Datadog (NASDAQ:DDOG) Shares Gap Up - Here's Why

Key Points

• Datadog shares gapped higher, opening at $220 versus a prior close of $209.23, although they later traded near $214. The move came after quarterly results exceeded expectations, with revenue up 35.6% year over year to $1.12 billion and EPS of $0.65 versus a $0.58 estimate.
• Analysts maintain a generally positive outlook, with a consensus “Moderate Buy” rating and a $276.32 target price. Recent targets range from $280 to $305, though Goldman Sachs reiterated a sell rating with a $158 target.
• Company insiders have been selling shares: the CEO and CTO sold a combined roughly $21 million under pre-arranged Rule 10b5-1 plans, while insiders sold $283 million worth of stock over the past 90 days.

Datadog, Inc. (NASDAQ:DDOG - Get Free Report)'s stock price gapped up before the market opened on Thursday . The stock had previously closed at $209.23, but opened at $220.00. Datadog shares last traded at $214.0450, with a volume of 892,000 shares trading hands.

Wall Street Analysts Forecast Growth

A number of equities analysts have weighed in on the company. The Goldman Sachs Group restated a "sell" rating and issued a $158.00 target price on shares of Datadog in a research note on Friday, August 7th. UBS Group dropped their price target on Datadog from $315.00 to $280.00 and set a "buy" rating for the company in a research report on Friday, August 7th. Needham & Company LLC lifted their price target on Datadog from $260.00 to $300.00 and gave the company a "buy" rating in a research report on Friday, August 7th. Citigroup boosted their price objective on Datadog from $300.00 to $305.00 and gave the stock a "buy" rating in a report on Friday, August 7th. Finally, Robert W. Baird set a $300.00 price objective on shares of Datadog in a research report on Friday, August 7th. One analyst has rated the stock with a Strong Buy rating, thirty-eight have assigned a Buy rating, five have given a Hold rating and one has assigned a Sell rating to the company's stock. Based on data from MarketBeat.com, Datadog currently has a consensus rating of "Moderate Buy" and a consensus target price of $276.32.

Datadog Stock Performance

The company has a market cap of $77.18 billion, a P/E ratio of 437.83, a price-to-earnings-growth ratio of 21.92 and a beta of 1.49. The company's fifty day moving average is $250.31 and its 200 day moving average is $192.51. The company has a current ratio of 3.20, a quick ratio of 3.20 and a debt-to-equity ratio of 0.23.

Datadog (NASDAQ:DDOG - Get Free Report) last posted its quarterly earnings results on Thursday, August 6th. The company reported $0.65 earnings per share for the quarter, topping the consensus estimate of $0.58 by $0.07. Datadog had a net margin of 4.48% and a return on equity of 5.67%. The business had revenue of $1.12 billion during the quarter, compared to the consensus estimate of $1.08 billion. During the same period in the previous year, the firm posted $0.46 earnings per share. The firm's revenue for the quarter was up 35.6% on a year-over-year basis. Datadog has set its Q3 2026 guidance at 0.630-0.650 EPS and its FY 2026 guidance at 2.500-2.540 EPS. As a group, equities analysts predict that Datadog, Inc. will post 0.7 earnings per share for the current fiscal year.

Insider Buying and Selling

In other Datadog news, CTO Alexis Le-Quoc sold 43,224 shares of the business's stock in a transaction that occurred on Monday, August 24th. The stock was sold at an average price of $228.63, for a total value of $9,882,303.12. Following the completion of the sale, the chief technology officer owned 509,805 shares in the company, valued at approximately $116,556,717.15. The trade was a 7.82% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Olivier Pomel sold 47,054 shares of the company's stock in a transaction on Wednesday, August 19th. The shares were sold at an average price of $235.49, for a total transaction of $11,080,746.46. Following the sale, the chief executive officer owned 612,747 shares of the company's stock, valued at $144,295,791.03. This represents a 7.13% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold a total of 1,152,255 shares of company stock worth $283,013,115 in the last 90 days. 6.48% of the stock is currently owned by company insiders.

Institutional Inflows and Outflows

Hedge funds and other institutional investors have recently made changes to their positions in the company. Nomura Asset Management Co. Ltd. raised its position in shares of Datadog by 8.0% in the 4th quarter. Nomura Asset Management Co. Ltd. now owns 152,674 shares of the company's stock worth $20,762,000 after purchasing an additional 11,348 shares during the last quarter. Norges Bank bought a new position in Datadog in the 4th quarter worth about $469,461,000. MUFG Securities EMEA plc grew its position in Datadog by 115.6% during the 4th quarter. MUFG Securities EMEA plc now owns 13,342 shares of the company's stock valued at $1,814,000 after purchasing an additional 7,154 shares during the last quarter. BNP Paribas grew its position in Datadog by 18.4% during the 4th quarter. BNP Paribas now owns 41,280 shares of the company's stock valued at $5,614,000 after purchasing an additional 6,403 shares during the last quarter. Finally, Crossmark Global Holdings Inc. increased its stake in Datadog by 90.1% during the 4th quarter. Crossmark Global Holdings Inc. now owns 9,967 shares of the company's stock valued at $1,355,000 after purchasing an additional 4,723 shares in the last quarter. Hedge funds and other institutional investors own 78.29% of the company's stock.

About Datadog

Datadog NASDAQ: DDOG is a cloud-based monitoring and observability platform that helps organizations monitor, troubleshoot and secure their applications and infrastructure at scale. Its software-as-a-service offering collects and analyzes metrics, traces and logs from servers, containers, cloud services and applications to provide real-time visibility into system performance and health. Datadog's platform is widely used by engineering, operations and security teams to reduce downtime, accelerate incident response and improve application reliability.

The company's product suite includes infrastructure monitoring, application performance monitoring (APM), log management, real user monitoring (RUM), synthetic monitoring and network performance monitoring, along with security-focused products such as security monitoring and cloud SIEM.

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