DDOGDDOG
US • —
$246.86
P/E
642.69
PEG
—
FCF Yield
1.1%
Rev Growth YoY
+29.5% YoY
Gross Margin
79.9%
Health Score
8/10
D/E Ratio
0.26
Confidence
LOW
Business Snapshot
Datadog provides a monitoring and analytics platform for cloud-scale applications, serving software development and IT operations teams. The company operates in the observability and security market, where it holds a leading position as an independent platform provider. With a market capitalisation of $87.20B, Datadog is a large-cap technology company that generated positive free cash flow of $959.42M over the trailing twelve months. A defining characteristic of Datadog is its strong competitive moat built on the breadth of its integrated platform and high customer switching costs.
Financial Health
Datadog delivers a gross margin of 79.9%, reflecting a highly efficient business model that generates significant revenue from each dollar of sales. However, the net margin of 3.7% is thin, indicating substantial ongoing investment in sales, marketing, and research and development...
Risk Assessment
- VALUATION — Price-to-sales ratio of 23.75x is exceptionally high, implying the stock’s valuation depends on long-term expectations of sustained growth and expanding margins.
- EARNINGS QUALITY — Net income declined by 17.9% year-over-year, even as revenue grew strongly, pointing to fast-growing operating expenses.
- TECHNICALS — RSI, MACD, and moving average data unavailable for this period; momentum cannot be independently confirmed.
- VALUATION DIVERGENCE — The Python DCF estimate of $64.08 implies a premium in excess of 280% vs the current price, highlighting a wide gap between intrinsic value estimates and market pricing.
- FCF / CASH BURN — FCF yield of 1.1% is low relative to the company's valuation, offering minimal near-term cash return to investors....
Datadog delivers a gross margin of 79.9%, reflecting a highly efficient business model that generates significant revenue from each dollar of sales. However, the net margin of 3.7% is thin, indicating substantial ongoing investment in sales, marketing, and research and development. The balance sheet is conservative with a debt-to-equity ratio of just 0.26x, and a current ratio of 3.38x provides ample short-term liquidity. Free cash flow was $959.42M, producing a free cash flow yield of 1.1%. Overall, Datadog is financially healthy, with the capacity to self-fund its growth initiatives without relying on external capital.
- VALUATION — Price-to-sales ratio of 23.75x is exceptionally high, implying the stock’s valuation depends on long-term expectations of sustained growth and expanding margins. - EARNINGS QUALITY — Net income declined by 17.9% year-over-year, even as revenue grew strongly, pointing to fast-growing operating expenses. - TECHNICALS — RSI, MACD, and moving average data unavailable for this period; momentum cannot be independently confirmed. - VALUATION DIVERGENCE — The Python DCF estimate of $64.08 implies a premium in excess of 280% vs the current price, highlighting a wide gap between intrinsic value estimates and market pricing. - FCF / CASH BURN — FCF yield of 1.1% is low relative to the company's valuation, offering minimal near-term cash return to investors.
Unlock the full AI report
Full 8-section analysis includes:
Metric deep-dives