DDOG
Datadog, Inc.$111.96
Sell
Target $75.69
Report: Mar 07, 2026Technology • Software - Application • Early-Stage HypergrowthSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$111.96-32.4%
Rec: SellConviction: High
Entry Target
N/A
N/A
Fair Value
$75.69
(32% below current)
Stop Loss
N/A
N/A
Position Size
None
Time Horizon
N/A
Key Metrics
Live Snapshot
Market Data
52 Week High$201.69
52 Week Low$81.63
Avg. 3 Month Volume5.77M
Efficiency
LTM Gross Margin80.0%
LTM EBITDA Margin6.7%
LTM EBIT Margin4.0%
LTM Operating Margin-1.3%
LTM ROA1.8%
LTM ROE3.2%
LTM ROIC2.8%
LTM ROCE3.1%
Capital Structure
Market Cap (MM)$41.6B
Enterprise Value (MM)$42.5B
Shares Outstanding351.20M
Total Debt (MM)$1.28B
Cash & Equivalents (MM)$401.31M
LTM Net Debt (MM)$877.70M
LTM Net Debt/EBITDA3.8x
Growth
TTM Rev. Growth27.7%
Last 3-Yr Rev. CAGR26.9%
Last 3-Yr EBITDA CAGR88.0%
Last 3-Yr EPS CAGRN/A
Valuation
Street Target Price$174.50
LTM EV/Revenue12.4x
LTM EV/Gross Profit15.5x
LTM EV/EBIT307.8x
LTM EV/EBITDA185.4x
LTM P/E386.3x
LTM EV/FCF46.5x
LTM P/FCF45.5x
LTM P/TB6.8x
LTM P/B11.2x
Dividend Yield0.0%
Payout Ratio0.0%
Executive SummarySituation: Current price is $111.96 versus fair value $75.69 (-32.4% expected return), and valuation confidence is stable. Debate: Bull case depends on FY 2026 Revenue Guidance Realization: If quarterly results confirm the 18-20% growth range, the 'Hypergrowth' premium will evaporate. Bear case centers on AI-Native Hyper-Acceleration: If the AI cohort (currently 11% of ARR) grows significantly faster than expected, it could re-accelerate total revenue growth. Conclusion: Recommendation is Sell with no position, pending a materially better risk/reward setup.
Bull Case
AI-native workloads are a massive tailwind, with 14 of the top 20 AI companies already using the platform. High product adoption (84% of customers use 2+ products) creates significant switching costs and a durable recurring revenue stream.
Bear Case
Revenue growth is structurally decelerating toward 18% while operating margins have turned negative (-1.3%). Insiders have sold $640M of stock in 12 months with zero purchases, signaling a peak in valuation.
Key Catalysts
Near-Term (0-6 months)Impact: High
FY 2026 Revenue Guidance Realization: If quarterly results confirm the 18-20% growth range, the 'Hypergrowth' premium will evaporate.
Near-Term (0-6 months)Impact: Moderate
Continued Insider Selling: Further Form 4 filings showing founder sales will reinforce the 'exit' narrative.
Long-Term (18+ months)Impact: Moderate
Datadog is at a critical juncture where its valuation (11.8x EV/Sales) is decoupled from its decelerating growth profile (18-20% guide), mak...
Primary Risks
Concern: Medium
AI-Native Hyper-Acceleration: If the AI cohort (currently 11% of ARR) grows significantly faster than expected, it could re-accelerate total...
Concern: Low
Short Squeeze: With only 2.7% short interest, a sudden positive catalyst could trigger a rapid price increase.
Concern: Medium
The stewardship verdict is 'Weak' due to the extreme misalignment between management's public narrative and their private actions. The Gover...
Recent Activity
2026-02-10SEC Filing (8-K)
+13.74%Datadog reports Q4 2025 revenue of $953M, up 29% YoY, with 603 customers at $1M+ ARR
2026-01-29Analyst Target
-8.81%Firm: BMO Capital Analyst: Keith Bachman Price Target: $170.00 Price When Posted: $130.37 Implied Upside: +30.4%
2026-01-22Analyst Target
+6.31%Firm: Stifel Nicolaus Analyst: Brad Reback Price Target: $160.00 Price When Posted: $123.46 Implied Upside: +29.6%
2026-01-21Analyst Target
+5.52%Firm: Cowen & Co. Price Target: $200.00 Price When Posted: $124.81 Implied Upside: +60.2%
2025-11-06SEC Filing (SC 13G)
+23.13%FMR LLC and Abigail P. Johnson reported 5.1% ownership of Datadog Class A common stock.
Valuation Table
9.3/10Decision Grade
Scenario Range
$50
Bear
$82
Bull
$112