Key Stats for Datadog Stock
- Current Price: $293.26
- Target Price (Mid): ~$730
- Street Target: ~$288
- Potential Total Return: ~149%
- Annualized IRR: ~24% / year
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What Happened?
Datadog (DDOG) closed at $293.26 on October 9, 2026, up 7.11% and above its prior 52-week high of $292.72. Technology stocks recovered that session from a selloff the day before, and CIBC raised its price target on the stock. The close lifted Datadog above the Street’s mean target of around $288. Since March 31, shares are up 148%. Over the same stretch, the next-12-month normalized EPS estimate, which also rolls forward each quarter, rose about 23%. Most of the run came from what investors now pay for each dollar of earnings.
Investors Paid Twice the Multiple for 23% More Earnings
On March 31, Datadog traded at around 55 times NTM normalized earnings. By October 9, it traded at around 111 times, well above the around 74 times of September 30, 2025. Analysts did raise their numbers, lifting the consensus 2027 revenue about 11% since March 31, to around $5.5 billion.
Near-term consensus is flatter. Analysts expect adjusted EPS of $0.64 in both the third and fourth quarters, against the $0.65 Datadog earned in the second. That matches the $0.63 to $0.65 third-quarter range in its investor relations materials. The bar has proven low: Datadog beat adjusted EPS consensus in each of the last five quarters, by 6.33% to 20.33%. Even on the 2028 consensus EPS of around $3.75, the stock trades at around 78 times. On NTM earnings, Dynatrace (DT) trades near 32 times, and in TIKR’s software peer set, only CrowdStrike (CRWD), near 195 times, is pricier.
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Obstler’s Answer to the Optimization Question
The risk that a 111 times multiple handles worst is another optimization cycle like the one that followed 2021, when cloud customers cut usage. CFO David Obstler was asked about it at the Goldman Sachs Communacopia + Technology Conference on September 10. He said conditions differ from when the bubble burst. Datadog grew revenue 70.5% in 2021, and Obstler noted, “We’re growing well, but we’re not growing at 70%.” He added, “I think our customer base has not forgotten what happened and has, if you look at the net retention, acted more responsibly.” He also put gross retention in the upper 90s, with larger enterprises at the high end. He did not rule cycles out: “We always will have a yin and yang of growth and optimization in cloud software.”
The largest customer remains a separate question. After its usage moved around, Datadog’s guidance counts it only at its contracted commitment. Obstler also described a demand that management discussed on its earnings call: “Some of the larger hyperscalers and other companies came to us and said, ‘ We want to use you for training or post-training workloads.” He did not forecast it: “We don’t believe we have the evidence to say that we’re going to be the training company.”
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TIKR Advanced Model Analysis
- Current Price: $293.26
- Target Price (Mid): ~$730
- Potential Total Return: ~149%
- Annualized IRR: ~24% / year
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The TIKR model’s mid-case values Datadog at around $730 by December 31, 2030. That is a total return of around 149% from $293.26, or around 24% a year over 4.2 years. The model’s growth input is around 21% a year across its 2025 to 2035 forecast, below the around 23% consensus expects for 2027 alone. That growth would have to come from enterprise cloud migration, which Obstler cited as one reason the non-AI business is accelerating, and from AI-native workloads. Net income margins reach around 29% in the mid case.
The high case assumes around 23% growth and 30% margins. The low case assumes around 19% growth and 27% margins. The primary risk is an optimization cycle compressing the multiple before those margins arrive.
Conclusion
Datadog reported last year’s third quarter on November 6, 2025, and had not announced this year’s date as of October 10. Its smallest adjusted EPS beat of the last five quarters, 6.33%, would put third-quarter EPS near $0.68 against the $0.64 consensus. A print there or better, with net retention still rising, supports around 111 times earnings. A result at the $0.65 top of guidance would be the weakest beat of the run.
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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!
