In the fast-evolving software industry, Datadog, Inc. and Elastic N.V. stand out as key players specializing in cloud-based monitoring and data analytics. Both companies offer innovative platforms that empower businesses to gain real-time insights and optimize IT operations, making them natural competitors. This comparison will help investors understand which company presents the most promising opportunity in this dynamic market. Let’s explore which one could be the better addition to your portfolio.
Table of contents
Companies Overview
I will begin the comparison between Datadog and Elastic by providing an overview of these two companies and their main differences.
Datadog Overview
Datadog, Inc. offers a cloud-based monitoring and analytics platform for developers, IT operations teams, and business users globally. Its SaaS platform integrates infrastructure monitoring, application performance, log management, and security monitoring to deliver real-time observability. Founded in 2010 and headquartered in New York, Datadog serves a broad technology stack with features like dashboards, alerting, and incident management.
Elastic Overview
Elastic N.V. specializes in search technology solutions designed for public and private cloud environments. Its Elastic Stack product portfolio includes Elasticsearch for search and analytics, Kibana for visualization, Beats for data shipping, and Logstash for data processing. Founded in 2012 and based in Mountain View, California, Elastic targets use cases such as app search, logging, metrics, and application performance management in multi-cloud settings.
Key similarities and differences
Both Datadog and Elastic operate in the software application industry, focusing on cloud-based platforms that handle data monitoring and analysis. Datadog emphasizes integrated observability and security monitoring across technology stacks, while Elastic centers on search, analytics, and data ingestion through its modular Elastic Stack. Datadog has a larger market capitalization and workforce, reflecting broader infrastructure coverage, whereas Elastic is more specialized in search and data processing technologies.
Income Statement Comparison
This table compares the key income statement metrics of Datadog, Inc. and Elastic N.V. for their most recent fiscal years, highlighting revenue, profitability, and earnings per share.
| Metric | Datadog, Inc. (DDOG) | Elastic N.V. (ESTC) |
|---|---|---|
| Market Cap | 41.7B | 7.5B |
| Revenue | 2.68B (FY 2024) | 1.48B (FY 2025) |
| EBITDA | 318M (FY 2024) | 6.1M (FY 2025) |
| EBIT | 211M (FY 2024) | -6.3M (FY 2025) |
| Net Income | 184M (FY 2024) | -108M (FY 2025) |
| EPS | 0.55 (FY 2024) | -1.04 (FY 2025) |
| Fiscal Year | 2024 | 2025 |
Income Statement Interpretations
Datadog, Inc.
Datadog’s revenue surged from 603M in 2020 to 2.68B in 2024, with net income turning positive and reaching 184M in 2024 after losses in prior years. Gross margins remained strong at 80.76%, while net margin improved to 6.85%. The 2024 fiscal year showed accelerated growth, with revenue and net income both increasing by over 26%, and EPS rising significantly.
Elastic N.V.
Elastic’s revenue increased steadily from 608M in 2021 to 1.48B in 2025, with net income fluctuating and turning negative again to -108M in 2025. Gross margin stayed favorable at 74.39%, but EBIT and net margins were negative at -0.42% and -7.29%. The recent year saw 17% revenue growth but a sharp decline in net margin and EPS, signaling profitability challenges.
Which one has the stronger fundamentals?
Datadog exhibits stronger fundamentals with consistent revenue and net income growth, higher and improving margins, and favorable evaluations across income metrics. Elastic, despite revenue growth, suffers from negative EBIT and net margins, with significant net income volatility and unfavorable recent profitability trends, suggesting weaker income statement fundamentals compared to Datadog.
