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Datadog stock analysis: $DDOG

Datadog provides a platform that helps companies transition to the cloud. At the current share price, the company has a market cap of 39 billion dollars. It’s got 2.3 billion of cash and no debt so the enterprise value is 37.6 billion.

Revenue over the last 12 months is 2 billion with just under 500 million of free cash flow. Net income, however, is minus 35 million due to a significant amount of stock based compensation. Despite those losses, Datadog is one of the most expensive stocks on the market. It trades at almost 19 times revenue and 76 times free cash flow.

A quick look at Datadog’s investor presentation shows why investors are so willing to pay up for the stock. Revenue has increased at a rate of 66% a year over the last six years and the number of customers have risen by a multiple of 5. Dollar spent per customer has almost quadrupled to $75k and the company boasts an impressive net dollar retention rate just under 120%.

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