DigitalOcean (NYSE:DOCN) Given New $100.00 Price Target at UBS Group

Key Points

• UBS cut its DigitalOcean price target from $105 to $100 and maintained a Neutral rating; the new target implies 18.68% upside from the stock’s current price.
• DigitalOcean shares fell 6.9% to $84.26 in Wednesday trading.
• Quarterly results beat expectations: revenue rose 39.6% year over year to $321.2 million, and EPS of $0.45 topped the $0.32 consensus, though EPS was down from $0.54 a year earlier.

DigitalOcean (NYSE:DOCN - Get Free Report) had its price target reduced by equities researchers at UBS Group from $105.00 to $100.00 in a research note issued to investors on Wednesday, Benzinga reports. The brokerage presently has a "neutral" rating on the stock. UBS Group's price target would suggest a potential upside of 18.68% from the stock's current price.

Several other research analysts have also recently commented on the stock. Citigroup lowered their price target on shares of DigitalOcean from $190.00 to $160.00 and set a "buy" rating for the company in a report on Wednesday. William Blair restated an "outperform" rating on shares of DigitalOcean in a report on Wednesday, July 15th. Piper Sandler raised shares of DigitalOcean from a "neutral" rating to an "overweight" rating and decreased their price objective for the stock from $142.00 to $126.00 in a research report on Wednesday, October 21st. KeyCorp reaffirmed an "overweight" rating on shares of DigitalOcean in a research report on Tuesday, October 13th. Finally, Robert W. Baird started coverage on shares of DigitalOcean in a research note on Tuesday, July 21st. They set an "outperform" rating and a $165.00 target price for the company. Two investment analysts have rated the stock with a Strong Buy rating, fourteen have given a Buy rating and two have assigned a Hold rating to the company's stock. According to data from MarketBeat.com, DigitalOcean presently has an average rating of "Buy" and a consensus target price of $143.75.

DigitalOcean Stock Down 6.9%

DOCN stock traded down $6.24 during mid-day trading on Wednesday, reaching $84.26. The company had a trading volume of 6,227,843 shares, compared to its average volume of 3,547,239. The company has a debt-to-equity ratio of 1.14, a quick ratio of 1.31 and a current ratio of 1.31. The company has a market capitalization of $8.79 billion, a price-to-earnings ratio of 38.47, a price-to-earnings-growth ratio of 78.28 and a beta of 1.69. The firm has a fifty day simple moving average of $118.80 and a 200 day simple moving average of $111.32. DigitalOcean has a fifty-two week low of $41.96 and a fifty-two week high of $187.50.

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

Insider Activity at DigitalOcean

In other DigitalOcean news, Director Warren Adelman sold 4,200 shares of the stock in a transaction that occurred on Friday, August 7th. The shares were sold at an average price of $124.01, for a total value of $520,842.00. Following the transaction, the director directly owned 67,433 shares in the company, valued at $8,362,366.33. This represents a 5.86% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which is available at this hyperlink. Also, CAO Cherie Barrett sold 4,456 shares of the stock in a transaction that occurred on Thursday, August 13th. The shares were sold at an average price of $132.37, for a total transaction of $589,840.72. Following the completion of the transaction, the chief accounting officer owned 65,487 shares in the company, valued at $8,668,514.19. This represents a 6.37% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold 22,641 shares of company stock valued at $2,589,317 over the last three months. 0.96% of the stock is owned by corporate insiders.

Institutional Investors Weigh In On DigitalOcean

Several hedge funds and other institutional investors have recently bought and sold shares of DOCN. Ausbil Investment Management Ltd acquired a new position in DigitalOcean in the third quarter valued at $3,401,000. Danske Bank A S acquired a new stake in shares of DigitalOcean during the second quarter worth about $1,488,000. Wealth High Governance Asset Management Ltda. acquired a new stake in shares of DigitalOcean during the first quarter worth about $8,986,000. Assenagon Asset Management S.A. increased its position in shares of DigitalOcean by 956.0% during the third quarter. Assenagon Asset Management S.A. now owns 150,248 shares of the company's stock worth $20,042,000 after purchasing an additional 136,020 shares in the last quarter. Finally, Norris Financial Group LLC purchased a new stake in shares of DigitalOcean in the 1st quarter valued at about $7,234,000. 49.77% of the stock is currently owned by institutional investors and hedge funds.

Key Headlines Impacting DigitalOcean

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

About DigitalOcean

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.

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