Snowflake Inc. and Datadog, Inc. are two prominent players in the software application sector, each offering innovative cloud-based solutions that serve overlapping markets in data management and IT monitoring. Snowflake excels in cloud data platforms, while Datadog focuses on real-time observability and analytics for technology stacks. This comparison will help investors understand which company presents the most compelling opportunity in today’s fast-evolving tech landscape. Let’s explore which deserves a place in your portfolio.
Table of contents
Companies Overview
I will begin the comparison between Snowflake Inc. and Datadog, Inc. by providing an overview of these two companies and their main differences.
Snowflake Inc. Overview
Snowflake Inc. operates a cloud-based data platform designed to consolidate data into a single source of truth, enabling businesses to gain meaningful insights, develop data-driven applications, and share data efficiently. Founded in 2012 and based in Bozeman, Montana, Snowflake serves organizations of various sizes across multiple industries, positioning itself as a key player in the data cloud market.
Datadog, Inc. Overview
Datadog, Inc. offers a SaaS monitoring and analytics platform that provides real-time observability across infrastructure, applications, logs, and security for developers, IT operations, and business users. Founded in 2010 and headquartered in New York City, Datadog’s platform integrates various monitoring services to deliver comprehensive insights into technology stacks on a global scale.
Key similarities and differences
Both Snowflake and Datadog operate in the software application sector, focusing on cloud-based solutions that enhance data management and operational insights. While Snowflake emphasizes data consolidation and application development, Datadog specializes in monitoring and analytics across IT infrastructure and applications. Each company targets enterprise clients but with distinct approaches to managing and analyzing digital information.
Income Statement Comparison
The table below presents a side-by-side comparison of key income statement metrics for Snowflake Inc. and Datadog, Inc. for their most recent fiscal years.
| Metric | Snowflake Inc. (SNOW) | Datadog, Inc. (DDOG) |
|---|---|---|
| Market Cap | 70.4B | 41.7B |
| Revenue | 3.63B | 2.68B |
| EBITDA | -1.10B | 318M |
| EBIT | -1.28B | 211M |
| Net Income | -1.29B | 184M |
| EPS | -3.86 | 0.55 |
| Fiscal Year | 2025 | 2024 |
Income Statement Interpretations
Snowflake Inc.
Snowflake’s revenue increased significantly from 592M in 2021 to 3.63B in 2025, indicating strong top-line growth. However, net income remained negative throughout, widening from -539M to -1.29B, reflecting persistent losses. Gross margins held steady at a favorable 66.5% in 2025, but EBIT and net margins remained unfavorable, indicating ongoing profitability challenges despite revenue growth.
Datadog, Inc.
Datadog showed consistent revenue growth, rising from 603M in 2020 to 2.68B in 2024, with net income turning positive and reaching 184M in 2024. Gross margin improved to a favorable 80.8%, while EBIT margin was neutral at 7.9%, and net margin favorable at 6.9%. The company’s profitability and margin expansion in the latest year indicate improving operational efficiency.
Which one has the stronger fundamentals?
Datadog exhibits stronger fundamentals with predominantly favorable income statement metrics, positive net income, and expanding margins. Snowflake, despite impressive revenue growth, struggles with persistent losses and unfavorable profitability margins. The overall evaluation favors Datadog’s financial health and operational performance over the analyzed period.
Financial Ratios Comparison
Below is a comparison of key financial ratios for Snowflake Inc. and Datadog, Inc. based on their most recent fiscal year data available.
| Ratios | Snowflake Inc. (SNOW) FY 2025 | Datadog, Inc. (DDOG) FY 2024 |
|---|---|---|
| ROE | -42.9% | 6.8% |
| ROIC | -25.2% | 1.1% |
| P/E | -47.0 | 261.4 |
| P/B | 20.1 | 17.7 |
| Current Ratio | 1.75 | 2.64 |
| Quick Ratio | 1.75 | 2.64 |
| D/E (Debt to Equity) | 0.90 | 0.68 |
| Debt-to-Assets | 29.7% | 31.8% |
| Interest Coverage | -528 | 7.68 |
| Asset Turnover | 0.40 | 0.46 |
| Fixed Asset Turnover | 5.53 | 6.72 |
| Payout Ratio | 0 | 0 |
| Dividend Yield | 0 | 0 |
Interpretation of the Ratios
Snowflake Inc.
Snowflake’s financial ratios reveal a mixed picture with 50% unfavorable metrics, including negative net margin (-35.45%) and return on equity (-42.86%), indicating profitability challenges. Positive aspects include a solid current ratio (1.75) and low debt-to-assets (29.72%). Snowflake does not pay dividends, focusing on reinvestment and growth, with no dividend yield reported.
Datadog, Inc.
Datadog displays a slightly unfavorable ratio profile, with 42.86% unfavorable ratios such as an elevated PE ratio (261.42) and modest returns on equity (6.77%) and invested capital (1.07%). Favorable metrics include a strong current ratio (2.64) and high interest coverage (29.85). Like Snowflake, Datadog does not pay dividends, prioritizing growth and reinvestment strategies.
