Datadog Stock Is Racing Higher. The Company’s Earnings and Revenue Crushed Estimates.
Datadog is a provider of monitoring and security software for cloud-based applications.
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Datadog stock surged Thursday after the security-software provider beat fourth-quarter earnings estimates and provided an upbeat outlook.
The company earned 20 cents a share in the fourth quarter from revenue of $326.2 million. Analysts surveyed by FactSet expected Datadog (ticker: DDOG) to report 11 cents a share, with revenue of $291.5 million. Revenue in the quarter grew was 84% higher than the year-earlier quarter.
Datadog had 2,010 customers at the end of December, up roughly 63% from 1,228 reported in the year-ago quarter.
The stock skyrocketed 14.5% to $178.00 in premarket trading Thursday.
RBC Capital Markets analyst Matthew Hedberg said the highlight of the earnings report was the 12% quarterly revenue beat.
“It’s the largest quarterly beat since Q3/19 and a record on an absolute basis,” he noted. “This compares to last quarter’s 9% beat and the 8% average beat over the previous four quarters.”
Hedberg has an Outperform rating on the stock and a $210 price target.
For the first quarter, Datadog expects revenue between $334 million and $339 million, beating analysts’ estimates of $306.4 million.
“We continue to believe we’re in early days with our opportunities in observability. And we are just starting our efforts in cloud security and developer-focused products,” said CEO Olivier Pomel.
For the full fiscal year 2022, the company expects revenue between $1.51 billion and $1.53 billion, above analysts’ consensus call of $1.40 billion.
Truist analyst Joel Fishbein noted that Datadog is benefiting from accelerated digital transformation efforts because of the pandemic and the proliferation of work-from-home and hybrid-work strategies. He has a Buy rating on the company with a $200 price target.
Write to Karishma Vanjani at [email protected]
