Datadog (NASDAQ:DDOG – Get Free Report) and Magic Software Enterprises (NASDAQ:MGIC – Get Free Report) are both computer and technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, profitability, earnings, dividends, risk and institutional ownership.
Insider and Institutional Ownership
78.3% of Datadog shares are owned by institutional investors. Comparatively, 24.7% of Magic Software Enterprises shares are owned by institutional investors. 15.0% of Datadog shares are owned by insiders. Comparatively, 4.5% of Magic Software Enterprises shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Profitability
This table compares Datadog and Magic Software Enterprises’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Datadog | 2.28% | 3.79% | 1.90% |
| Magic Software Enterprises | 6.92% | 17.33% | 9.32% |
Analyst Ratings
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Datadog | 0 | 6 | 22 | 0 | 2.79 |
| Magic Software Enterprises | 0 | 0 | 1 | 0 | 3.00 |
Datadog presently has a consensus target price of $130.33, suggesting a potential upside of 4.77%. Magic Software Enterprises has a consensus target price of $14.00, suggesting a potential upside of 23.57%. Given Magic Software Enterprises’ stronger consensus rating and higher possible upside, analysts clearly believe Magic Software Enterprises is more favorable than Datadog.
Risk & Volatility
Datadog has a beta of 1.15, indicating that its share price is 15% more volatile than the S&P 500. Comparatively, Magic Software Enterprises has a beta of 1.17, indicating that its share price is 17% more volatile than the S&P 500.
Earnings & Valuation
This table compares Datadog and Magic Software Enterprises’ revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Datadog | $2.13 billion | 19.40 | $48.57 million | $0.12 | 1,036.67 |
| Magic Software Enterprises | $535.05 million | 1.04 | $37.09 million | $0.75 | 15.11 |
Datadog has higher revenue and earnings than Magic Software Enterprises. Magic Software Enterprises is trading at a lower price-to-earnings ratio than Datadog, indicating that it is currently the more affordable of the two stocks.
About Datadog
Datadog, Inc. operates an observability and security platform for cloud applications in North America and internationally. The company's products comprise infrastructure and application performance monitoring, log management, digital experience monitoring, continuous profiler, database monitoring, data streams and universal service monitoring, network monitoring, incident management, workflow automation, observability pipelines, cloud cost and cloud security management, application security management, cloud SIEM, sensitive data scanner, and CI visibility. Datadog, Inc. was incorporated in 2010 and is headquartered in New York, New York.
About Magic Software Enterprises
Magic Software Enterprises Ltd. provides proprietary application development, vertical software solutions, business process integration, information technologies (IT) outsourcing software services, and cloud based services in Israel and internationally. The company's Software Services segment develops, markets, sells, and supports application platform, software applications, and business and process integration solutions and related services. Its IT Professional Services segment offers IT services in the areas of infrastructure design and delivery, application development, technology planning and implementation services, communications services and solutions, and supplemental outsourcing services. It also offers proprietary application platforms, such as Magic xpa for developing and deploying business applications; AppBuilder for building, deploying, and maintaining business applications; Magic xpi for application integration; Magic xpi cloud native; FactoryEye for virtualization of production data; Magic Data Management and Analytics Platform for data management; and Magic SmartUX for cross-platform mobile business applications. It also provides vertical software solutions comprising Clicks, a software solution for healthcare providers; Leap, a software solution for business support systems; Hermes Cargo, a packaged software solution for managing air cargo ground handling; HR Pulse, a single-tenant software as a service tool; MBS Solution, a system for managing TV broadcast management; Nativ, a system for management of rehabilitation centers; and Mobisale, a system for sales and distribution field activities for consumer goods manufacturers and wholesalers. In addition, the company provides software maintenance, support, training, and consulting services. The company was formerly known as Mashov Software Export (1983) Ltd. and changed its name to Magic Software Enterprises Ltd. in 1991. The company was incorporated in 1983 and is headquartered in Or Yehuda, Israel.
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