Why Datadog Stock Skyrocketed Today

Datadog (DDOG +13.96%) stock posted huge gains in Tuesday’s trading. The company’s share price surged 13.7% despite a 0.4% drop for the S&P 500 and a 0.6% drop for the Nasdaq Composite in the session.

Datadog published its fourth-quarter results before the market opened this morning and delivered sales and earnings that beat Wall Street’s targets. The company also issued strong forward guidance.

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Datadog posts Q4 beats

Datadog posted non-GAAP (adjusted) earnings per share of $0.59 on sales of $935 million in the fourth quarter. Adjusted earnings per share beat the average analyst estimate by $0.04, and sales came in $34.8 million higher than anticipated.

Datadog’s revenue surged roughly 29% higher year over year. The business posted a gross profit of $776 million in the period — representing a gross margin of 81.4%. Meanwhile, adjusted operating income came in at $230 million in the period — good for a margin of 24%.

Today’s Change

(13.96%) $15.92

Current Price

$129.93

Key Data Points

Market Cap

$40B

Day’s Range

$123.31 – $133.42

52wk Range

$81.63 – $201.69

Volume

1.1M

Avg Vol

4.9M

Gross Margin

79.91%

What’s next for Datadog?

Datadog is guiding for sales between $951 million and $961 million in the current quarter — good for year-over-year growth of 25.5% at the midpoint of the guidance range.

Meanwhile, full-year revenue is projected to be between $4.06 billion and 4.1 billion. Hitting the midpoint of that guidance range would mean increasing revenue roughly 19% on an annual basis. The company is taking a relatively conservative approach to modeling forward growth, so it wouldn’t be surprising to see the business exceed that sales forecast.