In the fast-evolving software industry, Salesforce, Inc. (CRM) and Datadog, Inc. (DDOG) stand out as influential players shaping enterprise technology. Both companies operate in the application software sector, focusing on innovation and cloud-based solutions that enhance business operations and customer engagement. By comparing their market position, growth strategies, and technological edge, I will help you decide which stock fits best in your investment portfolio.
Table of contents
Companies Overview
I will begin the comparison between Salesforce, Inc. and Datadog, Inc. by providing an overview of these two companies and their main differences.
Salesforce Overview
Salesforce, Inc. is a leading provider of customer relationship management (CRM) technology, aiming to connect companies and customers worldwide. Its Customer 360 platform offers tools for sales, service, marketing, commerce, and analytics, supporting enterprises across various industries. Founded in 1999 and headquartered in San Francisco, Salesforce employs over 76K people and operates through direct sales and partnerships.
Datadog Overview
Datadog, Inc. delivers a cloud-based monitoring and analytics platform targeting developers, IT operations, and business users globally. Its SaaS platform integrates infrastructure, application, log, and security monitoring to enable real-time observability of technology stacks. Established in 2010 and based in New York City, Datadog has about 6.5K employees and focuses on providing comprehensive monitoring and incident management solutions.
Key similarities and differences
Both Salesforce and Datadog operate within the application software industry, leveraging cloud technologies to provide specialized enterprise solutions. Salesforce emphasizes CRM and customer experience platforms with a broad service scope, while Datadog focuses on IT infrastructure monitoring and analytics. The scale differs markedly, with Salesforce having a substantially larger market cap and workforce compared to Datadog’s more niche, monitoring-centered approach.
Income Statement Comparison
The table below compares key income statement metrics for Salesforce, Inc. and Datadog, Inc. for their most recent fiscal years, providing a clear financial snapshot.
| Metric | Salesforce, Inc. (CRM) | Datadog, Inc. (DDOG) |
|---|---|---|
| Market Cap | 219B | 42B |
| Revenue | 37.9B | 2.68B |
| EBITDA | 11.1B | 318M |
| EBIT | 7.67B | 211M |
| Net Income | 6.20B | 184M |
| EPS | 6.44 | 0.55 |
| Fiscal Year | 2025 | 2024 |
Income Statement Interpretations
Salesforce, Inc.
Salesforce’s revenue and net income exhibited consistent growth from 2021 to 2025, with revenue rising from $21.3B to $37.9B and net income increasing from $4.07B to $6.2B. Gross and EBIT margins remained favorable around 77% and 20%, respectively. In 2025, revenue growth slowed slightly to 8.7%, but EBIT and net margins improved significantly, reflecting operational efficiency gains.
Datadog, Inc.
Datadog showed strong revenue growth over 2020-2024, with top-line rising from $603M to $2.68B, and net income turning positive in recent years, reaching $184M in 2024. Gross margin stayed robust above 80%, while EBIT margin hovered near 7.9%, indicating moderate profitability. The 2024 fiscal year saw revenue and net income growth accelerate sharply, with net margin nearly tripling from prior year levels.
Which one has the stronger fundamentals?
Both companies demonstrate favorable income statement trends, but Salesforce exhibits higher absolute revenue and net income with stable high margins. Datadog, while smaller, has posted exceptional growth rates and margin improvements, albeit from a lower base. Salesforce’s scale and margin stability contrast with Datadog’s rapid expansion and improving profitability, reflecting differing maturity stages and operational profiles.
Financial Ratios Comparison
The table below presents the most recent financial ratios for Salesforce, Inc. and Datadog, Inc. based on their 2025 and 2024 fiscal year data respectively, highlighting key performance and financial health metrics.
| Ratios | Salesforce, Inc. (CRM) FY 2025 | Datadog, Inc. (DDOG) FY 2024 |
|---|---|---|
| ROE | 10.1% | 6.8% |
| ROIC | 7.9% | 1.1% |
| P/E | 53.0 | 261.4 |
| P/B | 5.37 | 17.7 |
| Current Ratio | 1.06 | 2.64 |
| Quick Ratio | 1.06 | 2.64 |
| D/E | 0.19 | 0.68 |
| Debt-to-Assets | 11.1% | 31.8% |
| Interest Coverage | 26.5 | 7.7 |
| Asset Turnover | 0.37 | 0.46 |
| Fixed Asset Turnover | 7.03 | 6.72 |
| Payout ratio | 24.8% | 0% |
| Dividend yield | 0.47% | 0% |
Interpretation of the Ratios
Salesforce, Inc.
