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Stifel maintained its Hold rating and $120 price target on Datadog (NASDAQ:DDOG) following the company’s mid-quarter check-in last week. The firm’s decision reflects balanced views on the cloud monitoring company’s growth trajectory and investment strategy. According to InvestingPro data, analyst targets range from $115 to $200, with 16 analysts recently revising earnings estimates upward, suggesting potential optimism despite the stock’s current overvalued status.
During the meeting, Datadog management did not provide an intra-quarter consumption update, consistent with previous practices. The discussion centered on newer products, though management indicated these represent future revenue opportunities that typically take years to reach meaningful scale, as customers currently focus on the existing product portfolio. The company has demonstrated strong execution, maintaining impressive revenue growth of 25.54% over the last twelve months.
Management addressed recent compression in gross and operating margins, explaining that the company is investing in expanding sales representative capacity, particularly in international and enterprise segments. Executives noted they have opportunities to drive additional leverage through their own cost optimization measures. InvestingPro analysis shows the company maintains robust gross profit margins of 80.15% and holds more cash than debt on its balance sheet, providing flexibility for these strategic investments. For deeper insights into Datadog’s financial health and growth metrics, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.
Stifel believes the combination of increasing contributions from sales and marketing investments and easier core growth comparisons could lead to stability within Datadog’s core business in late 2025. The firm acknowledged potential upside from newer products in coming years.
The analysis also highlighted risk factors, specifically pointing to uncertainty associated with large generative AI customer behavior that could impact future performance.
In other recent news, Datadog has been the subject of various analyst assessments following its DASH user conference. Wolfe Research upgraded Datadog’s stock rating from Peerperform to Outperform, setting a price target of $150.00, driven by positive feedback and AI customer growth. Meanwhile, Cantor Fitzgerald reiterated its Overweight rating with a $134.00 price target, citing Datadog’s strong innovation and product developments, particularly in AI. BNP Paribas (OTC:BNPQY) Exane also maintained an Outperform rating, with a $150.00 price target, highlighting excitement over Datadog’s Agentic AI capabilities and the potential for market share gains.
UBS raised its price target for Datadog to $140.00 from $125.00, maintaining a Buy rating due to positive customer feedback on emerging products. However, UBS noted mixed feedback regarding core product usage growth. Stifel, on the other hand, reiterated a Hold rating with a $120.00 price target, acknowledging Datadog’s expansion in generative AI but expressing caution while awaiting further data on core stability. These developments reflect a mix of optimism and caution among analysts regarding Datadog’s future prospects and market positioning.
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