Which one has the best ratios?
Both companies show slightly unfavorable overall ratio evaluations, with Snowflake facing more pronounced negative profitability ratios but better liquidity and leverage metrics. Datadog has fewer unfavorable ratios yet suffers from a high valuation and lower returns. Neither company offers dividends, reflecting their growth-oriented profiles.
Strategic Positioning
This section compares the strategic positioning of Snowflake Inc. and Datadog, Inc., including market position, key segments, and exposure to technological disruption:
Snowflake Inc.
- Large market cap of 70B; faces competitive pressure in cloud data platforms.
- Focused on cloud-based data platform with major revenue from Product segment (3.46B in 2025).
- Positioned in cloud data management; disruption risk linked to evolving cloud technologies.
Datadog, Inc.
- Market cap of 42B; competes in cloud monitoring and analytics markets.
- Provides SaaS monitoring and analytics platform with diverse IT observability tools.
- Positioned in cloud IT monitoring; exposed to technological changes in observability and security.
Snowflake Inc. vs Datadog, Inc. Positioning
Snowflake is concentrated on cloud data platforms with substantial product revenue, while Datadog offers a more diversified SaaS observability platform. Snowflake’s focus may limit flexibility; Datadog’s broader offerings address multiple IT needs.
Which has the best competitive advantage?
Both companies are currently shedding value, but Datadog shows a growing ROIC trend, indicating improving profitability. Snowflake faces a very unfavorable moat status with declining returns, suggesting weaker competitive advantage.
Stock Comparison
The past year showed notable bearish trends for both Snowflake Inc. and Datadog, Inc., with significant price decreases and decelerating downtrends in their stock prices.
Trend Analysis
Snowflake Inc. experienced a bearish trend over the last 12 months with a price decline of 8.27%. The stock showed deceleration and high volatility with a standard deviation of 42.6, hitting a high of 274.88 and a low of 108.56.
Datadog, Inc. also recorded a bearish trend with an 8.1% price drop over the past year. This trend decelerated with lower volatility than Snowflake, a standard deviation of 18.63, and price extremes between 191.24 and 87.93.
Comparing both, Snowflake and Datadog delivered similar negative performances, with Snowflake’s decline slightly exceeding Datadog’s, indicating Datadog had the relatively better market performance.
Target Prices
Analysts present a cautiously optimistic consensus on target prices for Snowflake Inc. and Datadog, Inc.
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| Snowflake Inc. | 325 | 237 | 281.86 |
| Datadog, Inc. | 215 | 105 | 177.67 |
Snowflake’s consensus target price of $281.86 significantly exceeds its current price of $210.38, suggesting upside potential. Datadog’s target consensus at $177.67 also implies notable growth from its current $119.02, reflecting positive analyst expectations.
Analyst Opinions Comparison
This section compares analysts’ ratings and grades for Snowflake Inc. and Datadog, Inc.:
Rating Comparison
Snowflake Inc. Rating
- Rating: C-, considered very favorable by analysts.
- Discounted Cash Flow Score: 3, a moderate valuation.
- ROE Score: 1, very unfavorable efficiency in equity.
- ROA Score: 1, very unfavorable asset utilization.
- Debt To Equity Score: 1, very unfavorable financial risk.
- Overall Score: 1, very unfavorable overall rating.
Datadog, Inc. Rating
- Rating: C+, considered very favorable by analysts.
- Discounted Cash Flow Score: 4, a favorable valuation.
- ROE Score: 2, moderate efficiency in equity.
- ROA Score: 3, moderate asset utilization.
- Debt To Equity Score: 2, moderate financial risk.
- Overall Score: 2, moderate overall rating.
Which one is the best rated?
Based strictly on the provided data, Datadog holds a better overall rating and stronger financial scores, including discounted cash flow, ROE, ROA, and debt-to-equity metrics, compared to Snowflake.
Scores Comparison
Here is a comparison of the Altman Z-Score and Piotroski Score for Snowflake Inc. and Datadog, Inc.:
Snowflake Scores
- Altman Z-Score: 5.36, in safe zone, low bankruptcy risk
- Piotroski Score: 4, average financial strength
Datadog Scores
- Altman Z-Score: 11.37, in safe zone, very low bankruptcy risk
- Piotroski Score: 6, average financial strength
Which company has the best scores?
Datadog holds a higher Altman Z-Score and Piotroski Score than Snowflake, indicating comparatively stronger financial stability and strength based on these metrics.
