Crispr Therapeutics shares tumble after significant earnings miss
Investing.com - UBS has reiterated its Buy rating and $165.00 price target on Datadog (NASDAQ:DDOG) ahead of the company’s second-quarter 2025 earnings report scheduled for Thursday. According to InvestingPro data, the company maintains strong financial health with impressive gross profit margins of 80% and robust revenue growth of 26% over the last twelve months.
The cloud monitoring and analytics platform has seen its stock rally 54% since early April, now trading at 12 times calendar year 2026 estimated revenues and 42 times estimated free cash flow. However, the stock has recently pulled back, dropping 10% in the past week. Based on InvestingPro’s Fair Value analysis, the stock appears slightly overvalued at current levels.
UBS acknowledged this significant price appreciation makes the investment case "less compelling" than before the rally began.
Despite the valuation concerns, the firm maintains its positive outlook, citing Datadog’s correlation to what it describes as a "very healthy cloud infrastructure market."
UBS also believes market participants are being overly concerned about potential risks related to Datadog’s relationship with artificial intelligence company OpenAI, while also noting recent Amazon (NASDAQ:AMZN) Web Services results that were "slightly disappointing."
In other recent news, Datadog is reportedly in talks to acquire Israel-based Upwind for approximately $1 billion, marking what could be the largest acquisition in the company’s history. This move aims to bolster Datadog’s capabilities in the cloud security market, particularly focusing on cloud-native applications and infrastructure. Meanwhile, several analyst firms have weighed in on Datadog’s prospects. TD Cowen has raised its price target to $170 from $150, maintaining a Buy rating and expressing confidence that Datadog will exceed its management’s guidance of 23% growth in the upcoming earnings report. Cantor Fitzgerald has reiterated an Overweight rating with a $171 price target, also highlighting the acquisition talks. Similarly, BofA Securities has maintained a Buy rating and a $175 price target, noting that the acquisition could strengthen Datadog’s security offerings. Stifel has maintained a Hold rating and a $135 price target, expecting a strong second-quarter performance driven by increased OpenAI usage, potentially contributing 9-10% to revenue growth. These developments come as Datadog continues to expand its reach and capabilities in the tech industry.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.