It’s been a difficult season for most cybersecurity stocks. Datadog (NASDAQ:DDOG) is no exception. While it has outperformed several of its peers during the past month, DDOG stock is still down more than 30% year-to-date (YTD). This puts it in the same category as many other cybersecurity firms, including SentinelOne (NYSE:S) and Crowdstrike Holdings (NASDAQ:CRWD). But to one Datadog insider, the stock’s decline represents an opportunity to buy the dip before a market turnaround in 2023. Director and Board Member Matthew Jacobson has been on a buying spree recently, acquiring a significant amount of DDOG stock.
Insider buying can lend liquidity and support to a company. But does that mean that Datadog is expected to start gaining in 2023? Let’s take a closer look.
What’s Happening With DDOG Stock
For all its turbulence this year, DDOG stock is having an excellent day. As of this writing, it is up almost 9% for the day and looks primed to rise even higher. Today’s growth has pushed it up more than 5% for the month. This is impressive when we consider the stock’s highly volatile performance throughout November. While other cybersecurity stocks are also in the green today, Datadog has outperformed most of them.
Jacobson clearly sees the recent momentum as an indication that DDOG stock will continue rising in the coming months. He isn’t the only one. As InvestorPlace contributor Bret Kenwell reports:
“Analysts expect about 61% revenue growth this year, then 34% growth next year. In 2025 and 2026, consensus estimates accelerate, calling for 35% and 44.5% growth, respectively.”
Like Kenwell and these analysts, Jacobson regards Datadog as a company with significant growth potential. According to Securities and Exchange Commission (SEC) filings, he has already made three large-scale DDOG stock purchases in December 2022. On Dec. 7, he made two separate purchases, acquiring a total of 1,422,696 shares in total. One week prior, on Dec. 2, he had acquired 617.503 shares.
Jacobson is the only company insider who has been buying up DDOG stock. In early December, several members of Datadog’s leadership team, including CEO Olivier Pomel and President and CTO Alexis Lê-Quôc both offloaded large amounts of shares. They likely did this for tax-covering purposes. All executives who recently sold are among the company’s top leaders, while Jacobson only serves as part of the board of directors. In addition to holding positions on the boards of several tech companies, Jacobson is a partner at wealth management firm ICONIQ Capital. According to his LinkedIn profile, he served as a lead investor in Snowflake (NYSE:SNOW) as part of its Series E and D rounds.
What It Means
What do Jacobson’s investments mean for DDOG stock? He clearly believes in the company’s potential. And there’s plenty of evidence that suggests his faith is well founded. Over the past five years, the company has seen its topline increase by an average of 78%. More importantly, the current economic climate may have pushed DDOG stock down but it hasn’t slowed the company’s sales growth. As InvestorPlace contributor Muslim Farooque notes, this suggests that Datadog may be providing a better platform than its competitors.
Even without Jacobson’s investment, DDOG stock seems to be destined for growth as markets rebounded in 2023. The need for cybersecurity isn’t going away and this company has proven it can hold its own against larger competitors.
On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
