Stocks got trashed today as higher gasoline prices are really hurting the economy. Today, Thursday June 9, 2022, the S&P 500 sank 2.4% to close at 4018 while the NASDAQ dropped 2.8% to close at 11754.
93% of the stocks on the NYSE were down on the day. 90% downside is a high fear indicator that’s often seen at market bottoms.
Investors await CPI data tomorrow, and although many items are seeing deflation, gasoline prices continue to surge higher. The national average for gas hit $5 a gallon today. That’s around $2 a gallon higher than last year.
Chart of the Day
Datadog (DDOG) is our chart of the day.
This is our 2022 Q1 one-year chart, with qtrly profit growth along the bottom. The stock was $160 when this chart was done last qtr, on February 24. The shares closed at $104 today.
Datadog helps organization monitor their websites and applications. Organizations have many different programs running continuously. From websites to mobile apps and emails, there are many languages from different data centers such as Amazon Web Services. Teams can then troubleshoot when problems arise, or optimize applications for greater speed and efficiency. Companies can search, filter and analyze logs for troubleshooting.
With the bear market taking down price-to-sales multiples, top tier growth stocks that were selling for 30x revenue last year are now selling for 15x. DDOG sold fo 33x 2022 revenue estimates last qtr when the stock was $160 (when this chart was done). With the stock now $104 it sells for 20x revenue.
Overall, this is the #1 speculative stock I don’t own for clients, and I want to buy in. But I may be too optimistic in thinking this company can keep this high valuation.