Latest news with #DDOG
Yahoo
31-05-2025
- Business
- Yahoo
Datadog, Inc. (DDOG): A Bull Case Theory
We came across a bullish thesis on Datadog, Inc. (DDOG) on @bigbullcap on X (Twitter). In this article, we will summarize the bulls' thesis on DDOG. Datadog, Inc. (DDOG)'s share was trading at $114.46 as of 23rd May. DDOG's trailing and forward P/E were 243.53 and 60.61 respectively according to Yahoo Finance. A computer engineer developing a secure cloud infrastructure solution. Datadog (DDOG) continues to distinguish itself within the observability space through its consistent ability to innovate and scale across a growing suite of product offerings. According to Bank of America, one of Datadog's most compelling attributes is its multi-product engine, which allows the company to layer new capabilities on top of its core infrastructure monitoring platform. While management does not disclose precise annual recurring revenue (ARR) figures for each category, the firm has provided enough commentary over time to piece together a detailed breakdown across key areas including infrastructure monitoring, application performance monitoring (APM), log analytics, security, and emerging products. BofA's granular analysis of these segments reveals a strong and diverse foundation of ARR contributors, suggesting that Datadog is less reliant on any single revenue stream and has multiple growth levers it can activate. Importantly, this product expansion has enabled deeper penetration across customer accounts, increasing net retention and stickiness. The firm believes this diversified growth profile supports a bullish outlook, particularly with potential upside to the company's 2025 revenue guidance. In refining its model, BofA notes that underlying trends in product attach rates and adoption trajectories for security and logs provide further confidence in acceleration potential. Given this backdrop and Datadog's continued execution in delivering value across its observability and security portfolios, BofA reiterates its Buy rating and raises its conviction in the $170 price target. The path to upside is paved with incremental product adoption, operational leverage, and a robust innovation pipeline, reinforcing DDOG as a high-quality compounder in enterprise software. Previously, we have covered Datadog, Inc. (DDOG) in November 2024 wherein we summarized a bearish thesis by Elliot on Substack. Since then, the stock is down 26%. However, the stock is expected give a turnaround and is already up 21.02% since April 2025. Datadog, Inc. (DDOG) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 83 hedge fund portfolios held DDOG at the end of the fourth quarter which was 71 in the previous quarter. While we acknowledge the risk and potential of DDOG as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than DDOG but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None. This article was originally published at Insider Monkey. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
29-05-2025
- Business
- Yahoo
Strong AI Boosts Datadog, Inc. (NASDAQ:DDOG) Q1 Results, But BMO Lowers Target on Macro Uncertainty
BMO Capital recently lowered the price target on Datadog, Inc. (NASDAQ:DDOG) to $130 from $152 and kept an Outperform rating on the shares. DDOG provides a monitoring and analytics platform for developers, information technology operations teams, and business users in the cloud in North America and internationally. The company reported a mostly solid March quarter, highlighted by a roughly 3% beat to the firm's and Wall Street's consensus estimates and strong AI Native contribution to ARR, the analyst tells investors in a research note. The advisory added that, consistent with its past writings, demand metrics have greater stock/multiple impact than margin and, given the weaker macro backdrop and compressed software valuations, it is lowering its price target. A close-up of a laptop with a software engineer coding on the monitor. While disclosing first quarter earnings, the firm provided guidance for Q2 revenue between $787 million and $791 million, representing 22%-23% year-over-year growth, and non-GAAP net income per share between $0.40 and $0.42. For fiscal year 2025, revenue is expected to be in the range of $3.215 billion to $3.235 billion, with an operating income of $625 million to $645 million and non-GAAP net income per share of $1.67 to $1.71. The company raised its full-year revenue guidance by $40 million compared to previous estimates due to strong performance in Q1 and visibility into Q2. While we acknowledge the potential of DDOG, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than DDOG and that has 100x upside potential, check out our report about this cheapest AI stock. READ NEXT: 33 Most Important AI Companies You Should Pay Attention To and 30 Best AI Stocks to Buy According to Billionaires Disclosure: None Sign in to access your portfolio
