What happened 

Shares of Datadog (DDOG -0.13%), a cloud-based monitoring and analytics company, were jumping this morning after an analyst initiated coverage of the company and put an outperform rating on its shares.

The tech stock was up 9.4% as of 11:03 a.m. ET on Wednesday. 

So what 

Bernstein analyst Peter Weed started coverage of Datadog today and put a $172 price target on the stock. It was trading at about $101 at the time of this writing.

A person looking at a computer and smiling.

Image source: Getty Images.

Weed believes that the company is doing a good job of expanding its addressable market and that Datadog has "large secular tailwinds," according to TheFly.com. 

Weed also thinks that management is being cautious in its revenue forecasts. Datadog's leadership says revenue will increase by 55% in 2022, but Weed believes sales could actually jump by 70% for the year, and could rise by more than 50% through 2024. 

Now what 

Datadog will report its second-quarter results on Aug. 4, and management expects sales between $376 million and $380 million, which would be an increase of 61% from the year-ago quarter at the midpoint of guidance. 

The company is also expecting adjusted earnings per share of $0.14 at the middle of guidance, which would be a year-over-year increase of 55%. 

While Datadog's stock is rising today, the company's share price is still down 42% year to date. Some investors are still wary of the tech sector as inflation continues to increase and fears of an economic slowdown rise.

All of which means that Datadog investors should keep an even closer eye on the upcoming quarterly report to gauge the company's current health.