DDOG Bites Into New Highs After Earnings

The security is going on its eighth consecutive weekly win

Deputy Editor
May 12, 2020 at 10:15 AM
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Datadog Inc (NASDQ:DDOG) is enjoying its day in the sun, following a first-quarter earnings and revenue beat. The software stock is up 17.5% to trade at $65.45, ready to notch its third-consecutive high, and already Wall Street is taking notice. No less than eight analysts raised their price targets, with the highest coming from Needham, which hiked its estimate to $70 from $58.

Sentiment coming into today was lukewarm, especially considering DDOG's positive price action. The consensus 12-month price target, of $62.45, sat at a 12.1% premium to last night's close. Plus, of the 13 covering the stock, six say "buy" or better, while seven say "hold." 

Bucking the broad market's recent tendency towards sideways trading, Datadog stock's rally off its March 16, annual lows has been nearly unstoppable. Since then, DDOG has managed to string together eight consecutive weekly highs, a record for the firm with just two other earnings reports under its belt. The security's 10-day moving average has helped guide the tech stock higher, leading it to a more than 50% win for the year, so far. 

Already options players are flocking to the stock in droves. Within the first hour of trading, 44,000 calls and 13,000 puts have crossed the tape, which is 11 times the intraday average, with volume running in the 100th percentile of its annual range. The May 60 call is by far the most popular, with positions being opened here. This mean these traders are expecting the underlying stock to stay above the $60 region until these contracts expire this Friday, May 15. 

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