Stocks wavered due to the fears of new lockdowns as coronavirus cases surged forward over the last few days. As a result, a sell-off wave followed positive sentiment. While the risk is real, some stocks stayed strong and even profited during the lockdowns.
Wall Street points out Datadog’s ability to expand and gain during the current market’s conditions. This cloud software company went public in September 2019. Its shares rallied by 187% since mid-March, surpassing even Zoom’s 120% and Netflix’s 50% gains. On Wednesday, the stock hit another new high.
Overall, the stock skyrocketed by 90% over the last year. Datadog closed the first quarter with 960 customers with annual recurring revenue of $100,000. The company easily surpassed its first-quarter fiscal 2020 earnings estimate on May 11, with revenues jumping by 87%.
Furthermore, Datadog is expected to rebound from an adjusted loss of -$0.01 per share to +$0.03 in fiscal 2020 and climbed up to +$0.05 a share in FY21. The company’s longer-term earnings revisions have trended heavily upward so far.
Datadog enables its clients to monitor the performance of databases, servers, apps, networks, and more. The company’s cloud-based SaaS offerings are quite popular. It has already attracted well-known clients, such as FedEx FDX, Pelton PTON, and Deloitte, and continues to add larger customers.
In addition to its usual services, the firm recently launched its Security Monitoring offering. According to CEO Olivier Pomel, the coronavirus crisis had demonstrated the need to be digital-first and agile, reaffirming the long-term opportunity for Datadog.
Currently, the stock is projected to reach $562.3 million. But investors should also consider that this would include FY19’s 83% sales growth. Analysts believe that Datadog will continue gaining. They advise grabbing this stock, giving it a strong-buy rating. Despite the uncertainty on the markets, caused by fears of novel outbreaks and global tensions, Datadog has good potential for further gains.
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