Datadog Upgraded To Buy: Analyst Highlights Positive Customer Feedback And Growth Prospect

Stifel analyst Brad R. Reback upgraded Datadog Inc DDOG to Buy from Hold with an increased price target of $140.00 from $98.00. 

As per the survey by the analyst, installed-base optimization showed a marked decline (~38% vs. 50%) from thier prior two surveys.

Around half of the customers who are still optimizing indicated they were close to completing their optimizations (an improvement from 8% in last survey), writes the analyst.

Related: Datadog's Q3 Earnings Ripper, Stock Soars On Strong Guidance

Consequently, the analyst says this aligns with current consumption commentary and bodes well for 2024 growth.

Going forward, the analyst says the customers primarily continue to highlight solid price to value and expect to increase their respective spend ~12% next year vs. high-single digits in CY23 as respondents expect their Cloud estates to resume more robust growth.

Given current consumption trends and a stable macro backdrop, Reback expects DDOG to post CY24 revenue growth of ~25% but expects guidance to start at ~20%.

Also Read: Datadog's Q3 Earnings Success Sparks Analyst Optimism, Hints At Bullish Tech Market Recovery

Price Action: DDOG shares are trading higher by 0.52% at $114.91 on the last check Thursday.