# Datadog (DDOG.US)

Canonical: https://gigainvestors.com/s/DDOG

Analysis as of: 2026-10-16T07:27:57.379Z. Financial observations: FY2017–FY2026.

Listing currency: USD. Reporting currency: USD.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: fail; earnings resilience is evidence only). Published buy qualification: no.

Share price: $266.25 per share; close as of 2026-10-15.

Estimated value: low $17.17 per share, central $17.67 per share, high $18.34 per share. Buy at or below the central value $17.67 per share. Valuation as of 2026-10-16T07:27:57.379Z; scenarios are not confidence intervals.

Expected annual return: 3.1% at the stated quote. About 3.1% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: fail

- 0 revenue declines in the last 10 years (informational)

- more than 2 net loss years

- negative average operating margin

- operating margin variation exceeds 0.35

- Financial history: 10 years

- Years with declining revenue: 0

- Years with a net loss: 6

- Operating margin variation: 1.01×

Chart: Operating margin; fiscal year observations.

- FY2017: -0.03×

- FY2018: -0.06×

- FY2019: -0.06×

- FY2020: -0.02×

- FY2021: -0.02×

- FY2022: -0.04×

- FY2023: -0.02×

- FY2024: 0.02×

- FY2025: -0.01×

- LTM to Jun 2026: 0.00×

### moat: fail

- Years with nonpositive invested capital use equity plus debt and leases; positive earnings with no positive capital are shown above 100%.

- ROIC median below threshold

- ROIC worst years below threshold (more than 1 bad year allowed)

- ROIC, median of available years: -15.4%

- ROIC, second-lowest year: -300.6%

- Typical minus recent gross margin: -0.6 pp

- Typical gross margin (annual median): 78.9%

- Recent gross margin (lower of latest and 3-year median): 79.5%

- Years with nonpositive capital: 3

- Capital spending / revenue: 3.7%

- ROIC including acquisitions, ten-year median: -12.6%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2017: -3.6%

- FY2018: -249.1%

- FY2019: -26.6%

- FY2020: -16.5%

- FY2021: -650.6%

- FY2022: -300.6%

- FY2023: -0.9%

- FY2024: >100%

- FY2025: -14.4%

- LTM to Jun 2026: 0.2%

### economics: fail

- incremental invested capital return below threshold

- Owner earnings / net income, 5-yr: 1.16×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $312M

- Net income, five-year total: $269M

- Return on incremental invested capital: -5.9%

- Working capital / revenue, annual change: -1.1 pp

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 1.00×

- FY2022: 1.00×

- FY2023: 1.35×

- FY2024: 1.11×

- FY2025: 1.06×

### management: pass

- potential debt-funded buybacks (informational)

- buybacks unrelated to price (informational)

- ROIC first 3 years vs last 3 years: -26.6% vs -0.9%

- Per-share earnings: -0.04 to 0.30 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 5-year annual growth: 3.9%

- Diluted shares, 5-year annual growth: 3.9%

- Per-share value change: $0.34

- Per-share value, starting three-year median: -$0.04

- Per-share value, ending three-year median: $0.30

- Buybacks concentrated in cheaper years (correlation): -1.00

- Average buyback yield: 0.0%

- Buyback history: 2 years

- Debt-funded buybacks: Yes

- ROIC, first three-year median: -26.6%

- ROIC, last three-year median: -0.9%

Chart: Earnings per share; fiscal year observations.

- FY2017: -$0.04

- FY2018: -$0.04

- FY2019: -$0.12

- FY2020: -$0.08

- FY2021: -$0.07

- FY2022: -$0.16

- FY2023: $0.14

- FY2024: $0.51

- FY2025: $0.30

### accounting: pass

- stock compensation exceeds 15% of operating cash flow

- Sloan accruals: -14.2%

- Receivables to sales index (DSRI): 0.97×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 71.5%

- Earnings backed by cash: Yes

- Operating cash / earnings: 9.75×

- Accounting red flags: 1

- Goodwill and intangibles / equity: 0.15×

Chart: Sloan accruals; fiscal year observations.

