Datadog Stock: There’s A Lot To Like Here (NASDAQ:DDOG)

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Daniel Snyder: There we go. Welcome, everyone, to Stock Market Live. I’m Daniel Snyder. This is Austin Hankwitz. You’re hanging out with us. We got Josh in the back. Nick is here with us, Mark is here with us, James, Dan, Anna. Thank you, everyone, for coming to hang out on your lunch hour, your dinner hour, wherever you might be joining. We know we got people in Mexico. We got people across Europe. We got people on the other side of the world.

Austin, I mentioned that we’re on Apple Podcast now. People have been going, they’ve been giving us ratings, they’ve been giving us reviews, shout out to all of those that have taken the time to do that for us. I don’t know, obviously, we’re talking about ratings in the charts on where we fall. I just noticed today that we are currently #65 in the Netherlands for this podcast.

Austin Hankwitz: Shout out to our Netherlands…

Daniel Snyder: [Cross Talk] over in the Netherlands…

Austin Hankwitz: Yours. How’s it going? Let us know.

Daniel Snyder: Internationally, of course, we love having you all here join us. As I mentioned, Marie, Mark, Greg, James, everybody is here hanging out with us. Guys, if you’re listening to the podcast on replay, come hang out with us for this hour. Obviously, we’re diving into all of it.

So without further ado, I want to get things started. I think not to do my own horn, but I think Elon Musk might have listened to me.

Austin Hankwitz: Yeah. Oh, wait a second. Are you talking about your checkmark…

Daniel Snyder: I’m talking about it. Josh, can you throw up this first right now?

Austin Hankwitz: Pull it up. Pull it up, let’s see.

Daniel Snyder: Look. Now there’s a lot that goes into this. Maybe it was just an idea. Maybe I saved somebody’s job at Twitter (TWTR). Who knows, right? I’m not – watch the ego, feed the soul, right? I posted this a little over a week ago. I created this little graphic. I said, “Hey, there’s a whole lot of problems over there at Twitter.” Why not add on to a blue color checkmark all these other colors and they can all be different categories, right? It just makes sense. It’s so simple to do. It solves so many problems, it helps classify ads to the user interface and the experience.

Josh, next slide. So I posted that, and then we just got word on, I think, it was Friday, right? Thursday or Friday, Twitter was to tweak the verification system, including gold and grey checks along with the blue checkmark.

Austin Hankwitz: Boom.

Daniel Snyder: Nice to hear it, right?

Austin Hankwitz: Like you laid it out for him one, two, three, ABC and…

Daniel Snyder: I’m here for the [indiscernible], man.

Austin Hankwitz: I’m sure he’s looking at your tweets, man. He’s looking at the mentions.

Daniel Snyder: Want to help.

Austin Hankwitz: He said this guy, Daniel Snyder. He knows what he’s talking about. We’re going to run with it. We’re going to put our Chief Strategy Officer on it, and now it’s game over, baby. We got it done.

Daniel Snyder: Hey, I’m looking forward to seeing what else comes to the platform, because there’s a lot of good that comes from the platform. There’s a lot of controversy right now, and we’ll get into that here in a second. But I also want to say congratulations to us, by the way. Obviously, everything you guys hear is just us in our opinions and the analysis that we do on these stocks that you guys pitch us and the ideas that come out of the show as well.

Josh, throw up the next slide, actually. This was sent to me by one of our longtime viewers, it makes me feel good. So I just want to share it with you as well, because I haven’t told you about this yet, but I received this text message the other day. So I picked up some Academy Sports stock last week after your broadcast, it is up $4.92 per share since my acquisition date.

Austin Hankwitz: Come on now. Come on now.

Daniel Snyder: Maybe for the people, right? Obviously, you guys anything we talk about here, we’re not telling you to buy, we’re not telling you sell, we’re just telling you what’s looks favorable to us, what we might do that’s all on us, obviously, continue to do your own research as you watch the show. I just had to pinpoint that out.

Josh, you can go ahead and take that off for me. So…

Austin Hankwitz: So I’m excited, Daniel. We’ve got a lot of going on today. We’ve got a little bit of stock analysis. We got a little bit of initial thoughts. I actually have a theme from my initial thoughts. So I’m really pumped to get into that. We’re going to talk a little bit about Elon. We’re going to talk a little bit about our sort of overlords, Apple, and we’re going to hit the Datadog.

So maybe you want to kick us off with some charts. You want to talk about maybe some gaps we’re seeing. What’s the VIX up to? We saw a little bit of a sell off recently, but we’re still up hovering around these all recent all-time highs. What’s – what are the charts telling us?

Daniel Snyder: Yeah. Let’s look at the overall market. Josh, go ahead and throw up that first slide. I’m going to highlight something new this week that actually is something that Mike saw used to do on what’s happening in the stock market that he did. And he would show you the CNN Fear & Greed Index and where are we right now? We’re going to start taking a look at this every week, because it gives you the overall sentiment of where we are in the market.

So here, we are obviously in greed. A year ago, we were in extreme fear. In the last few months, we’ve been slowly crawling up from that extreme fear reading, which was at an all-time low. It was week-over-week just completely in the gutter.

Let’s go ahead and take that off for me, Josh. I’m going to go ahead and jump over to the charts here, so that we can all take a look.

Austin Hankwitz: Before we do that, Daniel, maybe I don’t know if you have this information or I certainly don’t. Do you know what that that Fear and Greed Index is based upon? Is it based upon maybe call put ratio? Like, what do you think the Fear and Greed Index that you just showed is really truly based on maybe to give our listeners and watch us some context?

Daniel Snyder: I think there might be – I mean, I – so I don’t know the answer off the top of my head, but I can tell you that a lot of people use it for the contrarian trade and to get an overall sentiment of the market, right? I imagine there’s things like the AA investor survey that’s done every week. I’m sure there’s a bunch of different data points that they put into that.

But it seems to be one of those kind of watch things that you’re like, well, people were fearful now, they’re greedy. If you’re thinking of this as a bear market rally that kind of lines up with that. And so maybe I want to start going short the market, maybe I want to start selling, maybe I want to buy puts, maybe I want to do vertical credit spreads whatever it might be. So that’s why people kind of keep an eye on that. It’s just another data point to take into your consideration as you’re maybe doing a top-down approach into your stocks that you’re looking at this time.

So going into the charts, like we like to start off with the VIX. Let me make sure I’ve got this over here. There we go the VIX. So remember, last week, I went ahead and left this line right here for us, and that was my projection of we were probably going to come down and get to the 20 line and bounce up.

Well, what’s been going on so far? This is the weekly chart. Let me get down into the daily. We have seen that exactly. Of course, we came into this week, red hot off the news of the China lockdowns, the protests, everything going on over there. We got a nice little VIX pop. And now we have another gap underneath right here just as we fill the last one.

So, obviously, a gap just above the 20 mark. And here we are today with the VIX spiking green to the upside again. It’s just something to keep an eye on. Obviously, looking at the dollar. We’ve got Powell coming out, talking, I believe it’s today. So we’re all kind of watching this right now. It seems to have stabilized here a little bit.

