Datadog Completes Sqreen Acquisition; Street Sees 29.2% Upside

Monitoring and analytics platform provider Datadog has closed the acquisition of Sqreen. The latter is an SaaS-based security platform that helps clients detect, block, and respond to application-level attacks.

This acquisition enhances Datadog’s (DDOG) current APM functionality and brings it closer to offering customers a robust and full-stack monitoring solution.

Olivier Pomel, CEO of Datadog, said, “The application layer is currently one of the most vulnerable and exploitable attack surfaces. In combining Sqreen with Datadog, we are closing the gap between application developers and security teams and providing our customers with robust application security, without the disjointed visibility, high implementation costs, or steep learning curve of traditional application security products.” 

While traditional solutions such as intrusion detection systems and firewalls fall short of catching code-level security risks and vulnerabilities, Sqreen offers Runtime Application Self-Protection (RASP) and In-App Web Application Firewall (WAF). These solutions protect modern distributed applications from attacks that target the application logic. (See Datadog stock analysis on TipRanks)

Sqreen detects and traces attacks from network requests right to the line of code, with this approach blocking suspicious activity and pinpointing the root cause in a faster way.

Furthermore, on March 31, Datadog announced that it became the first company to launch Windows server monitoring of live traffic. This functionality allows companies to monitor their entire network across different operating systems, providing them with complete visibility.

Recently, Needham analyst Jack Andrews reiterated a Buy rating on the stock and increased the price target to $141 (55.9% upside potential) from $109.

Andrews commented, “DDOG delivers a strong combination of product/market fit that should enable the company to execute against a large opportunity with a capital efficient business model.”

Turning to the rest of the Street, the consensus rating is a Moderate Buy, based on 7 Buys and 7 Holds. The average analyst price target of $116.92 implies an upside potential of 29.2%. Shares have gained about 144.8% over the past year.

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