Datadog Is A Top Observability Player Leveraging Its Scale, Analysts Hail Company After 5th Dash Conference

Datadog, Inc DDOG held its 5th Dash Conference over two days in New York, unveiling over a dozen new products and features.

Needham analyst Mike Cikos reiterated a Buy on Datadog and a $135 price target. The theme and tone of the conference were consistent with Datadog's message of removing silos, improving cross-team collaboration, and driving incredible speed and agility. 

Cikos continued to see Datadog as a leading Observability player using its scale to invest in R&D for sustainable competitive advantages strategically.

Mizuho analyst Gregg Moskowitz reiterated a Buy and $108 price target. DDOG unveiled several innovations, including a few new products, with a skew toward DevOps and security. 

The investor session was informative, albeit product-focused, with the company in its quiet period (reporting 3Q results on November 3). 

More broadly, Moskowitz maintained his view that DDOG enabled customers to benefit from some of the most compelling trends in software, namely, cloud, DevOps, and analytics. 

Canaccord analyst Kingsley Crane upgraded to Buy from Hold with a price target of $110, down from $120. Crane came from the company's "even more positive" user conference on its near-term consumption momentum. 

Crane sees "room to get tactical" in the shares given Datadog's "deepening product moat."

RBC Capital analyst Matthew Hedberg reiterated an Outperform and $105 price target. The management highlighted several product announcements, focusing on bridging the gap between DevOps and Security (DevSecOps). 

The near-term macro dynamics remained in focus and not addressed. Hedberg believed the company remained tethered to strong long-term secular tailwinds of digital transformation, cloud migration, and continuous innovation, which should help drive consistent growth and margin improvement. 

Rosenblatt analyst Blair Abernethy reiterated a Buy and $120 price target, down from $137. The company made several new product announcements at Dash and reviewed its key business drivers and platform strategy. 

However, it did not offer any financial updates. Abernethy expected another strong performance by Datadog this quarter, with revenues in line with or marginally above his 52% y-o-y growth expectations. 

Recent end-market data points indicated that the rapid adoption of cloud services and enterprise Digital Transformation projects continue to drive strong demand for next-generation monitoring tools. 

With this note, Abernethy previewed his Q3 estimates (unchanged), trimmed his target price on a higher discount rate and lower comparable multiples, and remained a Buy on Datadog at current levels.

Price Action: DDOG shares traded higher by 3.84% at $82.03 on the last check Thursday.