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Datadog
(NASDAQ:DDOG)
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Rating:77Outperform
Price Target:
$294.00
▲(132.21% Upside)
Action:Reiterated
Date:06/17/26
DDOG scores well on financial quality (especially cash flow strength and high gross margins) and has supportive technical momentum. A positive earnings call and confident growth/margin guidance reinforce the outlook. The primary offset is valuation risk given the extremely high P/E, alongside noted concentration and margin-variability risks.
Positive Factors
Cash generation & margins
Sustained high gross margins and multiyear free cash flow above $1B indicate durable software economics and strong cash conversion. This underpins reinvestment capacity, funds product development and M&A optionality, and reduces reliance on external financing over the next 2–6 months.
Negative Factors
ARR concentration in AI cohort
Heavy ARR concentration in a small AI-active customer subset increases revenue volatility risk if a handful of large accounts pull back. Over 2–6 months this concentration can amplify swings in billings and RPO and forces conservative guidance assumptions tied to top customers.
Read all positive and negative factors
Positive Factors
Negative Factors
Cash generation & margins
Sustained high gross margins and multiyear free cash flow above $1B indicate durable software economics and strong cash conversion. This underpins reinvestment capacity, funds product development and M&A optionality, and reduces reliance on external financing over the next 2–6 months.
Read all positive factors
Datadog Key Performance Indicators (KPIs)
Any
Customers Over $100k
Shows the number of customers generating over $100,000 in annual revenue, reflecting the company's ability to attract and retain high-value clients.
Shows the number of customers generating over $100,000 in annual revenue, reflecting the company's ability to attract and retain high-value clients.
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The Fly
The FlyDatadog (DDOG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$92.08B
Dividend YieldN/A
Average Volume (3M)4.64M
Price to Earnings (P/E)672.3
Beta (1Y)1.43
Revenue Growth29.54%
EPS Growth-21.11%
CountryUS
Employees8,100
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)0.38
Shares Outstanding330,825,800
10 Day Avg. Volume3,939,204
30 Day Avg. Volume4,641,637
Financial Highlights & Ratios
PEG Ratio-10.05
Price to Book (P/B)12.65
Price to Sales (P/S)13.78
P/FCF Ratio47.20
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$250.12Price Target Upside97.55% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering37
EPS Forecast (FY)2.43
Revenue Forecast (FY)$4.35B
Datadog Business Overview & Revenue Model
Company Description
Datadog, Inc. offers a comprehensive cloud-based monitoring and analytics solution, serving the needs of developers, IT operations personnel, and business stakeholders across North America and internationally. This Software-as-a-Service (SaaS) off...
How the Company Makes Money
Datadog primarily makes money through subscription revenue from its cloud-based platform. Customers pay recurring fees to use one or more Datadog products (modules) that are typically priced based on usage/consumption metrics (for example, based o...
Datadog Earnings Call Summary
Earnings Call Date:May 07, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 06, 2026
Earnings Call Sentiment Positive
The call presented a strong operational and financial quarter: accelerating revenue growth (32% YoY), record sequential ARR adds, record new-logo bookings, expanding product adoption, notable AI traction and strategic large deals, robust cash generation and conservative but bullish guidance. Offsetting considerations include margin variability from ongoing investments, rising OpEx to fund growth, concentration risk in large AI accounts, and the need to scale newer products and sovereignty/on‑prem offerings. Overall the positives (broad-based acceleration, product momentum, strong cash and guidance) materially outweigh the risks highlighted.Positive Updates
Revenue Growth and Quarterly Milestone
Q1 revenue of $1.01 billion, up 32% year-over-year; quarterly revenue exceeded $1 billion for the first time. Sequential revenue growth was 6% quarter-over-quarter, with a $53 million quarter-over-quarter revenue add (highest for a Q1).
Negative Updates
Gross Margin Pressure and Quarter-to-Quarter Variability
Non-GAAP gross margin declined to 80.2% from 81.4% in the prior quarter (compared with 80.3% a year ago). Management cited margin variability driven by investments to support product innovation.
Read all updates
Q1-2026 Updates
Positive
Negative
Revenue Growth and Quarterly Milestone
Q1 revenue of $1.01 billion, up 32% year-over-year; quarterly revenue exceeded $1 billion for the first time. Sequential revenue growth was 6% quarter-over-quarter, with a $53 million quarter-over-quarter revenue add (highest for a Q1).