Let me go ahead and throw on our moving averages, so that everybody can see we’re kind of bouncing off the 100-day – sorry, the 200-day moving average here with the dollar index. Going into the SPY ETF for the S&P 500, we are just under this 200-day moving average, kind of trap between that in the 100 and 200, which are converging right now.

We’re kind of in the long down trend line. We’re just following that line on down right here into this little corner. We’re obviously all watching this, right? Maybe we’re just in a range, right? There’s a lot of gap. There’s gaps above the market. There’s gaps below the market. We have December 14, the next Fed interest rate hike. Everybody’s expecting 50 basis points. It’s going to affect the markets. It’s all about the talk though, right? We’re waiting to see how [Cross Talk]…

Austin Hankwitz: All about the talk.

Daniel Snyder: …and we’re about to go into the blackout period. So we won’t hear from the Fed speakers finally for a little bit, because I’d like to talk too much. But obviously, if we come down to the downside, looking for some resistance here around the 100-day moving average, let me come in here and just make sure I know where that level is for you. It’s about the 391 area on the S&P 500 SPY ETF.

Going into the queues, we balance off the 0.618 retraction. We’ve got gaps below the market. We are here. Now let me just expand this a little bit. I want to show you something here. So I drew this line earlier. Let me go ahead and just clean this up. So, boom, let’s do this. Oh, one second. Wrong one. Oh, I messed that up. All right. Well, we’ll keep going.

So we got this trend line right here where they call it the neck line, right? So it’s kind of a resistance point or sorry, support point in this regard. And what most people will do is, if you follow patterns because it kind of patterns relate to the psychology of the market at times, it’s kind of weird how they work out. You would take the trend line, the neck line you have here, and you would draw a line up to the top of the highest point of these two peaks, giving you a 4.32% move, right?

So I look at the gap below the market here and I go, okay, from the neckline, if I’m looking for a move to the downside, if I go down 4.32%, where does that take me? It takes me pretty much to the bottom of the gap.

Austin Hankwitz: How does – how that happens? I have no idea. What is this [Cross Talk]

Daniel Snyder: Well, it is a tech sector, right? So as we continue to raise interest rates in the tech sector, the tech – or sorry, as we raise interest rates in the economy, the tech sector usually gets hit. So that might be one of the next catalyst moves we see here. Or if you start to see earnings dropping, right, it’s something that we keep talking about as well. What our earnings going to do for these companies? We’re seeing layoffs. DoorDash (DASH) just announced their layoffs. There’s a lot more layoffs to go.

Austin Hankwitz: Have some stuff with CrowdStrike (CRWD) saying a lot of the macro headwinds they’re seeing. So I’m sure they’re not the only ones.

Daniel Snyder: Exactly. So now here we got IWM, which is the Russell ETF. We’re kind of converging here in this little balance zone that we have. Same thing. You’ve got a neckline here on the top of the gap. If we were to draw a neckline here, we’ll just take it from here. It goes to the top. This top highest point, 4.19%.

If we do break down to the downside, you could probably see that come back down here to the 173 area, which kind of looks like there’s a little bit of support right here. So we look at support and resistance zones. If it breaks to the downside, you might find some support down here at 174.

So just some levels to keep an eye on. Obviously, there’s a lot that’s we’re going into December, right? I don’t know about you. I’ve been reading some data about when the market is down over 15%, usually December is a down month. So keeping that in mind, obviously, everybody wants to see us Santa Claus rally. I would love to see us Santa Claus rally. There’s a lot of pain out there. but we’re going to find out from Powell and the Fed, FMC, where we’re headed from here. So that’s your overall look in the market.

And before we go any further, want to go ahead and throw up our poll. Josh, if you don’t mind, for everybody joining us today, we’re kind of curious. Last week, the response was higher. Where do you think the market is headed by the end of the year? Are we going higher? Or are we going lower? Go ahead and vote for us right there, throw a little music on in the background.

Guys, just to answer your question about the mic saw webinar, I’m seeing a lot of over here in the chat. Unfortunately, we had made the tough decision to sunset that show, but we appreciate that you’re still here hanging out with us. Hopefully, we can help fill in a little bit of what you guys were getting from that show. We’re diving more into stock analysis. I know he’s more general over market view. We’ll try to fill in some of those gaps as well.

Let me see where we go. Josh, let’s go ahead and end that poll for us. All right. What’s the results? We have…

Austin Hankwitz: Whoa, whoa, whoa, whoa, whoa.

Daniel Snyder: …people saying that the market is headed lower into the end of the year. This is man.

Austin Hankwitz: Welcome to the Job Fair.

Daniel Snyder: Week-over-week. I’m going to hire to lower. And I know…

Austin Hankwitz: I know you’re thinking about the Santa Claus rally. I know you’ve been wanting to see the stocks go up. I’ve just and I will be the first to admit. I have absolutely been terrible at timing my short position. I have been eaten alive over the last bear market rally six weeks.

However, I could not be more ready to see the market have a nice cool down. We’re a thing – I know bear market rallies. We’ve been talking about them for a while now, and I’m just – I’m here. The consensus is with me here. Let him lower.

Daniel Snyder: No, man, that’s a point, year-end tax loss harvesting, that is also something that we’re probably going to see, which is going to just put selling pressure on the market. You’re in and down here. You might as well take the tax loss harvesting now while you can. So, man, that’s interesting. All right.

We’ll keep that in a mind. Of course, we’ll ask you again here, oh, I got to mention. I was about to say next week. Everyone is here with us. Unfortunately, Austin and I are taking some time to ourselves next week. There will be no show next Wednesday, but we will be back the week after, and we got a great special guests joining that week. We’ll tell you more as that gets closer.

So let’s get into initial thoughts, bullish or bearish. Why don’t we go ahead and kick us off, Austin?

Austin Hankwitz: I’d love to. Okay. So Elon Musk was tweeting a lot during Thanksgiving break. And a lot of those tweets had a little bit to do with Apple and Google, right? I mentioned the theme of this initial takes, initial thoughts here is Apple, right? That’s my theme for this.

So Elon has been talking a lot about Apple (AAPL), how they’ve sort of had this 30% tax and things of that nature, and they even threatened to take Twitter off of the App Store. And because of that, people were speculating, and he even confirmed that if it got so bad that he was kicked off the apps who are both on Google (GOOG, GOOGL) and iPhones that he would create his own smartphone.

I think a Elon Musk smartphone would be incredibly awesome. I feel like it could be the missing puzzle piece between Neuralink, between Starlink, and between maybe some solar panel stuff that technology he has from Tesla (TSLA). What are your initial thoughts on Elon Musk smartphone, timelines, idea, anything around it, I want to know?

Daniel Snyder: I want to know from the people here watching with us, too, because my whole thought is, yeah, it’s not going to happen. If it does, it’s going to be running off Android. Maybe I mean, think about it. It’s the operating them that you need to control. And that’s why Apple is doing what it does with the App Store is it controls. It’s the gatekeeper. It controls everything that happens there.

