<div id="readability-page-1"><p>Amid the rise of cloud computing and AI, companies across many industries are generating significantly more data than they may have previously. The data observability business has grown rapidly to accommodate this. By using tools dedicated to monitoring this data and extracting insights, companies may be able to improve operations and reduce costs. The data observability market is small, at just $2.7 billion as of 2023, but it is growing quickly. Through 2030, this market is expected to increase at a CAGR of 10.7%.</p> <p>Some legacy software and infrastructure firms offer observability platforms as part of a broader array of products. AppDynamics by Cisco Systems Inc. <span>NASDAQ: CSCO<span></span></span> is a prominent example. On the other hand, smaller companies that have emerged in recent years have also dedicated themselves specifically to this burgeoning market. Two of the leading firms in that latter category are Datadog Inc. <span>NASDAQ: DDOG<span></span></span> and Dynatrace Inc. <span>NYSE: DT<span></span></span>. Investors interested in focusing specifically on data observability might look to these two companies first. Fortunately, for the sake of comparison, both companies reported recent fiscal results on the same day in early November 2024.</p> <h2><strong>Datadog: Solid Earnings Performance, Boosted Guidance, Loyal Customers</strong></h2>  <p>Datadog beat analyst predictions for the third quarter of 2024 on both the top and bottom lines. Revenue of $690 million improved by 26% year-over-year, while adjusted profit climbed to 46 cents per share, up 10 cents relative to this time in 2023. The company also raised its full-year revenue guidance to $2.66 billion from a previous high of $2.63 billion and its full-year adjusted profit to between $1.75 and $1.77, while previously the firm expected a range of $1.62 to $1.66 per share.</p> <p>Datadog's AI-based cybersecurity product lineup is driving both last quarter's gains and future optimism. The firm's products observe cloud infrastructure, which is key to most AI platforms. Notably, Datadog's growing customer base is extremely dedicated, with 83% of customers using two of its products and even 26% of customers using six or more Datadog products.</p><div><div><p><span><img src="https://imageproxy.pbkrs.com/https://www.marketbeat.com/scripts/TriggeredCampaignPixel.ashx/query-UGxhY2VtZW50PU5hdGl2ZURpc3BsYXkmU291cmNlPU5hdGl2ZURpc3BsYXkmVHJpZ2dlcmVkQ2FtcGFpZ25JRD0xMDM4MQ?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" height="1" width="1" original-src="https://imageproxy.pbkrs.com/https://www.marketbeat.com/scripts/TriggeredCampaignPixel.ashx/query-UGxhY2VtZW50PU5hdGl2ZURpc3BsYXkmU291cmNlPU5hdGl2ZURpc3BsYXkmVHJpZ2dlcmVkQ2FtcGFpZ25JRD0xMDM4MQ"/></span></p><div><p><img src="https://imageproxy.pbkrs.com/https://goterm.com/wp-content/uploads/2024/11/Money.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="421" height="253" original-src="https://imageproxy.pbkrs.com/https://goterm.com/wp-content/uploads/2024/11/Money.png"/></p></div><div><p><strong>Ad </strong> Colonial Metals</p><p>Trump’s IRS Hands Massive ‘Victory Gift’ To 401K Owners</p><p>Trump quietly left open an &#34;off the books&#34; wealth-protection loophole hidden in the 6,871 pages of the IRS Tax Code…  And since then…  &#34;In the know&#34; patriots have quietly used this same &#34;Trump revenge loophole&#34; to shield their life savings from Bidenomics…</p><p>Get Your Free Gold Guide</p></div></div></div> <div><div><div><div><h3>Datadog MarketRank™ Stock Analysis</h3></div><dl><p></p><dt><b>Overall MarketRank™</b></dt><dd><strong>93rd Percentile</strong></dd><p></p> <p></p><dt>Analyst Rating</dt><dd><strong>Moderate Buy</strong></dd><p></p> <p></p><dt>Upside/Downside</dt><dd><strong>21.3% Upside</strong></dd><p></p> <p></p><dt>Short Interest Level</dt><dd><strong>Healthy</strong></dd><p></p> <p></p><dt>Dividend Strength</dt><dd><strong>N/A</strong></dd><p></p> <p></p><dt>Environmental Score</dt><dd><strong>-0.81</strong></dd><p></p> <div><dt>News Sentiment</dt><dd><strong>0.81<img width="80" height="20" src="https://imageproxy.pbkrs.com/https://www.marketbeat.com/scripts/MediaMentionsMiniChart.ashx/query-UHJlZml4PU5BU0RBUSZTeW1ib2w9RERPRyZ2PTI?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" original-src="https://imageproxy.pbkrs.com/https://www.marketbeat.com/scripts/MediaMentionsMiniChart.ashx/query-UHJlZml4PU5BU0RBUSZTeW1ib2w9RERPRyZ2PTI"/></strong></dd></div> <p></p><dt>Insider Trading</dt><dd><strong>Selling Shares</strong></dd><p></p> <p></p><dt>Proj. Earnings Growth</dt><dd><strong>14.29%</strong></dd><p></p> </dl><p>See Full Analysis</p></div></div></div> <p>Datadog's up-and-coming products are likely to drive further growth as well. The company has seen traction with its large language model observability product, as roughly 3,000 of its customers use a Datadog AI integration. The company has also seen strong early interest in the initial roll-out of its On-Call product, designed to provide real-time incident management service.