TD Cowen Lifts Datadog Target to $215 as Strong Q4 and LLM Deal Support Outlook

Analyst upgrade reflects accelerated revenue and large-deal traction, even as valuation metrics remain elevated

By Hana Yamamoto DDOG

TD Cowen Lifts Datadog Target to $215 as Strong Q4 and LLM Deal Support Outlook

DDOG

TD Cowen raised its price target for Datadog to $215 from $200 and kept a Buy rating after the cloud monitoring company reported accelerating revenue and strong large-deal activity. Datadog’s fourth-quarter results and management guidance underpinned the move, though valuation measures and guidance nuance present points of caution for investors.

Key Points

TD Cowen raised its price target on Datadog to $215 from $200 and kept a Buy rating, following stronger-than-expected revenue acceleration.
Datadog reported 29% revenue growth for the quarter and 26.63% revenue growth over the trailing twelve months to $3.21 billion; management gave FY2026 revenue guidance of 18-20%.
The company won large deals, including an eight-figure agreement with a major LLM customer, and reported strong margins and a beat on Q4 EPS and revenue, prompting positive analyst responses.

TD Cowen raised its price target on Datadog (NASDAQ:DDOG) to $215 from $200 and retained a Buy rating. The firm’s revision followed Datadog’s latest quarter, which showed revenue acceleration and notable enterprise wins.

Market pricing at the time of the report put Datadog near $130.65 per share. An InvestingPro valuation read flagged the stock as overvalued using a price-to-earnings ratio of 421.85.

Quarterly results and growth dynamics

Datadog reported revenue growth of 29% for the period highlighted by TD Cowen analyst Andrew Sherman, a pace that represented acceleration and beat expectations by 4 percentage points according to the firm. Core growth also improved, moving from 20% to 23% in the latest comparison. Over the trailing twelve months, revenue rose 26.63% to $3.21 billion.

For fiscal year 2026, Datadog guided to revenue growth of 18-20%. TD Cowen described that range as slightly below Street expectations but characterized the guidance as better than anticipated in other respects. Management additionally signaled that core growth excluding very large customers is expected to exceed 20%.

Profitability and deal activity

Datadog reported gross profit margins of 79.96%, a metric highlighted by InvestingPro. TD Cowen emphasized the company’s performance on large deals, citing an eight-figure contract with a major large language model - LLM - customer as evidence of sustained traction among large enterprise buyers.

TD Cowen framed Datadog as an "AI winner" and noted that at 35 times enterprise value to free cash flow, the firm would recommend increasing position sizes, underscoring a favorable view on long-term cash generation relative to current market pricing.

Earnings beat and external analyst view

Datadog’s fourth-quarter 2025 results also surprised on the upside. The company reported earnings per share of $0.59 versus an expected $0.55 and delivered $953 million in revenue, topping the projected $917.01 million. Rosenblatt maintained a Buy rating and kept a $185.00 price target after the report.

Rosenblatt pointed to Datadog’s 29% Q4 revenue growth, above its own 24.5% forecast and roughly 3.7 percentage points ahead of consensus, and noted operating margins of 24.1%. The firm attributed the quarter’s revenue strength in part to demand driven by cloud migration and broader digital transformation initiatives.

These results and analyst responses reinforce Datadog’s recent momentum while also highlighting valuation and guidance nuances that investors continue to weigh.

Risks

Valuation appears stretched based on an InvestingPro P/E of 421.85, which could limit upside for equity investors.
Fiscal 2026 revenue guidance of 18-20% was slightly below Street expectations, introducing execution risk relative to investor forecasts.
Dependence on large deals and the pace of enterprise digital transformation may create variability in core growth; management noted the difference between growth including and excluding large customers.

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