One-glance verdict
Overvalued
$147.16 our estimate vs market $212.93
Wall Street consensus: $285.18 (93.8% higher than our fair-value estimate)
45% above our estimate, beyond the bull case
Fundamentals snapshot
Datadog, Inc.
DDOG · NMS · Technology · Software - Application
Current price
$212.93
52-week range
$98.01 - $292.72
Market cap
$76.46B
Balance sheet
Healthy
-4.01x Concerning
Net cash $3.71B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
1 Risk
3 rewards · 1 risks
- Reward Revenue grew 15.7% last year.
- Reward Returns 4.7% on equity, ahead of 50% of its peers.
- Reward Free cash flow was positive in 9/10 years.
- Risk Insider ownership is only 0.6% (peer median: 1.5%).
What this company does
Datadog, Inc.
Datadog provides a monitoring service that helps companies watch over the health and security of their online technology, such as websites and mobile apps. The company makes its money by selling subscriptions to this service, which is important because businesses can lose customers and money if their digital operations crash or get hacked.
How the company got here
Datadog was started in 2010 by two founders who, from their own work experience, saw the need to reduce friction between software developers and the teams that manage the systems the software runs on. They created a platform to help companies monitor their technology infrastructure as more businesses began moving their operations to the cloud (using remote servers hosted on the internet to store and manage data, rather than a local server). The company grew quickly as cloud use became more common, and it expanded its services to include monitoring application performance and managing log data. Datadog had its initial public offering (IPO), where a private company first sells shares of stock to the public, in 2019, which provided the capital to further scale its product development.
What it actually does
Datadog provides a software platform that acts like a control room for a company's entire technology stack (the collection of all the software, hardware, and services used to run an application). It brings together data from a company's servers, databases, and applications into one place, giving them a unified view of how everything is working in real-time. This helps companies prevent and solve technical problems, like a website crashing, by quickly identifying the root cause of the issue. Businesses pay Datadog a subscription fee, often based on the amount of data they process or the number of servers they monitor, to use this service.
Observability and Security Platform
This is Datadog's single, unified business segment that provides a wide range of monitoring and security services. Think of it as a comprehensive health check for a company's entire digital operation. Customers pay subscription fees to access different tools on the platform, such as infrastructure monitoring (watching the health of servers and data storage), application performance monitoring (making sure software is running smoothly), and log management (collecting and analyzing system records to troubleshoot issues). The company also offers security products that detect threats and protect a customer's cloud-based systems. This integrated platform model is the core of Datadog's business and generates all of its revenue.
What management is betting on now
Datadog's main strategy is to get customers to use more of its products, a concept often called a "land-and-expand" model. The company aims to be the single, consolidated platform for all of a company's monitoring and security needs, reducing the need for multiple different tools. A key focus is expanding its security offerings to attract security teams in addition to their traditional customers in operations and development. Datadog is also heavily investing in artificial intelligence (AI) to help engineers troubleshoot problems more quickly using natural language and to automate the investigation of system alerts.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$220.30M
FY2024 Q4
$257.47M
FY2025 Q1
$262.79M
FY2025 Q2
$184.90M
FY2025 Q3
$234.68M
FY2025 Q4
$318.18M
FY2026 Q1
$323.26M
FY2026 Q2
$305.98M
Revenue
$1.12B
Net income
$44.56M
Diluted EPS
0.12
Operating cash flow
$315.87M
Free cash flow
$305.98M
Fetching…
Sources
Revenue
$1.01B
Net income
$52.57M
Diluted EPS
0.15
Operating cash flow
$334.62M
Free cash flow
$323.26M
Fetching…
Sources
Revenue
$953.19M
Net income
$46.57M
Diluted EPS
0.13
Operating cash flow
$327.07M
Free cash flow
$318.18M
Fetching…
Sources
Revenue
$885.65M
Net income
$33.88M
Diluted EPS
0.10
Operating cash flow
$251.47M
Free cash flow
$234.68M
Fetching…
Sources
Revenue
$826.76M
Net income
$2.65M
Diluted EPS
0.01
Operating cash flow
$200.06M
Free cash flow
$184.90M
Fetching…
Sources
Revenue
$761.55M
Net income
$24.64M
Diluted EPS
0.07
Operating cash flow
$271.54M
Free cash flow
$262.79M
Fetching…
Sources
Revenue
$737.73M
Net income
$-600.00K
Diluted EPS
0.14
Operating cash flow
$265.23M
Free cash flow
$257.47M
Fetching…
Sources
Revenue
$690.02M
Net income
$51.70M
Diluted EPS
0.14
Operating cash flow
$228.68M
Free cash flow
$220.30M
Fetching…
Sources
Is it cheap or expensive?
Fair value $147.16 vs current price $212.93
Wall Street consensus is the average analyst price target: $285.18 (93.8% higher than our fair-value estimate).
Our most-likely fair value is $147.16 a share — about 30.9% below today's price of $212.93, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Healthy
Net cash $3.7B - more cash than debt. Interest coverage -4.0x.
Net debt
$-3.71B
Interest coverage
-4.01x
Datadog, Inc.'s profit covers its interest bill about 0.0 times over. which is weaker than most peers shown here and 4 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Healthy
Worse cushion
Baseline
Better cushion
DDOG
BASELINE
Datadog, Inc.
Total debt $1.28B Interest coverage -4.01x This is the baseline the peer rows are being compared against.
Total debt $159.27M Interest coverage 77.42x This peer still has a real interest-payment cushion, while DDOG does not.
Total debt $820.18M Interest coverage -10.47x Neither company has much profit cushion over interest right now.
Total debt $2.76B Interest coverage -172.95x Neither company has much profit cushion over interest right now.
Total debt $3.53B Interest coverage -23.64x Neither company has much profit cushion over interest right now.
Total debt $595.77M Interest coverage -1.33x Neither company has much profit cushion over interest right now.
What you should know
The case for and against DDOG
3 Rewards
1 Risk
Rewards
-
Revenue grew 15.7% last year.
-
Returns 4.7% on equity, ahead of 50% of its peers.
-
Free cash flow was positive in 9/10 years.
Risks
-
Insider ownership is only 0.6% (peer median: 1.5%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
434.55x
Forward P/E
71.73x
P/B
17.50x
P/S
19.27x
EV/EBITDA
877.60x
PEG ratio
1.08x
Profitability
How much profit each dollar creates
Gross margin
79.5%
Operating margin
0.7%
Net margin
4.5%
ROE
4.7%
ROA
0.2%
Health
Liquidity and balance-sheet strength
Debt / equity
0.29x
Current ratio
3.21x
Quick ratio
3.10x
Total debt
$1.28B
Total cash
$4.99B
Growth
How the business has been compounding
Revenue TTM
$3.97B
Revenue 5Y CAGR
35.1%
EPS TTM
0.49
EPS 5Y CAGR
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Cash flow
How much cash the business throws off
Operating CF TTM
$1.23B
Free CF TTM
$1.00B
FCF margin
25.2%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
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