Datadog’s Q2 Beat & Conservative Forecast Earns It Price Target Cuts From Analysts

Datadog, Inc (NASDAQ:DDOG) clocked second-quarter FY22 revenue growth of 74% year-on-year to $406.1 million, beating the consensus. Non-GAAP EPS of $0.24…
  • Datadog, Inc (NASDAQ:DDOG) clocked second-quarter FY22 revenue growth of 74% year-on-year to $406.1 million, beating the consensus. Non-GAAP EPS of $0.24 beat the consensus.
  • DDOG reported revenue growth that significantly beat Mizuho’s estimate and the Street consensus.
  • However, analyst Gregg Moskowitz highlighted the company citing a slowdown in usage growth among some larger customers, particularly in the consumer discretionary.
  • Moreover, total billings and RPO were disappointing, he noted.
  • Despite Datadog’s choppy quarter, analyst Gregg Moskowitz emphasized the relative importance of revenue/ARR and is hopeful DDOG’s strong value proposition in monitoring cloud environments will enable it to navigate a more challenging economic environment much better than most. 
  • He reiterated a Buy rating and cut his price target to $130 from $150, given more significant uncertainty and a more minor than typical upward revision. 
  • RBC Capital analyst Matthew Hedberg maintained an Outperform and boosted the price target from $115 to $125, betting on its revenue beat and profitability upside.
  • Barclays analyst Raimo Lenschow maintained an Overweight rating reflecting his bullishness but reduced the price target to $130 from $150 to account for lower multiples in software.
  • He noted that investors would take time to digest the 2H outlook reflecting increased conservatism.
  • KeyBanc analyst Michael Turits reiterated an Overweight and cut the price target to $127 from $132 following the Q2 beat and roughly in line guidance.
  • Price Action: DDOG shares traded higher by 3.07% at $113.88 on the last check Friday.
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