Core Viewpoint - Datadog's stock performance has shown a slight increase recently, but it has underperformed compared to the broader market over the past month, with upcoming earnings expected to reflect a decline in EPS but an increase in revenue [1][2]. Company Performance - Datadog closed at $110.58, with a daily increase of 0.37%, outperforming the S&P 500's gain of 0.16% [1]. - Over the past month, Datadog's shares have decreased by 6.25%, compared to a 5.94% loss in the Computer and Technology sector and a 3.59% loss in the S&P 500 [1]. - The upcoming earnings report is anticipated to show an EPS of $0.42, a decline of 4.55% year-over-year, while revenue is expected to reach $739.51 million, reflecting a 20.98% increase [2]. Earnings Estimates - For the full year, earnings are projected at $1.69 per share, representing a decrease of 7.14% from the previous year, while revenue is expected to be $3.19 billion, indicating an increase of 18.85% [3]. - Recent changes in analyst estimates suggest a positive outlook for Datadog's business operations and profitability [4]. Valuation Metrics - Datadog's current Forward P/E ratio is 65.32, significantly higher than the industry average of 28.29 [7]. - The company has a PEG ratio of 7.79, compared to the Internet - Software industry's average PEG ratio of 2.07, indicating a premium valuation relative to expected earnings growth [7]. Industry Context - The Internet - Software industry, part of the Computer and Technology sector, holds a Zacks Industry Rank of 128, placing it in the top 50% of over 250 industries [8]. - Historically, industries in the top 50% outperform those in the bottom half by a factor of 2 to 1 [8].

Core Insights - Chainguard and Datadog have announced a partnership to enhance software supply chain security by integrating container observability with proactive risk mitigation strategies [1][4] - The collaboration aims to provide real-time insights into container risks, enabling engineering and security teams to eliminate vulnerabilities and improve software development velocity [1][5] Group 1: Partnership Overview - The integration combines Chainguard's secure container solutions with Datadog's monitoring capabilities, allowing customers to identify and remediate common vulnerabilities and exploits (CVEs) [1][4] - A new Chainguard dashboard within Datadog will provide a holistic view of container infrastructure and associated CVE risks, facilitating better decision-making for security and engineering teams [3][4] Group 2: Industry Challenges - The World Economic Forum's report indicates that 54% of large organizations view supply chain challenges as the primary barrier to achieving cyber resilience [2] - There is a lack of visibility and accountability between engineering and security teams, leading to increased exposure to supply chain attacks and slower innovation [2] Group 3: Customer Benefits - Joint customers of Chainguard and Datadog will experience reduced risk across their application surface area, transitioning from reactive alerts to proactive risk reduction [5] - The integration allows security teams to prioritize CVE remediation in high-risk containers, enabling engineering teams to focus on shipping secure software more efficiently [5][6]

Group 1 - Datadog Inc. (DDOG) is a significant player in the IT infrastructure management space, valued at approximately $30 billion [1] - The company offers a comprehensive observability and monitoring platform that helps firms manage, optimize, and secure their IT infrastructure [1]

Core Viewpoint - Datadog has experienced a significant decline in stock performance, with a return of -27.4% over the past month, compared to the S&P 500's -9.6% and the Zacks Internet - Software industry's -18.8% [2] Earnings Estimate Revisions - The current quarter's earnings estimate for Datadog is $0.42 per share, reflecting a decrease of -4.6% year-over-year, with a notable change of -23.4% in the consensus estimate over the last 30 days [5] - For the current fiscal year, the consensus earnings estimate is $1.69, indicating a decline of -7.1% from the previous year, with a significant change of -44.8% in the estimate over the last month [5] - The next fiscal year's consensus earnings estimate is $2.08, showing an increase of +23.4% year-over-year, although it has decreased by -12.8% recently [6] Revenue Growth - Datadog's consensus sales estimate for the current quarter is $739.51 million, representing a year-over-year growth of +21% [9] - The sales estimates for the current and next fiscal years are $3.19 billion and $3.79 billion, indicating growth rates of +18.9% and +18.8%, respectively [9] Last Reported Results and Surprise History - In the last reported quarter, Datadog achieved revenues of $737.73 million, a year-over-year increase of +25.1%, with an EPS of $0.49 compared to $0.44 a year ago [10] - The reported revenues exceeded the Zacks Consensus Estimate of $711.65 million by +3.67%, and the EPS surprise was +13.95% [11] - Datadog has consistently beaten consensus EPS and revenue estimates in the last four quarters [11] Valuation - Datadog is currently graded F in the Zacks Value Style Score, indicating it is trading at a premium compared to its peers [15] - Valuation multiples such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF) are essential for assessing whether the stock is overvalued, fairly valued, or undervalued [13][14] Bottom Line - The current Zacks Rank of 3 suggests that Datadog may perform in line with the broader market in the near term, despite the recent market buzz [16]