Globe and Mail
11-05-2025
- Business
- Globe and Mail
3 Reasons Datadog Stock Is Still a Top Artificial Intelligence Buy Right Now
For Datadog (NASDAQ: DDOG) shareholders, the past few years must have felt like treading water. The volatile stock shed approximately 38% from its 52-week high at the time of writing and is nowat levels first reached back in 2020. This frustrating performance stands in contrast to the impressive growth momentum from the cloud-computing leader in observability and monitoring. The company is capitalizing on strong demand for solutions that address the increasingly complex data demands generated by artificial intelligence (AI) applications. Several trends support a positive long-term outlook. Here are three reasons Datadog stock is still a top AI stock to buy right now. 1. AI-powered growth opportunity The Datadog platform acts as a central data hub for organizations, providing real-time visibility across their entire technology stack, including key cloud performance metrics, analytics, security, and system bottlenecks. Its unified approach uses integrates data from more than 900 software applications to identify problems and increase efficiency. New data-intensive AI workflows add to the need for comprehensive observability, representing a major growth driver. Datadog isn't just benefiting from the rise of AI -- it actively integrates AI tools into its platform, including through its Bits AI generative AI assistant. Solutions enhancing automation and intelligent analysis further bolster the company's value proposition for its customers. According to estimates from the industry research group Gartner, the public cloud services market is currently valued at $600 billion and is projected to nearly double in the coming years, with a 20% compound annual growth rate (CAGR) through 2028. Moreover, companies are allocating an increasing percentage of their total IT spending to the cloud. This significant tailwind underscores the substantial opportunity for Datadog and its attractiveness as an investment. 2. Robust operating tailwinds In the recently reported first quarter, revenue grew by 25% year over year to $762 million, surpassing Wall Street's expectation of $741.5 million. Similarly, adjusted earnings per share (EPS) of $0.46 came in above the $0.43 market estimate. Datadog has approximately 30,500 customers, including 3,770 that each generate more than $100,000 in annual recurring revenue (ARR) in software-as-a-service subscriptions. Perhaps the most encouraging metric is the 110% dollar-based net retention rate over the past year, as the company's customer base increases spending on the platform by adopting additional products. Strong demand for AI solutions is a key part of the growth story. The number of customers using its large language model (LLM) Observability product more than doubled in just the past six months. Datadog continues to strengthen its platform through strategic bolt-on acquisitions, including Metaplane, an AI-powered data observability specialist acquired in April, and Eppo, an AI experimentation platform purchased just this month. These deals enhance Datadog's reach in data monitoring and real-time AI analytics, boosting its competitive edge. 3. Free-cash-flow momentum For the full year 2025, Datadog targets revenue between $3.215 billion and $3.235 billion, reflecting a robust 20% to 21% growth rate from the prior year. While ongoing investments in research and development, particularly in AI capabilities, create some operating margin pressure, EPS estimates of $1.67 to $1.71 for the year demonstrate strong underlying profitability. Even more encouraging is the free-cash-flow trend, which reached $833 million over the past year, surging 39% from year-end 2023. This dynamic supports the stock's premium valuation. Datadog shares trade at a forward price-to-earnings (P/E) ratio of 64 -- high compared to the broader stock market, but still attractive relative to other high-growth software infrastructure peers. Compared to stocks like CrowdStrike, Cloudflare, Zscaler, CyberArk Software, and SentinelOne, which collectively average a forward P/E above 100, Datadog stands out with its unique blend of observability and cybersecurity capabilities, offering broader organizational use cases than pure-play cybersecurity companies. Investors who believe Datadog is just beginning to realize its potential have compelling reasons to buy and hold the stock for the long run. DDOG PE Ratio (Forward) data by YCharts Final thoughts Datadog's AI-fueled growth captures high-level themes, technology, and cloud computing to complement diversified portfolios. I'm bullish and expect shares to be trading at a higher price by this time next year. Should you invest $1,000 in Datadog right now? Before you buy stock in Datadog, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Datadog wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $614,911!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $714,958!* Now, it's worth noting Stock Advisor 's total average return is907% — a market-crushing outperformance compared to163%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of May 5, 2025
