On Friday, Datadog Inc. (NASDAQ:DDOG) shares spiked 8.2% after announcing its most recent quarterly results. The company reported its fiscal third-quarter revenue and earnings Thursday after markets closed, beating the consensus for Street expectations. DDOG also issued FY2021 revenue and earnings guidance above estimates.
The company posted FQ3 non-GAAP earnings per share of $0.13, beating the average for analyst estimates of $0.06. In addition, its GAAP EPS of -$0.02 outperformed the expectation of -$0.07, while revenue for the quarter increased by nearly 75% from the same quarter a year ago to $270.49 million, $22.67 million ahead of estimates.
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Datadog also announced a full-year 2021 revenue guidance in the range of $993 million to $995 million, surpassing the Street forecast of $943.95 million, while its EPS forecast of $0.39 t0 $0.40 is also significantly higher than the average analyst estimate of $0.28.
Time to bet on DDOG’s growth?
From an investment perspective, Datadog shares trade at a steep forward P/E ratio of 443.21, making the stock less attractive to value investors.
However, with analysts forecasting an EPS growth of 44.40% next year and an annual increase of 29.40% over the next five years, DDOG could gain the attention of growth investors.
Therefore, although the stock is up more than 98% this year, it could be time to invest in the data storage company.
Technically, Datadog shares seem to have spiked to complete an upward breakout from an ascending channel formation in the intraday chart. As a result, the stock has rallied to the overbought conditions of the 14-day RSI.
However, with shares pulling back late on Friday to trim session gains, the stock could bounce back extending the current gains.
Therefore, investors could target profits at about $193.78, or higher at $207.65, while $166.95 and $153.45 are crucial support zones.
DDOG could stretch gains
In summary, although Datadog seems to have spiked into overbought conditions, the stock offers exciting growth prospects to drive a long-term rally.
Therefore, its recent earnings beat and upbeat outlook could be the catalyst.
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