Datadog Likely to Deliver Another Beat-and-Raise Quarter, Wedbush Says

MT Newswires Live11-02 23:54

Datadog's (DDOG) Q3 results will likely show the company delivering another beat-and-raise quarter as it keeps capitalizing on the opportunities for artificial intelligence and non-AI clients, Wedbush said in a note Monday.

The company is scheduled to report its Q3 results on Wednesday.

Usage in Datadog's platform has likely accelerated and may push its revenue above the consensus estimate for revenue of about $1.14 billion, which is a "hittable bar," the note said.

The consensus estimate is about $5 million above the top end of Datadog's outlook, but the company has beaten on the top-line by an average of $40 million to $45 million this year as management framed "guidance conservatively given large customer usage reduction," the investment firm said.

Wedbush said that the company's Q3 results will likely show that "large customers continue to expand usage across more modules within [Datadog's] observability suite."

The investment firm said that Datadog's shares dropped about 12% on Friday amid the wider tech sector sell-off, but the pullback, which was not linked to company-specific news, established a favorable risk/reward proposition for the company into the results.

Wedbush maintained Datadog's outperform rating and $275 per share price target.

Price: 222.95, Change: -12.32, Percent Change: -5.24

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