What Are Datadog Investors Betting On

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Datadog (DDOG) stock trades at 69.7 times its adjusted earnings over the last twelve months, profit with stock-based pay added back after tax. Datadog earns some of that profit outside its operations: in fiscal Q3 2026, net income of $118 million came on $75.8 million of operating income. Set against the profit analysts expect for fiscal 2026 and 2027, though, the same price looks different. The trailing figure and the forecast may not count profit the same way, so part of that gap can come from how profit is measured. So what sales and profit are buyers at that price expecting from Datadog?

Datadog Investors Are Betting On Growth Without Wider Margins

The consensus forecast places Datadog's sales at $5,518 million in fiscal 2027, up 22.2% from fiscal 2026. Analysts do not expect margins to widen on the way there. The forecast projects a net margin of 22.8% for fiscal 2026 and 22.2% for fiscal 2027. Those margins may not count profit the way Datadog reports it, which gives a far lower margin, as shown further down.

Based on that consensus profit, the stock trades at 62.2 times fiscal 2026 earnings and 52.2 times fiscal 2027 earnings. All three multiples use the November 10, 2026 close of $178.40 a share. The fiscal 2027 figure remains less settled, since the gap between the highest and lowest per-share estimates equals 26.3% of the forecast.

Datadog Is Already Growing Sales Faster Than Forecast

Over the last twelve months, Datadog grew revenue by 33.2%, coming in well above the consensus forecast for fiscal 2027. In fiscal Q3 2026 alone, revenue rose 35.2% from a year earlier.

On its November 4, 2026 call, management said the company's infrastructure monitoring suite now tops $2 billion in annual recurring revenue, growing in the mid-30s percent. Management also called the Bits AI agent the fastest adopted product in Datadog's history. The company raised its fiscal 2026 revenue guide to a midpoint of $4,520 million, up from an earlier guide of $4,460 million in August, and the consensus forecast for that year sits right on it.

Where Could Datadog Fall Short Of The Forecast?

On sales, the risk lies with Datadog's largest customers. The biggest customer reduced its usage in fiscal Q3 2026. Management's fiscal Q4 2026 guide includes that customer only at its minimum commitment, so sales would be higher if it spends above that minimum. Management also renewed several large customers, including large AI customers, early at higher commitments, but with volume discounts, and said those renewals weigh on revenue in the short term.

If Datadog delivers the consensus profit, the forward multiples are an honest measure of what you pay for the stock. The forecast does not appear to count reported profit. On reported profit, though, you are paying for earnings Datadog has not yet shown, which makes the shares a riskier bet than the forward multiples suggest. Management said it will give its fiscal 2027 guidance on its year-end call, and the revenue guide for that year is the measure to watch.

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