And the reason with Twitter and the debacle is, if you’re allowing people to say whatever they want on Twitter, well, Apple still has guidelines. They still have morals, if you will. I mean, I’m all for free speech. Don’t get me wrong, but I think there’s certain areas where we need to be like moderating a little bit, not overarching, right? But, like, would I love to see the phone? Absolutely.

What would it look like? What would it entail? Would it talk to your – what – here’s a question for you, because with Apple, they always say, if you buy the iPhone, we pretty much got you, right? I think that’s the entry point. If Elon designs his version of the phone, would you buy a Tesla after that?

Austin Hankwitz: See, that’s the first thing I thought, right? So Tesla, there are 3 million Teslas at least is what Wikipedia said. There are 3 million Teslas just all over the world right now that are being driven around. Like, if you think about it, those are his devices. Now compare that to the billion, say that again, 1 billion Apple products, if it’s an iPad or MacBook and or an iPhone that are across the world, right?

So not really at all in comparison here, but perhaps I know – I don’t know any of the operating system that goes into these Teslas. There’s a lot of stuff that I don’t know. I’m just kind of piecing it all together as I see it.

But to that point, right, I mean, could the Tesla, these 3 million Tesla’s be kind of that that first step toward a more mass produced product, which could be a smartphone. I mean, we’ve kind of all seen that, I don’t even call it a meme anymore. It was kind of a game plan, where Elon released the first electric vehicle for a very high price point and then it came down a little bit more and it came down a little bit more and then now we have a Model 3 for, like, 40 or 50 grand, right?

So maybe it comes down so much that now is a smartphone for 2 grand, 3grand, right? Who knows what that is? But I think, first, Elon…

Daniel Snyder: His smartphone would have to be, like, $500 or less. So yeah, I think, I mean, first off, do you know how long it takes for an operating system to be built? I mean, it takes years…

Austin Hankwitz: No. I have no idea.

Daniel Snyder: I mean and also you’re talking about it’s not just the problem of him building the phone. Sure, you can build the piece of hardware, but developers in the world have already learned so many languages. They don’t want to learn more languages. They don’t want to have to learn how to code in new languages and new ways in order to implement, I want my phone to do this or that when you touch the screen and then you go into, all right, well, who owns the patents on this technology and that technology? I mean, it could get expensive really fast.

Austin Hankwitz: That makes a lot of sense. So I guess what we’re hearing is Daniel does not think that a smartphone is on the way from our Iron Man of Elon Musk.

Daniel Snyder: I would love to be surprised, but I don’t think he’s going.

Austin Hankwitz: Got it. All right. So staying on that topic of Apple, Ming-Chi Kuo shared recently that major iPhone 14 Pro shortages and delays could be around the corner. I think that he was saying that we saw 20 million iPhones just kind of disappeared from a shortage perspective that got shipped. This is because the labor things, labor protests that are happening with a Foxconn and I think the Zhengzhou plants. What do we think about this? Is this going to impact Apple in a meaningful way? Is this now some sort of I don’t know, I just – I’m trying to piece it together.

Daniel Snyder: Yeah, I think I mean, we all are, right? I’m not sure where this guy gets his data from. I’m curious about that. The thing that has been going through my head about all this news about lockdowns and China and Foxconn factory workers kind of hopping fences and running out, because they’re not getting paid bonuses for their work and now the incentive plans of how they’re trying to get more iPhones made in time.

I think the conversation or the question should be, how many iPhones are being made in India now, right? So they’ve – they’re moving to diversify their production, because Tim Cook is a brilliant man and used to control all supply chain things at Apple. And as Taiwan Semi opens the plant here in America, will iPhone start being made here in America? I mean, I think they have many levers that they’re setting up the polls, so that they don’t have to rely as heavy on China.

So is that 20 million iPhones that were supposed to be made at those plants in China? Or is that also China plus, India plus, all these other little areas that they’re outsourcing, I mean, MacBook computers remain in Texas? Why not make iPhones in Texas, too? That’s where my mind goes. I think we’ll be surprised by what Apple can do, of course.

Obviously, if you can’t get your product in the hands of consumers, then you won’t get the revenue. But the demand for their products are still high. So it’s not so much people may not buy. They just might miss the opportunity to buy the iPhone 14 when the iPhone 15 will be here in 10 months. Whatever it might be.

Austin Hankwitz: Got it. Got it. Okay. Okay. And now sticking on this same sort of idea of Apple, we talked a little bit about Elon. In the App Store, we talked a little bit about the protests. Now let’s talk about Spotify’s (SPOT) CEO. Spotify’s CEO took to Twitter this morning with a long Twitter thread kind of fueling the fire of Apple’s anti-competitive 30% tax on in-app purchases, providing a lot of reasons as to why it could be considered unethical and even hampering growth and innovation, something that Apple has been very adamant about and kind of the poster child of growth and innovation and technology.

Is this the downfall of Apple’s tight grip on monetizing their App Store? I know we’ve seen a little bit of stuff with Fortnite. We Spotify, they’ve been talking about this for three, four years now. Like, people have brought this up, but Elon, all eyes on Elon, he’s one – he’s been someone who’s really gotten a lot of tension now toward this idea of this 30% tax on Apple in-app purchases.

Daniel Snyder: Let me flip the question on you. How much do you think is an acceptable amount for them to take? And that’s a question for everybody watching as well. Drop in your chat.

Austin Hankwitz: [Pretty well] [ph], it’s not a tax, right? I’m using quotations with my fingers here. So just we’re on the same page.

Daniel Snyder: 5%, 7%, 10%, 15%.

Austin Hankwitz: Yeah. I think if I’m going to go 15% because whenever I think about and now this is from my perspective as a content creator, and most agents, whenever they present some sort of opportunity, a way for you to monetize beyond your own ability to monetize, they take a 15% cut. So that’s my only kind of perspective on that. Yeah, 15%, which they’re already doing now for developers who are making less than $1 million a year in revenue. So I think that’s commendable, but this 30%, that’s I don’t know, it’s interesting.

Daniel Snyder: It’s a structured approach, right? And I think that’s what the – I mean, let’s – you brought a Spotify, right? I just pulled a Spotify here on Seeking Alpha. The stock down is down to $75 a share. It was a direct listing stock, not an IPO, right? So they would directly list at $149 a share. Stock peaked up to $364.

Also, sidenote, I watched that series the playlist on Netflix about Spotify? Incredible. Also, like, the way they did the storytelling structure of, like, each episode is told from a different perspective. You have the VC investor, you had the CEO, you had the artist, you had the music label, the Head of Sony guy, like, go check it out. But I think they have a bunch of other issues going on besides just Apple taking 30% of the in-app purchases here.

But you’re talking about this company created a product and put in so much money into the research and development costs, develop the software, increase productivity around the globe, connected us to the Internet everywhere, why not let them profit off of it in the scale structure that you’re talking about, right? Give a smaller – take a smaller percentage for companies making up to a $1 million in revenue. Like, have it scaled like that? Why is that not acceptable?

Austin Hankwitz: Yeah. No, I think it’s….

