DataDog (DDOG) Q4 FY12/26 Earnings Review
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Don’t Bother Reading This
by Alex King, CEO, Cestrian Capital Research, Inc
There is no future for software. ClawdLobsterPot will write it all at lunchtime. And give it for free to the world’s largest companies. Who will then fire all their developers, sysops, sysadmins, support heads, everyone associated with s—ftw—e (the word will be banned soon), who will proceed to subsist on UBI whilst their corporate overlords mull over which part of Hawai’i to buy tomorrow.
$DDOG Price Target: $0
Rating: RUN FOR THE HILLS. TAKE NO BELONGINGS. GO NOW!!
Or, in the alternative, this is a company growing a $3.4bn revenue base at 28%, with 19% cashflow margins, $3.4bn net cash in the bank, and an order book worth more than all of the last twelve months’ revenue, said order book growing almost twice as fast as recognized revenue. Which doesn’t look like it’s doomed, but who can say.
This sinking ship is pricey, that I would agree. Even after a ginormo-dump, the market is asking you to pay 50x TTM cashflow for this thing. That is a lot, even if it is down since we entered the Age Of Clawdius.
The chart I think is bottoming out or at least is giving you a tradable low. I think it is buyable down here, though I personally got stopped out on this stock yesterday. There will come a time, soon I believe, when money rotates into software - this whole “IT’S DOOMED” thing is just psyop 101 designed to have you hand cheap shares to folks who don’t read Substack doom p-rn. But that may not be today, so I would say - get ready for DDOG to make a higher low and get up and over its 8-day simple moving average (currently $117), and then think about opening a long position with a stop somewhere below today’s intraday low of $100. Yes that is a wide stop but that is the nature of high-beta software stocks; they are volatile on the upside so you pay for that on the downside. Don’t like it? Take a look at $SNY instead, which is a more relaxing way to make money probably.
Nathan Brinkman
OK, here goes with the reality on $DDOG.