106%+ returns, 97% win rate: A fresh list of AI-picked stock is out NOW
On Monday, Rosenblatt Securities adjusted its outlook on Datadog (NASDAQ:DDOG) shares, reducing the price target to $150 from the previous $160, while still recommending a Buy rating for the cloud monitoring company. The revision comes as the firm anticipates Datadog to unveil its first-quarter financial results for the fiscal year 2025 on Tuesday, May 6th. According to InvestingPro data, analyst targets for the stock range from $115 to $200, with the company currently trading at $105. Rosenblatt expects the company to deliver a performance that meets or slightly exceeds expectations, with a year-over-year organic revenue growth of 21% for the quarter ending March 31st.
The forecast by Rosenblatt suggests that Datadog’s robust growth in the fourth quarter is likely to continue into the first quarter, supported by positive reports from Cloud Service Providers and an increase in demand for AI-driven workloads. The company has maintained impressive revenue growth of 26.12% over the last twelve months, with InvestingPro analysis showing strong gross profit margins of 80.81%. Additionally, the firm predicts further expansion in the adoption of Datadog’s products among enterprise customers. Notably, only 12% of Datadog’s clients were using eight or more of the company’s 30 products as of the fourth quarter.
The analyst also highlighted the ongoing shift towards IT monitoring platforms, a trend observed at the RSA security conference last week. Despite the broader challenging economic environment, Datadog is expected to adhere to its guidance for approximately 19% organic revenue growth for the year 2025, with operating margins around 20%.
The decision to lower the price target to $150 reflects the recent decrease in comparable multiples within the sector. Nevertheless, Rosenblatt reaffirms its positive stance on Datadog shares at their current market price, indicating confidence in the company’s continued performance and market position.
In other recent news, Microsoft (NASDAQ:MSFT) and Meta Platforms (NASDAQ:META) reported quarterly earnings that exceeded expectations, driving their shares up by 8.1% and 6.9%, respectively. Microsoft’s results highlighted the success of its cloud business, while Meta’s performance included an optimistic outlook and an increased full-year forecast for capital expenditures, focusing on AI investments. Meanwhile, Datadog announced the acquisition of Metaplane, a move aimed at enhancing its data observability capabilities, which resulted in a 3.3% rise in its shares. This acquisition is part of Datadog’s strategy to expand its product offerings and address the growing need for reliable data in AI and data-centric platforms.
Analysts have recently adjusted their price targets for Datadog, with TD Cowen lowering it to $140 while maintaining a Buy rating, citing strong sales headcount data and potential inclusion in the S&P 500 as positive factors. UBS also reduced its price target for Datadog to $120, maintaining a Buy rating, and noted a shift among customers towards stricter IT cost management. Despite these adjustments, both firms remain optimistic about Datadog’s growth prospects and valuation. Additionally, Apple (NASDAQ:AAPL) faced a setback as a federal judge ruled that the company violated a court order regarding its App Store, leading to a 1.6% decline in its shares.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.