Datadog Inc. (DDOG:NSD) 7 Analysts adjust targets on earnings

Datadog Inc.

Datadog Inc Stock Forecast:

According to 35 analysts who have provided stock forecasts for Datadog Inc, the average analyst target price for the company over the next 12 months is USD 88.97. The analysts have also given Datadog Inc an average rating of Strong Buy. However, Stock Target Advisor has analyzed the company’s stock and has a Slightly Bearish view, based on 4 positive signals and 6 negative signals. The stock closed at USD 82.47 in the previous session. In the last week, the stock has decreased by -1.12%, but over the past month, it has increased by +17.03%. Over the past year, the stock has decreased by -52.58%.

DataDog Inc. News:

Datadog (DDOG:NSD) announced its financial results for the fourth quarter on Thursday and exceeded the estimates of analysts in terms of earnings and revenue. However, the guidance provided for DDOG’s stock performance was much lower than anticipated, leading to a decline in the company’s stock price.

Adjusted earnings for the quarter ending on December 31 were 26 cents per share, showing a 30% increase from the previous year. Meanwhile, the revenue surged by 44% to $469 million, primarily driven by the slower growth of its cloud computing partners such as Amazon Web Services, the cloud computing unit of Amazon.com (AMZN). A year ago, the revenue was $326.2 million, with earnings of 20 cents.

Datadog provided financial projections for the current quarter, which ends in March. According to their forecast, they anticipate a profit of 23 cents, which is slightly lower than the estimated figure of 24 cents. Additionally, they expect their revenue to be around $468 million, which is lower than the estimated figure of $481.8 million. Looking ahead to 2023, Datadog expects to generate revenue of $2.08 billion, which falls short of the estimated figure of $2.19 billion.

Analysts Coverage Change:

  • Raymond James maintains an “Outperform” rating on Datadog Inc. and lowers the price target from USD 110 to USD 100.
  • Mizuho Securities maintains a “Buy” rating and increases the price target from USD 85 to USD 94.
  • Goldman Sachs & Co. maintains a “Buy” rating and lowers the price target from USD 128 to USD 114.
  • Needham & Company maintains a “Buy” rating  and increases the price target from USD 90 to USD 105.
  • Capital One Financial initiates coverage with an “Overweight” rating and a price target of USD 105.
  • Morgan Stanley & Co. maintains an “Overweight” rating and lowers the price target from USD 110 to USD 105.
  • Rosenblatt Securities maintains a “Buy” rating and lowers the price target from USD 120 to USD 105.

Positive Fundamentals:

Datadog Inc. has a high market capitalization, which indicates that it is a large and stable company in its sector. The stock has provided superior risk-adjusted returns compared to its peers over a holding period of at least 12 months and is among the top quartile. Additionally, the company has positive cash flow and positive free cash flow in the most recent four quarters, which is a positive indicator for potential investors.

Negative Fundamentals:

Datadog Inc stock has high volatility with total returns that are volatile and above median for its sector over the past 5 years, and it is highly leveraged. Additionally, the stock is overpriced compared to its peers on a price to earnings, book value, cash flow, and free cash flow basis. Investors should proceed with caution and ensure they have the risk tolerance for investing in such a stock.

FA Score (Fundamental Analysis):

The fundamental analysis of Datadog Inc. stock is “Slightly Bearish” with a FA score of 4 out of 10, where 0 is very bearish and 10 is very bullish.

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