Financial Ratios Comparison
The table below compares key financial ratios for Datadog, Inc. and Elastic N.V. based on their most recent fiscal year data, providing a snapshot of their financial health and valuation metrics.
| Ratios | Datadog, Inc. (2024) | Elastic N.V. (2025) |
|---|---|---|
| ROE | 6.77% | -11.66% |
| ROIC | 1.07% | -3.45% |
| P/E | 261.42 | -82.65 |
| P/B | 17.70 | 9.64 |
| Current Ratio | 2.64 | 1.92 |
| Quick Ratio | 2.64 | 1.92 |
| D/E | 0.68 | 0.64 |
| Debt-to-Assets | 31.8% | 22.9% |
| Interest Coverage | 7.68 | -2.17 |
| Asset Turnover | 0.46 | 0.57 |
| Fixed Asset Turnover | 6.72 | 51.28 |
| Payout Ratio | 0 | 0 |
| Dividend Yield | 0 | 0 |
Interpretation of the Ratios
Datadog, Inc.
Datadog shows a mixed ratio profile with favorable liquidity and interest coverage but unfavorable profitability metrics such as ROE and ROIC. Its valuation ratios like P/E and P/B are notably high, indicating potential overvaluation. The company does not pay dividends, consistent with its reinvestment strategy and growth focus, prioritizing R&D and share repurchases without dividend distributions.
Elastic N.V.
Elastic presents weaker profitability ratios, including negative net margin and ROE, alongside unfavorable interest coverage. However, its capital structure and liquidity ratios are favorable, supported by a low debt-to-assets ratio and solid current and quick ratios. Elastic also does not pay dividends, reflecting its reinvestment in technology and growth, foregoing payouts in favor of operational expansion.
Which one has the best ratios?
Elastic exhibits a more balanced ratio profile with a neutral overall opinion, benefiting from favorable liquidity and capital structure despite profitability challenges. Datadog’s ratios are slightly unfavorable, largely due to stretched valuation and weak returns. Elastic’s mix of stronger liquidity and moderate leverage contrasts with Datadog’s elevated valuation risk and weaker profitability metrics.
Strategic Positioning
This section compares the strategic positioning of Datadog and Elastic, including market position, key segments, and exposure to technological disruption:
Datadog, Inc.
- Leading SaaS monitoring platform, facing strong tech competition in cloud observability.
- Offers integrated monitoring, security, and analytics platform for developers and IT teams.
- Operates in a rapidly evolving cloud tech sector with continuous innovation demands.
Elastic N.V.
- Search-focused software firm with a smaller market cap, competing in multi-cloud environments.
- Revenue mainly from subscription software and professional services centered on Elastic Stack.
- Faces disruption risks in cloud search and data analytics but leverages open-source roots.
Datadog vs Elastic Positioning
Datadog pursues a diversified SaaS observability platform, enabling broad IT monitoring, while Elastic concentrates on search and analytics software with subscription and services revenue. Datadog’s scale offers competitive reach, Elastic’s niche focus targets specialized data solutions.
Which has the best competitive advantage?
Both companies are currently shedding value based on ROIC versus WACC but show improving profitability trends. Their competitive advantages remain slightly unfavorable, reflecting ongoing challenges in capital efficiency despite growth in returns.
Stock Comparison
The stock prices of Datadog, Inc. (DDOG) and Elastic N.V. (ESTC) have both experienced notable declines over the past year, with distinct trading volume dynamics and decelerating bearish trends shaping their recent performance.
Trend Analysis
Datadog’s stock has declined by 8.1% over the past 12 months, confirming a bearish trend with deceleration. The price ranged from a high of 191.24 to a low of 87.93, with volatility reflected by an 18.63 standard deviation.
Elastic’s stock fell sharply by 44.93% over the same period, also bearish with deceleration. Price volatility is lower than Datadog’s, with a 14.08 standard deviation, and prices fluctuated between 129.62 and 70.04.
Comparing the two, Datadog’s stock showed a smaller decline and higher volatility, delivering the better market performance relative to Elastic over the past year.
Target Prices
Analysts present a balanced target consensus for Datadog, Inc. and Elastic N.V., reflecting moderate upside potential.