Daniel Snyder: You’re making a lot of money and somebody enabled you to make that money? I mean…

Austin Hankwitz: I get it. Hey, I’m a capitalist. I’m right there with you. But I just think at the end of the day as well, like, if I am – I – how can businesses – think about Alexa, for example, right? Let’s say Amazon (AMZN) Alexa. I’m a seller on Amazon, like let’s pretend, right? And let’s say, hey, Alexa, I’m going to go buy some toothpaste.

And I don’t name a brand, but Alexa orders some random brand’s toothpaste, puts it, checks it out. How much is Amazon Alexa charging for that, right? I just want to know, like, Apple, the App Store is one ecosystem of monetization and I think it’s powerful. Obviously, 1 billion devices, right? Like, that’s massive and you need to pay to play. But on the same token, I want to compare that now to other types of ecosystems that are enabling scalability of this nature, if that makes sense?

Daniel Snyder: No, that does make sense. I mean, obviously, I don’t believe Amazon affiliates are paying up 30%. I mean, even thinking about credit cards, right? Credit cards are taking what 3% if your American Express maybe 4% or 5% of every transaction to the business owner, the consumers never see it, right?

The interesting thing is you’re doing this premium model of my apps on the phone in the app store. And of course, you get the app for free, but then you got to go in and you got to make all the upgrade purchases, and that’s a business model. And, of course, Apple gets 30% of all of that. At the same time, users of the iPhone are enabled to use maps for free. There’s a free email app on there. There’s calendar apps. There’s all these free apps that you don’t pay for at all.

And so it’s like, would you pay for those? Or should those stay free? Obviously, whenever we get something free, we always wanted to stay free, right? Like, that’s just the consumer mind says they, hey, once you get it for free, you never want to pay for it. I think in regards to charging attacks, Christian over here in the chat says, 10% to 15%, there’s kind of a – they’re protecting the security of your phone. They’re protecting your computer. They’re protecting your life. Everything is ease of use. I mean, there’s a cost to that.

And we don’t know how much they’re putting in labor costs and R&D costs and everything into developing things beyond this. So they’re presenting us an opportunity that we wouldn’t rather have. I think they’re allowed to export. 30% maybe knocked down to 20%. But I think the tier structure is the right approach.

Austin Hankwitz: Boom. That’s it. That’s the take.

Daniel Snyder: All right. So let’s get into this real quick. I’m going to go through these three real quick, so we can get to Datadog (DDOG).

First up, going off what you’re talking about with Elon, the Tesla Semi just completed a journey for 500 miles on one charge, that’s an all-electric Class 8 truck, weighing 81,000 pounds, bullish or bearish and initial thoughts?

Austin Hankwitz: I am super bullish on Tesla Semi trucks. I think that as someone whose sister’s husband drives a truck for a living, and I know how backed up him and his crew is. I think it’s incredibly exciting to know that not only will Tesla is – not only is Tesla building some sort of device to allow him to perhaps drive longer, perhaps allow him to drive more safely, more accurately and even at a lower cost, but eventually to completely subsidize what he and his crew are doing altogether, right?

I think at the end of the day is they are goods that need to be moved from one location to another and there are so many people that are skilled enough to do that. I would argue that people with CDL licenses are skilled, very skilled at driving and doing what they know how to do. And so I’m super bullish on Tesla Semi trucks. I’m excited for them. Full self-driving one day. Like, I’m here for it.

Daniel Snyder: And isn’t this going to, like, completely take Tesla? Like, they – they’ve always said, we are so far ahead of every other electric vehicle manufacturer, and isn’t this just like that next, like, hire, right?

Austin Hankwitz: I would argue totally, right.

Daniel Snyder: [Cross Talk] consumer side.

Austin Hankwitz: To me, what’s really interesting about this is, like, they went to the top of the supply chain logistics side of things, right? They – so how we’ve seen other companies, other EVs approach this supply chain logistics challenge with – within that EV sector is, you see Rivian (RIVN), right? Rivian and Amazon. It’s the last-mile approach, right?

But Tesla said, no, we don’t want to do the last-mile stuff. We want to do the actual, like, the straight driving that just across the country. I think that’s really cool, and I think the way that they approached that was smarter than how Amazon and Rivian have had approached that sort of last-mile strategy.

Daniel Snyder: Yeah. I love to see this, right? I think about our railways and the logistics of our country and the backbone of our country and how you have that intermodal connection that trains that CSX offers that, United Pacific offers that. I think if they double down into this sector, I think you’re going to see an explosive gross out of the semi sector of Tesla. And my main question though is how fast can you crank these out? Because there’s going to be a lot of demand, and I want to see you fulfill that.

So moving on, there we go. That’s your take on that. Meta Platforms (META) backed off their New York City office space as it trends cost. Do you think that this will become kind of like the next story, right? We’re seeing layoffs after layoffs. And now we’re seeing companies saying, Amazon did it with their warehouses. We’re going to stop building so many warehouses. We’re going to stop leasing so many warehouses. So we get through this moment in the economy. What are your initial thoughts on just companies scaling back from the commercial office space? And does that hurt that entire sector, which was already decimated by COVID?

Austin Hankwitz: So that’s interesting, right? Like, I mean, let’s rewind a year ago. I don’t know if you experienced this, but I had a lot of friends and family that were actively working full-time jobs and they had lived in these larger metropolitan areas like Nashville, Chicago, places like that. And their employers are saying, got to come to work, got to come to work, got to come to work, right? Walk. Walk. No hybrid. We need you here. Same thing what Elon is doing, right?

And now maybe, like, as things have begun to slow down over the last 8 to 12 months from macroeconomic perspective and how it’s being forecasted that we’re going to see a recession in the next, call it, 12 months, these same companies might now be saying, hold up. Maybe we should have just let them all work remote, so we don’t have to pay that/

I mean, for example, a company I was working for here in Nashville, I think it was $42,000 a month they were paying to lease the office building that I had worked in, and I believe there was about 70 of us that worked there, right? I mean, that’s $40,000 a month is a lot of money, right? And so if you’re a small to midsized company, maybe it’s not $40,000, maybe it’s $20,000, but that’s still a meaningful impact to the company’s bottom line. And be able to say, man, maybe we don’t let them come back. Let’s save some money.

I think this is a trend we’re going to continue to see. I think companies now that the economy is beginning to slow down or are going to kind of have, not just the perspective of from a moral, let’s all come together and work together, kind of mentality, but I’ll say, wait, maybe financially, it might make more sense to keep people at home for just – let’s see how the economy shapes up in the next 12 to 18 months and hopefully, our bottom lines are going to be able to allow us now the ability to all come together and work in unison and a larger environment like that.

But I think it could be a trend. I could see this actually becoming a thing, where we’ll see and I don’t know if it’s going to be New York or Texas or California, but I could certainly see more of these companies starting to say, oh, you guys just stay home. We’re actually going to save the money instead.

