Why Datadog and Workiva Offer Rare Value in Enterprise Tech's Post-Pandemic Landscape

The post-pandemic era has reshaped enterprise software markets, with many stocks retreating from their 2021 peaks. Yet, amid this correction, two companies—Datadog (DDOG) and Workiva (WK)—now offer compelling opportunities for investors seeking growth at a discount. Their price-to-sales (P/S) ratios have collapsed to multiyear lows, even as they deliver robust revenue growth and innovate aggressively in AI-driven solutions. With analyst optimism rising and massive addressable markets ahead, this duo presents a rare chance to buy high-growth tech at post-bubble valuations.

The Valuation Drop: A Buying Opportunity or Concern?

Both companies have seen their P/S ratios plummet since 2021, reflecting broader market skepticism about growth stocks. Datadog's P/S ratio has fallen to 15.5 from a peak of 70, while Workiva's P/S dropped to 4.8—near its post-IPO lowest level. For context, the average P/S for enterprise software companies is around 5–10, suggesting both are still trading above sector averages. But this isn't a red flag—it's a sign of their potential to grow into these valuations.

The graph above shows how both stocks have underperformed the S&P 500 recovery, despite outpacing revenue expectations. While this pain has been steep—Workiva's stock is down 57% from its high—investors who focus on fundamentals might see this as a buying opportunity.

AI-Driven Innovation: The Growth Catalyst

The undervaluation isn't rooted in stagnation. Both firms have doubled down on AI integration, positioning themselves to capitalize on secular trends in observability, security, and compliance.

Datadog: The Observatory of the AI Era

Datadog's AI-first updates at its 2025 DASH conference underscore its dominance in observability, a $53 billion market. Key innovations include:
- LLM Observability: Visualizes AI decision-making paths and tool usage, solving the “black box” problem for multi-agent systems.
- GPU Monitoring: Helps enterprises optimize cloud and on-premises AI workloads, slashing costs while scaling performance.
- Bits AI Integrations: Autonomous tools like the AI Dev Agent and AI Security Analyst reduce human intervention in incident response and code debugging.

These features aren't just incremental—they're redefining how enterprises manage AI at scale. With revenue forecasted to hit $3.235 billion in 2025 (+21% YoY), Datadog's AI pivot is paying off.

Workiva: Compliance Meets AI-Enhanced Collaboration

Workiva's focus on regulatory compliance and data-driven collaboration aligns with the $35 billion ESG reporting market. Its 2025 updates include:
- Cell Range Inline AI: Enables teams to analyze datasets directly within spreadsheets, boosting productivity for financial and sustainability reporting.
- Audit-Ready AI Logging: Automatically tracks AI interactions in Workiva Workspaces, easing compliance without sacrificing usability.
- CDP 2025 Support: Ensures alignment with the latest sustainability reporting standards, a must-have for global enterprises.

Workiva's revenue is projected to grow 17.5% to $868 million, proving its value to regulated industries.

Analysts See Upside: A Consensus in the Making

Despite the valuation drops, analysts remain bullish. For Datadog, 31 of 46 analysts rate it a “buy,” with a 12–18-month target of $140.72—15% above current levels. For Workiva, 11 of 13 analysts recommend buying, with a 44% upside to $97.64.

This consensus isn't accidental. Both companies are executing against clear, high-margin markets. Datadog's observability tools reduce cloud costs for AI workloads, while Workiva's compliance solutions are mission-critical for ESG mandates.

The Case for Buying Now: Risk vs. Reward

The risks? Both stocks face macroeconomic uncertainty and competition. But the rewards—driven by secular tailwinds—are asymmetric.

• Datadog's Moat: Its observability platform is irreplaceable for enterprises adopting AI at scale. The $53 billion market isn't just a number—it's a growth runway for years.
• Workiva's Niche: Regulatory reporting isn't glamorous, but it's a must-have for global firms. Workiva's AI tools make compliance faster and more accurate, not just cheaper.

The P/S ratios, while still elevated versus peers, reflect the premium investors once paid for growth. Now, with revenue growth intact and innovation accelerating, the stocks appear mispriced.

Final Take: A Rare Entry Point

For growth investors, Datadog and Workiva offer a rare combination: fallen angels with intact fundamentals and secular tailwinds. Their valuations have been corrected, but their moats remain intact. The analyst targets suggest a potential 15–44% return, but the real upside lies in their ability to dominate their respective markets.

If you're looking for enterprise software stocks that blend valuation discipline with high-growth potential, these two are near the top of the list. The post-pandemic correction has created an entry point that may not last long.

Invest accordingly.