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Why Datadog Stock Jumped on Thursday

By Daniel Sparks - Dec 17, 2020 at 3:21PM

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One analyst is betting this growth stock will rise to $112.

What happened

Shares of monitoring and analytics platform specialist Datadog ( DDOG -1.53% ) spiked on Thursday. The stock rose as much as 5%. As of 3 p.m. EST, it had settled to about a 4% gain.

The stock's rise today was likely fueled by a combination of an upbeat day in the overall stock market and an analyst's decision to increase his 12-month price target for the stock.

A chart showing a stock price moving higher

Image source: Getty Images.

So what

Morgan Stanley analyst Sanjit Singh increased his price target for Datadog stock by 30% on Thursday. The new price target stands at $112, up from $86 previously. Singh maintained an equal-weight rating on the stock, which is similar to a hold. The stock is currently trading at about $108.40.

Highlighting bullishness in the overall market on Thursday, the S&P 500 and Nasdaq Composite were up 0.5% and 0.6%, respectively, at the time of this writing. Many growth stocks like Datadog were up even more. This market momentum likely helped its shares.

Now what

Datadog's business has been growing rapidly recently. Its revenue jumped 61% year over year in the third quarter, and for the fourth quarter, management forecast revenue between $162 million and $164 million. This would be up from $114 million in the fourth quarter of 2019.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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Stocks Mentioned

Datadog, Inc. Stock Quote
Datadog, Inc.
$161.71 (-1.53%) $-2.51
Morgan Stanley Stock Quote
Morgan Stanley
$100.16 (1.99%) $1.95

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