Why Datadog Stock Has Been A Top Performer – Investor's Business Daily

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Datadog Inc Cl A

Datadog Inc Cl A

DDOG

$9.16 8.92% 122%

IBD Stock Analysis

  • Stock has formed a high handle, also known as a shelf pattern
  • Pattern is small area of consolidation that forms between bases
  • Shelf patterns may offer additional entry points for existing positions

Composite Rating

Industry Group Ranking

Emerging Pattern

Consolidation

* Not real-time data. All data shown was captured at 2:36PM EDT on 10/09/2020.

Datadog (DDOG) is the IBD Stock Of The Day, as the fast-growing provider of software used to troubleshoot company networks has proved especially useful during the pandemic. Datadog stock is hovering at a buy point.

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In addition to troubleshooting software applications, Datadog’s cloud-based tools also monitor business workloads deployed on Amazon Web Services and the Azure network from Microsoft (MSFT).

Datadog rallied on Sept. 30, sending the fast-rising stock beyond a 99.09 buy point in a 12-week consolidation and shooting above the high end of its buy range that day.

Since then, Datadog stock formed a brief consolidation. In this case, the new buy point on Datadog is 109.70, extending to 115.18.

New Buy Point On Datadog Stock

Datadog stock jumped past that entry Friday, surging 8.9% to 111.82 during afternoon trading on the stock market today.

In addition, Datadog was added to IBD’s SwingTrader group of stocks. It’s also on IBD’s Big Cap 20 watchlist.

The jump in Datadog stock on Sept. 19 was the result of an announcement that it entered into a cloud computing partnership with Microsoft.

The deal involved Microsoft’s Azure-branded cloud unit as well as Microsoft’s GitHub. Microsoft’s Azure business is the second-biggest cloud computing service, behind Amazon Web Services. With the deal, Microsoft customers will be able to access Datadog tools at the Azure web portal.

Datadog Thrives During Pandemic

Datadog has thrived during the pandemic because the disruptions caused by the outbreak put a strain on technology networks. Much of it was due to companies that tried to automate operations and track key business metrics in order to support employees working from home. Companies also sped up the deployment of digital applications for e-commerce and other business activities.

Datadog was there to help companies make the transition.

Its customers include Airbnb, Walt Disney‘s (DIS) 21st Century Fox division, AT&T (T) and FedEx (FDX).

Datadog reported second-quarter results on Aug. 6 that beat estimates. The company reported an adjusted profit of 5 cents per share, vs. expectations of a 1-cent loss, Revenue jumped 68% to $140 million, topping views of $135.4 million.

“Our execution was strong during challenging times, including continued platform adoption,” Chief Executive Olivier Pomel said in a conference call with analysts. “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.”

High Composite Rating On Datadog Stock

The IBD Stock Checkup Tool shows that Datadog has an IBD Composite Rating of 98 out of a best-possible 99. The rating means Datadog stock currently outperforms 98% of all stocks in terms of the most important fundamental and technical stock-picking criteria

The stock also has a Relative Strength Rating of 96. The rating tracks market leadership by showing how a stock’s price movement over the last 52 weeks measures up against that of other stocks.

Also, the stock’s relative strength line is reaching new highs for the first time in two months.

The relative strength line is found in daily and weekly charts at Investors.com, It compares the stock’s daily price performance to the S&P 500. An upward-sloping RS line means the stock is outperforming the S&P 500. A downward-sloping means the stock is lagging the S&P 500.

The company held its initial public offering in September 2019, raising $648 million.

To find the other best stocks to buy or watch, check out IBD Stock Lists and other IBD research.

Please follow Brian Deagon on Twitter at @IBD_BDeagon for more on tech stocks, analysis and financial markets.

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