Key Stats for Datadog Stock
- Current Price: $269.65
- Target Price (Mid): ~$730
- Street Target: ~$292
- Potential Total Return: ~170%
- Annualized IRR: ~27% / year
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What Happened?
Datadog (DDOG) CFO David Obstler told a Goldman Sachs conference in September that companies trying to build an integrated monitoring platform, often through acquisitions, had not succeeded. Datadog is now reportedly testing that idea from the buyer’s side. The Information reported on October 22 that Datadog offered nearly $4 billion for Israeli cloud security startup Upwind Security, which has not accepted. Datadog did not immediately respond to the outlet’s request for comment.
Shares fell 5.62% on October 22, and reports differed on how much of that drop traced to the bid. They rose 4.62% on October 23 as cloud software stocks rebounded and BofA raised its price target to $335 from $305. The stock is up 98% in 2026 and closed on October 23 at 8.05% below its 52-week closing peak.
Obstler Set the Bar for an Acquired Platform
Obstler was answering whether newer AI-native observability companies could displace Datadog. He pointed to integration as the barrier. “A lot of the attempts have been through acquisition, platforms that aren’t integrated together,” he said, adding that those companies “have not succeeded.” He also said, “Generally, there’s been a preference for single pane of glass and everything knitted together.”
That bar now applies to Datadog. Upwind sells real-time security for cloud-hosted applications, including AI agents, according to The Information. Datadog already markets itself as an AI-powered observability and security platform, so Upwind would have to work inside that single product rather than as a separate tool sold beside it.
The two companies reportedly discussed a deal of about $1 billion last year that fell apart. Since then, Upwind’s annual recurring revenue has passed $50 million, up from about $20 million at the end of 2025. It is finalizing a $300 million funding round at about a $3.8 billion valuation, roughly the price Datadog offered, and has drawn approaches from several companies, according to the report.
TIKR tracks 48 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
Up to 80 Times Recurring Revenue
Nearly $4 billion for more than $50 million of recurring revenue works out to about 80 times or less. Datadog trades at 18.85 times NTM enterprise value to revenue, CrowdStrike (CRWD) at 39.10 times, and Palo Alto Networks (PANW) at 21.93 times. Those multiples use forward revenue. The Upwind figure uses current recurring revenue that more than doubled in under a year, so the gap overstates the premium.
A cash deal near $4 billion would roughly match Datadog’s net cash of $3.71 billion as of June 30, 2026, a funding question TIKR covered after the report. Paying in stock at the October 23 close would instead mean about 15 million new shares, roughly 4% of the 359.08 million outstanding.
TIKR Advanced Model Analysis
- Current Price: $269.65
- Target Price (Mid): ~$730
- Potential Total Return: ~170%
- Annualized IRR: ~27% / year
The mid case values Datadog at around $730 by December 31, 2030. That is about 170% above the $269.65 close, or around 27% a year over 4.2 years. Its inputs, set across the model’s full forecast period, assume around 21% annual revenue growth and a net income margin near 29%. The model does not include Upwind.
The main risk the deal adds is the one Obstler described: a security tool that sits beside the platform instead of inside it, bought at up to about 80 times recurring revenue. On the upside, Upwind’s recurring revenue more than doubled in under a year. On the downside, an all-stock deal would mean about 4% dilution for a business whose recurring revenue equals roughly 1% of Datadog’s 2026 revenue estimate.
Conclusion
The detail that decides this deal is how Datadog pays, if Upwind accepts. An all-stock price near $4 billion means about 4% dilution that Upwind would need to earn back well before the model’s 2030 horizon. A mostly cash price would use roughly all of Datadog’s net cash. Datadog’s next scheduled update is its third-quarter report before the open on November 4.
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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 stocks mentioned. Thank you for reading, and happy investing!
