Saiyi He, an analyst from CMB International Securities, maintained the Buy rating on Datadog (DDOG – Research Report). The associated price target was raised to $158.70.
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Saiyi He has given his Buy rating due to a combination of factors that highlight Datadog’s strong performance and growth potential. The company’s first-quarter results exceeded expectations, with total revenue surpassing both internal and consensus forecasts. This was accompanied by a notable improvement in operating efficiency, which contributed to a better-than-expected net income. Despite the potential short-term impact on margins due to increased investments, the long-term outlook remains positive, driven by the ongoing digital transformation and cloud migration trends.
Saiyi He also notes the solid growth in Datadog’s customer base and average revenue per user (ARPU). The number of large customers and the usage of multiple products have increased significantly, indicating strong customer engagement and product adoption. Additionally, the company’s investments in international expansion and sales force growth are expected to support future growth. While these investments may affect near-term earnings, they are anticipated to benefit Datadog’s long-term development, justifying the Buy rating.
In another report released yesterday, Barclays also maintained a Buy rating on the stock with a $128.00 price target.