Salesforce presents a slightly favorable ratio profile with strong net margin (16.35%) and good interest coverage (28.18), indicating financial stability. However, its high P/E (53.04) and P/B (5.37) ratios raise valuation concerns. The company pays dividends with a modest 0.47% yield, supported by a sustainable payout ratio and free cash flow, though yield remains low.
Datadog, Inc.
Datadog shows a slightly unfavorable ratio profile, with neutral net margin (6.85%) but weak returns on equity (6.77%) and invested capital (1.07%). Its valuation metrics are stretched, with a very high P/E of 261.42 and P/B of 17.7. Datadog does not pay dividends, focusing instead on reinvestment and growth, as reflected by high R&D spending and share buybacks.
Which one has the best ratios?
Salesforce offers a more balanced and slightly favorable ratio set, with better profitability and coverage ratios, despite some valuation premiums. Datadog’s ratios reflect a higher risk profile, with weaker profitability and stretched valuation multiples, resulting in a slightly unfavorable overall view compared to Salesforce.
Strategic Positioning
This section compares the strategic positioning of Salesforce, Inc. and Datadog, Inc., focusing on Market position, Key segments, and Exposure to technological disruption:
Salesforce, Inc.
- Leading CRM software provider with significant market cap; faces competition in enterprise software.
- Diverse segments: Sales, Service, Marketing Clouds, Integration, Analytics, Platform, and Professional Services.
- Operates in established CRM and cloud software markets; potential disruption from evolving cloud and AI technologies.
Datadog, Inc.
- Cloud monitoring and analytics niche player with smaller market cap; competes in cloud observability.
- Focused on SaaS monitoring platform integrating infrastructure, application, log, and security monitoring.
- Positioned in cloud-native monitoring; exposed to rapid innovation and evolving cloud security and observability trends.
Salesforce, Inc. vs Datadog, Inc. Positioning
Salesforce adopts a diversified approach across multiple enterprise software segments, benefiting from broad market reach but facing competitive pressure. Datadog concentrates on cloud monitoring and analytics, offering specialized solutions but with a narrower scope and smaller scale.
Which has the best competitive advantage?
Both companies show slightly unfavorable MOAT evaluations, shedding value despite growing ROIC trends. Neither demonstrates a strong sustainable competitive advantage based on ROIC versus WACC metrics provided.
Stock Comparison
The stock price movements of Salesforce, Inc. (CRM) and Datadog, Inc. (DDOG) over the past 12 months reveal distinct bearish trends with differing acceleration dynamics and volume patterns.
Trend Analysis
Salesforce, Inc. (CRM) experienced a bearish trend with a -21.73% price change over the past year, showing acceleration and high volatility with a standard deviation of 31.79. The price ranged from a high of 361.99 to a low of 227.11.
Datadog, Inc. (DDOG) also followed a bearish trend with a -8.1% decline over the same period, but with deceleration and moderate volatility at a 18.63 standard deviation. The stock price fluctuated between 191.24 and 87.93.
Comparing both, CRM’s stock showed a stronger negative price movement and acceleration, while DDOG’s decline was less severe but decelerating; CRM delivered the lower market performance over the year.
Target Prices
Analysts present a clear consensus on the target prices for Salesforce, Inc. and Datadog, Inc., reflecting moderate to strong upside potential.
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| Salesforce, Inc. | 400 | 250 | 324.17 |
| Datadog, Inc. | 215 | 105 | 177.67 |
The consensus target prices indicate analysts expect Salesforce’s stock to appreciate from its current 229.1 USD, while Datadog’s consensus target suggests significant upside from its current 119.33 USD price.
