| Factor | Score | Distribution | Value | Avg | Rank |
|---|---|---|---|---|---|
Valuation | 8 | 560.5x | 17.3x | Bottom tier | |
Growth | 90 | 31.5% | 7.1% | Top tier | |
Quality | 74 | -0.1% | 4.5% | Top tier | |
Safety | 77 | — | 2.6x | Top tier | |
Capital Return | 15 | 0.00% | 0.06% | Bottom tier | |
Momentum | 96 | 80.4% | -1.6% | Top tier | |
Sentiment | 68 | 25 | 3 | Top tier |
10-year US Treasury yield 4.96% as of 2026-10-22. Estimates computed from company data and analyst targets, not investment advice.
Ten ratios that matter, each compared against its sector median and average — so you can see whether a number is rich or cheap relative to peers in the same sector.
Datadog provides a unified platform for monitoring applications, infrastructure, networks, databases, user experience, and security, and generates revenue from enterprise contracts and the actual usage of its cloud products. Its model expands by adding products within the same customer: in Q2 FY2026, 58% of customers used four or more products, 37% used six or more products, and 13% used ten or more products, while annual recurring revenue for the Real User Monitoring product exceeded $200 million.
Revenue for Q2 FY2026 reached approximately $1.12 billion, up 36% year over year and 11% quarter over quarter. Non-GAAP gross profit was $892 million, with a gross margin of 79.6% versus 80.9% in the comparable quarter, while non-GAAP operating profit was $257 million, with a 23% margin, and free cash flow was $279 million, with a 25% margin.
Datadog ended Q2 FY2026 with approximately 33,400 customers, including about 4,720 customers each generating more than $100,000 in annual recurring revenue, and this group represented approximately 91% of total annual recurring revenue. The AI customer base included more than 750 customers, while revenue growth from customers not classified as AI companies accelerated to the high twenties percentage range, compared with the mid-twenties in the previous quarter and 18% in the comparable quarter.
The average analyst price target is $274.47, with a wide range between $158 and $320 and a consensus rating of “Buy”; the average is below the 52-week range high of $292.72, while the upper end exceeds that high and the lower end falls within the $98.01–$292.72 range. No published P/E ratio is available in the data despite trailing-twelve-month net income through 2026 reaching approximately $135.7 million, so the broad consensus target should be weighed against the slowdown in Q3 FY2026 growth guidance, the decline in gross margin, and reduced usage by the largest customer.
Figures in the text are as of 2026-08-27; the live price is shown at the top of the page.
Revenue increased 36% year over year to $1.12 billion, and the company recorded a sequential increase of $115 million. Growth from customers not classified as AI companies accelerated to the high twenties percentage range, while the number of customers grew to approximately 33,400. New customers contributed approximately 30% of annual revenue growth, up from 25% in Q1 FY2026.
The company served more than 750 AI customers in Q2 FY2026, including 31 customers each spending more than $1 million annually. Its products monitor model training, GPUs, agents, and tool calls through products including GPU Monitoring, Agent Observability, Agent Console, and AI Guard. MCP tool calls also exceeded their Q4 FY2025 level by more than 22 times.
In June 2026, Datadog expanded Bits AI from alert investigation into monitor creation, root-cause detection, remediation execution, release verification, and test generation. The named products include Bits Release, Bits Code, Bits Testing, and Bits Security Analyst, and the company separated the security analyst from its proprietary platform to make it available with other SIEM systems. According to management, using Bits AI leads to the deployment of more products, the creation of additional dashboards and alerts, and an increase in users within the platform.
Automated analysis for informational purposes only — not investment advice.
Management expects revenue of between $4.45 billion and $4.47 billion in FY2026, equivalent to annual growth of 30%, and a non-GAAP operating margin of 23%. However, Q3 FY2026 guidance assumes slower growth of between 28% and 29%, compared with 36% in Q2. Management incorporated reduced usage by the largest customer into its Q3 and full-year guidance, despite renewing a nine-figure contract with that customer.
58% of customers used four or more products in Q2 FY2026, compared with 52% a year earlier. The share using six or more products rose from 29% to 37%, and the share using ten or more products increased from 7% to 13%. Examples of expansion include a health insurer that will use 19 products, a South American bank that consolidated 11 products, and a large AI company using 17 products.
Non-GAAP gross profit was $892 million in Q2 FY2026, with a margin of 79.6%. Non-GAAP operating profit was $257 million, with a margin of 23%, compared with 20% in the comparable quarter. The company also generated $279 million in free cash flow, with a 25% margin, and held approximately $5 billion in cash, cash equivalents, and marketable securities.