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Prediction: Datadog will be at $100 by May 2021

On April 30th I tweeted that the Datadog stock had started recovering from the initial “COVID drop” and was ticking back up over the course of April. At close on April 30th, DDOG was at $45.12 which at the time was .16 away from a new high. 

As of this morning, 17 days later the DDOG stock is sitting at $67.16 – not bad! So, what happened?

On May 11 Datadog announced their much anticipated Q1 earnings. Obviously, certain companies like Zoom have seen a huge uptick based on the impact of COVID but would the same effect be true for a SaaS Monitoring company?

I think the answer to that is sort of… Datadog announced continued success and growth in Q1 including the following stats

  • First quarter revenue grew 87% year-over-year to $131 million
  • Strong growth of larger customers, with 960 $100k+ ARR customers versus 508 a year ago
  • Launched Security Monitoring to break down the silos between security, dev, and ops
  • Surpassed 400 out-of-the-box supported integrations

While obviously this is very positive news for investors I feel like regardless of the COVID situation Datadog was already on a trajectory to see their stock hit new highs. As mentioned they are starting to focus on the SIEM market and are continuously launching new product integrations. 

I feel that if anything the COVID situation has highlighted the importance of having easy to use, high-quality monitoring and observability tools so that employees can ensure the health and performance of their environments no matter where they are working from. 

The reality is a lot of organizations are going to have reduced operational budgets for tooling in 2020 and 2021 but I feel that most smart organizations are going to try and avoid cutting costs on monitoring and automation tools because it allows them to do just that; monitor, automate and optimize which translates into cost savings if done right. 

This prediction is good news for companies like Datadog. 

Additionally, I was to make an even bolder prediction about the DDOG stock. I personally feel that over the next 2 years we are going to see the same growth that we saw with the Splunk stock from 2017 to 2019. 

So I am predicting that by May 2021 that DDOG will be at least $102.00 

I am a bit crazy, right? Only time will tell I suppose. I have personally always liked Datadog as a product, they have an awesome brand and I continue to like the direction they are going. 

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Thanks for reading,

-Dylan

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