Datadog (NASDAQ:DDOG) Shares Gap Up Following Earnings Beat

Datadog, Inc. (NASDAQ:DDOG)’s share price gapped up prior to trading on Tuesday after the company announced better than expected quarterly earnings. The stock had previously closed at $114.01, but opened at $124.18. Datadog shares last traded at $131.5180, with a volume of 6,572,671 shares.

The company reported $0.59 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $0.55 by $0.04. The business had revenue of $953.19 million for the quarter, compared to the consensus estimate of $916.53 million. Datadog had a return on equity of 4.14% and a net margin of 3.32%.The company’s revenue was up 29.2% compared to the same quarter last year. During the same quarter in the previous year, the company posted $0.49 EPS. Datadog has set its FY 2026 guidance at 2.080-2.160 EPS and its Q1 2026 guidance at 0.490-0.510 EPS.

Datadog News Summary

Here are the key news stories impacting Datadog this week:

• Positive Sentiment: Q4 beat and strong forward guidance — Datadog posted $953M revenue (+29% YoY) and $0.59 adjusted EPS, topping Street estimates, and raised Q1 and FY2026 guidance well above consensus (Q1 EPS guide 0.49–0.51 vs. ~0.35 estimate; FY EPS guide 2.08–2.16 vs. ~1.60). This is the primary catalyst for the rally. Read More.
• Positive Sentiment: Product and customer momentum — Datadog announced GA launches (Bits AI SRE Agent, Storage Management, Feature Flags, Data Observability) and reported 603 customers with $1M+ ARR (up from 462), supporting recurring revenue durability and AI-led upsell potential. Read More.
• Positive Sentiment: Strong cash flow metrics highlighted — management cited robust operating and free cash flow ($1,050M operating; $915M free cash flow for FY2025), which reduces execution risk and supports valuation debate. Read More.
• Neutral Sentiment: Market context: software rebound and AI narrative — strategists say recent AI-driven sell-off created buying opportunities for high-quality software names, helping DDOG’s recovery alongside broader software strength. Read More.
• Neutral Sentiment: Coverage and media commentary — multiple outlets (Barron’s, Zacks, Proactive, Seeking Alpha transcript) covered the beat and call; coverage can amplify intraday flows but is informational rather than directional. Read More.
• Neutral Sentiment: Short-interest note is not meaningful — filings show effectively zero reported short interest in the latest snapshot, so short-covering likely did not materially drive the move. (Data published 2/10)
• Negative Sentiment: Analyst price-target trims — several firms lowered targets ahead of or after earnings (Needham to $155, Wolfe to $160, RBC/Cantor/Jefferies to ~$150–160) which tempers the near-term valuation narrative despite buy/outperform ratings. Read More.

Analyst Upgrades and Downgrades

A number of equities analysts have commented on the stock. DA Davidson reissued a “buy” rating and issued a $225.00 price objective on shares of Datadog in a research note on Monday, February 2nd. Piper Sandler lowered their price target on shares of Datadog from $225.00 to $195.00 and set an “overweight” rating for the company in a report on Monday, January 5th. TD Cowen reissued a “buy” rating on shares of Datadog in a research note on Wednesday, January 21st. KeyCorp decreased their price objective on Datadog from $170.00 to $155.00 and set an “overweight” rating on the stock in a research report on Wednesday, February 4th. Finally, Daiwa Securities Group started coverage on Datadog in a report on Tuesday, January 27th. They issued a “buy” rating and a $190.00 target price for the company. Thirty-seven investment analysts have rated the stock with a Buy rating, four have given a Hold rating and two have issued a Sell rating to the company’s stock. According to data from MarketBeat.com, the stock has an average rating of “Moderate Buy” and an average price target of $181.88.

Insiders Place Their Bets

In related news, CEO Olivier Pomel sold 11,195 shares of the firm’s stock in a transaction dated Wednesday, December 17th. The shares were sold at an average price of $137.93, for a total value of $1,544,126.35. Following the transaction, the chief executive officer owned 518,133 shares of the company’s stock, valued at $71,466,084.69. This trade represents a 2.11% decrease in their position. The transaction was disclosed in a filing with the SEC, which is accessible through the SEC website. Also, Director Shardul Shah sold 7,916 shares of the business’s stock in a transaction dated Tuesday, January 13th. The shares were sold at an average price of $124.89, for a total transaction of $988,629.24. Following the completion of the sale, the director directly owned 340,701 shares of the company’s stock, valued at approximately $42,550,147.89. This trade represents a 2.27% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. In the last ninety days, insiders have sold 538,917 shares of company stock worth $86,804,288. 8.70% of the stock is currently owned by company insiders.

Institutional Trading of Datadog

Institutional investors and hedge funds have recently modified their holdings of the stock. PKO Investment Management Joint Stock Co bought a new position in Datadog in the third quarter worth about $1,709,000. Munro Partners bought a new stake in shares of Datadog in the 3rd quarter valued at about $7,120,000. Hartford Investment Management Co. purchased a new position in shares of Datadog in the 3rd quarter worth approximately $2,689,000. IQ EQ FUND MANAGEMENT IRELAND Ltd raised its stake in shares of Datadog by 134.5% during the 3rd quarter. IQ EQ FUND MANAGEMENT IRELAND Ltd now owns 31,142 shares of the company’s stock worth $4,435,000 after acquiring an additional 17,860 shares in the last quarter. Finally, Sumitomo Mitsui DS Asset Management Company Ltd lifted its position in Datadog by 37.9% during the third quarter. Sumitomo Mitsui DS Asset Management Company Ltd now owns 109,233 shares of the company’s stock valued at $15,555,000 after acquiring an additional 30,008 shares during the last quarter. Institutional investors own 78.29% of the company’s stock.

Datadog Price Performance

The company has a market cap of $45.47 billion, a PE ratio of 418.29, a PEG ratio of 20.37 and a beta of 1.27. The company has a debt-to-equity ratio of 0.29, a current ratio of 3.66 and a quick ratio of 3.66. The stock’s 50-day moving average is $133.87 and its 200 day moving average is $144.06.

Datadog Company Profile

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.