Datadog, Inc. (DDOG) — Fundamental Analysis & Key Financial Ratios

Kaplio's reading: Datadog, Inc.

Updated on October 31, 2026 · accounts published on August 6, 2026

Reading of October 30, 2026: A fast-growing, cash-generative software business with thin profits and heavy share dilution

Datadog trades at a P/E of 476.6 over the last 12 months, 1,389 % above its sector median, while revenue grows 28 % a year.

• Is Datadog expensive or cheap? Its P/E of 476.6 over the last 12 months is 1,389 % above the 32.0 median of its sector.
• How is the business doing? Revenue grew 28 % over the last 12 months, but EPS fell 41 % and the operating margin is just 0.4 %.
• How strong is the balance sheet? Datadog held net cash of $8.43 per share in fiscal 2025, and its current ratio over the last 12 months is 3.20.
• What to expect from the next earnings? Analysts expect EPS of $0.64 when Datadog reports on November 4, 2026; it beat estimates in each of the last 8 quarters.
• Does Datadog grow with real cash or by diluting shareholders? Stock-based pay equalled 22 % of revenue in fiscal 2025, above the 20 % toxic line for technology.

Is Datadog expensive or cheap?

Datadog trades at a P/E of 476.6 over the last 12 months, 1,389 % above the 32.0 median of 314 technology companies. Profits are still tiny, so the earnings yield is only 0.2 %. The free cash flow yield of 1.9 % is the more useful measure here. EV/EBITDA of 284.5 looks extreme, but it is well below its own five-year average of 954.9, so the multiple has come down compared with its history. The stock is up 50 % over the last 12 months and trades 20 % below its 52-week high of $293.26. Buyers are paying for growth that has not yet reached profits.

How is the business doing?

Revenue grew 28 % over the last 12 months, and gross margin was 80 % in fiscal 2025. Profits are weaker: EPS fell 41 % year on year, and the operating margin over the last 12 months is 0.4 %. That is still better than the 2017-2025 average of −2.5 % and the −1.3 % of fiscal 2025, so the margin trend is improving. Returns on capital remain poor. ROIC of 0.2 % over the last 12 months is 7.9 points below the 8.2 % sector median, and it has not reached 10 % in any of the last nine fiscal years.

How strong is the balance sheet?

The balance sheet is the strongest part of the picture. At the end of fiscal 2025 Datadog held $12.88 per share in cash against $4.45 of debt. That leaves net cash of $8.43 per share, equal to 3.6 % of the current share price. Over the last 12 months, debt to equity is 0.29 and the current ratio is 3.20, so short-term obligations are covered more than three times over. The Altman Z-score of 10.9 is deep in the safe zone. The Piotroski score of 5 out of 9 is middling, which fits a company whose profits are still thin.

What to expect from the next earnings?

Datadog reports on November 4, 2026, and analysts expect EPS of $0.64 for the quarter. Its record sets a high bar: it has beaten EPS estimates in 8 of the last 8 quarters. Most recently, on August 6, 2026, it reported $0.65 against $0.58 expected, a 12 % beat. Over the last 30 days the full-year 2026 EPS consensus has barely moved, from $2.53 to $2.54 across 26 analysts, and revenue estimates are just as steady. Of the 48 analysts covering the company, 40 rate it a buy, 7 a hold and 1 a sell. With expectations this settled, the size of the beat will count for more than the beat itself.

Does Datadog grow with real cash or by diluting shareholders?

In technology, reported earnings understate companies that reinvest heavily. That is why growth, pricing power and dilution tell you more than the P/E. Datadog passes the growth tests. Revenue per share grew 23 % a year over fiscal 2022-2025, above the 15 % healthy mark, and its Rule of 40 score of 52 in fiscal 2025 is in the elite range. Its 80 % gross margin clears the 70 % bar for software. The weak point is dilution. Stock-based pay equalled 22 % of revenue in fiscal 2025, close to the 29 % free cash flow margin. ROIC of 0.2 % is also far below the 15 % healthy level.

How this was prepared: the data comes from companies' official filings, collected by a professional provider, and from Kaplio's analysis engine (trailing-12-month ratios, 10 years of history and sector medians computed across US-listed companies). The text is written from that data alone, every figure is checked against it before publication, and it is reviewed when the company reports results. This is not investment advice.