Applied Digital (NASDAQ:APLD) Shares Gap Up Following Better-Than-Expected Earnings

Key Points

• Applied Digital shares surged before the market opened, rising from a previous close of $29.29 to an opening price of $37.02, following a better-than-expected earnings report.
• The company reported an earnings per share (EPS) of ($0.03), exceeding analysts' expectations of ($0.11), although revenue of $38.01 million fell short of the estimate of $52.25 million.
• Brokerages have raised their price targets for Applied Digital, with a consensus rating of "Moderate Buy" and a target price of $16.20, reflecting positive market sentiment despite insider stock sales.

Applied Digital Corporation (NASDAQ:APLD - Get Free Report)'s share price gapped up before the market opened on Friday following a stronger than expected earnings report. The stock had previously closed at $29.29, but opened at $37.02. Applied Digital shares last traded at $38.09, with a volume of 30,785,496 shares trading hands.

The company reported ($0.03) EPS for the quarter, topping analysts' consensus estimates of ($0.11) by $0.08. Applied Digital had a negative net margin of 107.22% and a negative return on equity of 50.03%. The firm had revenue of $38.01 million for the quarter, compared to analyst estimates of $52.25 million. During the same quarter in the previous year, the business posted ($0.15) EPS. The firm's revenue was up 84.3% compared to the same quarter last year.

Analysts Set New Price Targets

A number of brokerages have commented on APLD. HC Wainwright boosted their price objective on shares of Applied Digital from $15.00 to $20.00 and gave the stock a "buy" rating in a report on Monday, August 25th. Craig Hallum restated a "buy" rating on shares of Applied Digital in a research note on Friday. Needham & Company LLC upped their target price on shares of Applied Digital from $12.00 to $16.00 and gave the company a "buy" rating in a research note on Thursday, July 31st. Weiss Ratings restated a "sell (d-)" rating on shares of Applied Digital in a research note on Wednesday. Finally, Lake Street Capital restated a "buy" rating on shares of Applied Digital in a research note on Friday. One 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. Based on data from MarketBeat.com, Applied Digital presently has a consensus rating of "Moderate Buy" and a consensus price target of $16.20.

Insider Activity at Applied Digital

In other Applied Digital news, CEO Wes Cummins sold 400,000 shares of the company's stock in a transaction dated Wednesday, September 3rd. The shares were sold at an average price of $15.26, for a total value of $6,104,000.00. Following the completion of the transaction, the chief executive officer owned 2,659,379 shares in the company, valued at approximately $40,582,123.54. This represents a 13.07% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. Also, CFO Mohammad Saidal Lavanw Mohmand sold 75,000 shares of the company's stock in a transaction dated Wednesday, September 3rd. The stock was sold at an average price of $15.26, for a total transaction of $1,144,500.00. Following the completion of the transaction, the chief financial officer owned 201,800 shares of the company's stock, valued at approximately $3,079,468. This trade represents a 27.10% decrease in their position. The disclosure for this sale can be found here. Insiders sold a total of 506,250 shares of company stock valued at $7,713,675 in the last quarter. Insiders own 9.50% of the company's stock.

Institutional Trading of Applied Digital

Institutional investors and hedge funds have recently added to or reduced their stakes in the business. GAMMA Investing LLC lifted its position in shares of Applied Digital by 1,237.4% in the 1st quarter. GAMMA Investing LLC now owns 9,576 shares of the company's stock valued at $540,000 after acquiring an additional 8,860 shares in the last quarter. Rhumbline Advisers lifted its position in shares of Applied Digital by 7.8% in the 1st quarter. Rhumbline Advisers now owns 279,191 shares of the company's stock valued at $1,569,000 after acquiring an additional 20,299 shares in the last quarter. Wealth Enhancement Advisory Services LLC lifted its position in shares of Applied Digital by 29.4% in the 1st quarter. Wealth Enhancement Advisory Services LLC now owns 13,778 shares of the company's stock valued at $77,000 after acquiring an additional 3,127 shares in the last quarter. Exchange Traded Concepts LLC lifted its position in shares of Applied Digital by 4.0% in the 1st quarter. Exchange Traded Concepts LLC now owns 1,042,035 shares of the company's stock valued at $5,856,000 after acquiring an additional 39,945 shares in the last quarter. Finally, Mayfair Advisory Group LLC purchased a new stake in shares of Applied Digital in the 1st quarter valued at approximately $68,000. 65.67% of the stock is owned by institutional investors and hedge funds.

Applied Digital Trading Up 26.8%

The company has a current ratio of 0.77, a quick ratio of 0.77 and a debt-to-equity ratio of 1.36. The firm has a market cap of $10.18 billion, a PE ratio of -34.08 and a beta of 6.77. The company's 50-day moving average is $18.50 and its 200 day moving average is $11.62.

Applied Digital Company Profile

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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