Yahoo
08-05-2025
- Business
- Yahoo
DDOG Q1 Earnings Call: Growth in Large Deals, AI Adoption, and Platform Expansion Drive Outlook
Cloud monitoring software company Datadog (NASDAQ:DDOG) reported Q1 CY2025 results topping the market's revenue expectations , with sales up 24.6% year on year to $761.6 million. The company expects next quarter's revenue to be around $789 million, close to analysts' estimates. Its non-GAAP profit of $0.46 per share was 9% above analysts' consensus estimates. Is now the time to buy DDOG? Find out in our full research report (it's free). Revenue: $761.6 million vs analyst estimates of $741 million (24.6% year-on-year growth, 2.8% beat) Adjusted EPS: $0.46 vs analyst estimates of $0.42 (9% beat) Adjusted Operating Income: $166.5 million vs analyst estimates of $165.1 million (21.9% margin, 0.8% beat) The company lifted its revenue guidance for the full year to $3.23 billion at the midpoint from $3.19 billion, a 1.3% increase Management raised its full-year Adjusted EPS guidance to $1.69 at the midpoint, a 2.4% increase Operating Margin: -1.6%, down from 2% in the same quarter last year Free Cash Flow Margin: 32.1%, similar to the previous quarter Customers: 3,770 customers paying more than $100,000 annually Net Revenue Retention Rate: 118%, in line with the previous quarter Annual Recurring Revenue: $3.2 billion at quarter end, up 24.6% year on year Billings: $747.7 million at quarter end, up 21% year on year Market Capitalization: $36.61 billion Datadog's first quarter results were shaped by robust customer adoption of new observability and security products, alongside notable expansion in enterprise and AI-native segments. CEO Olivier Pomel highlighted increased usage of products like Flex Logs and Database Monitoring, as well as strong traction with large customers, stating, 'Dollar bookings for new logos were up over 70% year-over-year and much stronger than our typical seasonal softness in Q1.' Looking ahead, management raised full-year revenue and adjusted earnings guidance, citing continued investment in sales capacity and R&D to support product innovation and market expansion. CFO David Obstler emphasized that while 'cloud hosting costs rose more quickly than we expected in Q1,' Datadog remains focused on optimizing expenses and expects efficiency projects to yield savings throughout the year. Datadog's leadership attributed Q1 performance to increasing product adoption, strong execution in large enterprise deals, and momentum in AI-driven workloads. The company also emphasized investments in new product areas and international expansion to sustain growth. Platform adoption broadening: Management reported rising customer engagement across multiple products, with a growing proportion of users adopting four or more Datadog offerings. Notably, 83% of customers now use at least two products, reflecting increasing reliance on the platform. AI cohort accelerating: The AI-native customer segment continued to grow, with these clients now representing approximately 8.5% of annual recurring revenue. Management noted that AI-related deals contributed significantly to overall revenue growth and bookings. Large enterprise deals rising: The quarter saw a sharp increase in large transactions, with 11 deals exceeding $10 million in total contract value—up from just one in the same period last year. These wins were attributed to Datadog's ability to replace multiple existing tools and consolidate observability functions for complex organizations. Security and data observability investment: The company highlighted expansion in its security and data observability products, supported by the recent acquisitions of Eppo and Metaplane. Over 7,500 customers now use Datadog's security offerings, and the Database Monitoring product is approaching $50 million in annual recurring revenue. International and sales capacity growth: Datadog increased its international sales headcount by mid-30% year-over-year and continues to target new markets, including the launch of an Australian data center to address regional requirements for data residency and privacy. Management's outlook for the coming quarters is shaped by continued investment in product innovation, expansion of sales