Read all positive updates
Company Guidance
Datadog guided Q2 revenue of $1.07–1.08 billion (up 29%–31% year‑over‑year), implying sequential revenue growth of $64–74 million (6%–7%); non‑GAAP operating income of $225–235 million (21%–22% margin) — which reflects an estimated ~$15 million DASH conference cost — and non‑GAAP diluted EPS of $0.57–0.59 based on ~369 million weighted average diluted shares. For fiscal 2026 the company expects revenue of $4.30–4.34 billion (25%–27% YoY), non‑GAAP operating income of $940–980 million (22%–23% margin), and non‑GAAP EPS of $2.36–2.44 on ~372 million diluted shares. Management said guidance is based on recent trends with conservatism (including a higher degree of conservatism applied to its largest customer) and included assumptions of ~ $170 million net interest and other income, ~$30–40 million cash taxes, a 21% non‑GAAP tax rate, and capital expenditures plus capitalized software of 4%–5% of revenue.Datadog Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
78
Positive
Cash Flow
90
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.67B | 3.43B | 2.68B | 2.13B | 1.68B | 1.03B |
| Gross Profit | 2.93B | 2.74B | 2.17B | 1.72B | 1.33B | 794.54M |
| EBITDA | 228.57M | 193.84M | 265.94M | 111.00M | 13.09M | 25.57M |
| Net Income | 135.67M | 107.74M | 183.75M | 48.57M | -50.16M | -20.75M |
Balance Sheet | ||||||
| Total Assets | 6.95B | 6.64B | 5.79B | 3.94B | 3.00B | 2.38B |
| Cash, Cash Equivalents and Short-Term Investments | 4.76B | 4.47B | 4.19B | 2.58B | 1.88B | 1.55B |
| Total Debt | 1.29B | 1.54B | 1.84B | 902.34M | 837.52M | 807.75M |
| Total Liabilities | 2.96B | 2.91B | 3.07B | 1.91B | 1.59B | 1.34B |
| Stockholders Equity | 3.99B | 3.73B | 2.71B | 2.03B | 1.41B | 1.04B |
Cash Flow | ||||||
| Free Cash Flow | 1.08B | 1.00B | 835.88M | 632.37M | 353.52M | 250.52M |
| Operating Cash Flow | 1.11B | 1.05B | 870.60M | 659.95M | 418.41M | 286.55M |
| Investing Cash Flow | -1.21B | -1.33B | -736.84M | -731.37M | -384.67M | -273.74M |
| Financing Cash Flow | -564.42M | -572.48M | 787.08M | 58.28M | 36.02M | 34.94M |
Datadog Technical Analysis
Positive
126.61
Price Trends
233.20
Positive
178.20
Positive
162.28
Positive
Market Momentum
10.63
Positive
57.66
Neutral
47.70
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DDOG, the sentiment is Positive. The current price of 126.61 is below the 20-day moving average (MA) of 249.92, below the 50-day MA of 233.20, and below the 200-day MA of 162.28, indicating a bullish trend. The MACD of 10.63 indicates Positive momentum. The RSI at 57.66 is Neutral, neither overbought nor oversold. The STOCH value of 47.70 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DDOG.
Datadog Risk Analysis
Datadog disclosed 59 risk factors in its most recent earnings report. Datadog reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Datadog Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $12.89B | 82.47 | 6.00% | ― | 18.82% | -66.60% | |
77 Outperform | $92.08B | 672.27 | 3.78% | ― | 29.54% | -21.11% | |
75 Outperform | $794.36M | 4.93 | 77.20% | ― | 3.69% | ― | |
75 Outperform | $206.79B | -4,275.37 | -0.58% | ― | 23.17% | 73.57% | |
66 Neutral | $93.20B | -76.39 | -57.21% | ― | 31.07% | 16.46% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
DDOG
Datadog
258.69
113.42
78.08%
PD
PagerDuty
10.30
-4.32
-29.55%
CRWD
CrowdStrike Holdings
203.08
82.69
68.68%
DT
Dynatrace
44.41
-8.17
-15.54%
SNOW
Snowflake
268.90
53.25
24.69%
Datadog Corporate Events
Executive/Board ChangesShareholder Meetings
Datadog Shareholders Back Board, Pay at 2026 Meeting
Positive
Jun 16, 2026
On June 15, 2026, Datadog, Inc. held its 2026 Annual Meeting of Stockholders, where shareholders re-elected Olivier Pomel, Dev Ittycheria, Shardul Shah and Ami Vora as Class I directors to serve until the 2029 annual meeting, reinforcing continuit...
Business Operations and StrategyRegulatory Filings and ComplianceShareholder Meetings
Datadog Shareholders Approve Redomiciling to Nevada Corporation
Neutral
Apr 22, 2026
On April 21, 2026, Datadog stockholders approved a proposal at a special meeting to redomicile the company by conversion from the State of Delaware to the State of Nevada, with Class A and Class B shares voting together as a single class and passi...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.