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Datadog (NASDAQ:DDOG) Falls after Projections Disappoint – TipRanks.com – TipRanks

It’s been a long day for cloud software stock Datadog (NASDAQ:DDOG), I’m only about halfway done. The company released its earnings report, and its stock price fell more than 14% at one point in premarket. However, it has recovered from most of those losses and is currently down about 4% in afternoon trading Tuesday.

Datadog’s earnings report itself looked pretty good, thanks to revenue of $589.6 million, which was up 26% compared to Q4 2022 numbers. The number of customers with average recurring revenue of more than $1 million also increased, increasing from 317 companies in Q4 2022 to 396 companies in Q4 2023.

However, the predictions turned out to be far more disappointing. Datadog expects earnings per share to be between $1.38 and $1.44 and revenue between $2.555 billion and $2.575 billion during fiscal 2024. Meanwhile, analysts had expected earnings of $1.78 per share and revenue of $2.59 billion. That was enough to cause stock prices to fall.

Potential problems in Q1

TD Cowen analyst Andrew Sherman said the first quarter “looks light,” and so far that seems to be the case. Datadog expects the first quarter to be off to a slow start, with revenue ranging from $587 million to $591 million. This means only about $1 million in additional revenue from the previous quarter, potentially no growth at all or even a loss. This will make it more difficult to meet the full-year target, even if greater growth is expected in the remainder of 2024.

What is Outlook on Datadog?

Turning to Wall Street, analysts are giving DDOG stock a Strong Buy rating, based on 15 Buys and 5 Holds assigned over the past three months, as shown in the chart below. Has a consensus rating. DDOG’s average price target of $137.58 per share means it has upside potential of 5.3%, after the stock’s price has increased 51.82% over the past year.

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