What happened

Shares of monitoring and analytics platform provider Datadog (DDOG -1.23%) were hit hard on Monday, declining 6.5% by the time the market closed.

The stock was down likely for two primary reasons. First, many growth stocks like Datadog fell several percentage points or more on Monday. Second, RBC Capital analyst Matthew Hedberg lowered his 12-month price target on the stock.

A chalkboard sketch of a chart showing a stock price going down

Image source: Getty Images.

So what

Many growth stocks are down sharply from levels in January and early February. Datadog is no exception -- and pricing pressure on these stocks persisted on Monday. The market seems to have been taking profits on lots of growth stocks after their huge gains last year.

RBC Capital's Hedberg reduced his price target for Datadog stock from $120 to $105, citing multiple compression in the valuations of many of Datadog's industry peers. 

Now what

Despite Hedberg's lowered price target for the stock, the analyst is optimistic about Datadog's underlying business, noting that he expects the company to report strong first-quarter performance, particularly when it comes to its cloud adoption.

Datadog reports its first-quarter results after market close this Thursday.