Wedbush gives Datadog stock "Outperform" rating

Wedbush initiated coverage of Datadog with an "Outperform" rating and a $275 price target, reflecting strong growth and product expansion. The target implies a 54x enterprise value to free cash flow ratio for fiscal 2028. Datadog's revenue growth accelerated to 36% year-over-year in Q2 2026, with free cash flow margin at 25% and non-GAAP operating margin at 23%. Client adoption of eight or more products rose to 22% of the base, up from 14% a year ago. Datadog reported Q2 earnings of $0.65 per share on revenue of $1.12 billion, beating estimates, though management flagged reduced consumption from its largest client starting in Q3. Other analysts including Needham, Macquarie, and Mizuho also raised targets or reaffirmed positive ratings.