Is Datadog, Inc. overvalued or undervalued?

As of 10 June 2025, the valuation grade for Datadog, Inc. has moved from expensive to very expensive, indicating a significant increase in perceived overvaluation. The company is currently considered overvalued based on its high P/E ratio of 255, an EV to EBITDA ratio of 351.05, and a PEG ratio of 6.59, which are substantially above industry norms.
In comparison to peers, Datadog's P/E ratio is notably higher than Palantir Technologies, Inc. at -134.38 and Autodesk, Inc. at 56.52, both of which are also classified as expensive. Additionally, Datadog's EV to EBITDA ratio far exceeds that of Veeva Systems, Inc., which is at 48.96, indicating a stark contrast in valuation metrics among these companies. Despite a recent positive return of 6.22% over the past week compared to a slight decline in the S&P 500, the overall valuation suggests that Datadog, Inc. is not a favorable investment at this time.