Key Takeaways
- Datadog beat Wall Street’s third-quarter estimates, but a flat fourth-quarter revenue outlook left the stock 36% below its October high.
- Canaccord Genuity kept its Buy rating and $295 target on Nov. 5, 56% above the Nov. 4 close, while five other Buy-rated firms cut theirs to $260-$275.
- Management’s new 2026 earnings guide came in above what analysts expected, and $295 works out to about 78x 2028 earnings estimates, close to the multiple Datadog carried on Oct. 30.
- The stock looks oversold, and earnings growth alone points to about $238. The rest of the way to $295 depends on February’s 2027 outlook.
Datadog (DDOG) beat Wall Street’s estimates for its third quarter on Nov. 4, and the stock sank anyway, closing at $188.72, 36% below its October high. A day later, as firm after firm trimmed its target, Canaccord Genuity kept its Buy rating and $295 target, 56% above that close.
Investors Balked at a Flat Fourth Quarter
The stock was already sliding as AI spending fears hit cloud stocks in late October.
The report was strong: revenue grew 35% to $1.20 billion, and adjusted EPS was $0.81, against the $0.64 analysts expected. But Datadog guided fourth-quarter revenue to $1.19-$1.20 billion, growth of 25%-26%, which left revenue flat with the third quarter.
CFO David Obstler said on the call that the guide counts the largest customer, which cut its usage, only at its minimum commitment, and several big AI customers renewed early for better pricing. As CEO Olivier Pomel put it, “So these are all good news, but they do create like headwind into the short term into the revenue.”
Canaccord Held at $295 While Others Cut
Analyst Kingsley Crane raised Canaccord’s target to $295 from $250 in August and left it there on Nov. 5. Five other firms that kept Buy ratings cut theirs to between $260 and $275, Bernstein’s to $273 from the $350 it set in October.
The average target climbed from $169 to $296 over the year to Nov. 1:
Getting to $295 takes three things, and the report delivered two:
- Earnings ahead of plan: management now guides 2026 non-GAAP EPS to $2.73-$2.75, above the $2.53 analysts expected going in.
- A core still speeding up: growth outside the AI customers rose for a fifth straight quarter, to the high 20s.
- A higher multiple: $295 is about 78x 2028’s expected EPS, while the Nov. 4 close is about 63x 2027’s.
TIKR Tracks 47 Analysts on Datadog. How Many Say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Datadog, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Datadog’s Analyst Ratings
What $295 Really Asks of Datadog Stock
Analysts expected earnings to keep climbing before the report:
With management’s 2026 guide above that $2.53, I’d expect these to move up.
Datadog traded at 81x forward earnings on Nov. 2, below its five-year average of 104x, and about 71x at the Nov. 4 close:
That average leans on 2021, when the multiple hit 558x. Since the end of 2022, Datadog has averaged 76x at quarter-ends.
A 12-month target gets priced on the earnings a year out, and by next November that’s mostly 2028’s expected $3.76 a share. Hold today’s 63x on that, and the stock gets to about $238. The last $57 needs investors to pay about 79x next-year earnings again, which is where Datadog sat on Oct. 30, after the AI selloff had already started.
A Rebound, With $295 Riding on February
The risk: the AI customers driving growth also have the most say over what they pay, and the biggest one has already cut back.
Still, Datadog looks oversold after a quarter this strong, and I’d expect a recovery toward the $260-$275 those five firms landed on. February’s report brings Datadog’s first look at 2027, when analysts expect 22.7% revenue growth. If management guides well above that, $295 within a year looks reachable.
So What Is Datadog Stock Actually Worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
