As of May 22, 2025, Datadog Inc has a Discounted Cash Flow (DCF) derived fair value of $7.90 per share. With the current market price at $113.69, this represents a potential upside of -93.0%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $0.00 |
| DCF Fair Value (10-year) | $7.90 |
| Potential Upside (5-year) | -107.0% |
| Potential Upside (10-year) | -93.0% |
| Discount Rate (WACC) | 7.5% - 9.9% |
Revenue is projected to grow from $2684 million in 12-2024 to $21176 million by 12-2034, representing a compound annual growth rate of approximately 22.9%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 12-2024 | 2684 | 26% |
| 12-2025 | 3344 | 25% |
| 12-2026 | 4484 | 34% |
| 12-2027 | 5947 | 33% |
| 12-2028 | 7658 | 29% |
| 12-2029 | 9473 | 24% |
| 12-2030 | 11508 | 21% |
| 12-2031 | 13649 | 19% |
| 12-2032 | 15989 | 17% |
| 12-2033 | 18500 | 16% |
| 12-2034 | 21176 | 14% |
Net profit margin is expected to improve from 7% in 12-2024 to 11% by 12-2034, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 12-2024 | 184 | 7% |
| 12-2025 | 250 | 7% |
| 12-2026 | 372 | 8% |
| 12-2027 | 538 | 9% |
| 12-2028 | 748 | 10% |
| 12-2029 | 990 | 10% |
| 12-2030 | 1218 | 11% |
| 12-2031 | 1462 | 11% |
| 12-2032 | 1733 | 11% |
| 12-2033 | 2028 | 11% |
| 12-2034 | 2348 | 11% |
with a 5-year average of $57 million. Projected CapEx is expected to maintain at approximately 4% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 12-2025 | 76 |
| 12-2026 | 101 |
| 12-2027 | 132 |
| 12-2028 | 175 |
| 12-2029 | 224 |
| 12-2030 | 284 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 85 |
| Days Inventory | 0 |
| Days Payables | 60 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 9M/2025 | 133 | 27 | 91 | 143 | (128) |
| 2026 | 278 | 53 | 163 | 207 | (144) |
| 2027 | 418 | 77 | 216 | 292 | (166) |
| 2028 | 606 | 107 | 278 | 376 | (154) |
| 2029 | 833 | 141 | 344 | 367 | (20) |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 0.00 | -107.0% |
| 10-Year DCF (Growth) | 7.90 | -93.0% |
| 5-Year DCF (EBITDA) | 46.86 | -58.8% |
| 10-Year DCF (EBITDA) | 94.70 | -16.7% |
Is Datadog Inc (DDOG) a buy or a sell? Datadog Inc is definitely a sell. Based on our DCF analysis, Datadog Inc (DDOG) appears to be overvalued with upside potential of -93.0%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.
Key investment drivers include:
Investors should consider reducing exposure at the current market price of $113.69.