Datadog Analyst Long On Stock Ahead Of Q4 Print, But Retail’s Divided

Macquarie analyst Steve Koenig said the company's strong third-quarter performance enabled it to enter the fourth quarter with plenty of headroom to post a typical $17 million+ revenue beat.

Datadog, Inc. (DDOG) stock rose in early afternoon trading on Wednesday as investors position for the company’s fiscal year 2024 fourth-quarter results due before the market opens on Thursday.

Wall Street analysts expect the New York-based cloud applications monitoring and security platform to report fourth-quarter adjusted earnings per share (EPS) of $0.43 and revenue of $714.53 million. This compares to the year ago’s $0.44 and $589.65 million, respectively.

The guidance announced in early November modeled adjusted EPS of $0.46 and revenue of $690 million.

Ahead of the fourth-quarter print, Macquarie analyst Steve Koenig said he would prefer to be long into Datadog’s quarterly results and would continue to accumulate the stock.

The analyst said, “We're sanguine about prospects for a healthy beat and satisfactory guide.” He added that the company's strong third-quarter performance enabled it to enter the fourth quarter with plenty of headroom to post a typical $17 million+ revenue beat.

Koenig said he looks forward to commentary about existing customer usage trends even as he expects this primary driver of near-term revenue performance to be consistent with 2024.

He noted that year-to-date (YTD) trends showed strength in enterprise and small and mid-size business segments.

Koenig expects the company to guide the first quarter revenue above the consensus estimate and the full-year revenue surrounding the consensus estimate. The company could get more constructive with its EPS guidance due to anticipated strong revenue performance and a low bar for operating margin embedded in consensus estimates, he added

Macquarie has an ‘Outperform’ rating and $200 price target for Datadog stock.

On Stocktwits, sentiment toward the stock remained ‘neutral’ (48/100) although the message volume remained at ‘high’ levels.

A watcher said he is bullish, attributing his outlook toward the stock to solid fundamentals.

But another user dismissed the stock as pricey.

The forward price-earnings (P/E) multiple is at 70.42, according to Yahoo Finance data.

Datadog stock was up 0.89% at $146.71 in early trading. It is up nearly 2% so far this year.

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