Is There Now An Opportunity In Datadog, Inc. (NASDAQ:DDOG)?

Today we're going to take a look at the well-established Datadog, Inc. (NASDAQ:DDOG). The company's stock saw a significant share price rise of 32% in the past couple of months on the NASDAQGS. The recent rally in share prices has nudged the company in the right direction, though it still falls short of its yearly peak. 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? Let’s take a look at Datadog’s outlook and value based on the most recent financial data to see if the opportunity still exists.

Our free stock report includes 1 warning sign investors should be aware of before investing in Datadog. Read for free now.

What's The Opportunity In Datadog?

Great news for investors – Datadog is still trading at a fairly cheap price. Our valuation model shows that the intrinsic value for the stock is $175.05, but it is currently trading at US$114 on the share market, meaning that there is still an opportunity to buy now. Although, there may be another chance to buy again in the future. This is because Datadog’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company's shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

Check out our latest analysis for Datadog

What kind of growth will Datadog generate?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. With profit expected to grow by 98% over the next couple of years, the future seems bright for Datadog. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What This Means For You

Are you a shareholder? Since DDOG is currently undervalued, it may be a great time to increase your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on DDOG for a while, now might be the time to enter the stock. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy DDOG. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.

In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. While conducting our analysis, we found that Datadog has 1 warning sign and it would be unwise to ignore this.

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.