Why Datadog Stock Jumped Thursday

One analyst thinks the analytics company could have an impressive inaugural quarterly update.

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What happened

Shares of monitoring and analytics platform Datadog (NASDAQ: DDOG) jumped on Thursday. The stock closed the trading day up 13%.

The stock’s gain comes as a Morgan Stanley analyst predicted the company is well set up heading into its third-quarter results next month.

So what

Datadog is one of the best-positioned companies in the infrastructure software market going into third-quarter updates, said Morgan Stanley analyst Sanjit Singh about the growth stock in a note to clients (via TheFly) on Thursday morning. He also said that Datadog has strong business momentum and could see accelerating year-over-year growth.

The analyst has an equal-weight rating on the stock and a $39 12-month price target.

Now what

On Nov. 12, Datadog will report its inaugural earnings report since going public in September. The market has high expectations for the company.

Datadog has garnered a $9.6 billion market capitalization despite having less than $300 million in revenue. But the company is growing at a wild pace. Revenue for the trailing-12-month period ending June 30 increased 82% year over year.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool recommends Datadog. The Motley Fool has a disclosure policy.

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