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| Datadog, Inc. | 215 | 105 | 177.67 |
| Elastic N.V. | 134 | 76 | 108 |
The target consensus for Datadog suggests a significant potential increase from its current price of $119.02, while Elastic’s target consensus also indicates upside from $71.38, showing cautious but positive analyst sentiment.
Analyst Opinions Comparison
This section compares analysts’ ratings and financial scores for Datadog, Inc. and Elastic N.V.:
Rating Comparison
Datadog, Inc. Rating
- Rating: C+ indicating a very favorable stance.
- Discounted Cash Flow Score: 4, favorable valuation.
- ROE Score: 2, moderate efficiency in profit generation.
- ROA Score: 3, moderate asset utilization.
- Debt To Equity Score: 2, moderate financial risk.
- Overall Score: 2, moderate overall financial standing.
Elastic N.V. Rating
- Rating: C- indicating a very favorable stance.
- Discounted Cash Flow Score: 3, moderate valuation.
- ROE Score: 1, very unfavorable profit efficiency.
- ROA Score: 1, very unfavorable asset utilization.
- Debt To Equity Score: 1, very unfavorable financial risk.
- Overall Score: 1, very unfavorable overall standing.
Which one is the best rated?
Datadog holds consistently higher scores across key financial metrics including discounted cash flow, ROE, ROA, and debt to equity, resulting in a better overall rating compared to Elastic, which shows very unfavorable scores in most categories.
Scores Comparison
Here is a comparison of the Altman Z-Score and Piotroski Score for the two companies:
Datadog, Inc. Scores
- Altman Z-Score: 11.37, indicating a safe zone with very low bankruptcy risk.
- Piotroski Score: 6, reflecting average financial strength.
Elastic N.V. Scores
- Altman Z-Score: 3.51, indicating a safe zone with low bankruptcy risk.
- Piotroski Score: 4, reflecting average financial strength.
Which company has the best scores?
Datadog shows a significantly higher Altman Z-Score, suggesting stronger financial stability. Both have average Piotroski Scores, but Datadog’s score is slightly higher than Elastic’s.
Grades Comparison
The following is a comparison of the recent grades assigned to Datadog, Inc. and Elastic N.V. by recognized grading companies:
Datadog, Inc. Grades
This table summarizes the latest grades from notable grading companies for Datadog, Inc.:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Citigroup | Maintain | Buy | 2026-01-16 |
| Morgan Stanley | Upgrade | Overweight | 2026-01-12 |
| Barclays | Maintain | Overweight | 2026-01-12 |
| Keybanc | Maintain | Overweight | 2026-01-12 |
| Truist Securities | Maintain | Hold | 2026-01-07 |
| Jefferies | Maintain | Buy | 2026-01-05 |
| RBC Capital | Maintain | Outperform | 2026-01-05 |
| Piper Sandler | Maintain | Overweight | 2026-01-05 |
Datadog’s grades mostly indicate positive sentiment with several Buy and Overweight ratings, reflecting a generally favorable consensus.
Elastic N.V. Grades
This table presents the most recent grades from recognized grading companies for Elastic N.V.:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Barclays | Maintain | Overweight | 2026-01-12 |
| RBC Capital | Maintain | Outperform | 2026-01-05 |
| Jefferies | Maintain | Buy | 2026-01-05 |
| Citigroup | Maintain | Buy | 2025-11-24 |
Elastic also enjoys a positive grading trend, with consistent Buy, Outperform, and Overweight ratings, suggesting steady confidence from analysts.
Which company has the best grades?
Datadog, Inc. has received a broader number of Buy and Overweight ratings compared to Elastic N.V., which could indicate stronger analyst conviction. Investors might interpret this as a signal of relatively higher confidence in Datadog’s prospects, potentially influencing portfolio decisions accordingly.
