DigitalOcean (NYSE:DOCN) Stock Price Target Lowered at Citigroup

Key Points

• Citigroup cut DigitalOcean’s price target from $190 to $160 but maintained its Buy rating; the new target implies about 90% upside from the cited share price of $84.26.
• Shares fell $6.24 to $84.26 on Wednesday, despite DigitalOcean reporting quarterly EPS of $0.45 and revenue of $321.19 million, both above analyst estimates. Revenue rose 39.6% year over year.
• Analyst sentiment remained broadly positive: MarketBeat reported an average Buy rating and an average price target of $144.06, though several firms had recently lowered their targets.

DigitalOcean (NYSE:DOCN - Get Free Report) had its price target reduced by Citigroup from $190.00 to $160.00 in a research note issued on Wednesday, Benzinga reports. The firm presently has a "buy" rating on the stock. Citigroup's price objective suggests a potential upside of 89.89% from the stock's current price.

DOCN has been the topic of a number of other reports. UBS Group reduced their price target on shares of DigitalOcean from $125.00 to $105.00 and set a "neutral" rating on the stock in a research note on Monday, October 26th. Robert W. Baird started coverage on shares of DigitalOcean in a research report on Tuesday, July 21st. They set an "outperform" rating and a $165.00 price objective for the company. Oppenheimer upped their price objective on shares of DigitalOcean from $190.00 to $220.00 and gave the stock an "outperform" rating in a research report on Wednesday, October 14th. KeyCorp reissued an "overweight" rating on shares of DigitalOcean in a research note on Tuesday, October 13th. Finally, Zacks Research upgraded shares of DigitalOcean from a "hold" rating to a "strong-buy" rating in a research report on Monday, October 19th. Two equities research analysts have rated the stock with a Strong Buy rating, fourteen have assigned a Buy rating and two have given a Hold rating to the company's stock. Based on data from MarketBeat.com, the company currently has an average rating of "Buy" and an average target price of $144.06.

DigitalOcean Price Performance

Shares of DOCN stock traded down $6.24 on Wednesday, hitting $84.26. 6,224,233 shares of the company's stock were exchanged, compared to its average volume of 3,544,030. The company has a 50 day moving average of $118.80 and a 200 day moving average of $111.32. The stock has a market cap of $8.79 billion, a P/E ratio of 38.47, a price-to-earnings-growth ratio of 78.28 and a beta of 1.69. The company has a debt-to-equity ratio of 1.14, a current ratio of 1.31 and a quick ratio of 1.31. DigitalOcean has a 12 month low of $41.96 and a 12 month high of $187.50.

DigitalOcean (NYSE:DOCN - Get Free Report) last released 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. The firm had revenue of $321.19 million for the quarter, compared to analysts' expectations of $306.74 million. DigitalOcean had a return on equity of 31.01% and a net margin of 23.26%. The business's revenue for the quarter was up 39.6% on a year-over-year basis. During the same quarter in the previous year, the business posted $0.54 earnings per share. On average, equities research analysts predict that DigitalOcean will post 0.62 EPS for the current year.

Insider Buying and Selling

In other DigitalOcean news, Director Warren Adelman sold 4,200 shares of the business's stock in a transaction that occurred 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 directly owned 67,433 shares of the company's stock, valued at $8,362,366.33. The trade was a 5.86% decrease in their position. The transaction was disclosed in a legal filing with the SEC, which can be accessed through this link. Also, CAO Cherie Barrett sold 3,985 shares of the business's stock in a transaction that occurred on Thursday, September 3rd. The stock was sold at an average price of $105.73, for a total transaction of $421,334.05. Following the sale, the chief accounting officer directly owned 58,399 shares in the company, valued at $6,174,526.27. The trade was a 6.39% 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. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders have sold a total of 22,641 shares of company stock worth $2,589,317 in the last ninety days. Company insiders own 0.96% of the company's stock.

Institutional Trading of DigitalOcean

Several institutional investors have recently modified their holdings of the business. Bank of America Corp DE acquired a new position in DigitalOcean in the second quarter valued at $241,945,000. Principal Financial Group Inc. grew its holdings in DigitalOcean by 155.3% during the 1st quarter. Principal Financial Group Inc. now owns 1,108,420 shares of the company's stock worth $95,080,000 after acquiring an additional 674,231 shares during the period. Bank of New York Mellon Corp acquired a new stake in DigitalOcean during the 2nd quarter worth about $98,011,000. Allspring Global Investments Holdings LLC grew its holdings in DigitalOcean by 81.3% during the 1st 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 during the period. Finally, Sei Investments Co. raised its position in shares of DigitalOcean by 82.8% in the 1st quarter. Sei Investments Co. now owns 370,223 shares of the company's stock worth $31,758,000 after acquiring an additional 167,659 shares in the last quarter. Institutional investors own 49.77% of the company's stock.

More DigitalOcean News

Here are the key news stories impacting DigitalOcean this week:

• Positive Sentiment: DigitalOcean reported Q3 adjusted earnings of $0.45 per share, above the $0.32 consensus, and revenue of $321.19 million, ahead of estimates and up 39.6% year over year. The company also raised its 2026 outlook. Q3 earnings and revenues top estimates
• Positive Sentiment: Longer-term commentary points to expected revenue growth of 60% or more in 2027. DigitalOcean also said that about 90% of AI-related customer revenue comes from customers using its core cloud services. Three key takeaways for long-term investors
• Neutral Sentiment: Analyst actions were mixed but included lower targets: Barclays cut its target to $140 while maintaining an Overweight rating; UBS lowered its target to $100 and kept Neutral. These targets remain above the share price cited in the reports, but the cuts may temper sentiment. UBS adjusts price target
• Negative Sentiment: Despite beating estimates, reported quarterly EPS was below the $0.54 earned a year earlier. Shares are falling, suggesting the earnings beat and improved outlook have not outweighed investor concerns; analyst target reductions may add to that pressure. DigitalOcean shares are falling

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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