Exploring the Growth Potential of DATADOG INC - CLASS A (NASDAQ:DDOG) as It Nears a Breakout.

In this article, we'll take a closer look at DATADOG INC - CLASS A (NASDAQ:DDOG) as a potential candidate for growth investing. While it's important for investors to conduct their own research, DATADOG INC - CLASS A has piqued our interest by appearing on our strong growth and breakout radar. Let's explore further.

A Closer Look at Growth for DDOG

Every stock receives a Growth Rating from ChartMill, ranging from 0 to 10. This rating assesses various growth aspects, including historical and projected EPS and revenue growth. DDOG boasts a 9 out of 10:

• DDOG shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 10.98%, which is quite good.
• The Earnings Per Share has been growing by 54.87% on average over the past years. This is a very strong growth
• Looking at the last year, DDOG shows a very strong growth in Revenue. The Revenue has grown by 26.12%.
• Measured over the past years, DDOG shows a very strong growth in Revenue. The Revenue has been growing by 49.22% on average per year.
• The Earnings Per Share is expected to grow by 19.43% on average over the next years. This is quite good.
• The Revenue is expected to grow by 20.11% on average over the next years. This is a very strong growth

Health Analysis for DDOG

ChartMill utilizes a Health Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of liquidity and solvency ratios, both in absolute terms and in comparison to industry peers. DDOG has earned a 6 out of 10:

• An Altman-Z score of 7.26 indicates that DDOG is not in any danger for bankruptcy at the moment.
• The Altman-Z score of DDOG (7.26) is better than 79.30% of its industry peers.
• DDOG has a debt to FCF ratio of 2.08. This is a good value and a sign of high solvency as DDOG would need 2.08 years to pay back of all of its debts.
• DDOG's Debt to FCF ratio of 2.08 is fine compared to the rest of the industry. DDOG outperforms 67.02% of its industry peers.
• DDOG has a Debt/Equity ratio of 0.36. This is a healthy value indicating a solid balance between debt and equity.
• Although DDOG does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
• DDOG has a Current Ratio of 2.64. This indicates that DDOG is financially healthy and has no problem in meeting its short term obligations.
• The Current ratio of DDOG (2.64) is better than 69.12% of its industry peers.
• A Quick Ratio of 2.64 indicates that DDOG has no problem at all paying its short term obligations.
• DDOG has a Quick ratio of 2.64. This is in the better half of the industry: DDOG outperforms 69.82% of its industry peers.

Profitability Examination for DDOG

ChartMill's Profitability Rating offers a unique perspective on stock analysis, providing scores from 0 to 10. These ratings consider a wide range of profitability metrics and margins, both in comparison to industry peers and on their own merits. For DDOG, the assigned 5 is a significant indicator of profitability:

• DDOG's Return On Assets of 3.18% is fine compared to the rest of the industry. DDOG outperforms 70.88% of its industry peers.
• Looking at the Return On Equity, with a value of 6.77%, DDOG is in the better half of the industry, outperforming 72.63% of the companies in the same industry.
• DDOG's Return On Invested Capital of 1.18% is fine compared to the rest of the industry. DDOG outperforms 67.72% of its industry peers.
• DDOG has a Profit Margin of 6.85%. This is in the better half of the industry: DDOG outperforms 71.93% of its industry peers.
• DDOG has a better Operating Margin (2.02%) than 67.02% of its industry peers.
• With an excellent Gross Margin value of 80.79%, DDOG belongs to the best of the industry, outperforming 83.86% of the companies in the same industry.

Looking at the Setup

ChartMill provides a Setup Rating for each stock. This rating, ranging from 0 to 10, assesses the level of consolidation in the stock based on multiple short-term technical indicators. Currently, DDOG has a 7 as its setup rating, indicating its current consolidation status.

Although the technical rating is bad, DDOG does present a nice setup opportunity. We see reduced volatility while prices have been consolidating in the most recent period. There is very little resistance above the current price. There is a support zone below the current price at 88.18, a Stop Loss order could be placed below this zone. We notice that large players showed an interest for DDOG in the last couple of days, which is a good sign.

More Strong Growth stocks can be found in our Strong Growth screener.

Our latest full fundamental report of DDOG contains the most current fundamental analsysis.

Our latest full technical report of DDOG contains the most current technical analsysis.

Disclaimer

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.