Analyst Opinions Comparison
This section compares analysts’ ratings and grades for Salesforce, Inc. (CRM) and Datadog, Inc. (DDOG):
Rating Comparison
Salesforce, Inc. (CRM) Rating
- Rating: B+, indicating a very favorable outlook.
- Discounted Cash Flow Score: 4, favorable valuation.
- ROE Score: 4, strong profit generation efficiency.
- ROA Score: 4, effective asset utilization.
- Debt To Equity Score: 3, moderate financial risk.
- Overall Score: 3, moderate overall financial standing.
Datadog, Inc. (DDOG) Rating
- Rating: C+, reflecting a very favorable but lower grade.
- Discounted Cash Flow Score: 4, favorable valuation.
- ROE Score: 2, moderate profit generation efficiency.
- ROA Score: 3, moderate asset utilization.
- Debt To Equity Score: 2, moderate financial risk but lower than CRM.
- Overall Score: 2, moderate overall financial standing but lower than CRM.
Which one is the best rated?
Based purely on the provided ratings and scores, Salesforce, Inc. (CRM) is better rated overall with higher grades in key financial metrics such as ROE, ROA, and overall score, compared to Datadog, Inc. (DDOG).
Scores Comparison
Here is a comparison of the Altman Z-Score and Piotroski Score for Salesforce, Inc. and Datadog, Inc.:
Salesforce Scores
- Altman Z-Score: 5.26, indicating a safe zone with low bankruptcy risk.
- Piotroski Score: 7, classified as strong financial health.
Datadog Scores
- Altman Z-Score: 11.37, indicating a safe zone with very low bankruptcy risk.
- Piotroski Score: 6, considered average financial strength.
Which company has the best scores?
Datadog has a higher Altman Z-Score indicating very low bankruptcy risk, while Salesforce has a stronger Piotroski Score suggesting better overall financial health. Each excels in different financial measures based on the data provided.
Grades Comparison
Here is the grades comparison of Salesforce, Inc. and Datadog, Inc. from leading grading companies:
Salesforce, Inc. Grades
The following table presents recent grades from reputable financial institutions for Salesforce, Inc.:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Barclays | Maintain | Overweight | 2026-01-12 |
| RBC Capital | Maintain | Sector Perform | 2026-01-05 |
| Morgan Stanley | Maintain | Overweight | 2025-12-09 |
| Citigroup | Maintain | Neutral | 2025-12-08 |
| DA Davidson | Maintain | Neutral | 2025-12-05 |
| Citizens | Maintain | Market Outperform | 2025-12-04 |
| Deutsche Bank | Maintain | Buy | 2025-12-04 |
| Wedbush | Maintain | Outperform | 2025-12-04 |
| Northland Capital Markets | Maintain | Market Perform | 2025-12-04 |
| Canaccord Genuity | Maintain | Buy | 2025-12-04 |
Salesforce’s grades indicate a generally positive outlook, with a majority maintaining buy or outperform ratings and no downgrades reported.
Datadog, Inc. Grades
The following table outlines recent grades from leading financial firms for Datadog, Inc.:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Barclays | Maintain | Overweight | 2026-01-12 |
| Keybanc | Maintain | Overweight | 2026-01-12 |
| Morgan Stanley | Upgrade | Overweight | 2026-01-12 |
| Truist Securities | Maintain | Hold | 2026-01-07 |
| RBC Capital | Maintain | Outperform | 2026-01-05 |
| Jefferies | Maintain | Buy | 2026-01-05 |
| Piper Sandler | Maintain | Overweight | 2026-01-05 |
| Citigroup | Maintain | Buy | 2025-11-12 |
| Truist Securities | Maintain | Hold | 2025-11-07 |
| DA Davidson | Maintain | Buy | 2025-11-07 |
Datadog’s grades show a generally favorable consensus with recent upgrades and stable buy/overweight ratings, reflecting confidence from several analysts.
Which company has the best grades?
