Datadog stock down 4.9% as Stifel downgrades rating to hold, faces potential downside risk

From Nasdaq, Inc.: 2025-01-29 14:40:44

Datadog (NASDAQ: DDOG) stock is down 4.9% in Wednesday’s trading, with Stifel downgrading its rating on the company from buy to hold. Revenue for Datadog climbed 26% year over year to $690 million in the third quarter. The company is set to report fourth-quarter earnings on Feb. 13, with sales expected between $709 million and $713 million. Datadog faces potential downside risk in the near term, as analysts believe the business may struggle to meet expectations set by previous reports. The stock is trading at 73 times expected annual earnings and 15 times expected sales, making it highly growth-dependent.

In the investing world, Datadog could be a lucrative opportunity with AI-related demand tailwinds for its cloud monitoring and security platform. The company’s stock price is at a highly growth-dependent valuation, with shares priced at roughly 73 times expected annual earnings and 15 times expected sales. Stifel analysts are concerned that Datadog may not meet expectations set by its Q3 performance, leading to potential downside risk in future quarterly reports. The company is set to release its Q4 earnings on Feb. 13, with sales expected to grow by 20.5% year over year. Wall Street may be looking for Datadog to exceed this guidance range.



Read more at Nasdaq, Inc.: Why Datadog Stock Is Sinking Today