Wedbush initiates Datadog stock coverage with Outperform rating

Investing.com reports that investment firm Wedbush has started covering Datadog Inc. (NASDAQ:DDOG) with an "Outperform" rating and a price target of $275.00. This reflects a valuation of around 54 times the company's free cash flow in the fiscal year 2028. The company's revenue growth accelerated to 36% year-over-year in the second quarter of fiscal 2026, up from 28% in the previous quarter.

Datadog currently boasts a Financial Health Score of "GOOD," indicating a strong balance sheet with more cash than debt. The company reported impressive gross profit margins of 79.54%, showcasing its pricing power in the observability market. In June, Datadog announced over 100 new capabilities at its DASH 2026 conference, with 22% of its customer base adopting eight or more products, up from 14% in the same period a year earlier.

Similarly, 13% of customers adopted 10 or more products, compared to 7% a year ago. The stock is currently trading at $221.72 with a market capitalization of $80 billion. Analysts suggest the stock may be overvalued relative to its estimated fair value. For a more detailed analysis, investors can refer to Datadog's Pro Research Report, available exclusively through InvestingPro.