- FY2017: -12.9%

- FY2018: -12.0%

- FY2019: -3.9%

- FY2020: -7.1%

- FY2021: -12.9%

- FY2022: -15.6%

- FY2023: -15.5%

- FY2024: -11.9%

- FY2025: -14.2%

## Holders

## Price story

Price needs cash profits to grow 58.1% a year for ten years · sales +15.7%

Story as of 2026-10-16T09:58:37.405Z; price observation 2026-10-15.

Price needs cash profits to grow 58.1% a year for ten years

- 2025-05-06: Datadog Sees 25% Q1 Growth, Hikes Guidance ([finance.yahoo.com](https://finance.yahoo.com/news/datadog-sees-25-q1-growth-182623678.html))

- 2026-05-07: Datadog raises annual forecast on strong cloud security demand, shares jump 36% ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/datadog-raises-annual-forecast-strong-131454327.html))

- 2026-06-14: Datadog (DDOG): AI Observability Push Shows Why Cloud Monitoring Demand Is Broadening ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/datadog-ddog-ai-observability-push-194501076.html))

- 2026-07-31: Datadog (DDOG) Rose on Accelerating Growth and AI-Driven Demand ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/datadog-ddog-rose-accelerating-growth-152322798.html))

- 2026-08-06: Datadog Earnings Top Views. Software Stock Plunges As Revenue Outlook Underwhelms. ([finance.yahoo.com](https://finance.yahoo.com/m/d1e4ac14-1871-347a-b7f0-b04158905b39/datadog-earnings-top-views..html))

- 2026-10-09: Datadog (DDOG): Capitalizing on AI-Native Adoption and Cloud Observability Demand ([finance.yahoo.com](https://finance.yahoo.com/technology/ai/articles/datadog-ddog-capitalizing-ai-native-141237554.html))

### Sales · FY2025–2026

sales +15.7%; source https://www.sec.gov/Archives/edgar/data/1561550/000162828026008819/ddog-20251231.htm; observed 2026-02-18.

- FY2017: $101M 

- FY2018: $198M 

- FY2019: $363M 

- FY2020: $603M 

- FY2021: $1.0B 

- FY2022: $1.7B 

- FY2023: $2.1B 

- FY2024: $2.7B 

- FY2025: $3.4B 

- FY2026: $4.0B 

### Gross margin · FY2026

gross margin 79.5%; source https://www.sec.gov/Archives/edgar/data/1561550/000162828026008819/ddog-20251231.htm; observed 2026-02-18.

- FY2017: 76.8% 

- FY2018: 76.5% 

- FY2019: 75.5% 

- FY2020: 78.4% 

- FY2021: 77.2% 

- FY2022: 79.3% 

- FY2023: 80.7% 

- FY2024: 80.8% 

- FY2025: 80.0% 

- FY2026: 79.5% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in software application; annual sales are USD 3.4 billion.

- Source: https://www.sec.gov/Archives/edgar/data/1561550/000162828026008819/ddog-20251231.htm (filed 2026-02-18); FY2025: revenue 3427158000; grossProfit 2740201000; margin = grossProfit / revenue.

### Why customers stay

Margins ranged from 80% to 80.8% during 2023–25; it lost 15.4% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-18); FY2023: grossProfit / revenue = 80.7%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-18); FY2024: grossProfit / revenue = 80.8%.

- Source: https://www.sec.gov/Archives/edgar/data/1561550/000162828026008819/ddog-20251231.htm (filed 2026-02-18); FY2025: grossProfit / revenue = 80%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-18); 10-year return on capital observations [[2017,-0.035869378225608255],[2018,-2.4910174335524435],[2019,-0.266339683283672],[2020,-0.1648911149165745],[2021,-6.506122098022356],[2022,-3.0064870647733906],[2023,-0.009216243043432314],[2024,6.885658913877812],[2025,-0.14365902708759518],[2026,0.0023548478978941655]]; median -0.15427507100208482. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Paid dividends in 2 of 9 years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-18); FY2023: growth capex 0; upkeep 27586000; owner earnings 65447000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-18); FY2024: growth capex 0; upkeep 34719000; owner earnings 203960000. Growth capex / owner earnings = 0.

- Source: https://www.sec.gov/Archives/edgar/data/1561550/000162828026008819/ddog-20251231.htm (filed 2026-02-18); FY2025: growth capex 0; upkeep 49578000; owner earnings 113919000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-18); Dividend observations: [[2017,0],[2018,0],[2019,0],[2020,640582000],[2021,0],[2022,4021000],[2023,0],[2024,0],[2025,0]]. Zero only counted when supported by a complete cash-flow statement.

