No. of Recommendations: 5
Could you give your insights as to why DataDog will reasonably certainly retain customers without a competitive technology taking sales after year 7 or year 13 for example.
I cannot. Actually, I expect that, as is the case historically for most companies in this field, Datadog will be acquired by a larger firm well within the time frame you mention. I also expect that acquisition will occur at a healthy premium to the quoted price. M* and CFRA use standard valuation methods based on projected future revenues and margins to produce (12-month) target share prices in the $120 to $157 range--a big premium to the price I paid (~$71) but less than what others paid within the past year.
And what other insights do you que that make this the SaaS firm to own? Thank you!
I wouldn't claim that Datadog is the SaaS firm to own but rather that it's pretty clearly one of them. Perhaps its closest competitor, Splunk, lags Datadog in key areas for customers migrating to the Cloud. Datadog's most recent Q report indicates that the company continues to attract new customers at a very healthy pace and also succeeds in retaining and upselling to its customers, including big customers. Datadog's R&D division rolled out several new offerings recently, and indications are that customer reception has been very positive.
In any event, my DDOG investment is merely a toe in the water at this point.
