Datadog (DDOG) AI Stock Analysis

• Market Cap: $45.70B
• Dividend Yield: N/A
• Average Volume (3M): 4.20M
• Price to Earnings (P/E): 292.5
• Beta (1Y): 1.50
• Revenue Growth: 25.54%
• EPS Growth: 40.02%
• Country: US
• Employees: 6,500
• Sector: Technology
• Sector Strength: 84
• Industry: Software - Application
• EPS (TTM): 0.46
• Shares Outstanding: 319,498,050
• 10 Day Avg. Volume: 4,584,608
• 30 Day Avg. Volume: 4,200,459
• PEG Ratio: -3.34
• Price to Book (P/B): 16.44
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 65.58
• Enterprise Value/Market Cap: 0.52
• Enterprise Value/Revenue: 2.27
• Enterprise Value/Gross Profit: 10.43
• Enterprise Value/Ebitda: 42.56
• 1Y Price Target: $140.46
• Price Target Upside: 4.04% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 37

• Rating: 73 Outperform
• Price Target: $133.00 ▼(-1.49%Downside)

Datadog exhibits strong financial performance and a positive earnings outlook, driven by robust revenue growth and strategic acquisitions. However, the high P/E ratio signals overvaluation, and technical indicators suggest short-term caution due to overbought conditions. Despite these concerns, the company's long-term growth prospects remain positive.

Positive Factors

AI Integration

The announcement from the DASH user/partner event highlighted a portfolio-wide AI infusion and reinforced developer-centric messaging, indicating a strong competitive position and healthy usage growth.

Product Innovation

New product announcements at the DASH conference, including an expanding AI agents strategy and faster problem solving, have the potential to become significant revenue generators.

Revenue Growth

Datadog is experiencing healthy 20%+ revenue growth and strong release pace of new and differentiated products.

Negative Factors

Budget Constraints

Despite enthusiasm for new features, net-new budget availability constrains overall platform uptake during usage spikes, impacting the pace of net revenue retention expansion.

Economic Sensitivity

Usage-based models are sensitive to the vicissitudes of the economy, and the macro remains treacherous.

Price Competition

Concerns exist around limited traction in cyber-budget areas and price competition, particularly with mega AI-native customers optimizing their spending.

Datadog Business Overview & Revenue Model

Company Description

Datadog, Inc. (DDOG) is a leading monitoring and analytics platform for developers, IT operations teams, and business users in the cloud age. Headquartered in New York City, Datadog provides a comprehensive suite of tools designed to enable customers to monitor the performance of their infrastructure, applications, and logs in real-time. The platform is particularly popular among organizations leveraging cloud technologies, microservices, and other modern architectures, as it facilitates seamless observability and collaboration across teams.

How the Company Makes Money

Datadog generates revenue primarily through a subscription-based model where customers pay for access to its cloud-based monitoring and analytics platform. The company's key revenue streams include its Infrastructure Monitoring, Application Performance Monitoring (APM), Log Management, and other related services. Customers are typically billed based on the volume of data they send to Datadog's platform and the number of hosts monitored. Additionally, Datadog offers various tiers of service with different levels of features and support, allowing for scalable solutions for both small startups and large enterprises. Strategic partnerships with major cloud providers such as Amazon Web Services, Microsoft Azure, and Google Cloud Platform further enhance its market reach and customer base.

Datadog Financial Statement Overview

Summary

Datadog presents a strong financial profile with significant revenue growth, solid profitability metrics, and robust cash flow generation. The balance sheet indicates a stable financial position with manageable leverage. While the net profit margin presents an area for potential improvement, the company's overall financial health is sound, supported by strong operational performance and effective cash management.

Income Statement

Datadog demonstrates strong revenue growth with a TTM revenue of $2.83 billion, up from $2.12 billion in 2023, indicating a healthy growth trajectory. The gross profit margin is robust, reflecting efficient cost management. However, the net profit margin is moderate, suggesting room for improvement in profitability. The company's positive EBIT and EBITDA margins indicate operational efficiency. Overall, Datadog's income statement reflects a strong growth trajectory with potential for enhanced profitability.

