Shares of Datadog (DDOG 2.32%) charged sharply higher Tuesday, surging as much as 306%. As of 10:28 a.m. ET, the stock was still up 29.4%.

The catalyst that sent the cloud monitoring, analytics, and security company soaring was financial results that proved beyond the shadow of a doubt that its rebound was well and truly underway.

Why Datadog stock was running higher

For the third quarter, Datadog reported revenue of $547.5 million, up 25% year over year, resulting in non-GAAP earnings per share (EPS) of $0.45. This sailed past expectations, as analysts' consensus estimates were calling for $524.2 million and EPS of $0.34.

Helping fuel the robust results was strong growth of those customers spending $100,000 per year in annual recurring revenue. Their number grew to 3,130, up 20%.

At the same time, operating cash flow and free-cash-flow generation both accelerated, increasing 83% and 105%, respectively, compared to the year-ago period. This shows that it's only a matter of time before Datadog generates GAAP profitability.

Is the stock a buy?

Management expects Datadog's robust growth to continue. Management is guiding for revenue of about $566 million, up roughly 21% year over year at the midpoint of its guidance. The company is also forecasting adjusted EPS of about $0.43. For context, this is well ahead of Wall Street's expectations, as analysts' consensus estimates were calling for revenue of $543 million and adjusted EPS of $0.35.

Investors had been concerned about the slowing adoption -- or the trend toward optimization -- in the cloud computing space as economic uncertainty remains. Some feared this secular headwind would weigh on Datadog's results, but the company's strong performance and better-than-expected growth helped put those concerns to rest.

Datadog stock has never been cheap, currently selling for 13 times next year's sales after today's spike. That said, the stock is still near its cheapest valuation ever and well below its three-year average of 26.5. This gives astute investors the opportunity to buy Datadog stock on sale before the price surges even further.