By Sam Boughedda
Despite its initial jump at the start of Thursday's session, Datadog (NASDAQ:DDOG) shares have given up most of their initial gains, up 1% at the time of writing, following its latest earnings report.
Datadog stock initially opened the session at $79.03 per share, but they now trade at around the $75 mark.
The software firm reported third-quarter earnings of $0.23 before the open, $0.07 better than the analyst estimate of $0.16. Revenue for the quarter came in at $437 million versus the consensus estimate of $415.07 million.
"We are pleased with our third quarter results, with 61% year-over-year revenue growth, strong adoption of our products and robust opportunities with new customers," said Olivier Pomel, co-founder and CEO of Datadog.
The company also raised guidance. It expects Datadog Q4 EPS between $0.18 and $0.20, versus the consensus of $0.14, with revenue for the period in a range of $445 to $449 million, versus the consensus of $446.6 million.
Full-year earnings are seen between $0.90 and $0.92, versus the consensus of $0.79, with revenue expected from $1.65 to $1.654 billion, versus the consensus of $1.62 billion.
Following the release, Stifel analysts cut the firm's price target on the stock to $96 from $120, telling investors, "Datadog posted a solid quarter against conservative guidance, but upside was the lowest since June '20."
Meanwhile, Moffett Nathanson said in a note to clients that "even the fastest growing software companies will feel impact of economic changes in health, but the relative growth for companies like Datadog remain well in advance of peers. AWS (AMZN, Not Rated) revenue growth slowed to 27% in September, but Datadog was able to grow 61% as it is still penetrating the over $100B of spend in the cloud."