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

Datadog, Inc 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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