By Sam Boughedda
In a note on Thursday, BofA initiated Datadog, Inc. (NASDAQ:DDOG) with a Buy rating and a $135 price target.
An analyst explained that the company is an observability software vendor that enables its customers to have "strong visibility into the health and performance of its technology stacks to drive high-quality end-user experiences."
"Datadog is able to achieve this with its best-of-breed portfolio of 15 products that spans infrastructure monitoring, APM, SIEM, among others," he added.
BofA said the company performs very well on its four M's framework: Market, competitive Moat, Management strength, and Margin potential.
"We estimate its Market is $53bn, with expansion potential from new products and service offerings, laying a visible path for durable revenue growth over the medium-term. We see a differentiated Moat from: 1) its modern technology stack built for a cloud workload future; 2) its infrastructure monitoring leadership positions the business for healthy expand; 3) it is positioned to take share as workloads shift to the cloud; 4) its low-friction deployment strategy drives fast time to value; and 5) the platform is hyperscaler agnostic," concluded the analyst.