Group 1 - Datadog (NASDAQ: DDOG) has experienced a significant decline since its recent highs in December, indicating potential volatility in the software sector [1] - The management of Datadog provided conservative guidance, reflecting cautious expectations for future performance [1] - The investment strategy discussed emphasizes finding undervalued companies with strong balance sheets and management teams in sectors with long growth potential [1] Group 2 - The leader of the investing group Best Of Breed Growth Stocks focuses on stocks with a high probability of delivering substantial alpha compared to the S&P 500 [1] - The investment approach combines growth-oriented principles with strict valuation criteria to enhance the margin of safety [1] - Features of the investment group include access to high-conviction stock picks, comprehensive research reports, real-time trade alerts, and macro market analysis [1]

Group 1: Market Overview - Analysts on Wall Street unanimously believe certain stocks are undervalued, indicating potential investment opportunities [1][2] - The article highlights three AI stocks that are trading below the lowest price targets set by analysts [3] Group 2: Microsoft - Microsoft is a leader in AI due to its early investment in OpenAI and the ChatGPT application, which has driven growth in its Azure cloud computing platform [4] - Azure's revenue increased by 31% year over year, with AI services growing by 157% in the last quarter, suggesting continued strong growth [5] - The enterprise software segment, boosted by AI features, saw a 15% increase in sales for Microsoft 365 commercial products and Microsoft Dynamics [6] - Microsoft stock trades at approximately 29 times forward earnings, reflecting its strong cash flow and buyback strategy [7] Group 3: Dell Technologies - Dell's revenue is split between PC sales and enterprise solutions, with the latter benefiting significantly from AI, leading to a 54% increase in server sales last year [8][9] - Despite a recent shortfall in AI server sales, Dell's AI server backlog reached $9 billion, doubling from the previous year, indicating strong future growth potential [12] - Dell's forward P/E ratio is just 10, making it an attractive investment despite stagnant client PC business [13] Group 4: DataDog - DataDog provides solutions for unifying data across various platforms, which is increasingly important as businesses adopt AI [14] - The introduction of the LLM Observability product has expanded DataDog's customer base and increased product uptake, contributing to high net dollar-based retention rates [16] - DataDog's stock has a forward P/E ratio of 66, reflecting its potential for over 20% annual revenue growth and margin improvement [18]

Core Viewpoint - Datadog's stock has experienced a significant decline of -18.3% over the past month, underperforming compared to the S&P 500's -1.3% and the Zacks Internet - Software industry's -6.2% [1] Earnings Estimate Revisions - Datadog is expected to report earnings of $0.42 per share for the current quarter, reflecting a year-over-year decrease of -4.6% and a 30-day estimate change of -21.8% [4] - For the current fiscal year, the consensus earnings estimate is $1.70, indicating a -6.6% change from the previous year, with a 30-day estimate change of -40.8% [4] - The next fiscal year's consensus earnings estimate of $2.11 suggests a +23.7% increase from the prior year, although it has changed -11.8% in the past month [5] Revenue Growth Forecast - The consensus sales estimate for Datadog is $739.51 million for the current quarter, representing a year-over-year growth of +21% [8] - For the current and next fiscal years, the sales estimates are $3.19 billion and $3.79 billion, both indicating a growth of +18.9% [8] Last Reported Results and Surprise History - Datadog reported revenues of $737.73 million in the last quarter, a year-over-year increase of +25.1%, with an EPS of $0.49 compared to $0.44 a year ago [9] - The reported revenues exceeded the Zacks Consensus Estimate of $711.65 million by +3.67%, and the EPS surprise was +13.95% [10] - The company has consistently beaten consensus EPS and revenue estimates over the last four quarters [10] Valuation - Datadog is graded F in the Zacks Value Style Score, indicating it is trading at a premium compared to its peers [14]