Strengths and Weaknesses
Below is a comparative overview of the strengths and weaknesses of Datadog, Inc. (DDOG) and Elastic N.V. (ESTC) based on their financial and strategic metrics as of the most recent fiscal years.
| Criterion | Datadog, Inc. (DDOG) | Elastic N.V. (ESTC) |
|---|---|---|
| Diversification | Focused on cloud monitoring and analytics, limited product diversification | Primarily subscription-based with growing professional services segment, moderately diversified |
| Profitability | Slightly favorable net margin at 6.85%, but ROIC (1.07%) below WACC (9.53%) indicates value shedding | Negative net margin (-7.29%) and ROIC (-3.45%) below WACC (7.83%), shedding value but improving profitability |
| Innovation | Strong innovation in cloud-native environments, moderate asset turnover | High fixed asset turnover (51.28) shows operational efficiency, but profitability challenges persist |
| Global presence | Strong with established customer base, good liquidity ratios (current and quick ratio 2.64) | Growing global presence, solid liquidity (current and quick ratio 1.92), lower debt burden compared to DDOG |
| Market Share | Leading position in cloud monitoring but faces intense competition | Niche player in search and analytics with expanding subscriptions, yet profitability lagging |
Key takeaways: Both companies exhibit growing profitability trends but currently destroy value as ROIC remains below WACC. Datadog’s stronger liquidity and innovation in cloud monitoring contrast with Elastic’s operational efficiency and revenue growth, though profitability risks remain. Investors should weigh growth potential against current value erosion.
Risk Analysis
Below is a comparison of key risk factors for Datadog, Inc. (DDOG) and Elastic N.V. (ESTC) based on the most recent data from 2025 and 2024.
| Metric | Datadog, Inc. (DDOG) | Elastic N.V. (ESTC) |
|---|---|---|
| Market Risk | Beta 1.26, moderately volatile | Beta 0.93, lower volatility |
| Debt level | Debt-to-Equity 0.68 (neutral) | Debt-to-Equity 0.64 (neutral) |
| Regulatory Risk | Moderate, US-focused | Moderate, US-focused |
| Operational Risk | SaaS reliance, intense competition | Multi-cloud complexity, competition |
| Environmental Risk | Low, software sector | Low, software sector |
| Geopolitical Risk | Moderate, global operations | Moderate, global operations |
The most significant risks for both companies are operational given their high reliance on cloud infrastructure and software innovation amid fierce competition. Datadog’s higher beta suggests greater market sensitivity, while Elastic’s negative profitability ratios and interest coverage indicate financial strain that could impact resilience. Both maintain moderate debt levels with no dividend yield, reflecting growth-focused strategies but with cautious financial health.
Which Stock to Choose?
Datadog, Inc. (DDOG) exhibits strong income growth with a 26.12% revenue increase in 2024 and a favorable net margin of 6.85%. Its financial ratios are slightly unfavorable overall, with moderate debt and strong liquidity, while profitability improves despite a net debt to EBITDA of 1.87. The company’s rating is very favorable with a C+ grade, supported by solid discounted cash flow and moderate profitability scores.
Elastic N.V. (ESTC) shows moderate income growth at 17.04% revenue increase in 2025 but suffers from an unfavorable net margin of -7.29%. Its financial ratios present a balanced view with 42.86% favorable and unfavorable scores, including strong liquidity and low debt. However, profitability metrics are weak, and its rating is very favorable with a C- grade, despite several unfavorable ratio scores.
Investors focused on growth and improving profitability might find Datadog’s upward income and profitability trends more appealing, while those prioritizing balanced financial ratios and lower leverage could see Elastic’s profile as potentially more stable. Both companies have slightly unfavorable moats, indicating value destruction despite improving ROIC trends.
Disclaimer: Investment carries a risk of loss of initial capital. The past performance is not a reliable indicator of future results. Be sure to understand risks before making an investment decision.
Go Further
I encourage you to read the complete analyses of Datadog, Inc. and Elastic N.V. to enhance your investment decisions:
