Key Takeaways
- Datadog shares rose 4% today after Oppenheimer raised its price target to $330 from $300 and kept its Outperform rating.
- This is the third target raise in a week, after Bernstein’s upgrade and BofA’s $335, and the consensus target has climbed from $169 to $293 over the past year.
- Management expects only a small revenue gain over the second quarter while Datadog’s largest customer cuts its usage, though revenue has beaten the top of guidance for three quarters in a row.
- The stock is already priced for a beat, so the Nov. 4 report has to show revenue well above guidance and the core business still growing in the high 20s.
Datadog (DDOG) rose 4% this morning after Oppenheimer raised its price target to $330 from $300 and kept its Outperform rating, saying it expects strong performance with upside.
That makes three Wall Street firms lifting their targets in a week, all ahead of Datadog’s third-quarter report before the open on Nov. 4.
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
Wall Street keeps raising the bar
Oppenheimer follows Bernstein’s upgrade to Outperform on Oct. 19, with a Street-high $350 target, and BofA’s raise to $335 on Friday.
The consensus target has climbed to $293, from $169 a year ago.
Nov. 4 has to beat a cautious guide
Management guided third-quarter revenue to $1.135 billion to $1.145 billion, just $14 million to $24 million above the second quarter’s $1.12 billion, as its largest customer, an unnamed AI company, cuts its usage starting this quarter.
But Datadog has topped the high end of its revenue guidance by $37 million to $45 million in each of the past three quarters. A repeat would put third-quarter revenue around $1.18 billion to $1.19 billion, up 33% to 34% from a year earlier.
Growth outside its AI-native customers matters just as much. It has risen five quarters running, to the high 20s in the second quarter, and holding there would show the core can carry Datadog through the cut.
Analysts are counting on it. They expect revenue of $4.47 billion this year, the top of management’s range, then $5.49 billion in 2027 and $6.78 billion in 2028.
Those estimates already assume Datadog grows through its biggest customer’s pullback, so the Nov. 4 numbers and the fourth-quarter outlook will decide whether they hold.
Priced for a beat
Investors are paying up for that path. Datadog traded at 102x forward earnings at Friday’s close, and closer to 106x after today’s move, around the top of its range since 2022.
The five-year average of 106x is lifted by late 2021, when the multiple topped 500x; the low was 47x in February.
My take: Oppenheimer’s $330 is within reach if the third quarter lands near that $1.18 billion zone with core growth still in the high 20s. Revenue inside the guided range would make today’s multiple hard to defend.
Of course, that customer’s cut runs through the fourth quarter too, where Datadog’s full-year range implies growth slowing to 25% to 26%. The outlook for that quarter matters as much as any beat.
So what is Datadog stock actually worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what Datadog could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
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!
