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On Wednesday, Datadog (NASDAQ:DDOG) shares maintained their Overweight rating at Cantor Fitzgerald, with a steady price target of $134.00. The research firm’s analysts underscored Datadog’s position as a leader in the cloud observability space, which includes AI-driven insights. The company’s recent financials showed a Rule of 46 score, indicative of a robust and balanced business model. According to InvestingPro data, this strength is reflected in the company’s impressive 80% gross profit margins and a "GOOD" Financial Health score.
The analysts at Cantor Fitzgerald expressed confidence in Datadog’s trajectory, forecasting over 20% growth by calendar year 2025. They highlighted the stock’s current valuation as attractive, noting that it is trading at a trough relative to the IGV, with a multiple of 1.13 times versus its one-year average of 1.55 times. Additionally, they pointed out that the stock is trading at 33 times its projected calendar year 2026 free cash flow, compared to the one-year average of 50 times. InvestingPro analysis suggests the stock is slightly overvalued at its current price of $105.92, with revenue growing at 25.5% year-over-year.
The firm’s positive outlook is supported by Datadog’s performance this quarter, which aligns with their growth expectations. The analysts emphasized the strategic significance of the cloud-focused observability market, which is expanding and where Datadog is strategically positioned as a market leader.
Cantor Fitzgerald’s analysts reiterated their recommendation for investors to buy Datadog shares, especially after a volatile intraday trading session. They believe that the company’s market leadership and growth prospects make it a compelling investment opportunity at the current valuation levels.
In the statement provided, Thomas Blakey of Cantor Fitzgerald said, "We continue to believe Datadog is a unique asset in software, with market leadership in a strategically growing market centered on cloud-focused observability including AI." He further justified the firm’s stance by pointing to Datadog’s balanced business model and relative valuation metrics. For deeper insights into Datadog’s valuation and growth prospects, InvestingPro subscribers can access 15 additional ProTips and a comprehensive Pro Research Report, which provides detailed analysis of what really matters for this $36.5 billion market cap company.
In other recent news, Datadog reported strong financial results for the first quarter of 2025, exceeding Wall Street expectations. The company achieved earnings per share (EPS) of $0.46, surpassing the forecast of $0.43, and reported revenue of $762 million, beating projections by over $20 million. Datadog has raised its full-year 2025 revenue guidance to between $3.215 billion and $3.235 billion, reflecting 20-21% growth. Barclays (LON:BARC) raised Datadog’s stock price target to $128, maintaining an Overweight rating, citing robust first-quarter results driven by AI-native technology and customer expansions. Meanwhile, DA Davidson reaffirmed its Buy rating with a $125 target, highlighting Datadog’s strategic product investments and growth among AI-native customers. Bernstein adjusted its price target to $145 from $151, maintaining an Outperform rating, noting Datadog’s significant revenue contributions from AI-related businesses. The company also reported a substantial year-over-year increase of 70% in net new customer bookings, although it maintained a conservative stance on guidance for the second half of the year.
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