Credit Suisse analyst Brad Zelnick initiated coverage of Datadog with a Neutral rating and $40 price target, citing valuation vs. peers and the competitive nature of the market. In a research note to investors, Zelnick says he expects AI and ML capabilities to increasingly become core part of offerings and, given the vast amount of data Datadog's platform already collects, he feels it is well positioned to continue to take share, driving confidence in his 46% top-line CAGR through 2021.

DA Davidson analyst Gil Luria elevated Datadog (DDOG) to the firm's 'Best-of-Breed Bison' list while maintaining a Neutral rating and $115 price target on the stock. The firm cites large enterprises like Coinbase (COIN) who adopted Datadog after its homegrown monitoring solution struggled to keep up with the tremendous increase in user traffic, which allowed its engineers to focus on building new functionality instead. The total addressable market of Observability is also large at about $60B with a low-teens growth CAGR and underpenetrated at less than 30% overall, the analyst tells investors in a research note. The firm adds however that at 16-times expected 2024 revenue, Datadog's "full" valuation reflects "one of the most expensive" software names today.