RiverPark Advisors, an investment advisory firm, and sponsor of the RiverPark family of mutual funds released its “RiverPark Large Growth Fund” first quarter 2023 investor letter. A copy of the same can be downloaded here. The fund outperformed in the first quarter by returning 16.59%. The market also performed well with the S&P 500 index returning 7.50% and the Russell 1000 Growth index returning 14.37% in the same period. In addition, please check the fund’s top five holdings to know its best picks in 2023.
RiverPark Large Growth Fund highlighted stocks like Datadog, Inc. (NASDAQ:DDOG) in the first quarter 2023 investor letter. Headquartered in New York, New York, Datadog, Inc. (NASDAQ:DDOG) is a software company that provides monitoring and analytics platform for developers. On May 8, 2023, Datadog, Inc. (NASDAQ:DDOG) stock closed at $78.54 per share. One-month return of Datadog, Inc. (NASDAQ:DDOG) was 21.11%, and its shares lost 20.11% of their value over the last 52 weeks. Datadog, Inc. (NASDAQ:DDOG) has a market capitalization of $25.28 billion.
RiverPark Large Growth Fund made the following comment about Datadog, Inc. (NASDAQ:DDOG) in its Q1 2023 investor letter:
“Datadog, Inc. (NASDAQ:DDOG): DDOG was a top detractor in the quarter. The company reported strong 4Q results including 44% revenue growth and 30% earnings growth but gave cautious revenue guidance for 2023. Macroeconomic headwinds have caused clients to slow the transition of workloads to the cloud and instead to optimize current capacity. Despite this temporary slowdown, DDOG still expects revenue to grow nearly 25% in 2023.
As businesses have transitioned to cloud software infrastructure, much of which is in isolated data silos, it has become increasingly difficult for data engineers to monitor and analyze system performance. Datadog provides a SaaS software platform to monitor and analyze the system performance of software applications and IT infrastructure by giving users a single page view to observe their company’s technology stack. The company has quickly grown its revenue from $100 million in 2017 to $1.7 billion in 2022 and, we believe, should continue to grow revenue at more than 20% annually as it penetrates its $40 billion and fast-growing market. Less than 10% of software applications are currently monitored. The company’s dollar-based net retention rate has been 130%+ as existing customers continue to use an increasing number of products and the company continues to add new features. As of 4Q22, 81% of customers used 2+ products, while only 18% of customers used 6+ products (up from less than 1% two years ago). As an extremely capex light software business, DDOG already has significant free-cash-flow ($350m in 2022) and free-cash-flow margins (21% in 2022).”
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Datadog, Inc. (NASDAQ:DDOG) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 63 hedge fund portfolios held Datadog, Inc. (NASDAQ:DDOG) at the end of the fourth quarter which was 74 in the previous quarter.
We discussed Datadog, Inc. (NASDAQ:DDOG) in another article and shared the list of best cybersecurity stocks to buy. In addition, please check out our hedge fund investor letters Q1 2023 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