Daniel Snyder: Yeah. Oh, I don’t know about stay home, but maybe they’ll just be like, look, if you – we’ll go back to the old structure. If you want to come work for Meta, you have to move to Silicon Valley, right? Is that conversation? Even though I was just looking through the so, indeed, just put out a report with Glassdoor about state of the labor market and what the trends are and everything I was looking at it yesterday.

And they said that the search volume for remote work positions is still pretty much at an all-time high. So it seems like you’re going to have this clash potentially between the employers and what the employees or potential employees still want. So interesting point, though. All right. Let’s finish this up.

So the last one going back to our friend, Elon, who seems to be the theme of this so far today. Elon said this morning that the Fed needs to cut rates immediately echoing what professor Jeremy Siegel just from the Wharton School just said yesterday as well, it seems like they’re all calling for Fed rate cuts. I don’t think the Fed’s going to listen, but what do you think?

Austin Hankwitz: I don’t think the Fed’s going to listen. I don’t think they should. I don’t think that we’re going to see, so to your point, right, this 50% basis hike that’s going to likely happen. It’s like we’re not going to see a 75% or even a 100%, right? That’s not reality anymore. And – but I would also be very careful to make sure that people don’t think that this is them pivoting, right? The Fed’s not pivoting. The Fed is still raising rates. Monetary policy is still tightening.

I don’t think they’re going to pivot at least until the end of next year. I think if anything, they’re just going to continue to remain just tight, like, I just don’t think it’s going to happen. So, no, Elon, that’s not what I want. That’s not what I think should happen. But maybe something I don’t.

Daniel Snyder: I just don’t think that Elon, I think, Cathie Wood came out and said this too, and Jeremy Siegel, like, everybody’s telling them to cut, but they have – it’s bigger than America at this point, right? We’re trying to help not have a global recession, because think about the contagion of that, right? And Alexis [ph] has did – Alexis has chatted us and said, are we having more rate hikes? Yes. Alexis, unfortunately, we are.

I just want to point this out real quick. If you guys don’t know, the CME has, what they call the FedWatch tool, and this can give you insights into what the market is expecting at the next meeting. So obviously, you just come to this cmegroup.com website and look for the FedWatch tool.

So you have the December 14, 2022, that’s our next meeting. And then the next one after that, of course, is February 1st of next year. And the consensus right now is that we’ll have a raise of 50, there’s a 65% chance we’re going to have a raise of 50 basis points. And then after that, I believe everybody’s expecting a 25 basis point raise, 51% right now, to bring us up to about that 5%, 4.75% to 5% interest rate on the Fed side of things.

Now remember that’s going to – the banks are going to add their stuff on top of that, so you’re not going to get that nice luxury of only having that of interest payments. But, yes, we are expecting more interest rate hikes. And then Robert over here in the chat say, buy that logic then the pharma industry should be able to keep the patent on their drugs. And I think this goes back to our Apple conversation about the App Store.

Robert, I think the conversation right is capitalism. And patents were designed and they have a roll-off period to encourage innovation and competition. Technically, I think the same thing is happening with app on the App Stores. They’re saying, “Hey, if you want to beat us and create competition for us, then go build something, because we have spent so much time and hard work and effort and finance and everything else to go into this. Like, we hired so many people and we have been working at this for decades to get to this point. We want to enjoy the fruits of our labor, but we love capitalism, we love innovation, we love competition.”

So if somebody doesn’t like it, and Elon Musk, maybe he’ll design his new phone. Maybe he’ll create his own app store. Maybe he’ll be open source. Maybe everybody’s going to get hacked because of it. Who knows? Just my last thoughts right there on that. So, Austin, I think it’s about time.

Austin Hankwitz: It’s time, Daniel. It’s time.

Daniel Snyder: We got to get into this Datadog deep dive, because this company, so if you were here two weeks ago, remember, I kind of made the case of I’ve noticed some insider transactions going on that I found on the similar page here on Seeking Alpha, and there was some pretty large buying from an officer of the company. Just to remind you that his name is Matthew Jacobson as ICONIQ, I think, he was called and funny enough I was looking earlier today.

And even after our episode, I believe it was after the episode, he made a third purchase. So I only pointed out the first two and then we got another filing that he purchased even more. Haven’t seen any more purchases from him after that one. And then the other statement of ownership that changed over there was somebody got awarded stock option, compensation, converted shares, but they sold it immediately. So it’s something to keep in mind.

So, Austin, why don’t you go ahead and kick us off? We said we were going to do a deeper dive of this company. Why don’t you just kind of give it overall umbrella approach of what Datadog is all about?

Austin Hankwitz: I’d be happy to. So Datadog is a monitoring and analytics platform for developers, IT operations teams, and general business users that are working in the cloud. Their platform integrates with over 500 input companies, think like GitHub or SQL or even Evernote to provide metrics tracing logs and other important data points to their users, right?

So through Datadog, developers, operators, and business leaders can have a holistic view of the entire company’s technology stack no matter the cloud provider that they’re using to host it. The list of use cases this company offers to their customers is really long, but I think it’s important to name a few of them. So you guys have a better understanding of exactly what this company does, right?

So the types of monitoring we’re seeing – we’re – that Datadog does, we’re seeing infrastructure monitoring, application performance monitoring, log management, user experience monitoring, network performance monitoring, database monitoring, security, incident management, developer, testing and pipeline monitoring, all on this integrated data platform.

Josh, I’m not sure if you have this photo, but if – I’m assuming we do it. There’s a bunch of different, we’re seeing, infrastructure log management. Can we throw that up, so the people in the chat can kind of see more of their products here?

Exactly. This is perfect. So if you go to Datadog’s website, you’ll – and you click on services and products, things of that nature, this is what pops up, right? So just so you understand how vast and how many actual software products this company sells or kind of license seats to their customers, this is it, right?

These software products are applicable across countless industries as well, including financial services, real estate, healthcare, education, and even gaming. It’s huge. It’s a lot. Daniel, is there any feedback or input you want to jump in here?

Daniel Snyder: Yeah. I think to sum it up in, like, super layman terms is, this company provides their customers a dashboard, a one-stop shop, where building a website, building games, building whatever you have, all these different vendors, all these different apps that you have to use, and you piece them together like a puzzle, right?

This company takes all the data points that come out of those vendors, consolidates them into an easy visual dashboard to, say, “Hey, we just had a blip of an outage. Well, where did they come from, right?” They want to know exactly where it came from to save a lot of time, save your team’s productivity work. I mean, they have all the things that they’re working on, but this is how they do it. They implement Datadog, They immediately say, oh vendor X, Y, Z, they had an outage blip. Boom, fix, let’s keep it going. That’s what [Cross Talk]

Austin Hankwitz: 100%. So how does Datadog make money? Datadog is running the mill software as a service company. They allow customers to buy seats inside of their platform and those customers pay them a monthly bill to maintain their seat. So, for example, the cost per enterprise seat for their APM and continuous profiler product, which I believe is the third one, right in the middle of the top there, is $40 a month, right? $40 a month per seat.

