Adam Blitzer, the Chief Operating Officer of Datadog, Inc. (NASDAQ:DDOG), has sold a substantial amount of the company's Class A common stock, according to a recent SEC filing. The transactions, which occurred on November 13, involved the sale of 40,389 shares, amounting to a total value of approximately $5.2 million. The shares were sold at prices ranging from $123.17 to $130.69 per share.
Following these transactions, Blitzer retains ownership of 177,465 shares of Datadog stock. The sales were conducted under a pre-arranged 10b5-1 trading plan, established in August 2024. This plan allows insiders of publicly traded corporations to set up a trading plan for selling stocks they own, in compliance with insider trading laws.
In other recent news, Datadog's third-quarter financial performance revealed a 26% year-over-year revenue increase, reaching $690 million, with the addition of approximately 2,400 new customers. The company's robust growth was accompanied by 3,490 customers contributing over $100,000 in annual recurring revenue (ARR), accounting for 88% of the total ARR. Datadog's free cash flow remained strong at $204 million, indicating a 30% margin.
Several financial firms have revised their ratings and price targets for Datadog. CMB International Securities initiated a Buy rating on Datadog with a price target of $154.30, citing the company's solid revenue growth and strong position in the customer mindset. BMO Capital and Needham raised their targets to $145 and $160, respectively, recognizing the company's strong performance and the growing contribution of AI to Datadog's business. Rosenblatt increased its target to $148, while Barclays (LON:BARC) raised its target to $155, both firms highlighting the company's solid performance and growing AI-native customer base.
These recent developments reflect a positive outlook on Datadog's business prospects, innovation, and market position. However, the company has not provided specific guidance for 2025, focusing instead on building sales and engineering capacity.
InvestingPro Insights
Datadog's recent insider selling activity comes amid a backdrop of strong financial performance and market positioning. According to InvestingPro data, the company boasts a market capitalization of $42.99 billion and has demonstrated impressive revenue growth of 26.3% over the last twelve months as of Q3 2024. This growth aligns with the company's robust business model and expanding market presence in the cloud monitoring and analytics space.
InvestingPro Tips highlight Datadog's financial strength, noting that the company "holds more cash than debt on its balance sheet" and that "liquid assets exceed short-term obligations." These factors suggest a solid financial foundation, which may provide reassurance to investors despite the recent insider selling.
Furthermore, Datadog's gross profit margin stands at an impressive 81.24%, underscoring the company's efficiency in converting revenue into profit. This aligns with another InvestingPro Tip stating that Datadog has "impressive gross profit margins," which could be a key driver of its long-term value proposition.
It's worth noting that while the stock's P/E ratio is relatively high at 218.39, the PEG ratio of 0.39 indicates that the company's stock might be undervalued relative to its expected earnings growth. This presents an interesting dynamic for investors to consider.
For those seeking a more comprehensive analysis, InvestingPro offers 15 additional tips on Datadog, providing a deeper dive into the company's financial health and market position.
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