NASDAQ:DDOG—A High-Growth Stock Gearing Up for Its Next Upward Move.

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.

ChartMill's Evaluation of Growth

ChartMill assigns a Growth Rating to every stock. This score ranges from 0 to 10 and evaluates the different growth aspects like EPS and Revenue, both in the past as in the future. NASDAQ:DDOG scores a 9 out of 10:

• The Earnings Per Share has grown by an impressive 78.22% over the past year.
• Measured over the past years, DDOG shows a very strong growth in Earnings Per Share. The EPS has been growing by 95.35% on average per year.
• DDOG shows a strong growth in Revenue. In the last year, the Revenue has grown by 25.88%.
• Measured over the past years, DDOG shows a very strong growth in Revenue. The Revenue has been growing by 60.78% on average per year.
• DDOG is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 22.91% yearly.
• The Revenue is expected to grow by 24.62% on average over the next years. This is a very strong growth

Assessing Health Metrics 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 14.60 indicates that DDOG is not in any danger for bankruptcy at the moment.
• DDOG's Altman-Z score of 14.60 is amongst the best of the industry. DDOG outperforms 90.88% of its industry peers.
• The Debt to FCF ratio of DDOG is 1.11, which is an excellent value as it means it would take DDOG, only 1.11 years of fcf income to pay off all of its debts.
• DDOG has a better Debt to FCF ratio (1.11) than 72.99% 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.
• A Current Ratio of 3.43 indicates that DDOG has no problem at all paying its short term obligations.
• DDOG has a better Current ratio (3.43) than 78.47% of its industry peers.
• 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.
• DDOG has a Quick ratio of 3.43. This is in the better half of the industry: DDOG outperforms 79.20% of its industry peers.

Looking at the Profitability

Discover ChartMill's exclusive Profitability Rating, a proprietary metric that assesses stocks on a scale of 0 to 10. It takes into consideration various profitability ratios and margins, both in absolute terms and relative to industry peers. Notably, NASDAQ:DDOG has achieved a 5:

• DDOG has a better Return On Assets (2.78%) than 71.17% of its industry peers.
• DDOG has a Return On Equity of 5.23%. This is in the better half of the industry: DDOG outperforms 74.82% of its industry peers.
• DDOG has a better Return On Invested Capital (0.34%) than 64.60% of its industry peers.
• The Profit Margin of DDOG (5.10%) is better than 73.36% of its industry peers.
• Looking at the Operating Margin, with a value of 0.60%, DDOG is in the better half of the industry, outperforming 64.60% of the companies in the same industry.
• Looking at the Gross Margin, with a value of 81.39%, DDOG belongs to the top of the industry, outperforming 85.77% of the companies in the same industry.

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 8 as setup rating:

DDOG has an excellent technical rating and also presents a decent setup pattern. Prices have been consolidating lately. A pullback is taking place, which may present a nice opportunity for an entry. There is a resistance zone just above the current price starting at 132.98. Right above this resistance zone may be a good entry point. There is a support zone below the current price at 127.80, 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.

Every day, new Strong Growth stocks can be found on ChartMill 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.

Keep in mind

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.