10Y annualized return is
very good
at 11.7% per year
DDOG has met or exceeded earnings expectations in
all
recent quarters (10/10)
High Gross Profit Margin
Positive Net Profit Margin
Return on Equity (ROE)
Strong Liquidity Ratios
Manageable Debt Levels
Strong Revenue Growth
High Customer Retention and Expansion
Diverse Product Adoption
Focus on AI and Cloud Transformation
Continued Investment in R&D and Sales
High Price-to-Earnings (P/E) Ratio
Elevated Price-to-Sales (P/S) Ratio
Low Operating Profit Margin
High EV/EBITDA Ratio
Operating Margin Decline
Conservative Revenue Guidance
Datadog displays strong business quality with significant revenue growth, high customer retention, and diverse product adoption. However, declining operating margins pose a concern. The company's future prospects are bolstered by a focus on AI and cloud transformation, with continued investment in innovation, though the conservative revenue guidance suggests a cautious approach moving forward.
Analysis Date: February 13, 2025
Last Updated: March 11, 2025
Past performance does not guarantee future results. The data presented is indicative and may not be updated in real-time.
Datadog, Inc. is a company that helps other businesses keep track of their technology. They offer a service that allows companies to see how their apps and systems are performing in real-time, making it easier to spot problems and improve efficiency. Think of them as a tool that helps businesses ensure everything runs smoothly, from their websites to their cloud services. Founded in 2010 and based in New York, Datadog serves customers around the world.
Core Products
Business Type
Business to Business
Competitive Advantages
Key Business Risks
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
$20.79
Current Market Price: $88.56
IV/P Ratio: 0.23x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
-326.0%
Graham recommended a minimum of 20-30% margin of safety
Higher values indicate a greater potential discount to fair value
Graham Criteria Checklist
Benjamin Graham's value investing checklist for DDOG
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (162.86)
P/B ratio ≤ 1.5 (11.02)
Current ratio ≥ 2.0 (2.64x)
Long-term debt < Net current assets (0.59x)
Margin of safety (-326.0%)
DDOG does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
7.38%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-30)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
80.78%
Higher values indicate better efficiency in production
TTM (as of 2025-04-30)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
6.85%
Higher values indicate better overall profitability
TTM (as of 2025-04-30)
DDOG has a net profit margin of 6.85%, indicating that it retains a portion of its revenue as profit, which is favorable.
The company has a return on equity of 7.38%, which is a positive indicator of how effectively it is using shareholder funds to generate profits.
The operating profit margin is only 2.02%, which may raise concerns about operational efficiency and cost management.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
0.68x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q4 2024
Current Ratio
Current assets divided by current liabilities
2.64x
Higher values indicate better short-term liquidity
Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good
Q4 2024
DDOG has a current ratio of 2.64 and a quick ratio of 2.64, indicating strong liquidity and the ability to cover short-term obligations comfortably.
The debt-to-equity ratio is 0.68, showing that the company has a balanced approach to leveraging debt against equity, which is favorable.
An EV/EBITDA ratio of 215.93 suggests that DDOG may be overvalued in terms of its earnings before interest, taxes, depreciation, and amortization.
Meeting Expectations
Higher values indicate better execution and credibility
Recent Results
EPS
Datadog reported a revenue of $738 million in Q4 2024, representing a 25% year-over-year increase. This growth indicates strong demand for their products and services.
The company reported a trailing 12-month net revenue retention percentage in the high 110s, indicating strong customer loyalty and upsell opportunities.
A significant percentage of customers are using multiple products, with 83% using two or more products and 50% using four or more, showcasing the platform's stickiness.
Operating margin decreased to 24% in Q4 2024 from 28% in the year-ago quarter, indicating rising operational costs that may impact profitability.
The company is well-positioned to capitalize on the growing trend of AI and digital transformation, with a specific focus on helping enterprises migrate to cloud-based solutions.
Datadog plans to continue investing in R&D and sales capacity, which is expected to drive long-term growth opportunities as they expand their product offerings and market reach.
The company has provided conservative guidance for revenue growth in 2025, expecting an 18% to 19% year-over-year increase, which may indicate caution in the face of potential market challenges.
