Datadog

DDOG

Software - Application · Technology

Also trades as: 0A3O.L

Price

$235.62

+3.07 (+1.32%)

Market Cap

$83.87B

Exchange

NASDAQ

Winston Score

Winston is curious

A decent business — some strong pillars, some weaker.

Data as of Aug 23, 2026 · filings through Jun 30, 2026

How the score breaks down

Quality

Mixed

Growth

Good

Cash Flow

Exceptional

Stability

Good

Valuation

Good

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Share count rising — dilution

+17.6% over 4y

The company has issued more shares over this period, which dilutes each existing shareholder’s stake.

Diluted shares outstanding: 309.0M (2021) → 363.5M (2025)

Winston Score History

The full picture

Datadog is a software company that helps businesses monitor and understand what is happening inside their computer systems and apps in real time. Its main products include tools for tracking performance, finding errors, and securing cloud-based software. Customers are mostly technology companies, financial firms, and large enterprises that run complex software in the cloud.

Datadog makes money by charging customers a subscription fee, usually based on how much data they send through the platform. It operates globally, with most revenue coming from North America and Europe, and has grown to nearly $100 billion in market value. Its competitive strength comes from offering many monitoring tools in one connected platform, which makes it sticky — customers who use more products tend to stay longer and spend more. The key growth driver is the continued shift of businesses to cloud computing, though slowing cloud spending or competition from larger players like Microsoft and Amazon remains a real risk.

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Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+35.6% YoY

YoY Growth Rate

Revenue accelerating

EPS Growth

>+1,000% YoY

YoY Growth Rate

EPS growth accelerating

R&D Spend

$1.5B/ year

↑ Rising (+34% vs prior year)

45.2% of revenue

3.0x the sector average (15%)

Investing heavily in future products and technology

Insider Activity

7.6%ownership

→ Flat

Insider ownership roughly steady over the past year

Cash Position

Cash flow positive

$5.0B cash & investments

Quarterly Free Cash Flow

↑ Burn rate improving

Company generates more cash than it spends — no dilution risk from fundraising

Revenue accelerating

Datadog grew revenue 36% year-over-year and the growth rate is speeding up. That's the kind of momentum growth investors look for — the question is whether margins can follow.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

Every number that matters to educated investors.

Each metric is explained in plain language so you know exactly what you're looking at. Start your free trial now.

Quality

Profit per sale

Gross Margin

78.6%

Premium pricing power — 78.6% gross margin

Profit after running costs

Operating Margin

0.5%

Thin — 0.5% operating margin

Return on the money invested

ROCE

0.3%

Weak — 0.3% return on capital

ROIC between 0% and 5%. They earn a few cents back per dollar invested in the business.

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Growth

Sales growth

Sales YoY

+31.5%

Fast-growing sales (+31.5% YoY)

Profit growth

EPS YoY

+38.3%

Earnings growing fast (+38.3% YoY)

Earnings growing 25%+ a year. The compounder zone.

How steady the profit is

EPS Consistency

3/8 quarters

Earnings rarely grow — volatile business

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Cash Flow

Profit that turns into cash

Cash Conversion

692%

Turns 692% of profit into real cash

Spare cash per sale

FCF Margin

29.1%

Converts sales into free cash efficiently (29.1%)

Free cash flow margin above 20%. Out of every $100 in sales, more than $20 is real cash they keep.

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Stability

What it owes vs what it owns

Debt / Equity

0.23

Conservative — low debt load (0.23)

Covers its interest

Interest Cover

0.55x

Dangerous — barely covers interest (0.6x)

Interest coverage below 1. Their profits don't cover the interest bill.

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Valuation

Price vs profit

P/E Ratio (TTM)

473.9x

Expensive — P/E 473.9

P/E over 35. The market is pricing in heavy, sustained growth.

Cheaper or dearer next year

P/E vs Forward

+397.4

GROWING

Earnings expected to grow meaningfully — cheaper on forward P/E (473.9 → 76.5)

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Dividends

Not applicable for this business.

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