Datadog, Inc.
Orin's own judgment of how firmly the evidence points one way — not the chance the price goes up.
Datadog remains a hold at $287.29 as revenue growth accelerates meaningfully — Q2 2026 revenue of $1.12B grew 35.6% YoY, up from 28.1% in the year-ago quarter — but the valuation is extreme at 577.8x P/E and 25.8x P/S, a premium of 40% and 186% to peer medians on P/S and EV/EBITDA respectively.
FY2025 generated $1.0B in free cash flow at a 29.2% FCF margin, yet GAAP operating income was -$44.4M and diluted EPS fell to $0.30 from $0.51, with net income declining 41.4% YoY. Persistent insider selling — net -6.0M shares and -$1.08B in value over 24 months across 792 dispositions with zero open-market acquisitions — and a smart money score of just 0.02 as of the quarter ended 30 Jun temper enthusiasm despite the strong top-line momentum and eight consecutive earnings beats. The stock trades well above its 50-day ($247.3) and 200-day ($189.0) moving averages with an RSI of 67.9, leaving limited margin of safety at these levels.
What could go wrong
- Valuation compression. At 577.8x P/E and 343.8x EV/EBITDA, any deceleration in revenue growth or miss could trigger a sharp multiple contraction, especially with the stock already extended above key moving averages.
- Profitability deterioration. FY2025 operating income was -$44.4M with operating margin of -1.3%, and EPS declined to $0.30 from $0.51 despite 27.7% revenue growth, raising questions about operating leverage as the company scales.
- Insider selling pressure. Over 24 months, insiders disposed of 792 transactions totaling net -6.0M shares and -$1.08B in value with zero open-market acquisitions, signaling limited insider confidence at current prices.
- Smart money apathy. The smart money score of 0.02 as of the quarter ended 30 Jun is near the low end of the trailing two-year range, suggesting institutional positioning is not strongly supportive despite the stock's rally.
What would change my mind
Where this comes from: quarterly results · FY25 fundamentals · peer comparison · insider trades. Orin's read on DDOG; not advice.
How has the share price moved?
Up 78.2% over twelve months, from $157.62 on 27 Oct 2025 to $280.82 at the Tue 27 Oct 2026 close. Its highest close in that time was $293.26 on 9 Oct 2026; the last close is 4.2% below it.
- Green line: the closing price each trading day.
- Grey line: the average closing price over the last 50 trading days.
- Dashed amber line: the same over the last 200 trading days — a slower, smoother line.
- Bars along the bottom: shares traded each day — green when it closed higher than the day before, rose when lower (the most, 26.0M, on 7 May 2026).
- Flags: the company's filings, on the day they were made (a 10-Q is the quarterly report and a 10-K the annual report; an 8-K reports a major event).
- Rose flags: large share sales by the company's own officers and directors, from the Form 4 each one files after trading.
On file
All DDOG filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| BlackRock | $9.3B | 0.1% |
| Vanguard Capital Management | $5.6B | 0.1% |
| FMR | $5.1B | 0.2% |
| Vanguard Portfolio Management | $4.6B | 0.2% |
| State Street | $3.8B | 0.1% |
| Invesco | $3.4B | 0.3% |
| T. Rowe Price Associates | $2.8B | 0.3% |
| Geode Capital Management | $2.5B | 0.1% |
| Morgan Stanley | $1.2B | 0.1% |
| Goldman Sachs Group | $1.1B | 0.1% |
120 of the 815 filers we track · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 1137 Form 4 filings; open-market trades net −$1.1B. Of the 50 on hand, 0 were open-market purchases and 36 sales — the rest are grants, option exercises and tax withholding.
Ask Orin about DDOG
Orin answers questions about DDOG from its filings, transcripts and numbers — with the source behind every claim. Your own desk starts with 3 free days, card required.
Start 3 free days →How is it priced, against its own past and its sector?
