From Nasdaq: 2024-11-14 07:18:00

Datadog (DDOG) exceeded expectations with third-quarter results, reporting $690 million in revenue, a 26% YoY increase, and non-GAAP earnings of 46 cents, beating estimates by 4.15% and 17.95%, respectively. With 29,200 customers and $204 million in free cash flow, Datadog continues to expand its market presence profitably.

Datadog’s platform adoption is strong, with 83% of customers using two or more products, indicating platform stickiness and expansion opportunities. AI integration, including LLM observability products, is driving efficiency gains for customers, reducing investigation times significantly.

The company secured major wins in Q3, demonstrating its ability to serve diverse industries and global markets. Despite facing competition in the observability and monitoring market, Datadog’s differentiated platform and growing customer base position it well for future growth.

With a stretched valuation based on a P/S F12M ratio of 13.89, Datadog’s strong financial metrics and growth prospects justify investor expectations. The company’s recognition as a leader in the Gartner Magic Quadrant and focus on AI-native customers highlight its technological superiority and market leadership.

Datadog’s future outlook remains positive, with projected Q4 revenues of $709-$713 million and 2024 revenues between $2.656-$2.660 billion. With a Zacks Rank #2 (Buy) and A Growth Score, Datadog presents an attractive investment opportunity for those seeking exposure to the cloud computing and AI observability sectors.



Read more at Nasdaq: Datadog Soars on AI & Cloud Wins in Q3: Time to Buy the Stock?