Please ensure Javascript is enabled for purposes of website accessibility

Why Datadog Stock Jumped on Thursday

By Daniel Sparks - Apr 1, 2021 at 2:01PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Is the growth stock headed to $100?

What happened

Shares of Datadog (DDOG -1.32%) jumped on Thursday. The monitoring and analytics platform provider's shares rose as much as 5.8%. As of 1:15 p.m. EDT, however, the stock was up 3.8%.

The stock's gain was likely due to a combination of an upbeat day in the market for growth stocks in general as well as an analyst's move to upgrade his rating for the stock.

A chart showing a stock price moving up.

Image source: Getty Images.

So what

As the Nasdaq Composite gained 1.5% as of this writing on Thursday, many growth stocks like Datadog rose even more. This broader-market optimism for growth stocks, therefore, likely helped provide a lift to Datadog's stock today.

Also helping the stock was Monness Crespi analyst Brian White's move to upgrade his rating on Datadog stock from "neutral" to "buy." White's $100 12-month price target translates to more than 15% upside.

Now what

Datadog's business has been growing very rapidly. Fourth-quarter revenue was up 56% year over year.

Importantly, management expects more strong growth this year. The company guided for 2021 revenue between $825 million and $835 million, up from 2020 revenue of about $604 million.

"In 2020, we enhanced our positioning as the most complete and cloud-native end-to-end observability platform," explained Datadog Co-founder and CEO Olivier Pomel in the company's Q4 earnings release in February. "But we are even more excited for what's to come, and plan for meaningful continued investments to enhance our long-term positioning."

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Datadog, Inc. Stock Quote
Datadog, Inc.
$93.54 (-1.32%) $-1.25

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/23/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.