So let’s assume you have 20 people on your enterprise team that need access to the software product that’s $800 per month in revenue for Datadog just for this one product. Now let’s multiply that figure by six, because that’s a third of their total product offerings. Maybe you got a bunch of different things you’re working on as an enterprise.

We’re now at $4,200 a month in revenue paid to Datadog for this hypothetical customer. That’s $50,000 a year in annual recurring revenue that Datadog is now recognizing on their income statement because of the different products that they’re offering, right? And this is recurring.

So now that we understand who they are, how they make money, and things of that nature, how much did they make last quarter, right? What’s the bull case? What’s the bear case? Why would someone get excited about this company.

So starting with their most recent quarter, the third quarter, I believe the earnings came out just last week or the week before. Revenue was $436.5 million, this is up 61% year-over-year. Operating cash flow was $83.6 million, with $67 million of that being recognized as free cash flow. This was – this took Wall Street by surprise and we’ll get into that a little bit.

They reported 2,600 customers now paying them more than $100,000 in annual recurring revenue. This is up 44% year-over-year, and they offered us some guidance for this quarter that we’re in right now, right, fourth quarter revenue of about $450 million, bringing their 12-month 2022 total revenue to $1.65 billion.

Josh, do you mind throwing up the screenshot of their financial, their customers, and their platform? Yes, Stephanie, good point. We’ll definitely get into that. So before we jump in further though, I kind of want to – I saw this on their Investor Relations website, and I think does a really good job of kind of giving you a snapshot of their business, right?

We see the trailing 12-month financial revenue. We see kind of how that revenue has grown, we see their operating margin, their free cash flow margin, that dollar-based net retention rate being over 100% that means that on an annualized basis, they’re now monetizing 30% more on the initial contract that they had sold a vendor.

So in our example, earlier about that $50,000, let’s say, after 12 months, I say, hey, great, I’m this hypothetical customer. I love paying Datadog for these seats. Oh, and they want me to buy more products for them. Count me in. It’s a great platform. Here’s 30% more money than that initial $50,000. So that’s what that means. Customers, right, 22,000, with 2,600 paying them over a $100,000 a year.

And I think the platform adoption, right? That’s the interesting point to me. And we’re going to talk more about how these numbers have changed recently. But 80% of customers are using two products, right, not just one. 40% are using four products and 16% of customers are using six or more products.

Daniel Snyder: A real quick before we move on from this. So one of the customers, actually, yesterday, I was – so their CFO, David Obstler. I believe is how you say his name. He was presenting at Credit Suisse’s 26 Annual Tech Conference, which might be their last Tech Conference.

But – so he said and if you look at customers, over a $100,000 in ARR, you’ll see that the average of those customers, those 2,600 customers, the average is actually around $600,000.

Austin Hankwitz: Wow.

Daniel Snyder: So that’s impressive.

Austin Hankwitz: That is really impressive. Actually, I have some data around sort of their guidance to those 1 million and even 10 million-plus customers down the pipeline. But maybe jump to the next slide for me, Josh. I think we might have another image here of their annual revenue and sort of how their quarterly revenue has moved in the right direction.

So again, just make sure we’re on the same page. How this company has grown over the last, call it, two, three years now? You can see it’s grown exponentially, right? And that’s what happens. When you have a sticky product and you’re offering a software as a service, this awesome dashboard that is so robust and so needed from a strategic perspective, strategic spending, right? You think about macro headwinds. We saw this with CrowdStrike, whatever.

The last thing someone wants to do is, say, let’s get rid of the platform that that tells us everything going on with our business, right? Let’s get rid of that. No. No one’s saying that. No one’s saying that at all.

Next slide for me, Josh, that’d be great. Nice. So this is that that customers, right, we’re seeing how that has sort of changed over year-to-year. And even now and then that orange section there, that is year-over-year for this specific quarter, right? So Q3 of 2021, we saw 17,500; and Q3 of 2022, it’s now 22,000 customers. Absolutely incredible.

And the next slide shows us the number of customers with annual recurring revenue over $1 million a year, right? That’s $216 million in ARR. Like, that’s just crazy to me. And that was last year. What’s that going to be now? Coming this year as we will see their earnings, I think probably in February disclose that. Now you can see the number of customers with ARR over that 100,000 figure. And as a percentage of total annual recurring revenue, how that has changed and increased.

Now, let’s kind of back out for a second and talk about the bowl case, right? Why would someone be excited to invest into Datadog? I’ve got about three or four reasons here. The first one is they’re operating in a clear secular growth trend of migration to the cloud and you pair that with this major digital transformation, more and more and more and more companies are spending larger percentages of their budgets on cloud infrastructure. I think I saw it was a $65 million – $65 billion rather billion with a b, total addressable market for Datadog by the end of 2024, right?

So it’s a clear secular growth trend. People are spending in more money, more percentages of their budget on cloud infrastructure. The next thing is they’re selling a product as to what we said earlier that seems to be strategic, right? It’s a need similar to cybersecurity, not the first thing executives are thinking of getting rid of when they have to figure out how to save money on the spending side if macro headwinds start getting worse and worse, right?

The last thing these people are saying is, oh, no, let’s get rid of the platform that gives us all this information in data as how our business is running, right? That’s not exactly the person that comes to mind.

Next is, to Daniel’s point, earlier talking about these big, big, big deals, the management team shared very positive commentary during the last earnings call around their customer pipeline. These big $1 million-plus deals and the dollar-based net retention rates remaining very high, which could lead to outsized revenue growth in 2023, right? People are hoping for this 30% to 40% range and I think that is a pretty fair assumption.

Finally, their land and expand strategy is working, right? They added a 180 net new 100,000-plus ARR customers versus a 170 last quarter, right? So not only are they adding more customers, but they’re doing it faster than they were just three months ago. They’re bringing that total up to 2,600, right, up 44%. But the mix and this is what we talked about earlier about the number of products each customer uses, right?

So the mix of total customers using two or more products increased 80 – increased to 80%, right, so from 79% last quarter, moving in the right direction. Four-plus products increased to 40% from 37% last quarter, moving in the right direction quarter-over-quarter and six-plus products were consistent at this 16%.

So what I’m seeing from that is more and more of these customers are saying, wait, I’ve been using Datadog now for six months, 12 months, and I like this wait. You guys have this product, too. Count me in, right? Like, oh, I’m using six products. What do you want to cut any? No, I like using all of them. They’re very beneficial to me. I love it, right?

And, Josh, actually, can you throw on, I think that we’ve got some Bank of America estimates here. We’ll breeze through this one quickly. But it’s a quick snapshot I grabbed from a Bank of America, an analyst report that shows kind of over the last 2020, 2021, 2022, and other estimates going through 2024, how their operating margin, return on equity and more importantly, that free cash flow is looking to trend in the right direction, right?

So what gets me excited is it seems to me that their free cash flow is going to double between now and the end of 2024, really excited about that. Daniel, you got any commentary before we get into the bearish cases?

Daniel Snyder: Yeah, dude. So you made a lot of – I mean, we’ve talked about this frequently over the last couple of weeks. I feel like is how a lot of clients are looking to actually consolidate at this moment in time. And the thing that stood out to me, which I don’t think you mentioned yet, is Datadog recently put out a security platform as well.

