Datadog (DDOG) closed at $128.15 in the latest trading session, marking a +0.09% move from the prior day. This move outpaced the S&P 500's daily loss of 0.54%. At the same time, the Dow lost 0.02%, and the tech-heavy Nasdaq lost 0.12%.

Coming into today, shares of the data analytics and cloud monitoring company had lost 28.75% in the past month. In that same time, the Computer and Technology sector lost 13.86%, while the S&P 500 lost 7.87%.

Datadog will be looking to display strength as it nears its next earnings release, which is expected to be February 10, 2022. On that day, Datadog is projected to report earnings of $0.11 per share, which would represent year-over-year growth of 83.33%. Our most recent consensus estimate is calling for quarterly revenue of $291.17 million, up 64.01% from the year-ago period.

Investors should also note any recent changes to analyst estimates for Datadog. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 18.33% lower. Datadog is currently a Zacks Rank #4 (Sell).

Investors should also note Datadog's current valuation metrics, including its Forward P/E ratio of 246.76. For comparison, its industry has an average Forward P/E of 43.96, which means Datadog is trading at a premium to the group.

The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 161, which puts it in the bottom 37% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow DDOG in the coming trading sessions, be sure to utilize Zacks.com.

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