Balance Sheet

Datadog's balance sheet is solid, with a debt-to-equity ratio well within industry norms, indicating manageable leverage. The equity ratio is healthy, underscoring financial stability. The return on equity is modest but improving, suggesting potential for increased shareholder returns. Overall, Datadog maintains a stable financial position with a balanced approach to debt and equity.

Cash Flow

Datadog shows strong cash flow generation capabilities with a TTM operating cash flow of $929 million, reflecting effective cash management. The free cash flow growth rate is healthy, indicating strong operational cash flow after capital expenditures. The operating cash flow to net income ratio is high, highlighting efficient cash conversion from net income. Overall, Datadog's cash flow statement reflects robust cash flow generation and prudent capital expenditure management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.83B	2.68B	2.13B	1.68B	1.03B	603.47M
Gross Profit	2.27B	2.17B	1.72B	1.33B	794.54M	473.27M
EBITDA	158.18M	317.99M	150.21M	41.10M	25.57M	34.11M
Net Income	165.76M	183.75M	48.57M	-50.16M	-20.75M	-24.55M
Balance Sheet
Total Assets	6.01B	5.79B	3.94B	3.00B	2.38B	1.89B
Cash, Cash Equivalents and Short-Term Investments	4.45B	4.19B	2.58B	1.88B	1.55B	1.52B
Total Debt	1.88B	1.84B	902.34M	837.52M	807.75M	643.62M
Total Liabilities	3.09B	3.07B	1.91B	1.59B	1.34B	932.85M
Stockholders Equity	2.92B	2.71B	2.03B	1.41B	1.04B	957.43M
Cash Flow
Free Cash Flow	893.53M	835.88M	597.55M	353.52M	250.52M	83.21M
Operating Cash Flow	929.87M	870.60M	659.95M	418.41M	286.55M	109.09M
Investing Cash Flow	-919.04M	-736.84M	-731.37M	-384.67M	-273.74M	-1.15B
Financing Cash Flow	786.54M	787.08M	58.28M	36.02M	34.94M	670.28M

Datadog Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 135.01
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DDOG, the sentiment is Positive. The current price of 135.01 is above the 20-day moving average (MA) of 126.31, above the 50-day MA of 116.64, and above the 200-day MA of 124.31, indicating a bullish trend. The MACD of 4.96 indicates Negative momentum. The RSI at 71.11 is Negative, neither overbought nor oversold. The STOCH value of 86.15 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DDOG.

Datadog Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DT	79 Outperform	$16.30B	34.10	20.86%	―	18.75%	208.06%
SNOW	78 Outperform	$72.06B	―	-40.16%	―	27.50%	-49.96%
BL	74 Outperform	$3.58B	26.46	44.83%	―	8.93%	102.77%
DDOG	73 Outperform	$45.70B	292.48	6.48%	―	25.54%	40.02%
U	68 Neutral	$9.98B	―	-14.15%	―	-16.74%	49.75%
GTLB	61 Neutral	$7.52B	452.76	2.53%	―	29.31%	―
Sector *	57 Neutral	$1.14B	27.19	-27.06%	10.36%	10.83%	-5.57%

Datadog Corporate Events

Datadog Stockholders Approve Key Proposals at Annual Meeting

During the Annual Meeting, Datadog‘s stockholders voted on four proposals. These included the election of Titi Cole, Matthew Jacobson, and Julie Richardson as Class III directors until 2028, approval of executive compensation on an advisory basis, ratification of Deloitte & Touche LLP as the independent public accounting firm for 2025, and the amendment of the company’s Certificate of Incorporation to allow officer exculpation under Delaware law.

The most recent analyst rating on (DDOG) stock is a Buy with a $175.00 price target. To see the full list of analyst forecasts on Datadog stock, see the DDOG Stock Forecast page.