Oppenheimer analyst Ittai Kidron initiated coverage of Datadog with a Perform rating. In a research note to investors, Kidron says he is "positive" on Datadog's technology and growth prospects, and his firm's proprietary analysis suggests ~25%-30% of revenue upside to 2020-2021 consensus estimates, but says that even when taking this into account, he believes the upside is largely built into the shares and would look for a better entry point with this recent IPO.

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.