Applied Digital (NASDAQ:APLD) Downgraded to Strong Sell Rating by Zacks Research

Key Points

• Zacks Research downgraded Applied Digital from “hold” to “strong sell,” even as the broader analyst community still shows a Moderate Buy consensus with an average target price of $67.67.
• The stock has seen mixed analyst views: several firms recently raised price targets and maintained buy-style ratings, while Weiss Ratings reiterated a sell rating.
• Applied Digital’s latest quarter showed strong revenue growth to $108.55 million, but it also missed EPS estimates and remains unprofitable, with insiders recently selling shares and hedge funds holding a large stake.

Applied Digital (NASDAQ:APLD - Get Free Report) was downgraded by research analysts at Zacks Research from a "hold" rating to a "strong sell" rating in a note issued to investors on Monday,Zacks.com reports.

APLD has been the subject of a number of other reports. Lake Street Capital lifted their target price on Applied Digital from $70.00 to $90.00 and gave the company a "buy" rating in a report on Tuesday. Roth Mkm restated a "buy" rating and set a $65.00 price target on shares of Applied Digital in a report on Thursday, April 23rd. Weiss Ratings reiterated a "sell (d-)" rating on shares of Applied Digital in a research note on Friday, April 24th. Citizens Jmp boosted their price objective on Applied Digital from $40.00 to $60.00 and gave the stock a "market outperform" rating in a research report on Thursday, May 21st. Finally, Needham & Company LLC upped their target price on shares of Applied Digital from $66.00 to $83.00 and gave the stock a "buy" rating in a research note on Tuesday. Three analysts have rated the stock with a Strong Buy rating, eleven have issued a Buy rating and two have given a Sell rating to the stock. According to MarketBeat.com, Applied Digital presently has a consensus rating of "Moderate Buy" and an average target price of $67.67.

Applied Digital Stock Performance

Shares of Applied Digital stock opened at $41.91 on Monday. The stock has a market capitalization of $11.98 billion, a price-to-earnings ratio of -56.63 and a beta of 5.69. The company has a debt-to-equity ratio of 1.65, a current ratio of 2.38 and a quick ratio of 2.38. The business has a 50-day moving average of $36.85 and a 200 day moving average of $32.38. Applied Digital has a 12 month low of $9.02 and a 12 month high of $50.72.

Applied Digital (NASDAQ:APLD - Get Free Report) last issued its quarterly earnings results on Wednesday, April 8th. The company reported ($0.36) earnings per share (EPS) for the quarter, missing analysts' consensus estimates of ($0.13) by ($0.23). The business had revenue of $108.55 million for the quarter, compared to analysts' expectations of $78.47 million. Applied Digital had a negative return on equity of 15.91% and a negative net margin of 52.84%.The firm's revenue for the quarter was up 139.3% on a year-over-year basis. During the same quarter last year, the company earned ($0.08) earnings per share. As a group, sell-side analysts forecast that Applied Digital will post -0.68 earnings per share for the current year.

Insiders Place Their Bets

In other Applied Digital news, Director Douglas S. Miller sold 10,000 shares of the firm's stock in a transaction that occurred on Monday, April 27th. The shares were sold at an average price of $34.98, for a total transaction of $349,800.00. Following the sale, the director owned 184,859 shares of the company's stock, valued at approximately $6,466,367.82. This trade represents a 5.13% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this link. Also, Director Richard N. Nottenburg sold 12,500 shares of the business's stock in a transaction that occurred on Thursday, April 30th. The stock was sold at an average price of $34.59, for a total transaction of $432,375.00. Following the sale, the director owned 208,378 shares of the company's stock, valued at $7,207,795.02. This represents a 5.66% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Over the last 90 days, insiders sold 35,000 shares of company stock worth $1,182,175. 9.50% of the stock is owned by insiders.

Institutional Inflows and Outflows

A number of hedge funds have recently modified their holdings of the stock. Teachers Retirement System of The State of Kentucky acquired a new stake in shares of Applied Digital in the third quarter valued at approximately $994,000. MRA Advisory Group acquired a new position in shares of Applied Digital in the 3rd quarter valued at $978,000. Vanguard Group Inc. raised its position in Applied Digital by 23.2% in the 3rd quarter. Vanguard Group Inc. now owns 17,722,174 shares of the company's stock valued at $406,547,000 after purchasing an additional 3,339,062 shares during the last quarter. Cannon Capital Management Inc. purchased a new stake in Applied Digital in the 4th quarter valued at $3,635,000. Finally, Mirae Asset Global Investments Co. Ltd. acquired a new stake in Applied Digital during the 4th quarter worth $2,674,000. 65.67% of the stock is owned by hedge funds and other institutional investors.

Key Stories Impacting Applied Digital

Here are the key news stories impacting Applied Digital this week:

• Positive Sentiment: Applied Digital signed a 15-year, 210 MW lease with a U.S.-based investment-grade hyperscaler at its Delta Forge 2 campus, adding about $5.2 billion in contracted revenue and bringing total contracted portfolio value to roughly $36 billion across five campuses. Applied Digital signs $5.2 billion AI data center lease with U.S. hyperscaler
• Positive Sentiment: The company also signed a third hyperscaler lease in six weeks, further validating demand for its AI infrastructure and reinforcing visibility into future revenue. B. Riley pins APLD stock price at $66 after new lease signing
• Positive Sentiment: Analysts turned more bullish, with multiple firms raising price targets on the stock after the new lease announcements, signaling higher expected upside from current levels. Applied Digital Stock In Focus: Company Signs Fifth AI Campus Deal, Raises $1.59 Billion
• Neutral Sentiment: Applied Digital announced a $1.59 billion senior secured notes offering to fund the fourth building at Polaris Forge 1; while the debt raise supports growth, it also adds leverage and introduces financing execution risk. Applied Digital Announces Pricing of $1.59 Billion of Senior Secured Notes to fund the Fourth Building at Polaris Forge 1
• Neutral Sentiment: The stock was also added to a Zacks Strong Sell list, which may temper enthusiasm, though this is outweighed today by the large contract wins and analyst upgrades. New Strong Sell Stocks for June 9th

About Applied Digital

Applied Digital NASDAQ: APLD is a technology company specializing in the development and operation of large-scale digital infrastructure and sustainable Bitcoin mining solutions. Through its integrated platform, the company designs, builds and manages turnkey data center facilities while also providing comprehensive hosting services for cloud, colocation and enterprise computing needs. Applied Digital's modular approach to facility design enables rapid deployment of capacity and streamlined integration of power, cooling and network connectivity.

In addition to its data center business, Applied Digital operates a network of Bitcoin mining sites that leverage vertically integrated capabilities, including hardware procurement, mining farm engineering, energy management and real-time performance monitoring.

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