September 2022 DataDog (DDOG) Stock Pick and Heart of Mystic Single Barrel Whiskey Pairing

Authors: Allan Maule, Byron Harrell

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Website: datadoghq.com

Twitter: @datadoghq

CEO: Olivier Pomel

Founder: Olivier Pomel and Alexis Lê-Quôc (current CEO and CTO respectively, so here’s to being a founder-led company!)

Market Cap at Time of Article: $33.31B

Current Analyst Recommendations: With a current stock price of $103.03 and a median analyst target price of $136 (taken from 19 analysts), we see DDOG as a strong buy.

Quarterly Revenue Growth Year-Over-Year: 67.5%, an undeniably excellent number that gets criticized for being down from 83% sequentially. These complaints read to me like impatient investors saying “Boo hoo, my hyper-growth stock is only growing at great rather than absurd levels.” Here’s some advice for both investing and life: You always take the win when you can, and DDOG is winning at growth.

Insiders: 9.68%. We always like to see a higher percentage of insiders, especially when looking at rapidly growing companies. Still, DDOG has more insider investors than many companies we’ve recommended in recent months, and being founder-led is a big plus.

What makes DataDog (DDOG) worth your hard-earned money for the next decade or more? DDOG is a cloud-based data visualization company that enables real-time observability of its customers’ IT infrastructure, applications, and cloud platforms. Because DDOG grabs diagnostic data from an organization’s apps, databases, and servers in real-time, it saves a company from having to manually organize data from different sources when they’re trying to triage a problem. DDOG turns all that data into easy-to-grasp visualizations and graphs so everyone from IT experts to business users can understand how well different IT assets are performing. The company is also heavily moving into security with its latest acquisitions, which should be a fruitful endeavor.

As a stock, DataDog’s latest performance has a lot to be excited about. Their trailing earnings-per-share is $0.81 (up from only 9 cents a year ago), with operating cash flow at a strong $73 million. Sure, DDOG is down from its November high of around $200 (suffering from the great correction that has hit many of our favorite growth companies), but DDOG is also up 32% from its low of $82 in June. What we see is a well-positioned tech stock ready to expand into the enterprise space and reach new heights. This dog will hunt!

Why talk about DataDog (DDOG) to all your friends and family?

Here’s how to explain “cloud-based data visualization company” to your non-technical family and friends (or perhaps self): Datadog helps businesses make sense of how well all their IT resources are performing. Because lots of the software businesses rely on is cloud-based, all kinds of factors play a role in how quickly or slow these apps perform. DataDog shows you if a slowdown was because of internet conditions, device power, server issues, or lots of other reasons. Best of all, DataDog visualizes these factors in easy-to-read graphs and dashboards so it’s much simpler to solve technology problems and find new ways to make your tech work better. As remote work grows more popular and businesses look for ways to do more with less on the tech side, solutions like DataDog offers are going to be essential for rapidly triaging and solving tech problems before they hurt productivity.

How is this asset disruptive?

Many of us don’t work in IT, so whenever a business app or web tool quits working, we immediately call a tech expert to fix it. After that call and a certain amount of time, the IT person gets back to us with a solution or workaround. We do what they say, and then we’re back to work. This can make the actual causes of our problems seem like a complete mystery that only the tech wizards can solve.

What DataDog offers is a technology that quickly analyzes all kinds of reasons an app may be underperforming, then reveals the explanation in a format that nearly anyone can understand. This not only removes much of the mystery around IT issues but also significantly improves the time and energy it takes to solve the tech problems that show up all the time. You don’t have to be a wizard to realize this means less worker downtime, more effective IT staff, and better margins for your business. And with DataDog expanding into security analytics (another growth market) with its recent acquisitions, it’s easy to see why this is a company with its finger on the pulse of how business works in 2022.

Conclusion:

DataDog is a dominant player in the data visualization field, and its strong business model and founder-led leadership set it up for long-term success. Yes, it has grown relatively slower than it did a couple of years ago (which tech firms haven’t?), but it’s easy to see how DDOG is recovering rapidly and has room to grow. Put DDOG in your portfolio and take the win that’s waiting for you.

Whiskey Pairing: Heart of Mystic Single Barrel Straight Bourbon review
 Retail: $40 (375ml) Proof: ~124

Confession time from B-Train: While I find drinking hard spirits to be quite easy, writing about them is not. So I was excited to work on this joint review with Allan Maule, our resident professional writer. I knew I could ask Allan for the hard truth about my reviews and he would help me get better at spinning words about my spirits. The chance to knock back a few drams with an old friend who also shares a birthday with me was an added bonus. Here’s how it went:

B-Train: So give it to me straight (like a bourbon), Allan. What do you think of my reviews?

Allan: You write too much.

B-Train: Really? I always thought writing was about having a lot to say. That’s why I add so many good lines and good jokes.

Allan: Think about it this way: What makes a good story isn’t just nice words, a crazy plot, and interesting characters. A good story is about internal change: We’re not the same person at the end that we were at the beginning. A good whiskey review takes us on a journey from when we first pick up the bottle to when we finish our last sip. So let’s do that with Heart of Mystic, the bourbon you picked up from my home city of Durham.

Nose, Pallet, and Finish (B-Train)

Let’s start with the context of circumstantial Yin and Yang, B-Train and Mauler. To balance my yin of a man’s drink (Mystic), Allan offered a whiskey of the opposite with something buttery and wholesome (John Bowman Bourbon, which as a man I also enjoyed with vigor).

To be yin with my nose notes of leather and spice, Mauler yanged me by pointing out the rich oaky tastes of Mystic—butterscotch, molasses, and toffee. Upon reflection and a lot of sipping, we finished with the realization that sweet and savory complement each other just as Yin and Yang are part of the same circle. This is why I still eat donuts with bacon.

For more on this bourbon: https://www.whatismystic.com/spirits/p/heart-of-mystic

Score

3.75/5 (+.25 for being local for Train and Mauler)