Datadog (NASDAQ:DDOG) Shares Gap Down After Analyst Downgrade

Key Points

• Datadog shares fell sharply, opening at $199.74 versus the prior close of $220.52, after BTIG Research cut its price target from $289 to $260; BTIG maintained a Buy rating.
• Analyst sentiment overall remains positive: the consensus rating is “Moderate Buy,” with an average price target of $287.35.
• Datadog beat third-quarter estimates, with revenue up 35.2% year over year to $1.20 billion and adjusted EPS of $0.81. However, its roughly flat sequential fourth-quarter revenue outlook raised concerns about a possible growth slowdown.

Datadog, Inc. (NASDAQ:DDOG - Get Free Report) shares gapped down before the market opened on Wednesday after BTIG Research lowered their price target on the stock from $289.00 to $260.00. The stock had previously closed at $220.52, but opened at $199.74. BTIG Research currently has a buy rating on the stock. Datadog shares last traded at $197.1460, with a volume of 3,335,455 shares.

A number of other research analysts have also commented on DDOG. Oppenheimer boosted their price target on shares of Datadog from $300.00 to $330.00 and gave the company an "outperform" rating in a research report on Monday, October 26th. FBN Securities assumed coverage on Datadog in a research note on Friday, October 2nd. They set an "outperform" rating and a $325.00 price objective for the company. Wedbush initiated coverage on Datadog in a research report on Friday, September 11th. They set an "outperform" rating and a $275.00 target price for the company. Raymond James Financial restated an "outperform" rating and set a $280.00 target price on shares of Datadog in a research report on Thursday, August 6th. Finally, Morgan Stanley upped their target price on Datadog from $225.00 to $300.00 and gave the stock an "overweight" rating in a research note on Tuesday, July 28th. Three equities research analysts have rated the stock with a Strong Buy rating, forty have given a Buy rating, three have issued a Hold rating and one has given a Sell rating to the company. According to MarketBeat.com, Datadog has a consensus rating of "Moderate Buy" and an average price target of $287.35.

Insider Activity

In related news, CTO Alexis Le-Quoc sold 53,912 shares of Datadog stock in a transaction on Monday, August 10th. The shares were sold at an average price of $253.36, for a total value of $13,659,144.32. Following the transaction, the chief technology officer directly owned 509,805 shares of the company's stock, valued at $129,164,194.80. The trade was a 9.56% decrease in their ownership of the stock. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Matthew Jacobson sold 39,912 shares of the stock in a transaction that occurred on Thursday, August 13th. The stock was sold at an average price of $250.55, for a total value of $9,999,951.60. Following the completion of the sale, the director owned 544,220 shares of the company's stock, valued at approximately $136,354,321. This trade represents a 6.83% decrease in their position. The SEC filing for this sale provides additional information. Insiders have sold a total of 765,293 shares of company stock worth $180,233,548 over the last ninety days. Company insiders own 6.48% of the company's stock.

Datadog News Summary

Here are the key news stories impacting Datadog this week:

• Positive Sentiment: Q3 revenue rose 35.2% year over year to $1.20 billion, beating the $1.15 billion consensus, while adjusted EPS of $0.81 topped estimates of $0.64. Datadog also reported stronger operational results and raised its guidance. Datadog Announces Third Quarter 2026 Financial Results
• Positive Sentiment: Customer expansion was notable: Datadog had about 4,860 customers generating at least $100,000 in annual recurring revenue, up from roughly 4,060 a year earlier. The company also launched Scout 1.0, its first specialized model, for its Bits Investigation product. Datadog Announces Third Quarter 2026 Financial Results
• Negative Sentiment: The main concern is the fourth-quarter outlook: revenue is expected to be around $1.20 billion, roughly flat with Q3. Investors may see this as a slowdown after 35% annual growth, making the outlook disappointing relative to elevated expectations despite the quarterly beat. Datadog Guides Q4 Sales Flat After 35% Growth

Institutional Investors Weigh In On Datadog

Several institutional investors and hedge funds have recently made changes to their positions in the company. Integrated Wealth Concepts LLC lifted its stake in shares of Datadog by 1,691.4% in the 2nd quarter. Integrated Wealth Concepts LLC now owns 186,216 shares of the company's stock worth $48,483,000 after purchasing an additional 175,821 shares during the period. Congress Asset Management Co. lifted its position in shares of Datadog by 3.0% in the third quarter. Congress Asset Management Co. now owns 268,825 shares of the company's stock valued at $71,350,000 after acquiring an additional 7,802 shares in the last quarter. MassMutual Private Wealth & Trust FSB grew its holdings in Datadog by 7,711.3% during the 3rd quarter. MassMutual Private Wealth & Trust FSB now owns 94,048 shares of the company's stock valued at $25,755,000 after buying an additional 92,844 shares in the last quarter. Cooper Financial Group grew its stake in Datadog by 188.1% during the third quarter. Cooper Financial Group now owns 20,934 shares of the company's stock valued at $5,733,000 after acquiring an additional 13,669 shares in the last quarter. Finally, Saudi Central Bank boosted its stake in Datadog by 91.6% during the second quarter. Saudi Central Bank now owns 21,867 shares of the company's stock valued at $5,693,000 after buying an additional 10,455 shares during the last quarter. Institutional investors own 78.29% of the company's stock.

Datadog Price Performance

The company has a debt-to-equity ratio of 0.23, a current ratio of 3.20 and a quick ratio of 3.20. The firm's 50-day moving average is $250.77 and its two-hundred day moving average is $199.09. The company has a market cap of $67.62 billion, a P/E ratio of 384.30, a PEG ratio of 21.09 and a beta of 1.50.

Datadog (NASDAQ:DDOG - Get Free Report) last posted its quarterly earnings data on Wednesday, November 4th. The company reported $0.81 earnings per share for the quarter, beating analysts' consensus estimates of $0.64 by $0.17. Datadog had a net margin of 4.48% and a return on equity of 5.67%. The business had revenue of $1.20 billion for the quarter, compared to analysts' expectations of $1.15 billion. During the same quarter in the previous year, the business posted $0.55 earnings per share. The business's revenue was up 35.2% compared to the same quarter last year. Analysts anticipate that Datadog, Inc. will post 0.70 earnings per share for the current year.

About Datadog

Datadog, Inc is a technology company that provides a cloud-based monitoring and security platform for applications, infrastructure and other technology environments. Its platform helps organizations collect, analyze and visualize data from servers, databases, containers, cloud services, applications and user interactions in a unified environment.

Datadog's products include infrastructure monitoring, application performance monitoring, log management, real user monitoring, synthetic monitoring, network performance monitoring, cloud security, software delivery tools and incident-management capabilities.

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