So as you’re talking about consolidating and I mean, obviously, we saw CrowdStrike’s earnings last night and they projected weaker, kind of makes you think, like, if this is your overall top of the pyramid, look down on all your vendors, and Datadog is here presenting you with this opportunity to say, hey, we know you’re using them, but you really like us and now we have this product as well, that’s them just taking up market share.

And I think your strategy is what you laid out, what they do is they land and expand, right? You grab them on one and then you slowly expand it. So I think you’re hitting it right on the head. There’s going to be continued growth over time of more of their customers increasing the number of products they’re using in this company.

Austin Hankwitz: 100%. And we have a comment here from Sen [ph] saying that Datadog is down 60% since the recent all-time highs, have they hit the bottom? Welcome to the bearish case Sen, right? So continued multiple compression with high-grade stocks while interest rates rise and remain high, right? Datadog is no exception to the tech bubble that we’ve sort of seen because of interest rates growing or rising rather quite rapidly, right?

And I do believe that that is a downside risk, right, that these multiple compression will continue, and there’s some images we’ll share here in a bit. Another bearish case is the company operates in a highly competitive market, right? So they’ve got some peers and they have some really long sales cycles with that. Their international business might not develop as quickly as possible, and macro headwinds might not continue or might continue to force small customers to optimize spend and say, hey, we’re not going to be pre-buying – renewing our contract with Datadog.

So looking here at a couple of different companies, I think what’s interesting is thinking about how these enterprise value to next 12 months revenue multiples have changed.

If you actually don’t mind going to the next slide, Josh, there should be a graph that shows over the last, call it, three years or so, we can see and shout out to a cloud of judgment. Go check them out on Twitter at Jim and Pam. And we can see from this graph that how these multiples have absolutely been demolished, right? And what’s cool about this is the graph breaks down high growth, mid growth and low growth.

The high growth median is Datadog and it seems to coming in at 8.1% right now across most cloud softwares. And the data we had just seen before that says, it’s trading around 11.2. So it’s definitely above that or that median rather, right? So to Sen’s question, has it hit the bottom? I don’t know, right? I’d argue Datadog is a quality company. Their fundamentals are certainly moving in the right direction. So I’d imagine that they’d be trading at some sort of premium to the median.

But on the same token is – the question now is, what is the median going to continue to come down, which means is that premium…

Daniel Snyder: By median, you mean the middle median or the low median?

Austin Hankwitz: The high-growth median, the blue line right there.

Daniel Snyder: High-growth median.

Austin Hankwitz: 8.1%, right? So that is the – high growth is defined as more than 30% revenue growth year-over-year. Datadog is likely going to do between 35% and 45%. See you later. Thanks so much, Alan. Appreciate you joining with us.

Daniel Snyder: Thanks Alan.

Austin Hankwitz: But they’re going to do this 35% to 45% revenue growth. That’s great. And so from that perspective, I think we could see some continued multiple compression. The stock price could continue to move in the downward direction because of these rising interest rates.

So we had a lot of images coming at you guys. I’m sorry if it was any overwhelming, but we want to share this to give you guys perspective on Datadog is a growing company. They’ve got a lot of cool things going for them, but there are some risks, there are some things that are kind of I don’t – I wouldn’t want to use the word flat – red flashing lights, but certainly things to be aware of as it relates to valuation multiples, right?

Daniel Snyder: 100%. Josh, actually, let’s go ahead and take that off. I mean, you’re talking about charts, but we got another chart to look at. We got to look at the actual share price. Let’s go ahead and jump over and kind of look at what our moving averages are telling us, what Fibonacci is telling us, because we kind of like – we love to take a look.

So I’m starting off here with the weekly chart just to get an overview of what’s happened since this company came public back in 2019. Obviously, you were just talking about the median growth, right? And what happens with the growth sector when the interest rates rise? Because your chart just shows at all is you take interest rates down to 0, and you have all this money out there floating around the additional $2 trillion that was printed and put into the economy as well, well, you have to put the money to work. And so you put the money to work in growth.

And obviously, with this being a growth name, that’s where we saw the massive move up to about $200 a share here. But ever since we’re in this down trend line on the weekly, let’s go into the daily and kind of get more of an idea of what’s going on underneath the market. So we have, obviously, all the moving averages are in a downward structure. Like, [to a T] [ph], obviously, the entire growth sector as well.

Now, you remember I brought this up the other week when we were looking at the insider buying, it was three days here after the recent earnings announcement. And obviously, we talked about how by the time we did the episode, the entry – from the entry point, the investor was already about 25% on his entry point with his cost basis.

However, we pointed out the gap. So the gap has come down. The gap has pretty much filled here. I think there might be a little bit more of a ways to go. I’m not sure we completely filled it all the way. There’s still says there’s about 0.6% between the top of this candle stick right here and where we are today.

Obviously, at the bottom of it, yeah, it’s about 0.64%. I like to wait until it gets it out anything under 0.3%. I would consider a gap fill. And remember, once we see gap fills, usually, there is 80% of the time a move in the opposite direction. So you might see imbalance back to the 20-day moving average. But as we’re talking about, compression of the overall market multiples is what we’re watching here. I mean, I think the beta on us…

Austin Hankwitz: Absolutely.

Daniel Snyder: …pretty much 1.06 is moving with the market. So keep that in mind. So obviously, if we see this, there’s this major support zone here, which is kind of like what we just broke through. And this goes all the way back to March of 2021. And so once you get through – once you break that support usually becomes resistance. And what will happen is, obviously, we popped above and we came back under.

So now it’s going to act as a resistance. And if we can’t pop back above that, then you’re not even going to see this 50-day moving average again. You’ll probably see it fall further than that. And that’s just from the technical perspective. But the next level I would look below that, I mean, you got a little bit of support down here about $63 a share way back from oh, what was this back in 2020, obviously, when the market started to rip. So just something to keep an eye on there from a technical perspective. Yes. Sen, glad you enjoyed it.

So the other things I want to say about Datadog, obviously, it’s a growth company. It doesn’t pay dividends. So if you’re looking for dividend, this isn’t a place for you. They do have $1.7 billion in cash. They have $836 million in debt. I believe I saw a number of, like, $700 million of that is long-term debt, so they’ve got a little bit of runway there.

The thing that I didn’t like to see is that they have so many products, yet they’re still spending 30% of their revenue on R&D. I think personally, I would love to see managements double down on the products you have and continue to show that you can upsell those products and just, I think about the Adobe (ADBE) model, right? They have Creative Cloud. They have Premiere and Photoshop, and all these web Dreamweaver and everything else, like, they don’t continue to create new products. They doubled down on creating new functions for those products that become so sticky and so amazing that clients and customers are happy to pay for it.

So that’s one thing that, what’s your thought on that? Because that still got to me and I was like, I mean, I don’t know if I like that.

