Datadog Shares Jump 13% on Q4 Beat; Cramer Flags 50x Valuation
Datadog posted Q4 adjusted EPS of $0.59 beating $0.55 forecasts, revenue up 29% year-over-year to $953 million, and guided Q1 revenue of $951 million–$961 million versus $935 million estimates, sending shares up 13%. Despite strong results, Jim Cramer warned the stock remains expensive at nearly 50 times earnings after its 50% pullback.
1. Q4 Financial Beat
Datadog delivered adjusted EPS of $0.59 in Q4, surpassing consensus of $0.55, while revenue rose 29% year over year to $953 million, topping the $917 million estimate and triggering a 13% premarket share rally.
2. Customer Growth Trends
The number of customers generating over $1 million in annual recurring revenue climbed 31% year over year to 603, underscoring continued enterprise adoption and strengthening the observability platform’s recurring revenue base.
3. Forward Guidance Details
For Q1, Datadog expects revenue between $951 million and $961 million versus $935 million consensus, but projected EPS of $0.49–$0.51 falls short of the $0.54 estimate; full-year revenue guidance of $4.06 billion–$4.10 billion slightly misses the $4.11 billion forecast.
4. Valuation Concerns
Despite the earnings beat, Jim Cramer cautioned that shares still trade near 50 times earnings even after a nearly 50% pullback, labeling Datadog too expensive compared with other enterprise software peers.