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Datadog, Inc. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next
Datadog, Inc. (NASDAQ:DDOG) just released its quarterly report and things are looking bullish. The company beat forecasts, with revenue of US$1.2b, some 4.4% above estimates, and statutory earnings per share (EPS) coming in at US$0.32, 127% ahead of expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Datadog after the latest results.
Taking into account the latest results, the most recent consensus for Datadog from 39 analysts is for revenues of US$5.52b in 2027. If met, it would imply a substantial 29% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to expand 18% to US$0.86. In the lead-up to this report, the analysts had been modelling revenues of US$5.49b and earnings per share (EPS) of US$0.79 in 2027. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
See our latest analysis for Datadog
The average the analysts price target fell 7.9% to US$272, suggesting thatthe analysts have other concerns, and the improved earnings per share outlook was not enough to allay them. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Datadog analyst has a price target of US$350 per share, while the most pessimistic values it at US$158. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The period to the end of 2027 brings more of the same, according to the analysts, with revenue forecast to display 23% growth on an annualised basis. That is in line with its 26% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 17% per year. So it's pretty clear that Datadog is forecast to grow substantially faster than its industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Datadog following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
With that in mind, we wouldn't be too quick to come to a conclusion on Datadog. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Datadog going out to 2028, and you can see them free on our platform here..
Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Datadog that you should be aware of.
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