Canaccord Genuity Group Has Lowered Expectations for DigitalOcean (NYSE:DOCN) Stock Price

Key Points

• Canaccord Genuity cut its DigitalOcean price target from $200 to $180 but maintained a Buy rating; the new target implies 113.6% upside from the stock’s reported $84.26 price.
• DigitalOcean beat quarterly estimates, reporting EPS of $0.45 versus $0.32 expected and revenue of $321.2 million, up 39.6% year over year. EPS was lower than the $0.54 reported a year earlier.
• Analyst views remain mostly positive but mixed: MarketBeat reported a consensus Buy rating and $142.50 target, while several firms cut targets and Oppenheimer raised its target to $220.

DigitalOcean (NYSE:DOCN - Get Free Report) had its price objective reduced by investment analysts at Canaccord Genuity Group from $200.00 to $180.00 in a research note issued to investors on Wednesday, Benzinga reports. The brokerage presently has a "buy" rating on the stock. Canaccord Genuity Group's price target points to a potential upside of 113.63% from the company's current price.

A number of other brokerages also recently weighed in on DOCN. Morgan Stanley lowered their price target on DigitalOcean from $175.00 to $150.00 and set an "overweight" rating on the stock in a research report on Wednesday. Oppenheimer raised their price objective on DigitalOcean from $190.00 to $220.00 and gave the company an "outperform" rating in a research report on Wednesday, October 14th. Weiss Ratings downgraded DigitalOcean from a "buy (b-)" rating to a "hold (c+)" rating in a research note on Wednesday, September 9th. Barclays decreased their target price on DigitalOcean from $161.00 to $140.00 and set an "overweight" rating on the stock in a report on Wednesday. Finally, Robert W. Baird assumed coverage on DigitalOcean in a research note on Tuesday, July 21st. They issued an "outperform" rating and a $165.00 price target on the stock. Two investment analysts have rated the stock with a Strong Buy rating, fourteen have given a Buy rating and two have issued a Hold rating to the company. According to data from MarketBeat, DigitalOcean has an average rating of "Buy" and a consensus target price of $142.50.

DigitalOcean Stock Performance

NYSE DOCN traded down $6.24 on Wednesday, hitting $84.26. 6,227,843 shares of the stock were exchanged, compared to its average volume of 3,547,239. The company has a debt-to-equity ratio of 1.14, a current ratio of 1.31 and a quick ratio of 1.31. The business's fifty day moving average is $118.80 and its 200 day moving average is $111.32. DigitalOcean has a 52 week low of $41.96 and a 52 week high of $187.50. The company has a market capitalization of $8.79 billion, a PE ratio of 38.47, a P/E/G ratio of 78.28 and a beta of 1.69.

DigitalOcean (NYSE:DOCN - Get Free Report) last announced its quarterly earnings data on Tuesday, November 3rd. The company reported $0.45 EPS for the quarter, beating analysts' consensus estimates of $0.32 by $0.13. The company had revenue of $321.19 million during the quarter, compared to the consensus estimate of $306.74 million. DigitalOcean had a net margin of 23.26% and a return on equity of 31.01%. The company's quarterly revenue was up 39.6% on a year-over-year basis. During the same quarter last year, the firm posted $0.54 EPS. Research analysts anticipate that DigitalOcean will post 0.62 EPS for the current fiscal year.

Insider Activity

In other DigitalOcean news, Director Warren Adelman sold 4,200 shares of the business's stock in a transaction on Friday, August 7th. The shares were sold at an average price of $124.01, for a total transaction of $520,842.00. Following the sale, the director owned 67,433 shares of the company's stock, valued at approximately $8,362,366.33. The trade was a 5.86% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which can be accessed through the SEC website. Also, CFO Matt Steinfort sold 10,000 shares of the business's stock in a transaction on Thursday, September 3rd. The stock was sold at an average price of $105.73, for a total value of $1,057,300.00. Following the sale, the chief financial officer owned 503,692 shares in the company, valued at $53,255,355.16. This represents a 1.95% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. In the last three months, insiders have sold 22,641 shares of company stock worth $2,589,317. Corporate insiders own 0.96% of the company's stock.

Institutional Investors Weigh In On DigitalOcean

Large investors have recently added to or reduced their stakes in the business. Retirement Systems of Alabama grew its stake in DigitalOcean by 19.6% in the 3rd quarter. Retirement Systems of Alabama now owns 100,660 shares of the company's stock valued at $13,427,000 after purchasing an additional 16,464 shares during the period. Fulcrum Asset Management LLP bought a new stake in shares of DigitalOcean during the 3rd quarter worth $1,315,000. Allspring Global Investments Holdings LLC raised its stake in shares of DigitalOcean by 18.6% during the 3rd quarter. Allspring Global Investments Holdings LLC now owns 580,462 shares of the company's stock worth $81,149,000 after purchasing an additional 90,897 shares during the period. Ethic Inc. raised its stake in shares of DigitalOcean by 39.7% during the 3rd quarter. Ethic Inc. now owns 6,878 shares of the company's stock worth $918,000 after purchasing an additional 1,956 shares during the period. Finally, Summit Creek Advisors LLC boosted its holdings in shares of DigitalOcean by 28.8% in the 3rd quarter. Summit Creek Advisors LLC now owns 44,350 shares of the company's stock worth $5,916,000 after buying an additional 9,918 shares during the last quarter. Institutional investors and hedge funds own 49.77% of the company's stock.

DigitalOcean News Summary

Here are the key news stories impacting DigitalOcean this week:

• Positive Sentiment: Third-quarter revenue rose 39.6% year over year to $321.2 million, ahead of estimates, while EPS of $0.45 beat the $0.32 consensus. DigitalOcean also raised its 2026 outlook, which was reported as exceeding expectations. Zacks Q3 earnings report
• Positive Sentiment: Longer-term growth prospects may be supporting the bullish case: one report says the company expects revenue growth of at least 60% in 2027, and that 90% of AI customer revenue comes from customers also using its core cloud services. The Motley Fool's long-term takeaways
• Negative Sentiment: Several firms lowered their price targets, adding pressure after the results. Citigroup cut its target to $160 but kept a Buy rating, Barclays reduced its target to $140 and retained Overweight, and UBS lowered its target to $100 while maintaining Neutral. Stifel also cut its target, to $130. These revisions suggest analysts have moderated their expectations, even as some remain bullish. UBS target update
• Negative Sentiment: Despite beating estimates, quarterly EPS was down from $0.54 a year earlier, and a separate report noted a decline in non-GAAP earnings. That year-over-year earnings softness may temper the positive revenue and outlook news. Q3 non-GAAP earnings and outlook

DigitalOcean Company Profile

DigitalOcean Holdings, Inc is a cloud computing company that provides infrastructure and developer-focused services for startups, small and medium-sized businesses, and individual developers. Its platform is designed to simplify the deployment, management, and scaling of applications without requiring customers to build and operate extensive in-house infrastructure.

The company's offerings include Droplets, its virtual machine service; managed Kubernetes; managed databases; object and block storage; networking tools; and application deployment services through App Platform.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.