Brokerages Lift Datadog Price Targets to $220 after Q3 Beat, Guides FY25
Datadog secured a consensus “Moderate Buy” from 38 brokerages with an average 12-month price target of $207.78, including Jefferies’ boost to $220 and Morgan Stanley’s to $180. In Q3, Datadog reported revenue of $885.65 million (+28.4% YoY) and EPS of $0.55, beating estimates, and guided FY25 EPS at $2.00-2.02.
1. Brokerages Assign Moderate Buy and Bullish Price Targets
Thirty-eight brokerages currently cover Datadog, assigning a consensus recommendation of “Moderate Buy.” Of those, thirty-two recommend buying the shares, five recommend holding and one recommends selling. The average 12-month price objective among analysts stands at $207.78, implying more than 60% upside from current levels. Jefferies recently raised its target to $220 and reiterated a buy rating, while Wall Street Zen upgraded to buy after previously rating the shares a hold.
2. Q3 Results Exceed Estimates and Guidance Raised
In its latest quarterly report, Datadog delivered revenue of $885.7 million, a 28.4% increase year-over-year and beating the consensus estimate of $852.8 million. Adjusted earnings per share of $0.55 surpassed the consensus forecast by $0.10. Gross margin held at an industry-leading 80.1%, while net margin improved to 3.3%. The company raised its full-year guidance to between $2.00 and $2.02 per share and set Q4 earnings guidance of $0.54 to $0.56 per share, reflecting confidence in continued multi-product adoption and customer retention above 120%.
3. Insiders Reduce Holdings
Chief Executive Officer Olivier Pomel sold approximately 100,754 shares at an average price in the high-$180s range, reducing his stake by 15.9% and realizing proceeds in excess of $18 million. Chief Technology Officer Alexis Le-Quoc also sold 53,912 shares at an average price near $198, trimming his ownership by 12% and generating proceeds of more than $10 million. Over the last three months, insiders have sold a total of 1.17 million shares valued at over $210 million, leaving company executives with 8.7% of the outstanding shares.
4. Institutional Investors Maintain Large Stakes
Institutional and hedge fund ownership stands at 78.3%, underscoring confidence in Datadog’s observability platform as a critical infrastructure layer for AI-driven applications. Notable increases in the third quarter include Elevation Point Wealth Partners adding 3.3% to its position, V Square Quantitative Management boosting its stake by 13.8%, and Westside Investment Management raising its holdings by 74.3%. These shifts signal growing conviction from professional investors in Datadog’s long-term growth trajectory.