capacity, and growing demand for observability and security solutions—especially among large enterprises and AI-focused organizations. Continued AI adoption: Management expects further growth from AI-native customers, with increased observability needs as organizations deploy more AI-driven workloads in production environments. Platform expansion and integration: The integration of new capabilities from recent acquisitions and the expansion of data observability solutions are positioned to drive cross-sell opportunities and deepen customer engagement. Margin focus and efficiency projects: While gross margins faced short-term pressure from higher cloud hosting costs, Datadog is prioritizing efficiency initiatives to optimize spending and maintain margins within its historical range, even as operating investments continue. Mark Murphy (J.P. Morgan): Asked about the opportunity in monitoring AI-generated code, to which CEO Olivier Pomel responded that the shift to AI-written software increases the need for observability, moving value from code creation to operational monitoring. Sanjit Singh (Morgan Stanley): Inquired about the evolution of data observability as a growth area. Pomel explained that data observability is now seen as critical for building new AI workloads and emphasized the strategic importance of recent acquisitions in this space. Raimo Lenschow (Barclays): Questioned the factors behind the raised guidance and gross margin changes. CFO David Obstler explained that guidance reflects recent trends but remains conservative, and margin pressure was due to increased cloud costs and investment in new functionality. Jake Roberge (William Blair): Asked about the durability of AI-native cohort growth and Flex Logs adoption. Pomel noted potential volatility due to customer concentration but stated that Flex Logs is driving net new use cases and higher platform usage. Brad Reback (Stifel): Sought clarity on Datadog's approach to on-prem and "bring your own cloud" workloads. Pomel indicated that Datadog is adapting solutions to address customer preferences and sees opportunity in supporting hybrid and on-prem environments. Looking ahead, the StockStory team will monitor (1) ongoing adoption of AI observability and security products, (2) the impact of sales capacity expansion on large enterprise deal volume, and (3) the integration and market traction of recent acquisitions like Eppo and Metaplane. The outcome of Datadog's DASH user conference in June and progress on margin optimization initiatives will also be important signposts for tracking execution. Datadog currently trades at a forward price-to-sales ratio of 11.5×. In the wake of earnings, is it a buy or sell? See for yourself in our free research report. The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025. While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver's seat and build a durable portfolio by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years. Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
Yahoo
07-05-2025
- Business
- Yahoo
Investment Bank Raises Its Price Target on Datadog (DDOG)
After conducting in-depth research into Datadog's (DDOG) observability market, investment bank DA Davidson increased its price target on the name to $125 from $115. The investment bank identifies DDOG as a top pick in the software market. Meanwhile, investment bank Rosenblatt Securities remained upbeat on DDOG but slightly cut its price target on the name. Is Datadog, Inc. (DDOG) the Best Growth Stock to Buy According to Billionaires? A close-up of a laptop with a software engineer coding on the monitor. DA Davidson's Conclusions The investment bank estimates that DDOG is poised to generate annual growth of 20% to 25% for multiple years. In the wake of worries about OpenAI damaging Datadog, DA Davidson does not expect any negative impact on DDOG to last over the longer term. Rosenblatt's Take After DDOG delivered strong growth in Q4, the trend probably continued last quarter, according to Rosenblatt. As reasons for the latter conclusion, Rosenblatt cited the favorable reports by the large cloud-service firms and increased demand for AI. Additionally, the investment bank predicts that DDOG's existing customers will buy more of its offerings going forward. Rosenblatt cut its price target on DDOG to $150 from $160 but kept a Buy rating on the name. The Recent Price Action of DDOG In the last month, the shares have climbed 22%, while they have fallen 27% in the last three months. The stock has retreated 25% in 2025. While we acknowledge the potential of DDOG, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than DDOG but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires Disclosure: None. This article is originally published at Insider Monkey