Grades Comparison
The following presents the recent grades assigned to Snowflake Inc. and Datadog, Inc. by reputable grading companies:
Snowflake Inc. Grades
This table summarizes recent grade changes and maintenances from major financial institutions for Snowflake Inc.:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Barclays | Downgrade | Equal Weight | 2026-01-12 |
| Argus Research | Upgrade | Buy | 2026-01-08 |
| Citigroup | Maintain | Buy | 2025-12-08 |
| Wells Fargo | Maintain | Overweight | 2025-12-04 |
| Keybanc | Maintain | Overweight | 2025-12-04 |
| Piper Sandler | Maintain | Overweight | 2025-12-04 |
| Morgan Stanley | Maintain | Overweight | 2025-12-04 |
| Wedbush | Maintain | Outperform | 2025-12-04 |
| Deutsche Bank | Maintain | Buy | 2025-12-04 |
| Cantor Fitzgerald | Maintain | Overweight | 2025-12-04 |
Overall, Snowflake’s grades mostly reflect strong buy and overweight ratings, with a single recent downgrade from Barclays indicating some caution.
Datadog, Inc. Grades
Below is the recent grading activity for Datadog, Inc. from recognized financial analysts:
| 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 ratings consistently emphasize overweight and buy recommendations, with stable support from multiple firms and a few hold ratings.
Which company has the best grades?
Both Snowflake Inc. and Datadog, Inc. hold predominantly buy and overweight grades from major analysts, reflecting positive market sentiment. Datadog has maintained a steadier upgrade trend recently, which may suggest slightly stronger analyst confidence. Such grades can influence investor perception and may affect investment decisions based on perceived growth and risk profiles.
Strengths and Weaknesses
The table below compares key strengths and weaknesses of Snowflake Inc. (SNOW) and Datadog, Inc. (DDOG) based on their latest financial performance, market position, and innovation capabilities.
| Criterion | Snowflake Inc. (SNOW) | Datadog, Inc. (DDOG) |
|---|---|---|
| Diversification | Moderate: Revenue mainly from product sales ($3.46B in 2025) with limited services | Moderate: Focused on cloud monitoring solutions, less diversified product portfolio |
| Profitability | Weak: Negative net margin (-35.45%) and declining ROIC (-25.24%) indicate value destruction | Improving: Slightly favorable with positive net margin (6.85%) and growing ROIC (1.07%) |
| Innovation | Strong: High fixed asset turnover (5.53) suggests efficient asset use in innovation | Strong: Higher fixed asset turnover (6.72) and increasing profitability reflect innovation |
| Global presence | Solid: Expanding client base but facing profitability challenges worldwide | Solid: Growing global footprint with improving financial health |
| Market Share | Large but under pressure due to profitability issues and high price-to-book (20.13) | Growing market share with some valuation concerns (PE 261.42) |
Key takeaways: Snowflake shows strong revenue growth and innovation but suffers from declining profitability and value destruction. Datadog is improving profitability and operational efficiency, signaling potential value creation despite high valuation risks. Investors should weigh innovation and growth against current profitability challenges.
Risk Analysis
Below is a comparison of key risks for Snowflake Inc. (SNOW) and Datadog, Inc. (DDOG) based on the most recent data available.
| Metric | Snowflake Inc. (SNOW) | Datadog, Inc. (DDOG) |
|---|---|---|
| Market Risk | Beta 1.144; sensitive to tech sector volatility | Beta 1.263; higher volatility risk |
| Debt level | Debt to equity 0.9 (neutral); Debt to assets 29.72% (favorable) | Debt to equity 0.68 (neutral); Debt to assets 31.84% (neutral) |
| Regulatory Risk | Moderate; cloud data regulations evolving globally | Moderate; data privacy and security regulations impact |
| Operational Risk | Platform complexity, integration challenges | Reliance on cloud infrastructure and continuous innovation |
| Environmental Risk | Low; primarily software-based business | Low; software focus with limited physical footprint |
| Geopolitical Risk | Moderate; global customers expose to geopolitical tensions | Moderate; international operations sensitive to geopolitical shifts |
The most impactful risks include market volatility, especially given both companies’ betas above 1, suggesting higher sensitivity to market swings. Snowflake’s elevated debt level and unfavorable profitability ratios increase financial risk, while Datadog faces pressure from high valuation multiples and the need to maintain innovation. Investors should weigh these factors carefully, prioritizing risk management in their decisions.
Which Stock to Choose?
Snowflake Inc. (SNOW) shows strong revenue growth of 29.21% in 2025 but suffers from negative profitability with a net margin of -35.45% and declining ROIC well below WACC, indicating value destruction. Its financial ratios are slightly unfavorable overall, with a very favorable rating offset by poor returns and debt metrics.
Datadog, Inc. (DDOG) reports favorable income growth and profitability, including a positive net margin of 6.85% and increasing ROIC, though still below WACC, suggesting improving but modest value creation. Its financial ratios are slightly unfavorable but balanced by solid liquidity and interest coverage, supported by a very favorable rating.
Investors seeking growth might find SNOW’s rapid revenue expansion appealing despite its current profitability challenges, while those favoring improving profitability and stability may lean toward DDOG, reflecting its positive income trends and financial health improvements.
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 Snowflake Inc. and Datadog, Inc. to enhance your investment decisions:
