DataDog Q2 FY12/22 Earnings Review
Is This Stock In The Doghouse, Or Headed To The Beach?
DISCLAIMER: This note is intended for US recipients only and, in particular, is not directed at, nor intended to be relied upon by any UK recipients. Any information or analysis in this note is not an offer to sell or the solicitation of an offer to buy any securities. Nothing in this note is intended to be investment advice and nor should it be relied upon to make investment decisions. Cestrian Capital Research, Inc., its employees, agents or affiliates, including the author of this note, or related persons, may have a position in any stocks, security, or financial instrument referenced in this note. Any opinions, analyses, or probabilities expressed in this note are those of the author as of the note's date of publication and are subject to change without notice. Companies referenced in this note or their employees or affiliates may be customers of Cestrian Capital Research, Inc. Cestrian Capital Research, Inc. values both its independence and transparency and does not believe that this presents a material potential conflict of interest or impacts the content of its research or publications.
TL:DR
Recognized revenue and deferred revenue growth slowed some for $DDOG in the quarter. Everything still remains moving up at a strong pace, that said.
We don't have RPO data yet - that will be in the call, and the 10-Q - will update later.
Re-iterate Accumulate rating as per chart - note that this stock could get hit short term due to the growth slowdown, so, pick your moment if you plan to add.
Not As Fast As He Used To Be
It could be that DDOG is just getting old, or it could be that a shot of growth meds is required, we don't know. Doesn't matter right now. The question is, do you want to own a software company growing revenue at a TTM rate of +79% whilst generating 21% unlevered pretax FCF margins? And the only sensible answer is, yes, but at what price.
Below - for paying subscribers only - we walk you through the fundamentals and how we believe the stock can best be played right now. If you’d like to join the pay version of this service, you can click right here to do so.