Applied Digital (NASDAQ:APLD) Shares Down 9.1% - Time to Sell?

Key Points

• Shares fell 9.1% to $28.57 on Tuesday on below-average volume, and analysts show a mixed view — MarketBeat's consensus is a "Moderate Buy" with a $26.20 average price target while several firms have lifted targets to $37–$40 and one firm maintains a "sell".
• Applied Digital beat EPS estimates for the quarter (‑$0.03 vs. ‑$0.11) but missed revenue ($38.0M vs. $52.3M), remaining unprofitable with negative net margin and ROE despite strong year-over-year revenue growth.
• There has been notable insider selling (823,035 shares worth ~$18.9M last quarter, including sales by the CFO and a director) even as institutional investors increased stakes; insiders now own 9.5% and institutions 65.67% of the stock.

Applied Digital Corporation (NASDAQ:APLD - Get Free Report)'s stock price was down 9.1% on Tuesday . The stock traded as low as $27.64 and last traded at $28.57. Approximately 22,562,148 shares traded hands during trading, a decline of 37% from the average daily volume of 36,002,648 shares. The stock had previously closed at $31.44.

Analysts Set New Price Targets

APLD has been the topic of a number of research reports. Weiss Ratings reiterated a "sell (d-)" rating on shares of Applied Digital in a report on Wednesday, October 8th. Northland Securities lifted their price target on shares of Applied Digital to $40.00 and gave the stock an "outperform" rating in a research report on Friday, October 10th. HC Wainwright increased their price objective on Applied Digital from $20.00 to $40.00 and gave the company a "buy" rating in a research report on Friday, October 10th. Citigroup restated an "outperform" rating on shares of Applied Digital in a report on Thursday, October 9th. Finally, Lake Street Capital boosted their target price on Applied Digital from $18.00 to $37.00 and gave the stock a "buy" rating in a research report on Friday, October 10th. One investment analyst has rated the stock with a Strong Buy rating, eleven have given a Buy rating and one has issued a Sell rating to the stock. According to MarketBeat, the stock has an average rating of "Moderate Buy" and a consensus price target of $26.20.

Applied Digital Stock Performance

The firm's 50-day simple moving average is $26.62 and its two-hundred day simple moving average is $16.18. The company has a current ratio of 0.65, a quick ratio of 0.65 and a debt-to-equity ratio of 0.29. The stock has a market capitalization of $8.13 billion, a PE ratio of -25.28 and a beta of 6.77.

Applied Digital (NASDAQ:APLD - Get Free Report) last released its earnings results on Thursday, October 9th. The company reported ($0.03) earnings per share (EPS) for the quarter, beating analysts' consensus estimates of ($0.11) by $0.08. The company had revenue of $38.01 million during the quarter, compared to analyst estimates of $52.25 million. Applied Digital had a negative return on equity of 37.14% and a negative net margin of 111.29%.The company's revenue for the quarter was up 84.3% on a year-over-year basis. During the same quarter in the prior year, the company earned ($0.15) earnings per share. On average, equities research analysts expect that Applied Digital Corporation will post -0.96 earnings per share for the current fiscal year.

Insider Activity at Applied Digital

In related news, Director Richard N. Nottenburg sold 34,375 shares of the business's stock in a transaction that occurred on Friday, October 24th. The shares were sold at an average price of $33.23, for a total transaction of $1,142,281.25. Following the transaction, the director directly owned 263,612 shares of the company's stock, valued at approximately $8,759,826.76. The trade was a 11.54% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which is accessible through the SEC website. Also, CFO Mohammad Saidal Lavanw Mohmand sold 100,000 shares of the company's stock in a transaction that occurred on Friday, October 24th. The shares were sold at an average price of $34.08, for a total transaction of $3,408,000.00. Following the completion of the transaction, the chief financial officer owned 158,912 shares in the company, valued at approximately $5,415,720.96. This represents a 38.62% decrease in their position. The disclosure for this sale is available in the SEC filing. Over the last quarter, insiders have sold 823,035 shares of company stock worth $18,930,179. Company insiders own 9.50% of the company's stock.

Institutional Inflows and Outflows

A number of hedge funds and other institutional investors have recently modified their holdings of the business. Hood River Capital Management LLC lifted its holdings in shares of Applied Digital by 2.8% during the second quarter. Hood River Capital Management LLC now owns 21,859,031 shares of the company's stock worth $220,120,000 after buying an additional 592,314 shares during the last quarter. Vanguard Group Inc. increased its position in Applied Digital by 23.2% during the third quarter. Vanguard Group Inc. now owns 17,722,174 shares of the company's stock worth $406,547,000 after acquiring an additional 3,339,062 shares during the period. Situational Awareness LP raised its stake in Applied Digital by 63.3% during the 2nd quarter. Situational Awareness LP now owns 6,591,800 shares of the company's stock valued at $66,379,000 after purchasing an additional 2,556,200 shares during the last quarter. BNP Paribas Financial Markets boosted its holdings in Applied Digital by 24,356.8% in the 2nd quarter. BNP Paribas Financial Markets now owns 5,219,565 shares of the company's stock valued at $52,561,000 after purchasing an additional 5,198,223 shares during the period. Finally, MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. grew its position in Applied Digital by 24.0% in the 2nd quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 2,661,296 shares of the company's stock worth $26,799,000 after purchasing an additional 514,896 shares during the last quarter. Institutional investors own 65.67% of the company's stock.

About Applied Digital

Applied Digital Corporation designs, develops, and operates datacenters in North America. Its datacenters provide digital infrastructure solutions to the high-performance computing industry. The company also provides artificial intelligence cloud services, high performance computing datacenter hosting, and crypto datacenter hosting services.

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