Critical Contrast: VTEX (NYSE:VTEX) versus Datadog (NASDAQ:DDOG)

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

Analyst Ratings

This is a breakdown of recent ratings and price targets for VTEX and Datadog, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
VTEX	0	6	3	0	2.33
Datadog	1	4	38	3	2.93

VTEX presently has a consensus price target of $4.69, suggesting a potential upside of 15.03%. Datadog has a consensus price target of $280.51, suggesting a potential upside of 4.15%. Given VTEX’s higher possible upside, research analysts clearly believe VTEX is more favorable than Datadog.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
VTEX	11.98%	12.98%	8.76%
Datadog	4.48%	5.67%	3.24%

Risk & Volatility

VTEX has a beta of 0.94, meaning that its share price is 6% less volatile than the S&P 500. Comparatively, Datadog has a beta of 1.51, meaning that its share price is 51% more volatile than the S&P 500.

Valuation and Earnings

This table compares VTEX and Datadog”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
VTEX	$240.52 million	2.89	$20.01 million	$0.16	25.47
Datadog	$3.43 billion	28.22	$107.74 million	$0.49	549.65

Datadog has higher revenue and earnings than VTEX. VTEX is trading at a lower price-to-earnings ratio than Datadog, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

63.7% of VTEX shares are owned by institutional investors. Comparatively, 78.3% of Datadog shares are owned by institutional investors. 40.9% of VTEX shares are owned by company insiders. Comparatively, 6.5% of Datadog shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

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

About VTEX

VTEX provides software-as-a-service digital commerce platform for enterprise brands and retailers. Its platform enables customers to execute their commerce strategy, including building online stores, integrating, and managing orders across channels, and creating marketplaces to sell products from third-party vendors. It has operations in Brazil, Argentina, Chile, Colombia, France, Italy, Mexico, Peru, Portugal, Romania, Singapore, Spain, the United Kingdom, and the United States. VTEX was founded in 2000 and is headquartered in London, the United Kingdom.

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.