© Reuters. Datadog, Inc. (DDOG) Setup Is Too Aggressive – Wells Fargo
Wells Fargo analysts on Friday downgraded shares of Datadog, Inc. (NASDAQ to equal weight from overweight, reducing the price target to $95 from $120 per share.
Analysts told investors in a note that their company believes Datadog’s setup for fiscal 2024 is too aggressive.
The company’s thesis is based on four key principles. The first is the fact that they believe that cost optimization trends continue to persist and will likely last a few more quarters into 2024.
Next, they believe that “the consensus revenue estimates for FY24 do not align with management’s historical guidance trends.” Countering the above points, however, Wells Fargo said its third principle is the “belief that Datadog can gain share following Cisco’s acquisition of Splunk.”
“Finally, we believe Datadog’s new ai-based solutions could become important long-term growth drivers,” the analysts concluded.
