We Trim Our Long-Term Forecasts as Datadog Puts Another Strong Quarter Under Its Belt; FVE to $120

We are lowering our fair value estimate for Datadog to $120 from $192 primarily due to trimming of our long-term forecasts, which, in retrospect, were too bullish. Part of our fair value cut is also informed by our belief that, in the near term, Datadog's clients will rein in certain spending as they optimize costs in a challenging macroeconomic environment. At the same time, we'd be remiss not to note that despite the tough conditions in the near term, we continue to view Datadog as a high-quality software name with strong cash flow generation and increased enterprise penetration. With shares trading around $75 after earnings, we still consider Datadog as attractively priced for investors that can tolerate near-term volatility.