Applied Digital (NASDAQ:APLD) Shares Gap Up - Still a Buy?

Key Points

• Applied Digital shares gapped higher, opening at $32.35 versus a prior close of $29.69, but later traded near $31.09. The stock remains highly volatile, with a beta of 5.75 and trading below its 50- and 200-day moving averages.
• Analysts remain broadly positive, with a consensus “Moderate Buy” rating and an average price target of $68.15, substantially above the recent share price.
• The company delivered strong revenue growth of 406.3% year over year to $240.35 million, but missed earnings expectations sharply, reporting a loss of $0.39 per share versus a projected loss of $0.09. Applied Digital remains unprofitable, and an insider recently sold 75,000 shares.

Shares of Applied Digital Corporation (NASDAQ:APLD - Get Free Report) gapped up before the market opened on Wednesday . The stock had previously closed at $29.69, but opened at $32.35. Applied Digital shares last traded at $31.0850, with a volume of 4,907,037 shares changing hands.

Wall Street Analysts Forecast Growth

A number of equities analysts have recently commented on the company. Zacks Research raised Applied Digital from a "strong sell" rating to a "hold" rating in a report on Monday, July 27th. Lucid Cap Mkts upgraded Applied Digital to a "strong-buy" rating in a research note on Wednesday, May 27th. Craig Hallum increased their price objective on Applied Digital from $75.00 to $79.00 and gave the stock a "buy" rating in a report on Tuesday, June 9th. Needham & Company LLC restated a "buy" rating and issued a $83.00 target price on shares of Applied Digital in a research note on Tuesday, July 28th. Finally, Roth Capital reaffirmed a "buy" rating and set a $65.00 target price on shares of Applied Digital in a report on Thursday, April 23rd. Three analysts have rated the stock with a Strong Buy rating, eleven have given a Buy rating, two have issued a Hold rating and one has given a Sell rating to the stock. According to MarketBeat, the stock has a consensus rating of "Moderate Buy" and an average target price of $68.15.

Applied Digital Stock Performance

The company's fifty day simple moving average is $34.74 and its 200 day simple moving average is $33.99. The company has a current ratio of 4.01, a quick ratio of 4.01 and a debt-to-equity ratio of 2.88. The stock has a market capitalization of $8.90 billion, a P/E ratio of -34.29 and a beta of 5.75.

Applied Digital (NASDAQ:APLD - Get Free Report) last released its quarterly earnings results on Monday, July 27th. The company reported ($0.39) earnings per share for the quarter, missing the consensus estimate of ($0.09) by ($0.30). The firm had revenue of $240.35 million during the quarter, compared to the consensus estimate of $96.85 million. Applied Digital had a negative return on equity of 16.42% and a negative net margin of 37.78%.The company's revenue for the quarter was up 406.3% compared to the same quarter last year. During the same period in the previous year, the company posted ($0.24) EPS. As a group, sell-side analysts forecast that Applied Digital Corporation will post -1.09 earnings per share for the current fiscal year.

Insiders Place Their Bets

In other Applied Digital news, Director Richard N. Nottenburg sold 75,000 shares of the firm's stock in a transaction dated Tuesday, August 4th. The stock was sold at an average price of $31.15, for a total value of $2,336,250.00. Following the sale, the director owned 133,378 shares of the company's stock, valued at $4,154,724.70. This trade represents a 35.99% decrease in their position. The transaction was disclosed in a legal filing with the SEC, which is available at this link. 9.50% of the stock is owned by corporate insiders.

Institutional Investors Weigh In On Applied Digital

Institutional investors and hedge funds have recently bought and sold shares of the stock. Activest Wealth Management purchased a new position in Applied Digital in the 4th quarter worth approximately $25,000. Ameriflex Group Inc. purchased a new stake in shares of Applied Digital during the 4th quarter valued at $25,000. McMillan Office Inc. bought a new stake in shares of Applied Digital during the 4th quarter worth $25,000. Larson Financial Group LLC lifted its holdings in shares of Applied Digital by 56,450.0% during the 3rd quarter. Larson Financial Group LLC now owns 1,131 shares of the company's stock worth $26,000 after acquiring an additional 1,129 shares during the last quarter. Finally, Northwestern Mutual Wealth Management Co. purchased a new position in Applied Digital in the second quarter worth $26,000. 65.67% of the stock is owned by hedge funds and other institutional investors.

Applied Digital Company Profile

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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