Applied Digital (NASDAQ:APLD) Trading Down 11.7% - Here's Why

Key Points

• Shares of Applied Digital tumbled 11.7% to about $27.85 on Thursday with roughly 27.96 million shares traded, about 30% below the stock's average session volume.
• Analysts still overwhelmingly rate the stock a Buy (consensus target $34.73), with some firms raising targets (B. Riley to $53) despite the drop.
• The company reported revenue up 250% YoY to $126.6M but missed on EPS (-$0.11 vs. -$0.09) and remains unprofitable (net margin -43.49%); insiders have sold 244,593 shares (~$9M) in the past 90 days.

Applied Digital Corporation (NASDAQ:APLD - Get Free Report)'s share price fell 11.7% during trading on Thursday . The company traded as low as $27.62 and last traded at $27.85. 27,957,256 shares changed hands during trading, a decline of 30% from the average session volume of 39,666,516 shares. The stock had previously closed at $31.54.

Analyst Ratings Changes

APLD has been the subject of several recent analyst reports. B. Riley raised their price target on Applied Digital to $53.00 and gave the company a "buy" rating in a report on Friday, January 9th. Needham & Company LLC reiterated a "buy" rating and issued a $41.00 price objective on shares of Applied Digital in a research report on Thursday, January 8th. Lake Street Capital restated a "buy" rating and set a $45.00 target price on shares of Applied Digital in a research report on Tuesday, December 30th. Citigroup reaffirmed an "outperform" rating on shares of Applied Digital in a research note on Wednesday, January 28th. Finally, Texas Capital upgraded shares of Applied Digital to a "strong-buy" rating in a report on Tuesday, January 20th. Three research analysts have rated the stock with a Strong Buy rating, twelve have given a Buy rating and one has assigned a Sell rating to the company's stock. According to MarketBeat.com, Applied Digital has a consensus rating of "Buy" and a consensus target price of $34.73.

Applied Digital Stock Down 11.7%

The company has a current ratio of 4.82, a quick ratio of 4.82 and a debt-to-equity ratio of 1.79. The firm has a 50 day moving average price of $30.94 and a 200-day moving average price of $25.15. The firm has a market cap of $7.78 billion, a price-to-earnings ratio of -51.56 and a beta of 7.25.

Applied Digital (NASDAQ:APLD - Get Free Report) last posted its earnings results on Wednesday, January 7th. The company reported ($0.11) earnings per share for the quarter, missing the consensus estimate of ($0.09) by ($0.02). Applied Digital had a negative net margin of 43.49% and a negative return on equity of 13.53%. The business had revenue of $126.59 million for the quarter, compared to analysts' expectations of $82.22 million. During the same quarter last year, the business posted ($0.06) earnings per share. The business's revenue was up 250.1% compared to the same quarter last year. On average, equities analysts forecast that Applied Digital Corporation will post -0.96 EPS for the current year.

Insider Activity at Applied Digital

In other news, Director Chuck Hastings sold 45,987 shares of the company's stock in a transaction on Thursday, January 29th. The stock was sold at an average price of $38.57, for a total transaction of $1,773,718.59. Following the completion of the sale, the director directly owned 388,372 shares in the company, valued at $14,979,508.04. This represents a 10.59% decrease in their position. The transaction was disclosed in a filing with the SEC, which is available at this link. Also, CEO Wes Cummins sold 165,000 shares of the firm's stock in a transaction dated Friday, January 16th. The stock was sold at an average price of $36.42, for a total value of $6,009,300.00. Following the completion of the transaction, the chief executive officer owned 4,176,329 shares in the company, valued at approximately $152,101,902.18. This trade represents a 3.80% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. In the last 90 days, insiders have sold 244,593 shares of company stock valued at $9,003,278. Insiders own 9.50% of the company's stock.

Institutional Inflows and Outflows

Several institutional investors and hedge funds have recently made changes to their positions in APLD. Noble Wealth Management PBC purchased a new stake in shares of Applied Digital during the fourth quarter worth about $25,000. Albion Financial Group UT acquired a new stake in Applied Digital during the 4th quarter valued at approximately $25,000. Activest Wealth Management acquired a new stake in Applied Digital during the 4th quarter valued at approximately $25,000. Larson Financial Group LLC increased its holdings in 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 purchasing an additional 1,129 shares during the last quarter. Finally, Dagco Inc. acquired a new position in shares of Applied Digital in the 3rd quarter valued at approximately $27,000. 65.67% of the stock is currently owned by hedge funds and other institutional investors.

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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