Both Salesforce and Datadog have received predominantly positive grades with strong buy and overweight recommendations. Salesforce shows a broader range of hold to buy ratings, while Datadog features several recent upgrades and steady buy/overweight grades. Investors might interpret these patterns as indicative of continued market confidence in both firms, with Datadog showing slightly more recent momentum in analyst upgrades.
Strengths and Weaknesses
Here is a comparison of key strengths and weaknesses of Salesforce, Inc. (CRM) and Datadog, Inc. (DDOG) based on the latest financial and strategic data.
| Criterion | Salesforce, Inc. (CRM) | Datadog, Inc. (DDOG) |
|---|---|---|
| Diversification | Highly diversified with multiple cloud segments: Sales Cloud ($8.3B), Service Cloud ($9.1B), Platform & Other ($7.2B), Marketing & Commerce ($5.3B) in 2025 | Less diversified; primarily focused on cloud monitoring and analytics platforms |
| Profitability | Moderate profitability: Net margin 16.35%, ROIC 7.95%, but ROIC slightly below WACC indicating slight value destruction | Lower profitability: Net margin 6.85%, ROIC 1.07%, with ROIC well below WACC signaling value destruction |
| Innovation | Strong innovation evidenced by steady revenue growth across cloud products and increasing ROIC trend (+762%) | Growing ROIC trend (+225%) suggests improving innovation and operational efficiency |
| Global presence | Extensive global footprint with broad enterprise client base | Growing presence but smaller scale compared to Salesforce |
| Market Share | Leading CRM market share with strong brand and ecosystem | Niche player in cloud monitoring with growing market share but behind major competitors |
Salesforce benefits from significant diversification and strong market leadership in CRM, showing steady growth and improving profitability despite slight value destruction. Datadog, while less diversified and less profitable, demonstrates improving operational efficiency and growth potential but carries higher risk due to its narrower focus and financial metrics.
Risk Analysis
Below is a comparison of key risks for Salesforce, Inc. (CRM) and Datadog, Inc. (DDOG) based on the most recent data available:
| Metric | Salesforce, Inc. (CRM) | Datadog, Inc. (DDOG) |
|---|---|---|
| Market Risk | Beta 1.266, moderate volatility | Beta 1.263, moderate volatility |
| Debt Level | Low debt-to-equity 0.19, favorable | Moderate debt-to-equity 0.68, neutral |
| Regulatory Risk | Moderate, tech sector scrutiny | Moderate, cloud services regulation |
| Operational Risk | Large scale, complex operations | Growing operations, smaller scale |
| Environmental Risk | Moderate, standard tech industry impact | Moderate, typical for cloud providers |
| Geopolitical Risk | US-based, global exposure | US-based, global exposure |
Salesforce benefits from low leverage and strong operational scale, mitigating debt and operational risks. Datadog presents higher financial leverage and less established scale, increasing its vulnerability. Market risk is similar for both, with moderate beta values. Regulatory and environmental risks remain moderate given their technology sector context. The most impactful risk for Datadog is its higher debt level and valuation multiples, which could pressure financial stability amid market shifts.
Which Stock to Choose?
Salesforce, Inc. (CRM) shows favorable income growth with a 78% revenue increase over five years and strong profitability metrics, including a 16.35% net margin and a 10.13% ROE. Its debt ratios are favorable, and its B+ rating reflects a solid financial standing, though valuation multiples appear high and the company slightly destroys value based on ROIC versus WACC.
Datadog, Inc. (DDOG) exhibits rapid income growth, with revenue up 345% over five years and improving profitability, albeit at lower absolute margins (6.85% net margin). Its financial ratios indicate moderate risk with higher debt levels, and a C+ rating reflects this. Despite shedding value relative to cost of capital, DDOG’s ROIC trend is positive, suggesting improving operational efficiency.
For investors prioritizing stability and moderate valuation, Salesforce’s slightly favorable financial ratios and strong rating may appear more suitable. Conversely, those with a tolerance for higher risk and a focus on rapid growth might find Datadog’s strong income growth and improving profitability more appealing, despite its less favorable valuation and financial ratios.
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 Salesforce, Inc. and Datadog, Inc. to enhance your investment decisions:
