The end of an earnings season can be a great time to assess how companies are handling the current business environment and discover new stocks. Let’s have a look at how Datadog (NASDAQ:DDOG) and the rest of the cloud monitoring stocks fared in Q4.
Software is eating the world, increasing organizations’ reliance on digital-only solutions. As more workloads and applications move to the cloud, the reliability of the underlying cloud infrastructure becomes ever more critical, and ever more complex. To solve the challenge, companies and their engineering teams have turned to a range of cloud monitoring tools that provide them with visibility to troubleshoot the issues in real time.
The 5 cloud monitoring stocks we track reported a mixed Q4; on average, revenues beat analyst consensus estimates by 4.05%, while on average next quarter revenue guidance was 0.64% above consensus. Tech stocks have been hit the hardest as investors start to value profits over growth, but cloud monitoring stocks held their ground better than others, with the share prices up 13.3% since the previous earnings results, on average.
Weakest Q4: Datadog (NASDAQ:DDOG)
Named after a database the founders had to painstakingly look after at their previous company, Datadog (NASDAQ:DDOG) is a software as a service platform that makes it easier to monitor cloud infrastructure and applications.
Datadog reported revenues of $469.4 million, up 43.9% year on year, beating analyst expectations by 4.44%. Despite the top line beat, it was a weaker quarter for the company, with revenue guidance for the next quarter and the full year missing analysts' expectations.
"We are pleased with our fourth quarter performance, as we delivered more value to more customers across our broadening platform, while driving strong profitability and cash generation," said Olivier Pomel, co-founder and CEO of Datadog.
Datadog achieved the fastest revenue growth but had the weakest full year guidance update of the whole group. The company added 180 enterprise customers paying more than $100,000 annually to a total of 2,780. The stock is down 24.8% since the results and currently trades at $66.76.
Is now the time to buy Datadog? Access our full analysis of the earnings results here, it's free.
Best Q4: Sumo Logic (NASDAQ:SUMO)
Founded in 2010 by Christian Beegden who went from driving a cab in Germany to landing an internship at Amazon, Sumo Logic (NASDAQ:SUMO) is software as a service data analytics platform that helps companies get insight into what is happening in their servers and applications.
Sumo Logic reported revenues of $79 million, up 27.3% year on year, beating analyst expectations by 6.41%. It was a very strong quarter for the company, with a significant improvement in gross margin and a solid beat of analyst estimates.
Sumo Logic delivered the strongest analyst estimates beat and highest full year guidance raise among its peers. The stock is up 65.3% since the results and currently trades at $11.9.
Is now the time to buy Sumo Logic? Access our full analysis of the earnings results here, it's free.
New Relic (NYSE:NEWR)
With the name being an anagram of its founder, Lew Cirne, New Relic (NYSE:NEWR) makes a monitoring software that collects, scores, and analyses performance data about a client's IT stack.
New Relic reported revenues of $239.8 million, up 17.8% year on year, beating analyst expectations by 2.93%. It was a solid quarter for the company, with a significant improvement in gross margin and revenue guidance for the next quarter above analysts' estimates.
New Relic had the slowest revenue growth in the group. The stock is up 8.44% since the results and currently trades at $70.03.
Read our full analysis of New Relic's results here.
Started by three former Amazon engineers, PagerDuty (NYSE:PD) is a software as a service platform that helps companies respond to IT incidents fast and make sure that any downtime is minimized.
PagerDuty reported revenues of $101 million, up 28.6% year on year, beating analyst expectations by 1.99%. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and decelerating customer growth.
PagerDuty had the weakest performance against analyst estimates among the peers. The company lost 21 customers and ended up with a total of 15,244. The stock is up 15% since the results and currently trades at $32.02.
Read our full, actionable report on PagerDuty here, it's free.
Founded in Austria in 2005, Dynatrace (NYSE:DT) provides companies with software that allows them to monitor the performance of their full technology stack, from software applications to the infrastructure they run on.
Dynatrace reported revenues of $297.5 million, up 23.5% year on year, beating analyst expectations by 4.46%. It was a strong quarter for the company, with very optimistic guidance for the next quarter.
The stock is up 2.52% since the results and currently trades at $39.41.
Read our full, actionable report on Dynatrace here, it's free.
The author has no position in any of the stocks mentioned