumping anything that is heavily focused on growth and which doesn’t generate many profits yet.
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At the time of this writing, Ian Bezek owned AYX, DDOG, PACW, FAF, PAC, AOS, and EMN stock. Datadog (DDOG) Source: Shutterstock If you haven’t heard of Datadog (NASDAQ:) yet, you’re not alone. Grupo Aeroportuario del Pacifico (PAC) Source: Shutterstock You don’t have to stop your search for mid-cap stocks to buy at America’s borders.
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Datadog (DDOG) Source: Shutterstock If you haven’t heard of Datadog (NASDAQ:) yet, you’re not alone. At the time of this writing, Ian Bezek owned AYX, DDOG, PACW, FAF, PAC, AOS, and EMN stock. Mid-Cap Stocks to Buy: Alteryx (AYX) If you want to go hunting for mid-cap stocks that can turn into dominant giants over the next decade, you need to be looking in cloud software right now.
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Datadog (DDOG) Source: Shutterstock If you haven’t heard of Datadog (NASDAQ:) yet, you’re not alone. At the time of this writing, Ian Bezek owned AYX, DDOG, PACW, FAF, PAC, AOS, and EMN stock. PacWest Bancorp (PACW) Source: Shutterstock Want a mid-cap stock with a serious dividend yield?
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2019-10-01 00:00:00 UTC
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Don't Underestimate Datadog's Intensifying Competition
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DDOG
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https://www.nasdaq.com/articles/dont-underestimate-datadogs-intensifying-competition-2019-10-01
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nan
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The monitoring and analytics software-as-a-service (SaaS) company Datadog (NASDAQ: DDOG) has been growing rapidly. But its impressive performance comes with a lofty valuation that the company's competition could damage.
An impressive performance
Datadog sells products that monitor and analyze every element of cloud-based and in-house IT (Information Technology) infrastructure. According to studies, the infrastructure monitoring and application performance management (APM) markets in which Datadog competes will grow annually by 6.6% and 11.84%, respectively, over the next several years. In contrast, Datadog grew its revenue by 96.6% and 79.5% year over year in 2018 and during the first half of this year, respectively.
The company's low revenue base -- $266 million over the last 12 months -- favors its fast growth. In comparison, Datadog's SaaS competitors New Relic (NYSE: NEWR) and Splunk (NASDAQ: SPLK) posted revenue of $512 million and $2 billion, respectively.
Image source: Getty Images.
Datadog's unique offering also contributes to the company's growth.
For instance, public cloud giants such as Amazon with Amazon Web Services (AWS) each offer their own monitoring capabilities. Many other legacy tech vendors don't propose a single integrated monitoring solution, either. For instance, since Cisco partnered with Splunk to enhance its monitoring portfolio, Cisco's customers must manage different tools to monitor and analyze their IT infrastructure. But Datadog's customers can monitor their different cloud and legacy-tech deployments with one single product, instead of having to deal with a different monitoring solution for each vendor.
Thanks to its competitive offering, Datadog has generated higher revenue growth compared to other fast-growing SaaS vendors, with lower sales and marketing expenses (see table below).
The company's annual retention rate of 146% shows existing customers are willing to increase their consumption of the company's products, and existing customers may involve reduced marketing efforts. Since 40% of the company's customers use more than one product, cross-selling opportunities may lower the company's sales and marketing expenses as well.
Data source: Datadog, CrowdStrike, Zscaler, Splunk, New Relic. YOY = year over year.
Lofty valuation
In any case, Datadog's market cap around $10 billion and corresponds to a lofty TTM price-to-sales ratio of roughly 37. In comparison, the market values Crowdstrike, which reported similar revenue growth, at a lower -- but still elevated -- price-to-sales ratio of 25.2.
Besides, excluding $5 million of one-time tax-related benefits, Datadog posted a loss of $18.44 million during the first half of the year. The company's sales and marketing expenses, albeit lower than its competitors, remain too high for the company to post a profit.
