SolarWinds vs Datadog Which Performs Better?

SolarWinds and Datadog are two companies operating in the tech industry with a focus on cloud-based software solutions. SolarWinds specializes in providing IT infrastructure management software, while Datadog offers monitoring and analytics tools for cloud-based applications. Both companies have seen significant growth in recent years, drawing the interest of investors looking to capitalize on the booming cloud computing market. This article will compare the performance of SolarWinds and Datadog stocks, analyzing their financials, market outlook, and potential for future growth.

SolarWinds or Datadog?

When comparing SolarWinds and Datadog, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between SolarWinds and Datadog.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. SolarWinds has a dividend yield of 7.42%, while Datadog has a dividend yield of -%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. SolarWinds reports a 5-year dividend growth of 0.00% year and a payout ratio of 435.01%. On the other hand, Datadog reports a 5-year dividend growth of 0.00% year and a payout ratio of 0.00%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with SolarWinds P/E ratio at 58.79 and Datadog's P/E ratio at 214.96. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. SolarWinds P/B ratio is 1.67 while Datadog's P/B ratio is 15.71.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, SolarWinds has seen a 5-year revenue growth of -0.61%, while Datadog's is 1.35%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with SolarWinds's ROE at 2.87% and Datadog's ROE at 8.30%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $13.36 for SolarWinds and $121.52 for Datadog. Over the past year, SolarWinds's prices ranged from $10.14 to $14.03, with a yearly change of 38.36%. Datadog's prices fluctuated between $98.80 and $138.61, with a yearly change of 40.29%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.