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Investing.com - Stifel raised its price target on Datadog (NASDAQ:DDOG) to $135 from $120 on Thursday while maintaining a Hold rating, citing stabilizing customer optimization trends. According to InvestingPro data, the company currently trades above its Fair Value, with analyst price targets ranging from $115 to $200.
The price target increase follows Stifel’s fourth customer survey of approximately 25 Datadog users, with 84% spending over $100,000. The survey revealed that while installed-base optimization remained relatively flat at about 36% compared to the previous survey, the aggressiveness of these optimizations appears to be stabilizing. The company maintains impressive gross profit margins of 80% and has generated strong revenue growth of 26% over the last twelve months.
More than 50% of surveyed customers indicated they expected to return to growth after completing their optimization efforts. Customers also reported that pricing discounts remain consistent with historical trends, and the overall price-to-value ratio is broadly meeting user expectations.
The survey showed fiscal year 2025 growth expectations remain flat compared to fiscal year 2024 at approximately 11%. Security adoption is gaining momentum as ongoing improvements within Datadog’s suite of products generate some competitive displacements. InvestingPro subscribers can access 12 additional key insights about Datadog’s financial health, which currently rates as GOOD based on comprehensive analysis.
Stifel noted that LLM Observability adoption stands to accelerate, while Splunk (NASDAQ:SPLK) displacements remain modest. The firm suggested that an acceleration in growth and a rebound in operating margins might need to wait until the first half of 2026 as recent sales hires become increasingly productive.
In other recent news, Datadog has experienced a series of developments regarding its financial outlook and product innovation. BofA Securities raised its price target for Datadog to $150, citing strong revenue growth exceeding 20% and robust execution in artificial intelligence and new product releases. Meanwhile, Stifel maintained a Hold rating with a $120 price target, noting Datadog’s balanced growth trajectory and potential future revenue opportunities from newer products. Cantor Fitzgerald reiterated its Overweight rating with a $134 price target, highlighting Datadog’s innovation at the DASH conference and its new product cycle driven by acquisitions. BNP Paribas (OTC:BNPQY) Exane also maintained an outperform rating with a $150 price target, emphasizing the company’s Agentic AI capabilities and customer excitement at the DASH 2025 user conference. These developments underscore Datadog’s ongoing efforts in product innovation and its strategic positioning in the market. The company’s focus on expanding sales capacity and leveraging cost optimization measures was noted by Stifel as a strategy to stabilize its core business by late 2025. Additionally, Datadog’s On-call product, discussed at the DASH conference, is expected to enhance market share against competitors like PagerDuty (NYSE:PD).
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