NASDAQ:DDOG qualifies as a high growth stock and is consolidating.

Growth investors are on the lookout for stocks displaying robust revenue and EPS growth. In this analysis, we'll assess whether DATADOG INC - CLASS A (NASDAQ:DDOG) aligns with growth investing criteria, especially as it consolidates and signals a possible breakout. As always, investors should conduct their own research, but DATADOG INC - CLASS A has surfaced on our radar for growth with base formation, warranting further examination.

Evaluating Growth: NASDAQ:DDOG

To evaluate a stock's growth potential, ChartMill utilizes a Growth Rating on a scale of 0 to 10. This comprehensive assessment considers various growth aspects, including historical and estimated EPS and revenue growth. NASDAQ:DDOG has achieved a 9 out of 10:

• DDOG shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 78.22%, which is quite impressive.
• The Earnings Per Share has been growing by 95.35% on average over the past years. This is a very strong growth
• DDOG shows a strong growth in Revenue. In the last year, the Revenue has grown by 25.88%.
• The Revenue has been growing by 60.78% on average over the past years. This is a very strong growth!
• DDOG is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 21.95% yearly.
• The Revenue is expected to grow by 24.84% on average over the next years. This is a very strong growth

A Closer Look at Health for NASDAQ:DDOG

To gauge a stock's financial health, ChartMill utilizes a Health Rating on a scale of 0 to 10. This comprehensive evaluation encompasses liquidity and solvency, both in absolute terms and in comparison to industry peers. NASDAQ:DDOG has earned a 7 out of 10:

• An Altman-Z score of 13.33 indicates that DDOG is not in any danger for bankruptcy at the moment.
• DDOG has a better Altman-Z score (13.33) than 90.51% of its industry peers.
• DDOG has a debt to FCF ratio of 1.11. This is a very positive value and a sign of high solvency as it would only need 1.11 years to pay back of all of its debts.
• The Debt to FCF ratio of DDOG (1.11) is better than 72.63% of its industry peers.
• A Debt/Equity ratio of 0.34 indicates that DDOG is not too dependend on debt financing.
• 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 3.43. This indicates that DDOG is financially healthy and has no problem in meeting its short term obligations.
• With a decent Current ratio value of 3.43, DDOG is doing good in the industry, outperforming 78.10% of the companies in the same industry.
• DDOG has a Quick Ratio of 3.43. This indicates that DDOG is financially healthy and has no problem in meeting its short term obligations.
• Looking at the Quick ratio, with a value of 3.43, DDOG is in the better half of the industry, outperforming 78.83% of the companies in the same industry.

A Closer Look at Profitability for NASDAQ:DDOG

ChartMill utilizes a Profitability Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of profitability ratios and margins, both in absolute terms and in comparison to industry peers. NASDAQ:DDOG has earned a 5 out of 10:

• Looking at the Return On Assets, with a value of 2.78%, DDOG is in the better half of the industry, outperforming 71.17% of the companies in the same industry.
• The Return On Equity of DDOG (5.23%) is better than 74.82% of its industry peers.
• The Return On Invested Capital of DDOG (0.34%) is better than 64.96% of its industry peers.
• With a decent Profit Margin value of 5.10%, DDOG is doing good in the industry, outperforming 73.36% of the companies in the same industry.
• DDOG's Operating Margin of 0.60% is fine compared to the rest of the industry. DDOG outperforms 64.96% of its industry peers.
• DDOG has a Gross Margin of 81.39%. This is amongst the best in the industry. DDOG outperforms 86.13% of its industry peers.

Why is NASDAQ:DDOG a setup?

Besides the Technical Rating, ChartMill also assign a Setup Rating to every stock. This setup score also ranges from 0 to 10 and determines to which extend the stock is consolidating. This is achieved by evaluating multiple short term technical indicators. NASDAQ:DDOG currently has a 7 as setup rating:

DDOG has a bad technical rating, but it does show a decent setup pattern. We see reduced volatility while prices have been consolidating in the most recent period. There is a resistance zone just above the current price starting at 117.71. Right above this resistance zone may be a good entry point. There is a support zone below the current price at 110.67, a Stop Loss order could be placed below this zone.

Our Strong Growth screener lists more Strong Growth stocks and is updated daily.

Check the latest full fundamental report of DDOG for a complete fundamental analysis.

Check the latest full technical report of DDOG for a complete technical analysis.

Disclaimer

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.