Yahoo Finance Is It Time To Consider Buying Datadog, Inc. (NASDAQ:DDOG)?
Let's talk about the popular Datadog, Inc. (NASDAQ:DDOG). The company's shares led the NASDAQGS gainers with a relatively large price hike in the past couple of weeks. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, could the stock still be trading at a relatively cheap price? Today I will analyse the most recent data on Datadog’s outlook and valuation to see if the opportunity still exists.
See our latest analysis for Datadog
Is Datadog Still Cheap?
Good news, investors! Datadog is still a bargain right now. According to my valuation, the intrinsic value for the stock is $126.52, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. Datadog’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. If you believe the share price should eventually reach its true value, a low beta could suggest it is unlikely to rapidly do so anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range.
What kind of growth will Datadog generate?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. However, with a negative profit growth of -4.3% expected next year, near-term growth certainly doesn’t appear to be a driver for a buy decision for Datadog. This certainty tips the risk-return scale towards higher risk.
What This Means For You
Are you a shareholder? Although DDOG is currently undervalued, the negative outlook does bring on some uncertainty, which equates to higher risk. I recommend you think about whether you want to increase your portfolio exposure to DDOG, or whether diversifying into another stock may be a better move for your total risk and return.
Are you a potential investor? If you’ve been keeping tabs on DDOG for some time, but hesitant on making the leap, I recommend you research further into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.
If you'd like to know more about Datadog as a business, it's important to be aware of any risks it's facing. For example - Datadog has 2 warning signs we think you should be aware of.
If you are no longer interested in Datadog, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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