Head to Head Survey: Datadog (NASDAQ:DDOG) versus Elastic (NYSE:ESTC)

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

Institutional & Insider Ownership

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

Risk and Volatility

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Elastic	4.62%	-17.54%	-5.69%
Datadog	7.58%	9.41%	5.09%

Earnings & Valuation

This table compares Elastic and Datadog”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Elastic	$1.27 billion	7.67	$61.72 million	$0.55	171.95
Datadog	$2.13 billion	22.97	$48.57 million	$0.53	271.54

Elastic has higher earnings, but lower revenue 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 breakdown of current recommendations for Elastic and Datadog, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Elastic	0	8	16	0	2.67
Datadog	1	1	25	2	2.97

Elastic currently has a consensus target price of $103.43, indicating a potential upside of 9.37%. Datadog has a consensus target price of $150.96, indicating a potential upside of 4.90%. Given Elastic’s higher probable upside, research analysts clearly believe Elastic is more favorable than Datadog.

Summary

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

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.

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.