RBC Capital analysts provided their outlook on Datadog, Inc. (NASDAQ:DDOG) ahead of the upcoming Q1/23 earnings, scheduled to be released on Thursday.
The analysts look for essentially in-line quarterly results as management took a prudent view of guidance assuming no improvement in cloud cost optimization trends seen in the H2 of December.
While guidance looked conservative and the company saw record new logo ARR bookings in Q4/22, cloud usage trends appear to have deteriorated and a mid-quarter outage likely removes the opportunity for additional revenue upside.
Shares have been under pressure and feel fairly depressed as any signs of cloud usage improvements are likely rewarded. The analysts cut their price target to $85 from $100 while reiterating their Outperform rating.