Analyst Andrew Sherman from TD Cowen maintained a Buy rating on Datadog (DDOG – Research Report) and decreased the price target to $140.00 from $165.00.
Andrew Sherman has given his Buy rating due to a combination of factors that suggest strong growth potential for Datadog. Despite a slightly lower-than-normal expected beat, the company is showing a significant increase in sales headcount, aligning with management’s growth plans for the year. This increase in capacity is anticipated to sustain growth, and concerns regarding OpenAI are considered exaggerated.
Datadog’s recent performance includes a record $1 billion in bookings and an uptick in net revenue retention, indicating strong demand. The company’s track record of exceeding expectations is one of the strongest in the software sector, yet it seems undervalued at present. Additionally, Datadog’s strategic focus on expanding sales capacity and maintaining high enterprise gross retention rates supports the Buy rating, as these factors signal robust demand and customer loyalty.
In another report released yesterday, Mizuho Securities also maintained a Buy rating on the stock with a $125.00 price target.
DDOG’s price has also changed moderately for the past six months – from $126.000 to $91.880, which is a -27.08% drop .