Datadog (DDOG) shares surged 5.09% during intraday trading on Friday, extending a pre-market recovery from the previous session's steep selloff. The stock's rebound comes as a prominent Wall Street analyst raised the firm's price target, citing an attractive entry point following the post-earnings decline.
Monness Crespi Hardt lifted its target price on Datadog to $280 from $270, maintaining a bullish stance. The upgrade followed the stock's more than 16% plunge in the prior session, which was triggered by second-quarter results that, while beating baseline consensus estimates, fell short of elevated buy-side expectations. The company reported a 36% year-over-year revenue increase to approximately $1.12 billion and non-GAAP earnings per share of $0.65, but the results missed the market's whisper numbers. Additionally, the company's guidance pointed to a sequential growth deceleration in the third quarter, and management disclosed that its largest AI-native customer plans to reduce usage, which further spooked investors.
The combination of the analyst target price increase and technically oversold conditions from the prior day's sharp decline is providing a catalyst for the recovery bounce, as traders reassess the stock's valuation following the selloff.
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