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Datadog shares slide after earnings despite revenue and guidance beat

Datadog reported second-quarter revenue up 36% year over year and raised its full-year outlook on Aug. 6, but the stock still dropped nearly 19% in the session as expectations ran ahead of results.

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Datadog’s Aug. 6 earnings created a disconnect between fundamentals and the stock move, with the observability software company beating on both revenue and earnings but shares falling sharply afterward. The company reported second-quarter results with revenue rising 36% year over year, and management raised its full-year outlook.

Even with the beat and improved guidance, Datadog dropped almost 19% in a single session, closing at $229.29, according to MarketBeat Ratings. The outlet attributed the decline to valuation and expectations, noting the stock had already gained more than 100% year to date.

MarketBeat Ratings also framed the move as a reminder that strong quarterly performance does not always translate into gains when the stock has already run up. It added that analysts remain constructive, citing a Moderate Buy consensus across 45 analysts and an average price target of $274.05, implying about 15% upside, with projected earnings growth above 64%.

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