Datadog's analyst price target has risen from $165 to approximately $195. This reflects optimism from analysts who cite solid deal flow, growing AI-driven opportunities, and expectations for revenue acceleration in the coming quarters.
Analyst Commentary
Recent coverage from Street analysts reflects a largely optimistic tone on Datadog, with several firms raising price targets and highlighting growth signals across product segments and end-markets. Recent developments in Datadog’s AI offerings and robust deal flow are points of particular interest.
Bullish Takeaways- Bullish analysts point to a series of price target increases, which indicate expectations for both near-term and sustained upside in Datadog’s valuation.
- Solid quarterly results are anticipated for the analytics, data, infrastructure, and security software segments. This suggests an ability to consistently deliver above expectations.
- Positive data from proprietary developer datasets show usage growth and signs of potential acceleration, reinforcing confidence in execution and product-market fit.
- Analysts note tailwinds from rising adoption of AI-powered automation and observability solutions. This enhances Datadog’s growth prospects and supports long-term bullishness.
- Some caution remains regarding competitive dynamics in Datadog’s markets. While these are currently described as "normal," they could restrain outperformance if competitive pressures intensify.
- Although the latest guidance is considered prudent, there is mention that it may be on the conservative side. This could potentially limit upside revisions if execution does not significantly outpace expectations.
- Recent AI-driven sentiment is optimistic, but a shift in broader market sentiment, such as an unexpected downturn or disruption from large AI platforms, remains a watch point for cautious analysts.
What's in the News
- Datadog is reportedly working with bankers to explore a potential takeover bid for GitLab, with a new bid possibly exceeding $60 per share (Street Insider).
- Datadog is in advanced discussions to acquire Israeli cybersecurity firm Upwind for roughly $1 billion. Upwind's cloud security solutions are considered highly relevant for dynamic application environments (CTech).
- BMO Capital raised its price target on Datadog to $150 from $130 after strong Q2 results and updated 2025 guidance. The firm noted that Datadog's guidance is prudent, if not conservative (BMO Capital).
Valuation Changes
- Fair Value: Increased modestly from $162.08 to $165.35. This reflects a slightly higher intrinsic valuation estimate.
- Discount Rate: Decreased marginally from 8.53% to 8.49%, which indicates a minor reduction in perceived risk.
- Revenue Growth: Edged up slightly from 20.51% to 20.52%, suggesting a small increase in growth expectations.
- Net Profit Margin: Declined slightly from 10.36% to 10.30%. This shows a minor downward adjustment in profitability assumptions.
- Future P/E: Rose from 142.86x to 146.38x. This signals a higher valuation multiple based on forward earnings projections.
Disclaimer
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