Analyzing Datadog (NASDAQ:DDOG) and Elastic (NYSE:ESTC)

Datadog (NASDAQ:DDOG) and Elastic (NYSE:ESTC) are both large-cap computer and technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, institutional ownership, dividends, risk, earnings and valuation.

Risk & Volatility

Datadog has a beta of 1.1, suggesting that its stock price is 10% more volatile than the S&P 500. Comparatively, Elastic has a beta of 0.94, suggesting that its stock price is 6% less volatile than the S&P 500.

Valuation and Earnings

This table compares Datadog and Elastic”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Datadog	$2.13 billion	24.71	$48.57 million	$0.53	292.14
Elastic	$1.27 billion	8.76	$61.72 million	$0.55	196.42

Elastic has lower revenue, but higher earnings than Datadog. Elastic is trading at a lower price-to-earnings ratio than Datadog, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent recommendations and price targets for Datadog and Elastic, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Datadog	1	1	25	2	2.97
Elastic	0	6	17	1	2.79

Datadog presently has a consensus target price of $150.96, suggesting a potential downside of 2.50%. Elastic has a consensus target price of $122.00, suggesting a potential upside of 12.93%. Given Elastic’s higher possible upside, analysts clearly believe Elastic is more favorable than Datadog.

Institutional & Insider Ownership

78.3% of Datadog shares are owned by institutional investors. Comparatively, 97.0% of Elastic shares are owned by institutional investors. 11.8% of Datadog shares are owned by company insiders. Comparatively, 15.9% of Elastic shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Datadog and Elastic’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Datadog	7.58%	9.41%	5.09%
Elastic	4.39%	-13.54%	-4.63%

Summary

Datadog beats Elastic on 10 of the 15 factors compared between the two stocks.

About Datadog

Datadog, Inc. operates an observability and security platform for cloud applications in North America and internationally. The company's products comprise infrastructure and application performance monitoring, log management, digital experience monitoring, continuous profiler, database monitoring, data streams and universal service monitoring, network monitoring, incident management, workflow automation, observability pipelines, cloud cost and cloud security management, application security management, cloud SIEM, sensitive data scanner, and CI visibility. Datadog, Inc. was incorporated in 2010 and is headquartered in New York, New York.

About Elastic

Elastic N.V., a data analytics company, delivers solutions designed to run in public or private clouds in multi-cloud environments. It primarily offers Elastic Stack, a set of software products that ingest and store data from various sources and formats, as well as performs search, analysis, and visualization on that data. The company's Elastic Stack product portfolio comprises Elasticsearch, a distributed, real-time search and analytics engine, and data store for various types of data, including textual, numerical, geospatial, structured, and unstructured; Kibana, a user interface, management, and configuration interface for the Elastic Stack; Elastic Agent that offers integrated host protection and central management services; Beats, a single-purpose data shippers for sending data from edge machines to Elasticsearch or Logstash; and Logstash, a data processing pipeline for ingesting data into Elasticsearch or other storage systems from a multitude of sources simultaneously. It also provides software solutions on the Elastic Stack that address cases, including search applications, workplace search, logs, metrics, application performance monitoring, synthetic monitoring, security information and event management (SIEM), endpoint security, extended detection and response, and cloud security. The company was incorporated in 2012 and is based in Amsterdam, the Netherlands.