The New York-based firm met Wall Street estimates on all major financial performance measures, such as revenue, adjusted earnings and operating income. In the third quarter, Datadog had revenue of $1.14 billion, beating Wall Street estimates, and earnings between 63 cents and 65 cents per share, which was also above expectations. However, Jefferies lowered its valuation concerns after the stock's strong performance and downgraded the stock to a Hold rating prior to its earnings. Although several brokerages increased their price targets ahead of the earnings report, the average analyst target remained below the stock's pre-earnings trading price, suggesting investor expectations had outpaced Wall Street forecasts. A big drop in Datadog stock highlights how high-priced stocks can get heavy selling pressure even when they beat Wall Street estimates.