Applied Digital (NASDAQ:APLD) Shares Up 1.5% - Time to Buy?

Key Points

• Analysts remain broadly optimistic: Applied Digital has a consensus “Moderate Buy” rating and an average price target of $68.15, well above its recent trading price near $28.65.
• Revenue surged but profitability remains a concern: Quarterly revenue rose 406.3% year over year to $240.35 million, but the company reported an adjusted loss of $0.39 per share versus the expected $0.09 loss.
• Shares carry significant risk: Applied Digital has negative earnings and net margins, a debt-to-equity ratio of 2.88, and a high beta of 5.75; additionally, a director recently sold 75,000 shares at an average price of $31.15.

Applied Digital Corporation (NASDAQ:APLD - Get Free Report) shares were up 1.5% on Thursday . The company traded as high as $29.21 and last traded at $28.65. Approximately 13,484,583 shares traded hands during mid-day trading, a decline of 43% from the average session volume of 23,820,729 shares. The stock had previously closed at $28.23.

Analysts Set New Price Targets

A number of analysts have recently issued reports on APLD shares. Needham & Company LLC reissued a "buy" rating and issued a $83.00 price target on shares of Applied Digital in a research report on Tuesday, July 28th. Weiss Ratings reaffirmed a "sell (d-)" rating on shares of Applied Digital in a research report on Tuesday, July 21st. B. Riley Financial reiterated a "buy" rating and issued a $75.00 price objective (up from $66.00) on shares of Applied Digital in a research note on Monday, August 3rd. Citigroup reiterated a "market outperform" rating on shares of Applied Digital in a research report on Monday, August 3rd. Finally, Roth Capital reissued a "buy" rating and set a $65.00 target price on shares of Applied Digital in a research note on Thursday, April 23rd. Three research analysts have rated the stock with a Strong Buy rating, eleven have assigned a Buy rating, two have given a Hold rating and one has issued a Sell rating to the company's stock. According to MarketBeat.com, the company presently has a consensus rating of "Moderate Buy" and an average target price of $68.15.

Applied Digital Stock Performance

The firm has a 50-day simple moving average of $33.35 and a two-hundred day simple moving average of $33.66. 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 company has a market capitalization of $8.35 billion, a price-to-earnings ratio of -32.19 and a beta of 5.75.

Applied Digital (NASDAQ:APLD - Get Free Report) last announced its quarterly earnings results on Monday, July 27th. The company reported ($0.39) earnings per share (EPS) for the quarter, missing the consensus estimate of ($0.09) by ($0.30). The firm had revenue of $240.35 million for the quarter, compared to analyst estimates of $96.85 million. Applied Digital had a negative net margin of 37.78% and a negative return on equity of 16.42%. The firm's quarterly revenue was up 406.3% compared to the same quarter last year. During the same quarter in the prior year, the firm earned ($0.24) earnings per share. 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 related news, Director Richard N. Nottenburg sold 75,000 shares of the firm's stock in a transaction that occurred on Tuesday, August 4th. The shares were sold at an average price of $31.15, for a total transaction of $2,336,250.00. Following the transaction, the director owned 133,378 shares of the company's stock, valued at approximately $4,154,724.70. This trade represents a 35.99% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website. Insiders own 9.50% of the company's stock.

Institutional Inflows and Outflows

Hedge funds have recently modified their holdings of the business. Activest Wealth Management acquired a new stake in shares of Applied Digital in the 4th quarter valued at $25,000. FNY Investment Advisers LLC bought a new stake in Applied Digital in the second quarter worth $37,000. Ameriflex Group Inc. acquired a new position in Applied Digital during the fourth quarter worth $25,000. McMillan Office Inc. acquired a new position in Applied Digital during the fourth quarter worth $25,000. Finally, Mcguire Capital Advisors Inc. bought a new position in Applied Digital during the fourth quarter valued at about $27,000. Institutional investors and hedge funds own 65.67% of the company's stock.

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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