As computing gets more complex, it is important for IT teams to watch how their tech stack is performing. Datadog (DDOG) was created to help this be easier by allowing its customers to monitor all parts of their network and every application on it. The stock has doubled after the company went public in 2019, but shares have retreated with the recent sell-off. Even with shares under their recent high by double digits, this cloud company is worth a look. And here’s why:

This company is set for the future. If you do not know what Datadog does, it has what it says are observability tools, which allow IT teams to watch their applications, their logs, their network. Datadog pulls all this together in a way you can see it all at once.

As systems get more complicated, Companies might have stuff that they host on their own hardware but they might also use new cloud platforms like Azure and Amazon AWS. These hybrid environments are complicated and Datadog is really helpful in making them uncomplicated. In fact, they spoke about one customer who replaced eight different observability tools with just Datadog.

Some of their numbers are really great if you take the most recent quarter, 51% top-line revenue. I really love seeing customers go to Datadog and then expand. They have a lot of products. Customers spending $100,000 or more are the majority of their yearly recurring revenue, around 75% and it’s growing at a great 50% per year. They have around 1,400 customers that are spending over $100,000 per year.

This company has a possible market size of around $35 billion. And I am really positive about its future. The only thing that has changed is the stock price. If you have not looked at this amazing company, you should.

Author: Scott Dowdy

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