Rosenblatt has reiterated a Buy rating and maintained a $185.00 price target on Datadog (NASDAQ: DDOG) following the company’s fourth-quarter earnings release.
Datadog reported fourth-quarter revenue growth of 29%, ahead of Rosenblatt’s prior forecast of 24.5% and 3.7% above consensus estimates. The company recorded an operating margin of 24.1% for the quarter. Rosenblatt attributed the revenue acceleration primarily to heightened demand related to cloud migration and digital transformation initiatives.
Customer traction in the quarter included 700 net new customers, taking Datadog’s total customer base to 32,700. Bookings advanced 37% year-over-year to $1.63 billion. The bookings tally was supported by 18 deals larger than $10 million, including two agreements valued at over $100 million apiece.
For the first quarter of 2026, Datadog issued revenue guidance in a range of $951 million to $961 million, which the company said corresponds to 25.5% year-over-year growth. For the full year 2026, management supplied revenue growth guidance of 18.5% to 19.6%, a pace Rosenblatt described as "somewhat conservative."
Rosenblatt noted the strength of the fourth-quarter results, Datadog’s continued investments to broaden its market footprint, and the early momentum observed in 2026 as reasons for holding the $185 price target while implementing only marginal revisions to its 2026-2027 projections.
Additional reported figures from Datadog’s fourth-quarter financials included earnings per share of $0.59 versus an expected $0.55, representing a 7.27% earnings surprise. Quarterly revenue was reported at $953 million, above the forecasted $917.01 million. The company and Rosenblatt pointed to customer expansion and product innovation as drivers of the outperformance.
There have been no recent analyst upgrades or downgrades from major firms following the disclosure, according to the available reports. Market participants will likely monitor Datadog’s execution against its 2026 guidance and the company’s ability to sustain large deal momentum into the new fiscal year.
Summary
Rosenblatt has kept its Buy rating and $185.00 price target on Datadog after the company posted stronger-than-expected Q4 revenue, solid margins, meaningful bookings growth and continued customer additions. Datadog provided 2026 guidance that Rosenblatt views as somewhat conservative, and the firm made only minor adjustments to near-term estimates.
Key points
- Datadog posted Q4 revenue growth of 29% and an operating margin of 24.1%.
- Bookings rose 37% year-over-year to $1.63 billion, supported by 18 deals above $10 million and two deals exceeding $100 million.
- Guidance: Q1 2026 revenue of $951-961 million (25.5% growth) and full-year 2026 revenue growth guidance of 18.5% to 19.6%.
Risks and uncertainties
- Execution risk: The company’s ability to translate strong bookings into sustained revenue and margin performance could affect outcomes for investors and the cloud software sector.
- Guidance sensitivity: Full-year 2026 guidance described as somewhat conservative introduces uncertainty about growth trajectory and its impact on software and cloud infrastructure markets.
- Analyst reaction: With no recent upgrades or downgrades reported, future analyst revisions could alter market perception of Datadog’s outlook.