Datadog cut to Hold at Stifel on margin headwinds, full valuation

Stifel downgraded Datadog (DDOG) to Hold from Buy with a price target of $140, down from $165. The analyst warns that the company is heading for headwinds to revenue growth and margin expansion in FY25 while the stock is trading at a “full valuation” of 13.5-times on enterprise value to expected forward revenue basis. Datadog has also had a strong performance since its Q3 results, posing a “less than favorable” risk-reward in the coming quarters, the firm tells investors in a research note. OpenAI has also been able to optimize its Datadog usage even though checks suggest that it will renew the contract for another year, Stifel says.