Priced at 239× its last 12 months of profit (Thu 5 Nov close) — lower than in all 3 of its last 5 fiscal years with a P/E (middle 439×); the typical Technology company on the NASDAQ is at 46.1×.
| Measure | Now | Its usual | Sector |
|---|---|---|---|
| P/E | 239×below usual | 439× | 46.1× |
| P/S | 14.7×below usual | 17.9× | — |
| EV/EBITDA | 166× | — | — |
| P/B | 13.3×below usual | 17.7× | — |
- EV/EBITDA: no usual level — it ran from 183× to 2174× over its last 5 fiscal years, so a middle value says little.
- "Its usual" is the middle of its own last 5 fiscal years.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
P/S: the company's total market value divided by one year of revenue. Used when there is no profit to measure.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
P/B: the share price divided by the book value per share — what the company owns minus what it owes, as its accounts record it. When book value is tiny, P/B swings wildly and says little.
What do the analysts who cover it publish?
The analysts' average 12-month price target is $291 (from $158 to $350) — 4% above the Tue 27 Oct close price. That is their published opinion, not Orin's.
$291
$158 – $350 · +4% against the last close
- 31 buy or overweight
- 1 hold
- 1 underweight or sell
Price target: the share price an analyst publishes for about 12 months ahead. It is the opinion of the firm that wrote it; the average is across the firms that cover the company.
Overweight / underweight: analysts' rating words: overweight means the firm expects the stock to do better than the others it covers, underweight worse. Their words, not Orin's.
How is it priced next to the companies it is compared to?
Priced at 239× its last 12 months of profit. Only 2 of the 4 companies it is compared to have a P/E that says something (AKAM 29.0×, FFIV 36.2×), so there is no typical P/E.
| Company | Market value | P/E | EV/EBITDA | Gross margin | Net margin | ROE |
|---|---|---|---|---|---|---|
| DDOGDatadog, Inc. | $63B | 239× | 166× | 79.6% | 6.1% | 6% |
| AKAMAkamai Technologies, Inc. | $11B | 29.0× | 19.3× | 55.4% | 8.8% | 8% |
| CRWDCrowdStrike Holdings, Inc. | $274B | n/m | n/m | 75.2% | 1.1% | 1% |
| FFIVF5, Inc. | $26B | 36.2× | 27.1× | 111.9% | 28.9% | 19% |
| PANWPalo Alto Networks, Inc. | $329B | n/m | 213× | 70.4% | 2.7% | 2% |
- CRWD, PANW: P/E is not meaningful (n/m) — its profit over the last 12 months is so small against its price that the ratio says little.
- CRWD: EV/EBITDA is not meaningful (n/m) — its operating profit before depreciation over the last 12 months is so small against its price that the ratio says little.
- The list of companies is the data vendor's choice, so it can include a company a person would not have picked.
Market value: the share price times the number of shares — what the whole company is priced at.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
Gross margin: the share of each $1 of sales left after the direct cost of making what was sold.
Net margin: the share of each $1 of sales kept as profit after every cost. Below zero, the company lost money.
ROE: return on equity: one year of profit as a share of the shareholders' money in the business (its book value).
Is it priced high or low compared with its own past?
Priced at 239× its last 12 months of profit (Thu 5 Nov close). It has no full fiscal year on file since its history starts, so there is nothing of its own to compare with.
- Now239×
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
Fiscal year (FY): the company's own 12-month accounting year, which need not match the calendar year.
How has its sector been priced?
Technology companies on the NASDAQ were priced at a typical 46.1× their yearly profit (Tue 27 Oct close).
- Now46.1×
- Each year is the middle of that calendar year's daily sector P/E; "Now" is the Tue 27 Oct close figure, the same one in the table above.
Sector P/E: the middle P/E of the companies in the same sector on the same stock exchange, as the data vendor works it out each day.
What does a cash-flow model say a share is worth?
A standard cash-flow model puts it at $11 a share — 96% below the $279.45 price it was computed against (27 Oct).
| Model | Value a share | Against the price then |
|---|---|---|
| Standard | $11 | 96% below $279.45 |
| Levered | $50 | 82% below $279.45 |
Discounted cash flow: a model's estimate of what the company is worth today, from the cash it is forecast to make in future years. Small changes in the forecast move it a lot, and it says little about a company that loses money.
Standard / levered: two versions of the cash-flow model: the standard one counts the cash before the company pays its lenders, the levered one after.