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Why Datadog Is Still a Buy at Its All-Time High

By Taylor Carmichael and Brian Withers – Oct 1, 2021 at 12:00PM

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This software-as-a-service titan is firing on all cylinders.

Since its initial public offering two years ago, the stock of Datadog (DDOG 0.23%) has almost quadrupled, running up from a share price of $36 to a recent price of $141. Is it still a buy at its all-time high? 

In this episode of "Beat and Raise," Motley Fool contributors Brian Withers, Lou Whiteman, and Taylor Carmichael put forth some of their favorite high-flying stocks. Brian nominates Datadog as a stock that's still a strong buy. This segment was recorded live on Sept. 2.

 

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*Stock Advisor returns as of September 17, 2021

 

Brian Withers: The stock is within 2 percent of its high and I think it's still a deal today is Datadog, DDOG. It's all about observability and managing the ever-growing complexity of having on-premise servers, stuff in the cloud, employees all over the world working from anywhere. Companies need to -- more often the IT teams as well as from customer-facing websites -- need to make sure that everything is operating well together and everything is working well together. If you think about clumping together bunches of pieces of software, applications, cloud services, it gets really complicated, and Datadog gives IT organizations a view into all of that and allows them to monitor it proactively, and allows them to dive in deep when things go wrong. And it's just winning customers left and right. To me, the tailwind and the trend is that IT is going to only get more complicated and only going to get more cloud services, and Datadog is a critical tool for IT organizations and companies who use cloud computing, which is just everybody. I think it's going to continue to grow over the long term. All right. Yeah, Taylor you got a question? You were on mute there, bud.

Taylor Carmichael: Yeah. I'm an owner of Datadog and it just occurred to me, I've never really thought about this. Do you think there's any concentration risk in terms of the number of customers that they can have?

Brian Withers: Yeah, there isn't. When you look through, I remember we did the deep dive on it, and there were no customers that were more than 10% of its business. The other thing that's happening is you're seeing more and more customers spend $1 million or more with Datadog, which is, I love it when SaaS [software as a service] companies can command that kind of revenue and bring that value to customers. So that's super-exciting to me.

10 stocks we like better than Datadog
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

They just revealed what they believe are the ten best stocks for investors to buy right now... and Datadog wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

 

*Stock Advisor returns as of September 17, 2021

 

Taylor Carmichael owns shares of Datadog. The Motley Fool owns shares of and recommends Datadog. The Motley Fool has a disclosure policy.

Stocks Mentioned

Datadog Stock Quote
Datadog
DDOG
$68.74 (0.23%) $0.16

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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