</p> <p>27 out of 30 analysts that have rated Datadog have given the stock a Buy, and shares have a consensus price target of $143.56, nearly 11% higher than current levels. And this is after the company has already boosted its share price by more than 26% this year.</p> <h2><strong>Dynatrace: Outperformance in Earnings, No Revision to Annual Recurring Revenue Guidance</strong></h2>  <p>Dynatrace posted year-over-year gains, with total revenue rising 19% to $418 million and adjusted earnings reaching 37 cents per share, up from 31 cents last year. Despite these improvements, its shares fell slightly after the earnings report, while Datadog’s shares rose.</p> <p>Part of the reason for this post-earnings slump could be that the company only slightly boosted its total revenue guidance for the full fiscal year. </p> <p>That boost comes from subscriptions rather than the more highly coveted annual recurring revenue segment.</p> <div><div><div><div><h3>Dynatrace MarketRank™ Stock Analysis</h3></div><dl><p></p><dt><b>Overall MarketRank™</b></dt><dd><strong>98th Percentile</strong></dd><p></p> <p></p><dt>Analyst Rating</dt><dd><strong>Moderate Buy</strong></dd><p></p> <p></p><dt>Upside/Downside</dt><dd><strong>16.3% Upside</strong></dd><p></p> <p></p><dt>Short Interest Level</dt><dd><strong>Healthy</strong></dd><p></p> <p></p><dt>Dividend Strength</dt><dd><strong>N/A</strong></dd><p></p> <p></p><dt>Environmental Score</dt><dd><strong>-0.47</strong></dd><p></p> <div><dt>News Sentiment</dt><dd><strong>0.74<img width="80" height="20" src="https://imageproxy.pbkrs.com/https://www.marketbeat.com/scripts/MediaMentionsMiniChart.ashx/query-UHJlZml4PU5ZU0UmU3ltYm9sPURUJnY9Mg?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" original-src="https://imageproxy.pbkrs.com/https://www.marketbeat.com/scripts/MediaMentionsMiniChart.ashx/query-UHJlZml4PU5ZU0UmU3ltYm9sPURUJnY9Mg"/></strong></dd></div> <p></p><dt>Insider Trading</dt><dd><strong>Selling Shares</strong></dd><p></p> <p></p><dt>Proj. Earnings Growth</dt><dd><strong>21.13%</strong></dd><p></p> </dl><p>See Full Analysis</p></div></div></div> <p>One advantage that Dynatrace has over Datadog is its relative value. Dynatrace has a forward P/E ratio of 79.6, significantly lower than Datadog's 306.5. Dynatrace also maintains a lower P/S ratio (11.2 vs. 20.4) and a lower price-to-free-cash-flow ratio (78.0 vs. 321.5).</p> <p>Dynatrace also maintains a debt-free balance sheet, allowing it more flexibility with incoming cash.</p> <p>The firm's stock has been relatively level for much of the past year, although in recent months, it has risen, bringing its 1-year return to just over 11%.</p> <h2><strong>Which Comes Out on Top?</strong></h2> <p>The competition between Datadog and Dynatrace is fierce, with both companies seeking an edge in AI and infrastructure observability. Analysts seem generally optimistic about both firms, though Datadog may have an advantage based on expectations through the end of the year, and Dynatrace may take the lead when it comes to valuation metrics. Ultimately, both companies are part of a fast-growing industry with significant growth potential.</p><p>→ Trump’s IRS Hands Massive ‘Victory Gift’ To 401K Owners <span><span>(From Colonial Metals)</span> <span>(Ad)</span></span><img src="https://imageproxy.pbkrs.com/https://www.marketbeat.com/scripts/TriggeredCampaignPixel.ashx/query-UGxhY2VtZW50PU5hdGl2ZURpc3BsYXkmU291cmNlPU5hdGl2ZURpc3BsYXkmVHJpZ2dlcmVkQ2FtcGFpZ25JRD0xMDM4Mw?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" height="1" width="1" original-src="https://imageproxy.pbkrs.com/https://www.marketbeat.com/scripts/TriggeredCampaignPixel.ashx/query-UGxhY2VtZW50PU5hdGl2ZURpc3BsYXkmU291cmNlPU5hdGl2ZURpc3BsYXkmVHJpZ2dlcmVkQ2FtcGFpZ25JRD0xMDM4Mw"/></p><h2>Should you invest $1,000 in Dynatrace right now?</h2><p>Before you consider Dynatrace, you'll want to hear this.</p><p>MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Dynatrace wasn't on the list.</p><p>While Dynatrace currently has a &#34;Moderate Buy&#34; rating among analysts, top-rated analysts believe these five stocks are better buys.</p><p>View The Five Stocks Here</p>                  </div>

DDOG

<p>Datadog and Dynatrace are competing in the rapidly growing data observability market, projected to reach $1.7 billion by 2030. Datadog reported a 26% revenue increase and raised its guidance, while Dynatrace saw a 19% revenue rise but only slightly adjusted its guidance. Analysts favor Datadog for its strong customer loyalty and product growth, while Dynatrace offers better relative value with lower P/E ratios and a debt-free balance sheet. Both companies are well-regarded, but Datadog appears to have a competitive edge in the market.</p>

Observability Wars: Datadog and Dynatrace Vie for Data Dominance