Datadog soars to register with cloud actions Cloudflare and Asana

Higher-value cloud stocks have been on a roll lately and just got a new boost from data monitoring and analytics company Datadog, whose results beat analyst estimates.

Datadog shares rose 15% Thursday to close at a record $ 132.47. At the start of the day, Datadog traded for about 32 times revenue over the next year, making it one of the eight most expensive cloud stocks by that metric, according to the Bessemer Venture Partners Cloud Index.

Of the nine stocks that trade at 30 times forward sales, Datadog and four others closed at all-time highs on Thursday.

Bill.com, a financial software provider, was up 1.4% to $ 208.92. Asana, which sells collaboration software, jumped 7.1% to $ 78.10, bringing its annual profit to 164%. Security software provider Cloudflare rose 1.2% to $ 121.46. Atlassian, which sells popular developer tools, was up less than 1% to $ 343.43 and is up 28% since it announced quarterly results a week ago.

Confluent, the cloud data analytics provider that spun off from LinkedIn in 2014, was up 6.8% in extended trading on Thursday. In its first earnings report since it went public in June, Confluent said second-quarter revenue increased 64% to $ 88 million.

While cloud stocks had a slow start to the year after a historic rally in 2020, they have rebounded lately and have been particularly strong now that investors are seeing their latest results.

The fastest growing cloud companies with the highest price premiums are outperforming the broader cloud index, which is hit by companies struggling to expand. Yext, for example, is down 17% on the year and security firm Qualys is down 14%.

Datadog said Thursday that second-quarter revenue rose 67% to $ 233.5 million, beating the average analyst estimate of $ 212.5 million, according to StreetAccount. The company also raised its guidance for full-year revenue and profitability.

Stifel analysts raised their target share price to $ 160 from $ 100 and said the company is gaining market share and should be able to sustain 40% growth even after Covid-19 due to the continued shift to the cloud.

“Overall, we continue to believe that Datadog is the best form of derivatives for investors to gain ‘direct’ exposure to explosive growth within the hyperscale cloud market,” the analysts wrote after the earnings report.

The results were reminiscent of Atlassian’s earnings report a week ago, when the company said revenue rose 30% to $ 559.5 million, beating analyst estimates by about $ 35 million. Atlassian shares rose 22% after the report and have risen in three of the four days since then.

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