Shares of Datadog (DDOG) gained in trading after reporting strong results for the third quarter. The provider of observability and security platforms for cloud applications reported adjusted earnings that increased by 27.7% year-over-year to $0.46 per share, exceeding consensus estimates of $0.40 per share.
Additionally, the company’s revenues grew by 26% year-over-year to $690 million in the third quarter, surpassing Street estimates of $665 million. Furthermore, at the end of the third quarter, Datadog had 3,490 customers with an annualized revenue run-rate (ARR) of $100,000 or more, marking a 12% year-over-year increase. The company defines ARR as the annualized revenue run-rate from “subscription agreements with all customers at a point in time.”
DDOG Issues Guidance
Looking ahead, the company expects Q4 revenues to range between $709 million and $713 million, with adjusted earnings likely to be between $0.42 and $0.44 per share. Analysts had expected earnings of $0.40 per share on revenues of $710.4 million. For FY24, DDOG has forecasted adjusted earnings of $1.75 to $1.77 per share on revenues between $2.65 billion and $2.66 billion. Analysts had expected earnings of $1.66 per share on revenues of $2.63 billion.
Is DDOG a Good Stock to Buy?
Analysts remain bullish about DDOG stock, with a Strong Buy consensus rating based on 25 Buys and three Holds. Over the past year, DDOG has increased by more than 20%, and the average DDOG price target of $147.04 implies an upside potential of 14.6% from current levels. These analyst ratings are likely to change following DDOG’s results today.
