Written by Sam Bogda
In a research note on Wednesday, a Baird analyst assumed Datadog, Inc. (NASDAQ 🙂 and Dynatrace Inc. (NYSE 🙂 with an Outperform rating.
The analyst has set Datadog’s price target at $120 per share, while Dynatrace has set the target price at $49.
Baird is positive about the growth of observation and data analytics and believes that Datadog and Dynatrace are two of the pioneers of the monitoring platform.
“While the macroeconomic climate presents ongoing risks, we expect trends of digital transformation and cloud adoption to continue to benefit in the long term,” the analyst explained.
At Datadog, he said the company has “established itself as the leader of the cloud-native monitoring platform” with ground-breaking growth and strong cash flow.
Meanwhile, for Dynatrace, he commented that it is achieving “strong growth with enterprise differentiation and AI alongside industry-leading profitability,” while also continuing to expand its platform capabilities.
However, Bird acknowledges that there are headwinds, such as intense competition, macro influences and foreign exchange exposure, that can pose risks.