“Datadog is a stock we love,” say analysts at StockStory, even though the company’s shares have declined 1.2% over the past six months while the S&P 500 has risen 5.4%. They believe the current price of $150 still offers an attractive entry point given the business model and fundamentals.

According to experts, Datadog’s key advantage is its stable recurring revenue. “The company’s ARR reached $3.2 billion, with an average annual growth of 27.2% — this makes the business predictable and attractive to investors,” the report states.

Analysts also highlight the efficiency of customer acquisition. “The customer acquisition cost payback period is just 20.4 months — an excellent figure for a SaaS company,” they note.

Finally, StockStory emphasizes Datadog’s impressive cash flow. “The free cash flow margin averaged 29.4% over the past year — one of the best in the sector,” they stress.

While DDOG shares have lagged behind the market, analysts believe the company has strong growth potential. “The current valuation presents a good entry point,” StockStory concludes.