Datadog Earnings: What To Look For From DDOG

Jabin Bastian /
2022/02/09 5:58 am EST

Cloud monitoring software company Datadog (NASDAQ:DDOG) will be announcing earnings results tomorrow morning. Here's what investors should know.

Last quarter Datadog reported revenues of $270.4 million, up 74.8% year on year, beating analyst revenue expectations by 9.14%. It was an impressive quarter for the company, with a very optimistic guidance for the next quarter and an exceptional revenue growth.

Is Datadog buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting Datadog's revenue to grow 48.2% year on year to $263.3 million, slowing down slightly from the 56.2% year-over-year increase in revenue the company had recorded in the same quarter last year. Earnings are expected to come in at $0.11 per share.

Datadog Total Revenue

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company has a history of exceeding Wall St's expectations, beating revenue estimates every single time over the past two years on average by 8.37%.

Looking at Datadog's peers in the software development segment, some of them have already reported Q4 earnings results, giving us a hint what we can expect. Dynatrace (NYSE:DT) delivered top-line growth of 31.6% year on year, beating analyst estimates by 2.67% and New Relic (NYSE:NEWR) reported revenues up 22.3% year on year, exceeding estimates by 1.56%. Dynatrace traded down 21.8% on weak guidance and fears of increasing competition, New Relic was down 23% in reaction to the results. Read our full analysis of Dynatrace's results here and New Relic's results here.

Triggered by the Federal Reserve's hawkish stance on interest rates, shares of technology companies have been facing sell-off in 2022 and while some of the software stocks have fared somewhat better, they have not been spared, with share price declining 7.48% over the last month. Datadog is up 2.27% during the same time, and is heading into the earnings with analyst price target of $207.8, compared to share price of $151.98.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

The author has no position in any of the stocks mentioned.