Davidson starts Datadog at Neutral with bull case ‘well understood’

DA Davidson last night initiated coverage of Datadog with a Neutral rating and $70 price target. Datadog’s "compelling" expansion has resulted in a comprehensive platform with strong unit economics and customer adoption, the analyst tells investors in a research note. However, despite benefiting from a large and expanding total addressable market, the expected steep revenue deceleration in 2023 makes it difficult to be positive short-term on the shares, says the firm. It believes long-term bull case for Datadog "is both clear and well understood."