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Datadog Shares Jump on First-Quarter Earnings and Revenue Beat

Shares of analytics and monitoring provider Datadog are higher after the company beat Wall Street's earnings expectations.
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Several analysts increased their price targets for Datadog  (DDOG) - Get Datadog Inc. Report Tuesday after the cloud monitoring company beat Wall Street's first-quarter earnings expectations.

Shares of the New York company at last check jumped 23% to $68.68.

For the quarter Datadog swung to earnings of $18.8 million, or 6 cents a share, from a loss of $6.9 million, or 9 cents, in the year-earlier period. 

Revenue climbed 87% to $131.2 million. 

Analysts expected Datadog to report a loss of 1 cent a share on revenue of $117.6 million.

The coronavirus pandemic "has demonstrated the need to be digital-first and agile, has underscored the importance of observability into cloud environments, and reaffirmed the long-term opportunity for Datadog," Olivier Pomel, co-founder and CEO, said in a statement. 

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Sterling Auty, an analyst with JPMorgan, increased his price target to $65 from $60, while keeping an overweight rating on the shares. He said Datadog's March quarter was one of the most impressive results he saw throughout this earnings season.

Needham analyst Jack Andrews raised the firm's price target on Datadog to $70 from $58.

Andrews, who maintains a buy rating on the shares, said the tailwinds of cloud migration and digital transformation projects are underpinning the company's growth, with Datadog seeing a spike in activity during March from customers looking to support their increasingly digital and remote businesses. 

He also said that so far the impact on Datadog operations from macro headwinds appears minimal.

Credit Suisse analyst Brad Zelnick raised his price target on Datadog to $55 from $45, while affirming a neutral rating.

Zelnick said in a note to clients that the company posted "another strong quarter" as its low-friction business model along with incremental demand for visibility across some verticals drove a beat on both revenue and profitability.

He added that the results highlight significant tailwinds Datadog is levered to, which Zelnick said he expects will accelerate from here.