Datadog ticks higher as KeyBanc upgrades following Q4 results
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Datadog (NASDAQ:DDOG) shares ticked higher on Friday after KeyBanc Capital upgraded the stock following fourth-quarter results and guidance that showed strong fundamentals.
Analyst Michael Turits raised his rating to overweight and put on a $210 price target, noting that the results reaffirmed his positive outlook for the monitoring industry, including "increased prioritization of cloud platform modernization."
"Even with Datadog at [more than] $1B revenue, we see opportunity for sustained high growth within an expanded [total addressable market], ongoing Observability share gains, and potential for greater than historical share leadership given Datadog's high pace of innovation across cloud and modern workload use cases," Turits wrote in a note to clients.
Datadog shares were up slightly more than 0.5% to $175.60 in mid-day trading on Friday.
On Thursday, Datadog (DDOG) reported an adjusted fourth-quarter profit of 20 cents a share on revenue of $326.2 million, while Wall Street analysts had forecast the company to earn 11 cents a share on $291.5 million in sales.
For its first quarter, Datadog (DDOG) expects to earn between 10 cents and 12 cents a share, excluding one-time items, on revenue in a range of $334 million to $339 million.
In addition, Turits noted that while Datadog's valuation compared to competitors like Dynatrace (NYSE:DT) and NewRelic (NYSE:NEWR) is considered "high," the analyst noted that there is "reduced risk" for high growth software stocks, considering the pullback in these names.
Last month, Datadog (DDOG) said it was seeing more gains from its expanded partnership with Amazon Web Services (NASDAQ:AMZN).