11:18 AM EST, 11/08/2024 (MT Newswires) -- Datadog ( DDOG ) is poised for sustained growth heading into 2025 after delivering strong Q3 beats across the board and raising its full-year 2024 guidance, Wedbush Securities said in a note Friday.

On Thursday, Datadog ( DDOG ) posted higher Q3 results from a year earlier. The company's net income and revenue for the quarter surpassed market expectations.

Datadog's ( DDOG ) revenue exceeded expectations, showcasing effective execution across its three main growth pillars and broad-based strength in its portfolio, with 15 out of 23 products generating over $10 million in annual recurring revenue across security and cloud, according to the note.

The company's Q4 revenue outlook aligns with the street's estimate, as the company aims to leverage recent trends in AI integration and expand its customer base across multiple products within the platform. Non-GAAP EPS for Q4 is expected to be above the street's estimate, as Datadog ( DDOG ) strategically invests in research and development and sales & marketing to accelerate its growth trajectory, the note added.

"We believe this quarter was a step in the right direction for [Datadog ( DDOG )] as the company looks to provide a broad-based platform that capitalizes on multi-year trends within digital transformation and cloud migration markets especially with next-gen AI driving greater use of cloud and next-gen infrastructure," Wedbush said.

The firm said a slowdown in cloud migrations that could negatively impact the demand for Datadog's ( DDOG ) products, competition from open-source offerings, and macro slowdown, are the risks to its projected valuation.

Wedbush reiterated its outperform rating on the company's stock and $155 price target.

Datadog ( DDOG ) shares were down nearly 5% in recent trading.

Price: 123.47, Change: -6.32, Percent Change: -4.87