Datadog Earnings: We Like Datadog Barking Up the Enterprise Tree as Upselling Motion Remains Strong

We are maintaining our $115 fair value estimate for shares of narrow-moat Datadog after the firm reported a strong start to fiscal 2024 with a set of robust financial results. As the tough macro of recent quarters gradually fades, we anticipate Datadog to find greater success upselling its existing customers as well as landing new ones. As a firm operating on a consumption-based pricing model, Datadog’s financials tend to react sharply to changes in customer demand. From a valuation perspective, after dropping sharply following the earnings report, we view Datadog as fairly valued.