It is Poised to be a Bull Market for Datadog Inc. (DDOG)

Datadog Inc. (NASDAQ: DDOG) stock fell -2.13% on Tuesday to $73.69 against a previous-day closing price of $75.29. With 4.54 million shares changed hands, the volume of the stock remained lighter than its average volume of 4.57 million shares. During the session, the Software – Application company that operates in wider Technology sector, reached to the highest price of $76.42 whereas the lowest price it dropped to was $73.29. The 52-week range on DDOG shows that it touched its highest point at $184.70 and its lowest point at $61.34 during that stretch. It currently has a 1-year price target of $108.90. Beta for the stock currently stands at 1.01.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of DDOG was up-trending over the past week, with a rise of 0.86%, but this was down by -4.51% over a month. Three-month performance dropped to -10.30% while six-month performance fell -18.57%. The stock lost -41.31% in the past year, while it has gained 0.26% so far this year. A look at the trailing 12-month EPS for DDOG yields -0.05 with Next year EPS estimates of 1.17. For the next quarter, that number is 0.19. This implies an EPS growth rate of 17.90% for this year and 27.96% for next year. EPS is expected to grow by 47.01% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 117.70%.

Float and Shares Shorts:

At present, 315.99 million DDOG shares are outstanding with a float of 263.53 million shares on hand for trading. On Oct 13, 2022, short shares totaled 12.22 million, which was 3.86% higher than short shares on Sep 14, 2022. In addition to Mr. Olivier Pomel as the firm’s Co-Founder, CEO & Director, Mr. Amit Agarwal serves as its Pres.

Institutional Ownership:

Through their ownership of 80.78% of DDOG’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 9.20% of DDOG, in contrast to 39.76% held by mutual funds. Shares owned by individuals account for 36.64%. As the largest shareholder in DDOG with 8.08% of the stake, The Vanguard Group, Inc. holds 23,596,442 shares worth 23,596,442. A second-largest stockholder of DDOG, Iconiq Capital LLC, holds 16,877,924 shares, controlling over 5.78% of the firm’s shares. Morgan Stanley Investment Managem is the third largest shareholder in DDOG, holding 15,543,297 shares or 5.32% stake. With a 2.74% stake in DDOG, the Vanguard Total Stock Market Index is the largest stakeholder. A total of 7,996,299 shares are owned by the mutual fund manager. The Vanguard Mid Cap Index Fund, which owns about 2.10% of DDOG stock, is the second-largest Mutual Fund holder. It holds 6,123,770 shares valued at 450.1 million. T Rowe Price New Horizons Fund holds 1.57% of the stake in DDOG, owning 4,590,271 shares worth 337.38 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for DDOG since 35 analysts follow the stock currently. There are 24 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 6 believe that the stock is worth HOLDING, 5 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With DDOG analysts setting a high price target of $155.00 and a low target of $76.00, the average target price over the next 12 months is $107.21. Based on these targets, DDOG could surge 110.34% to reach the target high and rise by 3.13% to reach the target low. Reaching the average price target will result in a growth of 45.49% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. DDOG will report FY 2022 earnings on 02/15/2024. Analysts have provided yearly estimates in a range of $0.96 being high and $0.89 being low. For DDOG, this leads to a yearly average estimate of $0.91. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Datadog Inc. surprised analysts by $0.07 when it reported $0.23 EPS against a consensus estimate of $0.16. The surprise factor in the prior quarter was $0.09. Based on analyst estimates, the high estimate for the next quarter is $0.24 and the low estimate is $0.18. The average estimate for the next quarter is thus $0.19.

Summary of Insider Activity:

Insiders traded DDOG stock several times over the past three months with 20 Buys and 10 Sells. In these transactions, 1,228,715 shares were bought while 40,337 shares were sold. The number of buy transactions has increased to 41 while that of sell transactions has risen to 119 over the past year. The total number of shares bought during that period was 1,492,023 while 419,838 shares were sold.

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