Applied Digital (NASDAQ:APLD) Stock Price Up 16% Following Better-Than-Expected Earnings

Key Points

• Applied Digital's stock price surged 16% after reporting earnings that exceeded analysts' expectations, posting an EPS of ($0.03) compared to the forecast of ($0.11).
• The company achieved a revenue of $38.01 million for the quarter, although this was below the anticipated $52.25 million, yet reflected an 84.3% year-over-year increase.
• Several analysts have raised their price targets for Applied Digital, with Northland Securities setting a new target of $40.00 and maintaining an "outperform" rating.

Applied Digital Corporation (NASDAQ:APLD - Get Free Report)'s share price rose 16% on Friday following a better than expected earnings announcement. The company traded as high as $39.07 and last traded at $33.99. Approximately 104,945,844 shares changed hands during mid-day trading, an increase of 187% from the average daily volume of 36,511,863 shares. The stock had previously closed at $29.29.

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

Wall Street Analyst Weigh In

APLD has been the topic of several research reports. Northland Securities boosted their price objective on shares of Applied Digital to $40.00 and gave the company an "outperform" rating in a research report on Friday. Citigroup reaffirmed an "outperform" rating on shares of Applied Digital in a research report on Thursday. Lake Street Capital boosted their price target on shares of Applied Digital from $18.00 to $37.00 and gave the stock a "buy" rating in a research report on Friday. Craig Hallum boosted their price target on shares of Applied Digital from $12.00 to $23.00 and gave the stock a "buy" rating in a research report on Monday, August 18th. Finally, Needham & Company LLC boosted their price target on shares of Applied Digital from $12.00 to $16.00 and gave the stock a "buy" rating in a research report on Thursday, July 31st. 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 company currently has a consensus rating of "Moderate Buy" and an average target price of $22.10.

Insider Transactions at Applied Digital

In related news, Director Richard N. Nottenburg sold 20,000 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 $305,200.00. Following the transaction, the director owned 297,987 shares in the company, valued at approximately $4,547,281.62. This represents a 6.29% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which is accessible through the SEC website. Also, 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 transaction 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 trade represents a 13.07% decrease in their position. The disclosure for this sale can be found here. Insiders have sold 506,250 shares of company stock worth $7,713,675 in the last ninety days. Insiders own 9.50% of the company's stock.

Institutional Inflows and Outflows

A number of institutional investors and hedge funds have recently made changes to their positions in the business. Atlantic Union Bankshares Corp bought a new stake in shares of Applied Digital during the 2nd quarter worth approximately $25,000. Northwestern Mutual Wealth Management Co. bought a new stake in shares of Applied Digital during the 2nd quarter worth approximately $26,000. PNC Financial Services Group Inc. bought a new stake in shares of Applied Digital during the 1st quarter worth approximately $28,000. Geneos Wealth Management Inc. lifted its holdings in shares of Applied Digital by 113.3% during the 1st quarter. Geneos Wealth Management Inc. now owns 6,667 shares of the company's stock worth $37,000 after acquiring an additional 3,542 shares during the period. Finally, Ameriflex Group Inc. bought a new stake in shares of Applied Digital during the 2nd quarter worth approximately $42,000. Institutional investors and hedge funds own 65.67% of the company's stock.

Applied Digital Stock Performance

The company has a market cap of $9.31 billion, a P/E ratio of -31.18 and a beta of 6.77. The company has a debt-to-equity ratio of 1.36, a quick ratio of 0.77 and a current ratio of 0.77. The stock's fifty day moving average price is $18.50 and its two-hundred day moving average price is $11.62.

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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