Core Viewpoint - Datadog, Inc. will present at the Morgan Stanley Technology, Media and Telecom Conference on March 4, 2025, at 1:45 p.m. Eastern Time, with a live webcast available for the presentation [1]. Group 1: Company Overview - Datadog is a monitoring and security platform for cloud applications, providing a SaaS platform that integrates various capabilities such as infrastructure monitoring, application performance monitoring, log management, user experience monitoring, and cloud security [2]. - The platform is designed to offer unified, real-time observability and security for customers' entire technology stack, facilitating digital transformation and cloud migration across organizations of all sizes and industries [2]. - Datadog's services aim to enhance collaboration among development, operations, security, and business teams, accelerate application time to market, reduce problem resolution time, secure applications and infrastructure, understand user behavior, and track key business metrics [2].

Core Viewpoint - Datadog's stock is currently trading 33% below its record level from 2021, but its rapid revenue growth, increasing profits, and expanding AI product portfolio make it an attractive investment opportunity [1]. Company Overview - Datadog's flagship cloud observability platform assists businesses in monitoring their digital infrastructure, allowing for early detection of technical issues [3]. - The company is expanding into new industries, particularly AI, with the launch of an observability tool for large language models [4]. - Datadog offers an AI-powered virtual assistant, Bits AI, which helps trace technical issues and generates incident summaries, enhancing operational efficiency [5]. Business Performance - As of the end of 2024, approximately 30,000 businesses were using Datadog, with 3,500 adopting at least one AI product, a significant increase from 2,000 at the beginning of the year [6][7]. - Datadog generated $738 million in revenue during Q4 2024, a 25% increase year-over-year, exceeding management's forecast of $711 million [8]. - AI customers contributed about 6% to the company's annual recurring revenue (ARR) in Q4 2024, doubling from 3% in Q4 2023, with total ARR reaching a record $3 billion [9]. Profitability - Datadog's GAAP net income for 2024 was $183.7 million, a 278% increase from 2023 [10]. - On a non-GAAP basis, the company reported $653.8 million in net income for 2024, up 40.9% compared to 2023 [11]. Analyst Ratings - Among 46 analysts covering Datadog, 29 have assigned the highest buy rating, with no sell recommendations [2][12]. - The average price target for Datadog stock over the next 12 to 18 months is $161.74, indicating a potential upside of 26%, while the highest target suggests an 80% increase [13]. Valuation Metrics - Datadog's stock trades at a price-to-sales (P/S) ratio of 16.9, significantly lower than its long-term average of 28.9, although it is slightly more expensive than other cloud and AI software stocks [14][15]. - A 26% gain is considered a more realistic expectation for the next year, while an 80% gain would require substantial acceleration in revenue growth [16].

Core Viewpoint - Datadog's stock has declined 19% following a weaker-than-expected 2025 outlook, but there may still be investment opportunities as the company transitions to a more proactive service model [1] Group 1: Financial Performance - Datadog's Q4 revenue increased by 25% to $738 million, with stable consumption trends year-over-year [4] - The company reported an adjusted EPS of $0.49, an 11% increase from $0.44 a year ago, and generated free cash flow of $241 million in the quarter [8] - For Q1, Datadog forecasts revenue between $737 million and $741 million, indicating approximately 21% growth [8] Group 2: Guidance and Margins - The 2025 revenue growth forecast of 18% to 19% fell short of analyst expectations, attributed to a conservative management approach in a tight enterprise software spending environment [2] - Operating margin guidance for 2025 is set at 21%, below the 25% anticipated by analysts, as the company plans to increase spending on sales and marketing [3] Group 3: Customer Metrics - Datadog ended the year with 30,000 customers, including 3,610 with annual recurring revenue (ARR) exceeding $100,000 and 462 customers spending over $1 million [5] - The net dollar-based retention rate was in the high-110% range, indicating strong spending growth from existing customers [5] Group 4: Growth Opportunities - The company highlighted its infrastructure monitoring solution, contributing $1.25 billion in ARR, and sees cloud security as a growing opportunity [6] - AI-native customers now account for 6% of ARR, up from 3% a year ago, with increased interest in AI inference workloads [7] - Datadog aims to leverage AI to not only monitor but also automatically address potential threats [10] Group 5: Market Position and Valuation - Datadog's stock trades at a forward price-to-sales (P/S) multiple of 12.8 times, which is considered high given the projected growth [11] - A more appealing valuation may arise if the stock trades down to a P/S multiple around 10 times [12]