DDOG
Datadog
Usage-based SaaS
★ Quality 32/100Price today
$246.09
what the market pays
Worth
$49.29
calculated cycle value
Price is 399% above its value
charlieapp.co
Price vs Intrinsic Value
The line is the price month by month; the green band marks when it's undervalued (−20% off value). When the price drops in there, the discount is real, not opinion.
Where does the value come from?
Software and digital usage
$48.19
per share
How it's calculated
Datadog — high assistant lane (2026-06-07). Review note.
Net cash in the bank
cash minus financial debt, per share
Total calculated value
business + cash
How many times the cash flow
Usage-based SaaS · few peers to compare
You pay 89x times this business's cash flow.
80% above what Charlie thinks it's worth (17.5x) — you're overpaying, sector or no sector.
Why Overvalued?
Its free cash flow is $2.75/share × 17.5x multiplier plus $1.10 in net cash = $49.29 in intrinsic value. Today's price of $246.09 is 80% above the calculated value — the market is paying a premium over what the model sees as fair.
The price is 399% above the calculated value. You're paying more than it's worth.
Buying here lowers your expected return and wipes out the safety margin.
The next reasonable entry zone starts at $46.83.
At what price would buying make sense?
Entry zones
🟢 Undervalued
≤$39.43
-20% off Value
🟡 Discounted
≤$46.83
-5% off Value
🔴 Today
$246.09
-80% Valor
Overvalued
The market prices it too high versus what the business makes. Patience pays off here.
“Time is the friend of the wonderful company, the enemy of the mediocre.”
— Warren Buffett
Model updated · July 2026
The business
Datadog is the control room that sees your entire cloud; leaving hurts.
Datadog is the observability platform for cloud applications: it monitors infrastructure, logs, and performance in real time. It charges by usage —hosts, gigs of logs ingested— so the bill goes up as the customer grows. Revenue of $3.4B in 2025 with 80% gross margin.
The moat is adoption and stickiness: once instrumented across thousands of servers, ripping out Datadog is painful. The land-and-expand model sells 12+ products to the same customer, and net retention tops 110%. It's not a monopoly —Grafana, New Relic, and the hyperscalers push hard— but the switching cost is real.
Revenue history
From $1.0B to $3.4B in 4 years — nearly 3.4x its size. Selling more and more is the base of everything else.
Where each $100 of sales goes
Revenue $3.4B · FY2025
Of every $100 in sales, $97 goes to costs and operations; $3 is left as net profit (3% margin).
Catalysts and risks
AI observability and LLM monitoring products, a nascent segment with customer traction in 2025.
Expansion into security (Cloud SIEM, ASM): cross-selling into the installed base toward a market worth tens of billions.
Over 3,500 customers with ARR >$100k, a base that multiplies spend as they migrate workloads to the cloud.
The usage-based model is double-edged: in a recession customers optimize spend and the bill drops without warning.
The hyperscalers (AWS, Azure, GCP) offer 'good enough' native tools at zero cost.
Net Income of just $0.1B on $3.4B: much of the profit is stock-based compensation that dilutes shareholders.
Charlie's note
“Excellent business, a cash-generating machine with customers glued in. The problem is the price: at 17.5x it already prices in 35% growth for years. I pay for quality, not for fantasy.”
Analysis · June 2026
So when would be a good price for Datadog?
By our calculation, not yet. We will email you the day it drops to $46.83 — so you do not have to keep checking.
🔔 Email meFree · no card
Charlie informs, it doesn't advise. No information should be taken as a recommendation to buy or sell.