DDOG Stock Pops After Premier Earnings Report

Five analysts lifted their price targets, too

by Lillian Currens

Published on Nov 13, 2019 at 1:29 PM
Updated on Jun 24, 2020 at 10:16 AM

Cloud concern Datadog Inc (NASDAQ:DDOG) is trading at all-time highs following its first ever turn in the earnings confessional since going public in late September. The firm posted a third-quarter loss of 4 cents per share, which was smaller than analysts' expectations, and revenue that also beat expectations. The software company also upped its fourth-quarter revenue forecast, citing "continued traction with larger customers."

As a result, DDOG sliced through recent pressure at the $35 region today, and is looking to notch its fourth consecutive win. Now, the security is trading up 14.1% at $39.25, after touching a record high of $41.92 earlier. For the week, the equity has added nearly 20% so far. 

DDOG Chart Nov 13

This earnings beat has options bulls bombarding the stock. Already 12,000 calls and 3,730 puts have exchanged hands, 12 times what is typically seen at this point. A number of positions are being opened at the November 40- and 35- strike calls, the two most popular contracts today.

This preference for calls has been the norm in recent weeks, though. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), over four calls have been bought for every put during the past 10 days. 

Analysts have come out of the woodwork too, with five price-target hikes issued after Datadog's quarterly report, including a one from Needham, which raised its target price all the way to $48, putting the consensus 12-month target-price at $42.78 -- an 8% premium to current levels. There's still room for upgrades on the stock though, since four of the nine in coverage still consider DDOG a "hold." 

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