Datadog Inc. (DDOG) Vs. 21Vianet Group Inc. (VNET): Updated Outlook

Datadog Inc. (NASDAQ: DDOG) shares are 119.64% up in the year-to-date (YTD) period and have moved -0.67% or -$0.56 lower in the latest trading session. However, stock’s trailing 12-month performance remains nearly +187.33% lower. Comparatively, the stock is -16.17% down YTD and 19.41% over the trailing 3-month period. If we look at the shorter duration, its week performance is -3.65% and -10.54% over the month.

Analyst Recommendations

On July 10, 2020, FBN Securities recommended the DDOG stock is a Outperform, while earlier, Needham had Reiterated the stock as a Buy on August 07, 2020. 16 analysts offering the recommendations for the stock have a consensus rating of 2.40 to suggest that the DDOG stock is a “Moderate Buy. 0 of the 16 analysts rate the stock as a “Sell”, while 0 has rated it as “Underweight”. 8 recommend buying, with 0 rating it as an Overweight.

The stock currently trades at $82.98 and analysts tracking its performance over the next 12 months have a consensus estimate price target of $93.75. The consensus price target represents an upside potential 11.49.

Earnings Forecast

Analysts estimate the earnings to increase 400.00% in the current quarter to $0.01, up from the $0 reported in the same quarter a year ago. For the current year, earnings should grow to an average of $0.12, up 57.50% from -$0.01 reported last year. Analysts also offered guidance for the next financial quarter, with their average projected EPS at between -$0.02 and $0.02. Wall Street estimates earnings per share to be at an average of $0.15 for the next year.

Insider Transactions Summary

According to SEC data, total insider shares purchases at the company stands at 60 over the last 12 months, while SEC filings reveal that there have been 212 insider sales over the same period. Insiders have purchases 27,916,357 shares while those sold by company executives and officers stand at 36,161,354. The last 3 months have seen insiders trade a total of 1,637,814 and 5,209,709 in purchases and sales respectively.

Index Ventures VI (Jersey) LP, a 10% Owner at the company, sold 32,879 shares worth $2.75 million at $83.57 per share on Aug 20. The Chief Financial Officer had earlier sold another 35,000 DDOG shares valued at $3.05 million on Aug 26. The shares were sold at $87.14 per share. Shah Shardul (Director) sold 32,879 shares at $83.57 per share on Aug 20 for a total of $2.75 million while Shah Shardul, (Director) sold 50,483 shares on Aug 19 for $4.2 million with each share fetching $83.13.

21Vianet Group Inc. (NASDAQ:VNET), on the other hand, is trading around $23.75 with a market cap of $3.03B and analyst research firms have a positive stance on its shares. Analysts predict that the stock will reach $32.81 and spell out a more modest performance – a 27.61% return. Some analysts are even forecasting -$1.24 per share in earnings this year on a short term (1 year) basis.

Let us briefly look at the 21Vianet Group Inc. (VNET) financials, with a focus on its operating details as indicated in its earnings report for the last quarter.

Company balance sheet and cash flow

VNET’s operating margin was positive on the trailing 12 months basis, remaining steady at 4.30%, while the operating expenses over the recent quarter were at $55.97 million. This represented a 82.31% of the company’s total revenues which amounted $316.32 million. With this in place, we can see that the company’s diluted EPS declined -$2.88 on the year-over-year period, shrinking to -$0.12 as given in the last earnings report.

In terms of the balance sheet & cash flow as of (Sep 2020), the total assets figure advanced to $2.53 billion from $2.18 billion over the previous quarter. Short term investments amounted to $22.3 million while total current assets were at $1.09 billion. The company’s free cash flow for the quarter was -$108.11 million.

Major holders

Insiders own 1.70% of the company shares, while shares held by institutions stand at 66.80% with a share float percentage of 99.72M. Investors are also buoyed by the number of investors in a company, with 21Vianet Group Inc. having a total of 102 institutions that hold shares in the company. The top two institutional holders are Morgan Stanley with over 7.08 million shares worth more than $168.88 million. As of Jun 29, 2020, Morgan Stanley held 8.27% of shares outstanding.

The other major institutional holder is FIL LTD, with the investment firm holding over 6.02 million shares as of Jun 29, 2020. The firm’s total holdings are worth over $143.69 million and represent 7.04% of shares outstanding.