Austin Hankwitz: Yeah. I agree with you, right? I mean, it’s one thing to say you mentioned and I didn’t know this they just launched the security product, right? It’s one thing to say, if we understand that from a return on invested capital, we do help us R&D. And then when we come together and we’re able to launch this new security platform and it gives us another 200 million in ARR over the next 10 years, like, that’s great. I get that.

But to your point, right, they have – we’re no longer in this growth at any cost. kind of environment, I think, that companies like Datadog certainly need to begin thinking more about that free cash flow. You mentioned the debt, right, they are free cash flow positive, given an opportunity to perhaps pay that off. If need be, I don’t think they will.

But beyond that Daniel, what kind of strike to me is kind of a flag is I think I read that 23% of their revenue is getting paid out as stock-based compensation. And if you kind of look back to that chart, which you don’t have to pull up, Josh. But if you guys remember that chart before that I had, I think it was a 24% free cash flow margin, right? So 23% gets paid out in non-cash, 24% free cash flow margin. Where is that free cash flow margin coming from? Oh, the stock-based compensation, right?

So at some point, the company is going to have to stop paying out stock-based compensation as a percent of revenue so much. You’re diluting shareholders. This is a whole conversation you had about that. So I would be weary that the fact that this free cash flow, this valuable free cash flow is coming from sort of like a steal from [Peter to pay Paul Kite vibe[ [ph]. I just don’t really like that either.

Daniel Snyder: Yeah, that’s a great point as well. I mean, but that’s a lot of what growth companies have to do, right?

Austin Hankwitz: That’s true. That’s true.

Daniel Snyder: [Cross Talk] conversation. But you do want to see them doing in a respectable manner, man, manner for the existing shareholders. So that’s a great point you make as well. Now, we can’t get out of here without doing what we always do, and then that’s looking at the Ratings Summary and the Factor Grades of Seeking Alpha and what they have going on here with Datadog.

So Josh, if you wouldn’t mind throwing up that next slide, we’ll look through the Ratings Summary real quick. We got the Seeking Alpha authors who currently have a buy rating on Datadog. Wall Street analysts are a buy rating as well, but the quant system is a hold at this time.

Next slide, please, for the Factor Grades. So valuation is in F right now. And that is this growth and this multiple and just way over extending, that’s what we’re still seeing here. But the growth is in A; and profitability is a B+; the momentum is the D+, which is obviously just that down trend line of the stock that we’re seeing; and revisions are in A-, which is kind of favorable. So I like that.

So go to the next slide at one point out, one more thing that I pull from Seeking Alpha here on the symbol page. This goes back to what you’ve been saying from the get-go. These earnings estimates for the next few years for this company is tremendous. Wall Street analysts are expecting this company to continue to perform like crazy.

And obviously, as they continue to increase their sales and their revenue and hopefully stop spending so much on R&D and just upsell these products that they have, hopefully, you’ll see those customers that are spending more than a $100,000 in ARR with them just continue to grow, right? I think there’s a lot of things to like about this. But is now the right entry point? I’m a little hesitant.

Austin Hankwitz: I’m as well.

Daniel Snyder: At this moment in time, obviously, if when recession, obviously, we won’t know we might be in a recession now for all we know, but highly unlikely. Whenever the MBER [ph] comes out, says, hey, you guys run a recession during this time, because hindsight is 2020. We’ll see if – how this company does? Obviously, in recession, these companies are going to start pulling back on their vendor and their spending and trying to consolidate the expenses that are going out the door as they’re continuing to drive revenue from customers and clients and corporations and things like that.

But I do want to point out that there were 21 up revisions on the fiscal year earnings within the last 90 days from Wall Street analysts. And, of course, that’s just after the last earnings report that we just had. And remind everybody, the next earnings report for this company is estimated, I think, is for February 9th. So we got to say [Cross Talk]

Austin Hankwitz: Hey, my guess, if February wasn’t – that’s good.

Daniel Snyder: Yeah. Yeah. Yeah.

Austin Hankwitz: Yeah, I mean, Daniel, you run on the – you’re on the money here, right? Like this company is interesting. They got a lot of good things going for them. They have awesome products. They’re operating in a clear secular growth twin margin – or secular growth trend, not twin. Margins are there. Potential free cash flow growth is there.

So, if you’re listening right now and you’re looking to learn more about companies that are operating in this model, add to the watch list, right? Datadog is a great example of a company to add to the watch list if you’re looking for something that perhaps could be very growth-oriented, very technology-oriented, and is clearly offering a product to customers that want to pay hundreds of thousands about millions of dollars for it.

Daniel Snyder: There you go. All right, everyone. Let’s – we’re going to go ahead and wrap it up there. We’re pretty much at the end of the hour, but want to remind everyone next week there will not be a show. We will be back in two weeks with a special guest, who is one of the Marketplace authors here on Seeking Alpha. He’s really looking forward to it. I just talked to him yesterday.

We’re going to start talking about 2023 outlooks, stock ideas, where they expect the market to go. There’s a lot coming your way here over the next few weeks here on Stock Market Live. Also, you might see a little brand name switch up from us. We might not be stopping by much longer. We’re still going to be here.

Austin Hankwitz: Hey, give us some ideas. Give us some ideas before we chat. Give us the ideas on the name. We might see a name switch up. I will say though, and Daniel, you mentioned this earlier. We still got dozens of people here. I do want to just remind everyone.

If you’ve been rocking with us for a while, and you are leaving a review on the podcast, drop the 100 emoji. That’s a little insider joke that we know that you’re a real one, but we know that you’re out here. Oh, yeah, put the podcast on the slide. I didn’t really think about that, but we should definitely be [Cross Talk]

Daniel Snyder: I’m going to go ahead and just drop it. I’ve got the link right here. I’m going to drop it in the chat for everybody. [Cross Talk], you don’t mind…

Austin Hankwitz: And drop the 100 emoji in the – in rating.

Daniel Snyder: Those who’ve got the podcast, hit the follow button, leave us a rating, leave us a review. Help us climb the charts around the world. I’m so thankful, and I’m sure, Austin, you are as well. Like, we’re reaching a global audience. We’re all helping each other here.

We just want to see everybody succeed, build your wealth, some people are in retirement, some people want to buy a car, some people want to buy a house, some people want to go on vacation, some people don’t want to feel like they’re going into a recession. Hopefully, we can do that with the knowledge and the investing that we’re doing here.

So shout out to all of you for hanging out with us for this hour. We appreciate it. Austin Hankwitz from Cash Flow Freaks on Seeking Alpha, go give him a follow free trial if you haven’t already. I love your stuff. That’s just me. Maybe [Cross Talk]

Austin Hankwitz: I appreciate it. I like my stuff, too. I think it’s pretty cool.

Daniel Snyder: All right. Thanks for your time. Josh, we appreciate you. Thank you, again, everybody. Walter, Robert, Ralph, Sen, everybody thanks for hanging out with us. Stephanie, you’re here every week. We appreciate you. Vita [ph], you’re here every day as well. Oh my gosh. I love. We feel the love. So everybody, enjoy the rest of your week. Hopefully, Powell doesn’t take the market. We’ll see you next time. Josh, get us all out of here, man.