Thus, given Datadog's high valuation, investors expect the company to keep on generating strong revenue growth over the long term while improving its margins.
Competition is a significant risk
But Datadog is exposed to intensifying competition, and the attractiveness of the company's integrated platform may wane as competitors develop similar offerings.
For instance, following its recent agreement to acquire SignalFx, Splunk will enter into the APM business. Cisco is also developing its monitoring portfolio. After its $3.7 billion acquisition of AppDynamics in 2017, Cisco recently reinforced its partnership with Splunk. Given its cross-selling opportunities with its IT portfolio and its scale with its $51.9 billion of TTM revenue, Cisco's potential to build an integrated monitoring solution constitutes an increasing threat to Datadog.
Besides, Datadog's ability to stay competitive with a much lower R&D budget than some of its competitors represents a significant risk. The company's TTM R&D expenses of $78.7 million represented 29.6% of its revenue. In contrast, Splunk's and New Relic's R&D represented only 24.8% and 22.8% of their respective revenue. But thanks to their bigger scale, these two companies dedicated a much higher amount -- $507.6 million and $116.6 million, respectively -- for their R&D.
A risky bet, even for speculative investors
Datadog's high valuation compared to other fast-growing SaaS companies constitutes a real danger, as CrowdStrike's recent situation illustrates. Despite better-than-expected results and lifted guidance, CrowdStrike's stock price dropped after its latest earnings. Crowdstrike'selevated price-to-sales ratio above 57 before its earnings is my only explanation for the negative market reaction.
Even with Datadog's strong performance, buying into in the company at a price-to-sales ratio above 35 remains a risky bet for investors – especially given its exposure to extra competition.
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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 owns shares of Cisco Systems. The Motley Fool owns shares of and recommends Amazon, Splunk, and Zscaler, Inc. The Motley Fool owns shares of CrowdStrike Holdings, Inc. The Motley Fool recommends New Relic. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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The monitoring and analytics software-as-a-service (SaaS) company Datadog (NASDAQ: DDOG) has been growing rapidly. Thanks to its competitive offering, Datadog has generated higher revenue growth compared to other fast-growing SaaS vendors, with lower sales and marketing expenses (see table below). Given its cross-selling opportunities with its IT portfolio and its scale with its $51.9 billion of TTM revenue, Cisco's potential to build an integrated monitoring solution constitutes an increasing threat to Datadog.
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The monitoring and analytics software-as-a-service (SaaS) company Datadog (NASDAQ: DDOG) has been growing rapidly. In comparison, Datadog's SaaS competitors New Relic (NYSE: NEWR) and Splunk (NASDAQ: SPLK) posted revenue of $512 million and $2 billion, respectively. Thanks to its competitive offering, Datadog has generated higher revenue growth compared to other fast-growing SaaS vendors, with lower sales and marketing expenses (see table below).
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The monitoring and analytics software-as-a-service (SaaS) company Datadog (NASDAQ: DDOG) has been growing rapidly. In comparison, Datadog's SaaS competitors New Relic (NYSE: NEWR) and Splunk (NASDAQ: SPLK) posted revenue of $512 million and $2 billion, respectively. Thanks to its competitive offering, Datadog has generated higher revenue growth compared to other fast-growing SaaS vendors, with lower sales and marketing expenses (see table below).
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The monitoring and analytics software-as-a-service (SaaS) company Datadog (NASDAQ: DDOG) has been growing rapidly. In comparison, Datadog's SaaS competitors New Relic (NYSE: NEWR) and Splunk (NASDAQ: SPLK) posted revenue of $512 million and $2 billion, respectively. For instance, since Cisco partnered with Splunk to enhance its monitoring portfolio, Cisco's customers must manage different tools to monitor and analyze their IT infrastructure.
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d02b7ae9-b49d-4c23-986b-b4101b229757
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