DigitalOcean (NYSE:DOCN) Given New $156.00 Price Target at The Goldman Sachs Group

Key Points

• Goldman Sachs lowered its DigitalOcean price target to $156 from $178 but maintained a Buy rating; the article says the revised target implies 117.25% upside from the share price at the time.
• DigitalOcean’s latest quarter beat expectations, with revenue up 39.6% year over year to $321.2 million and EPS of $0.45 versus $0.32 expected.
• Shares fell 14.5% on Thursday to $71.81. Other analysts also cut price targets, though the consensus rating remained Buy with an average target of $141.06.

DigitalOcean (NYSE:DOCN - Get Free Report) had its target price dropped by equities research analysts at The Goldman Sachs Group from $178.00 to $156.00 in a research note issued to investors on Thursday, Benzinga reports. The brokerage currently has a "buy" rating on the stock. The Goldman Sachs Group's price target points to a potential upside of 117.25% from the company's current price.

A number of other equities analysts have also issued reports on the company. Citigroup lowered their price target on DigitalOcean from $190.00 to $160.00 and set a "buy" rating on the stock in a report on Wednesday. Canaccord Genuity Group lowered their target price on DigitalOcean from $200.00 to $180.00 and set a "buy" rating on the stock in a research note on Wednesday. KeyCorp reissued an "overweight" rating on shares of DigitalOcean in a report on Tuesday, October 13th. Truist Financial started coverage on DigitalOcean in a research note on Thursday, August 27th. They set a "buy" rating and a $175.00 price target for the company. Finally, Piper Sandler raised DigitalOcean from a "neutral" rating to an "overweight" rating and decreased their price target for the stock from $142.00 to $126.00 in a report on Wednesday, October 21st. Two research analysts have rated the stock with a Strong Buy rating, fourteen have issued a Buy rating and two have issued a Hold rating to the company. According to MarketBeat, DigitalOcean currently has a consensus rating of "Buy" and an average target price of $141.06.

DigitalOcean Stock Down 14.5%

DOCN traded down $12.21 on Thursday, reaching $71.81. The company's stock had a trading volume of 4,053,159 shares, compared to its average volume of 3,549,089. The company has a market capitalization of $7.49 billion, a price-to-earnings ratio of 230.05, a P/E/G ratio of 78.90 and a beta of 1.69. DigitalOcean has a fifty-two week low of $41.96 and a fifty-two week high of $187.50. The company has a quick ratio of 1.31, a current ratio of 1.15 and a debt-to-equity ratio of 0.61. The stock has a 50 day moving average of $118.24 and a two-hundred day moving average of $111.48.

DigitalOcean (NYSE:DOCN - Get Free Report) last announced its earnings results on Tuesday, November 3rd. The company reported $0.45 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $0.32 by $0.13. DigitalOcean had a return on equity of 15.01% and a net margin of 3.11%. The firm had revenue of $321.19 million during the quarter, compared to analysts' expectations of $306.74 million. During the same period in the prior year, the firm earned $0.54 EPS. The business's revenue was up 39.6% on a year-over-year basis. As a group, analysts forecast that DigitalOcean will post 0.62 EPS for the current fiscal year.

Insider Buying and Selling at DigitalOcean

In other DigitalOcean news, CFO Matt Steinfort sold 10,000 shares of DigitalOcean stock in a transaction that occurred 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 of the company's stock, valued at approximately $53,255,355.16. The trade was a 1.95% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through the SEC website. 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. Also, Director Warren Adelman sold 4,200 shares of the business's stock in a transaction that occurred on Friday, August 7th. The stock was sold at an average price of $124.01, for a total value of $520,842.00. Following the transaction, the director owned 67,433 shares in the company, valued at $8,362,366.33. The trade was a 5.86% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. In the last 90 days, insiders have sold 22,641 shares of company stock valued at $2,589,317. 0.96% of the stock is owned by corporate insiders.

Institutional Inflows and Outflows

Several large investors have recently bought and sold shares of DOCN. Bank of America Corp DE acquired a new stake in DigitalOcean during the 2nd quarter worth about $241,945,000. First Trust Advisors LP boosted its holdings in shares of DigitalOcean by 9.3% in the first quarter. First Trust Advisors LP now owns 1,441,151 shares of the company's stock worth $123,622,000 after buying an additional 122,675 shares during the period. Principal Financial Group Inc. boosted its holdings in shares of DigitalOcean by 155.3% in the first quarter. Principal Financial Group Inc. now owns 1,108,420 shares of the company's stock worth $95,080,000 after buying an additional 674,231 shares during the period. Allspring Global Investments Holdings LLC increased its position in shares of DigitalOcean by 81.3% in the first quarter. Allspring Global Investments Holdings LLC now owns 683,707 shares of the company's stock worth $59,947,000 after acquiring an additional 306,529 shares in the last quarter. Finally, Bank of New York Mellon Corp purchased a new position in shares of DigitalOcean in the second quarter worth approximately $98,011,000. Hedge funds and other institutional investors own 49.77% of the company's stock.

Key Headlines Impacting DigitalOcean

Here are the key news stories impacting DigitalOcean this week:

• Positive Sentiment: DigitalOcean beat Q3 expectations, reporting $321.2 million in revenue, up 39.6% year over year, and EPS of $0.45 versus the $0.32 consensus. The company also raised its outlook; management expects revenue growth of at least 60% in 2027, with most AI customer revenue coming from existing cloud customers. DigitalOcean Stock Jumps On Higher Guidance And AI Revenue Growth
• Positive Sentiment: A Yahoo Finance article argues DOCN could be 62% below fair value after the results and offering, suggesting potential upside if its valuation view proves correct. DigitalOcean Holdings Could Be 62% Below Fair Value
• Neutral Sentiment: Despite lowering price targets, Canaccord, Citi and Barclays maintained Buy or Overweight ratings; UBS kept a Neutral rating. Their revised targets remain above the recent share price, but the cuts signal more cautious assumptions. UBS Adjusts Price Target
• Negative Sentiment: The reported $1 billion offering may be weighing on sentiment amid concern about added share supply or dilution; the provided article headline does not specify the offering’s terms. Multiple firms also reduced targets, including UBS to $100, Citi to $160, Barclays to $140, Canaccord to $180 and Stifel to $130. Stifel Lowers DigitalOcean Price Target

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.

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