Datadog Poised To Exceed Expectations Over Long-Term, Says Piper Sandler Analyst

Piper Sandler analyst Rob D. Owens upgraded Datadog Inc DDOG to Overweight from Neutral rating at an increased price target of $115 from $88.

The analyst sees signs of stabilizing infrastructure and DevOps software demand along with incremental opportunities related to security and AI, which is expected to benefit DDOG in the coming years.

Notably, the analyst is pleased with the company's acceleration in security products (>5K cloud security customers, 79 $100K+ security customers) and believes in the company's capacity to exceed expectations over the long term.

Moreover, Owens believes that the company's lowered FY23 guidance (during the Q2 earnings call) and modest improvement in July offer upside opportunity in the future.

Related: Datadog Stock Plunges After Sharing Weak FY23 Outlook - What's Going On?

The analyst estimates revenue and EPS of $2,060.0 million and $1.34 for FY23 and $2,574.2 million and $1.72 for FY24. 

Also Read: Analysts Shift Datadog's Outlook After Q2 Print, See Resilience Amid Cloud Trends and Growth Concerns

Price Action: DDOG shares are trading higher by 0.35% at $91.41 on the last check Monday.