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Investing.com - BofA Securities has reiterated a Buy rating and $175.00 price target on Datadog (NASDAQ:DDOG), currently trading at $144.76 with a market capitalization of $50 billion, amid reports the company may acquire Upwind Security. According to InvestingPro analysis, Datadog shows strong financial health with impressive gross profit margins of 80%.
The potential acquisition would strengthen Datadog’s security offerings, which the company has been actively scaling, according to BofA Securities analyst Koji Ikeda.
BofA estimates that Datadog’s security segment currently generates approximately $50 million in annual recurring revenue (ARR) and is growing at more than 30% year-over-year, based on their ARR decomposition analysis published April 1.
The addition of Upwind Security would not only add scale to Datadog’s security segment but could also help the company gain more mindshare with security budget decision makers.
BofA notes that increasing influence with security budget decision makers has been a focus area for Datadog over the past several years.
In other recent news, Datadog has launched its full product and service portfolio on Amazon (NASDAQ:AMZN) Web Services’ Asia-Pacific (Sydney) Region. This expansion allows Datadog to offer local data storage and processing capabilities, which is particularly beneficial for organizations in regulated sectors such as government and healthcare. Additionally, Datadog has been added to the S&P 500 Index, a significant milestone that reflects its continued growth and prominence in the industry.
Morgan Stanley (NYSE:MS) has raised its price target on Datadog from $115 to $165, citing the company’s innovation and market share growth. Similarly, Wedbush increased its price target for Datadog from $140 to $170, maintaining an Outperform rating. TD Cowen has reiterated its Buy rating with a $150 price target, as Datadog prepares to join the S&P 500. These developments highlight the positive outlook analysts have for the company’s future performance.
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