Datadog (NASDAQ: DDOG) experienced a downgrade from a “buy” rating to a “hold” rating by Wall Street Zen in a report issued on November 11, 2023. This change reflects a shifting sentiment among various analysts regarding the company’s stock performance.
Several research firms have recently reassessed their positions on Datadog. On November 10, 2023, Citigroup lowered its target price from $200.00 to $175.00 while maintaining a “buy” rating. In contrast, UBS Group raised its target price from $189.00 to $225.00 and also assigned a “buy” rating. Meanwhile, TD Cowen increased its price target from $180.00 to $235.00, maintaining a “buy” rating, and CIBC upgraded their rating from “neutral” to “sector outperform” with a target price of $240.00. Conversely, KeyCorp adjusted its target down from $230.00 to $170.00, while still holding an “overweight” rating.
In total, thirty-three equity research analysts currently rate Datadog’s stock as a buy, five analysts have given it a hold rating, and two have issued sell recommendations. According to data from MarketBeat.com, the average rating stands at “Moderate Buy,” with an average target price of $196.45.
Quarterly Earnings and Stock Performance
Datadog released its latest quarterly earnings report on November 6, 2023. The company reported earnings per share (EPS) of $0.55, surpassing analysts’ expectations of $0.45 by $0.10. The company’s revenue for the quarter reached $885.65 million, exceeding analyst estimates of $852.77 million, marking a year-over-year revenue growth of 28.4%.
The firm’s return on equity stood at 4.14%, while its net margin was 3.32%. In comparison, the previous year’s EPS for the same quarter was $0.46. Looking ahead, Datadog has set its fiscal year 2025 guidance at $2.000-2.020 EPS, with a fourth-quarter guidance of $0.54-0.56 EPS. Analysts predict an EPS of $0.34 for the current year.
Insider Transactions and Hedge Fund Activities
In related news, Alexis Le-Quoc, Chief Technology Officer, sold 53,912 shares of Datadog on November 11, 2023, at an average price of $197.99, totaling approximately $10.67 million. Post-transaction, Le-Quoc holds 395,661 shares, valued at around $78.34 million, reflecting an 11.99% reduction in ownership.
Additionally, Matthew Jacobson, a Director, sold 404,306 shares on November 10, 2023, at an average price of $199.60, amounting to about $80.70 million. Following this sale, Jacobson retains 12,859 shares, worth approximately $2.57 million, a drastic 96.92% decrease in his ownership. Over the past ninety days, insiders have sold a total of 1,082,904 shares, valued at $194.32 million. Currently, insiders own 8.70% of Datadog’s stock.
Hedge funds have also been active with their holdings in Datadog. Perigon Wealth Management LLC increased its position by 8.4% in the last quarter, acquiring 2,534 shares valued at $345,000. Similarly, Aberdeen Group plc boosted its holdings by 1.4%, now owning 166,057 shares worth approximately $22.58 million. Other firms, such as Linden Thomas Advisory Services LLC and Compagnie Lombard Odier SCmA, also increased their stakes in the company.
Institutional investors and hedge funds collectively hold 78.29% of Datadog’s stock, reflecting strong institutional interest in the company.
Datadog operates as a cloud-based monitoring and observability platform, enabling organizations to monitor, troubleshoot, and secure their applications and infrastructures at scale. Its software-as-a-service model analyzes metrics, traces, and logs, providing real-time visibility into system performance and health. The company’s suite of products is widely used across engineering, operations, and security teams to enhance application reliability and incident response.