### Are managers owners

Insiders own 0.6% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); DDOG.US SharesStats.PercentInsiders = 0.561 percentage points; cache date 2026-10-16.

### What could break it

"We may not be able to successfully manage our growth" (SEC filing, Feb 2026)

- Source: https://www.sec.gov/Archives/edgar/data/1561550/000162828026008819/ddog-20251231.htm (filed 2026-02-18); We may not be able to successfully manage our growth

### What the price says

The price assumes cash profits grow 58.1% yearly over ten years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-18); Ten-year compound average after fade. Initial solved rate 0.8630104933688096. Price 266.25; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03.  Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2019-09: $33.91 per share

- 2019-10: $33.59 per share

- 2019-11: $40.77 per share

- 2019-12: $37.78 per share

- 2020-01: $46.21 per share

- 2020-02: $45.15 per share

- 2020-03: $35.98 per share

- 2020-04: $45.12 per share

- 2020-05: $71.27 per share

- 2020-06: $86.95 per share

- 2020-07: $93.86 per share

- 2020-08: $83.55 per share

- 2020-09: $102.16 per share

- 2020-10: $90.75 per share

- 2020-11: $98.92 per share

- 2020-12: $98.44 per share

- 2021-01: $102.75 per share

- 2021-02: $95.41 per share

- 2021-03: $83.34 per share

- 2021-04: $85.77 per share

- 2021-05: $91.05 per share

- 2021-06: $104.08 per share

- 2021-07: $110.70 per share

- 2021-08: $137.80 per share

- 2021-09: $141.35 per share

- 2021-10: $167.05 per share

- 2021-11: $178.29 per share

- 2021-12: $178.11 per share

- 2022-01: $146.11 per share

- 2022-02: $161.11 per share

- 2022-03: $151.47 per share

- 2022-04: $120.78 per share

- 2022-05: $95.39 per share

- 2022-06: $95.24 per share

- 2022-07: $102.01 per share

- 2022-08: $104.95 per share

- 2022-09: $88.78 per share

- 2022-10: $80.51 per share

- 2022-11: $75.78 per share

- 2022-12: $73.50 per share

- 2023-01: $74.81 per share

- 2023-02: $76.52 per share

- 2023-03: $72.66 per share

- 2023-04: $67.38 per share

- 2023-05: $94.91 per share

- 2023-06: $98.38 per share

- 2023-07: $116.72 per share

- 2023-08: $96.48 per share

- 2023-09: $91.09 per share

- 2023-10: $81.47 per share

- 2023-11: $116.57 per share

- 2023-12: $121.38 per share

- 2024-01: $124.44 per share

- 2024-02: $131.46 per share

- 2024-03: $123.60 per share

- 2024-04: $125.50 per share

- 2024-05: $110.18 per share

- 2024-06: $129.69 per share

- 2024-07: $116.44 per share

- 2024-08: $116.26 per share

- 2024-09: $115.06 per share

- 2024-10: $125.44 per share

- 2024-11: $152.75 per share

- 2024-12: $142.89 per share

- 2025-01: $142.71 per share

- 2025-02: $116.55 per share

- 2025-03: $99.21 per share

- 2025-04: $102.16 per share

- 2025-05: $117.88 per share

- 2025-06: $134.33 per share

- 2025-07: $139.98 per share

- 2025-08: $136.68 per share

- 2025-09: $142.40 per share

- 2025-10: $162.81 per share

- 2025-11: $160.01 per share

- 2025-12: $135.99 per share

- 2026-01: $129.32 per share

- 2026-02: $111.96 per share

- 2026-03: $118.05 per share

- 2026-04: $132.19 per share

- 2026-05: $247.35 per share

- 2026-06: $260.36 per share

- 2026-07: $267.97 per share

- 2026-08: $237.04 per share

- 2026-09: $273.85 per share

- 2026-10: $283.34 per share

## Annual estimated value (USD per share)

- FY2025: low $15.29 per share, central $15.73 per share, high $16.31 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/1561550/000162828026008819/ddog-20251231.htm); period 2025-12-31, filed 2026-02-18.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.