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Why Datadog Stock Jumped on Friday

By Daniel Sparks - Updated May 7, 2021 at 11:29AM

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The monitoring and analytics specialist's strong first-quarter results and rosy full-year outlook have investors looking up.

What happened

Shares of monitoring and analytics platform provider Datadog (DDOG -3.10%) jumped sharply on Friday. The stock rose as much as 11.8%. As of 10:45 a.m. EDT today, however, shares had settled to an 8.9% gain.

The growth stock's gain followed the company's strong first-quarter results, which were reported after market close on Thursday.

A chart showing a stock price moving higher

Image source: Getty Images.

So what

Datadog announced that its first-quarter revenue grew 51% year over year to $199 million. Analysts on average were expecting revenue of $187 million. Adjusted earnings per share were $0.06, beating a consensus analyst forecast for $0.03.

"Businesses are planning for a post-pandemic world," CEO Olivier Pomel said in the company's first-quarter earnings release, adding: "Digital transformation projects are being prioritized, as the need to be digital-first and agile is more prominent than ever. We believe we are in a strong position to benefit from this trend as the most complete and cloud-native end-to-end observability platform."

Now what

Looking to the second quarter, the company said it expects revenue to be between $211 million and $213 million. Analysts on average were expecting second-quarter revenue of $196.5 million.

For the full year, management guided for revenue between $880 million and $890 million, up from $604 million in 2020.

Daniel Sparks has no position in any of the stocks mentioned. His clients may own shares of the companies mentioned. The Motley Fool owns shares of and recommends Datadog. The Motley Fool has a disclosure policy.

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Datadog, Inc. Stock Quote
Datadog, Inc.
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