DCF Studio

    DDOG · NMS · Technology

    Datadog, Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 3.03

    Market price

    USD 216.10

    Implied upside

    -98.6%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    Wrong toolThis model values the shares at 1.4% of the market price. A gap that size is a modelling failure rather than a view - most often an unusable beta, a currency or units mismatch, or a cashflow base that does not represent the business. Read the figures below as diagnostics, not as a call.
    AdjustedFree cashflow is negative in at least one forecast year, so terminal value carries most of the valuation.
    AdjustedCapital expenditure runs at 3.6% of revenue against depreciation of 2.0%. A perpetuity has to be a steady state, so the forecast tapers capex to maintenance at depreciation plus the reinvestment terminal growth requires (g/ROIC of NOPAT), and the terminal year carries on from there. The bridge is shown under Terminal Value.

    Current EV/EBITDA of 6536.1x sits outside a defensible 3-20x band, so the exit multiple is capped at 20.0x. A multiple that far out usually means EBITDA is the wrong denominator for this business.

    Value Per Share

    Perpetuity growth
    USD 3.03-98.6%
    Exit multiple
    USD 5.41-97.5%
    Market price
    USD 216.10

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    -386359987-1931799940FY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 4.5bnUSD 5.5bnUSD 6.6bnUSD 7.8bnUSD 8.9bnUSD 10.1bnUSD 11.1bnUSD 11.9bnUSD 12.5bnUSD 12.8bn+12.4%
    EBITUSD -48.6mUSD -59.7mUSD -71.7mUSD -84.4mUSD -97.1mUSD -109.4mUSD -120.4mUSD -129.5mUSD -136.0mUSD -139.4m-12.4%
    NOPATUSD -41.3mUSD -50.6mUSD -60.8mUSD -71.6mUSD -82.4mUSD -92.8mUSD -102.1mUSD -109.8mUSD -115.3mUSD -118.2m-12.4%
    Add depreciation & amortisationUSD 87.6mUSD 107.5mUSD 129.1mUSD 151.9mUSD 174.9mUSD 196.9mUSD 216.7mUSD 233.1mUSD 244.8mUSD 250.9m+12.4%
    Less capital expenditureUSD -160.1mUSD -186.6mUSD -212.3mUSD -235.8mUSD -255.3mUSD -269.4mUSD -276.6mUSD -276.0mUSD -267.3mUSD -250.9m+5.1%
    Capex, % of revenue3.6%3.4%3.2%3.0%2.9%2.7%2.5%2.3%2.1%2.0%-
    Less increase in working capitalUSD -199.6mUSD -193.4mUSD -210.9mUSD -221.7mUSD -223.5mUSD -214.3mUSD -193.0mUSD -159.2mUSD -114.0mUSD -59.6m-12.6%
    Free cashflow to firmUSD -313.4mUSD -323.2mUSD -354.9mUSD -377.2mUSD -386.4mUSD -379.6mUSD -354.9mUSD -311.9mUSD -251.8mUSD -177.8m+6.1%
    Discount factor0.95130.86100.77930.70530.63830.57770.52290.47320.42830.3876-
    Present valueUSD -298.2mUSD -278.2mUSD -276.6mUSD -266.0mUSD -246.6mUSD -219.3mUSD -185.6mUSD -147.6mUSD -107.8mUSD -68.9m-
    Present Value Of The ForecastUSD -2.1bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta1.341Reported 1.509, pulled toward 1.0 (Blume)
    Cost of equity10.57%Risk-free + beta x equity risk premium
    Cost of debt6.89%Risk-free + 200bp, the spread for a D rating at -4.0x interest cover, capped at 200bp because one year's cover is too noisy to charge more. Book interest / average debt was lower, at 0.7%.
    Market capitalisationUSD 77.6bn98.4% of capital
    Total debtUSD 1.3bn1.6% of capital, book value as a proxy
    Tax rate15.2%Effective, capped at statutory
    WACC10.49%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 3.03

    0% of EV

    Terminal value, undiscounted
    USD 0.00
    Terminal value, discounted
    USD 0.00
    Enterprise value
    USD -2.1bn
    Less net debt
    USD -3.2bn
    Equity value
    USD 1.1bn

    Exit at 20.0x EBITDA

    Value per shareUSD 5.41

    -70% of EV

    Terminal value, undiscounted
    USD 2.2bn
    Terminal value, discounted
    USD 864.8m
    Enterprise value
    USD -1.2bn
    Less net debt
    USD -3.2bn
    Equity value
    USD 2.0bn

    Spread between methods: 56%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    8.49%2.582.582.582.582.58
    9.49%2.812.812.812.812.81
    10.49%3.033.033.033.033.03
    11.49%3.233.233.233.233.23
    12.49%3.423.423.423.423.42

    Outlined: this model. Green text: above today's price of 216.10. Shading: distance from this model's own value.

    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.