Analyst Mike Cikos of Needham maintained a Buy rating on Datadog (DDOG – Research Report), with a price target of $160.00.
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Mike Cikos has given his Buy rating due to a combination of factors that highlight Datadog’s strong performance and potential for future growth. The company reported an impressive quarterly performance, with key metrics such as Annual Recurring Revenue surpassing $3 billion and a substantial year-over-year increase in Remaining Performance Obligations. Additionally, Datadog achieved its first-ever quarter with bookings exceeding $1 billion, showcasing robust demand for its services.
Despite these achievements, Cikos acknowledges some challenges as the company moves into the next fiscal year. These include a projected revenue growth rate of 18%-19% and a potential operating margin compression of approximately 400-450 basis points. While these factors pose some concerns, Cikos remains optimistic about Datadog’s future, noting the potential for improvement in Net Revenue Retention to the “High-110%s” and the ongoing developments in its partnership with OpenAI. Overall, the combination of strong current performance and strategic opportunities justifies the Buy rating, even if the stock may face near-term fluctuations.
According to TipRanks, Cikos is a 5-star analyst with an average return of 15.3% and a 61.66% success rate. Cikos covers the Technology sector, focusing on stocks such as Okta, Tenable Holdings, and Dynatrace.
In another report released today, Monness also maintained a Buy rating on the stock with a $160.00 price target.