Applied Digital (NASDAQ:APLD) Trading Down 7.5% - Should You Sell?

Key Points

• Applied Digital shares fell 7.5% on Wednesday, trading as low as $40.41 after closing at $45.27, with volume below its daily average.
• Despite the drop, Wall Street remains broadly bullish: the stock carries a consensus “Moderate Buy” rating and an average price target of $70.56, with several firms reiterating buy or strong-buy views.
• The company’s latest earnings showed mixed fundamentals, with revenue jumping 139.3% year over year to $108.55 million but EPS missing estimates and margins remaining negative; insiders also sold shares in recent months.

Shares of Applied Digital Corporation (NASDAQ:APLD - Get Free Report) dropped 7.5% during trading on Wednesday . The company traded as low as $40.41 and last traded at $41.89. Approximately 15,354,649 shares changed hands during mid-day trading, a decline of 39% from the average daily volume of 25,275,705 shares. The stock had previously closed at $45.27.

Wall Street Analysts Forecast Growth

Several research analysts have recently weighed in on the company. Roth Mkm restated a "buy" rating and set a $65.00 target price on shares of Applied Digital in a report on Thursday, April 23rd. Lucid Cap Mkts upgraded Applied Digital to a "strong-buy" rating in a research report on Wednesday, May 27th. Citigroup reissued a "market outperform" rating on shares of Applied Digital in a research note on Tuesday, June 9th. Wall Street Zen cut Applied Digital from a "hold" rating to a "sell" rating in a report on Saturday, April 11th. Finally, Compass Point reaffirmed a "buy" rating and issued a $70.00 target price on shares of Applied Digital in a research note on Friday, May 22nd. Three equities research analysts have rated the stock with a Strong Buy rating, eleven have given a Buy rating and two have given a Sell rating to the company's stock. According to MarketBeat.com, Applied Digital has a consensus rating of "Moderate Buy" and an average price target of $70.56.

Applied Digital Stock Performance

The company has a debt-to-equity ratio of 1.65, a current ratio of 2.38 and a quick ratio of 2.38. The company has a market cap of $11.97 billion, a price-to-earnings ratio of -56.61 and a beta of 5.69. The firm has a 50 day simple moving average of $40.80 and a 200-day simple moving average of $33.74.

Applied Digital (NASDAQ:APLD - Get Free Report) last announced its quarterly earnings results on Wednesday, April 8th. The company reported ($0.36) EPS for the quarter, missing the consensus estimate of ($0.13) by ($0.23). The business had revenue of $108.55 million during the quarter, compared to analyst estimates of $78.47 million. Applied Digital had a negative net margin of 52.84% and a negative return on equity of 15.91%. The business's revenue for the quarter was up 139.3% on a year-over-year basis. During the same period last year, the company earned ($0.08) EPS. As a group, analysts predict that Applied Digital Corporation will post -0.68 EPS for the current fiscal year.

Insider Transactions at Applied Digital

In other news, Director Douglas S. Miller sold 10,000 shares of the business's stock in a transaction that occurred on Monday, April 27th. The shares were sold at an average price of $34.98, for a total value of $349,800.00. Following the sale, the director directly owned 184,859 shares of the company's stock, valued at approximately $6,466,367.82. The trade was a 5.13% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available at this hyperlink. Also, Director Richard N. Nottenburg sold 12,500 shares of the company's stock in a transaction that occurred on Thursday, April 30th. The stock was sold at an average price of $34.59, for a total transaction of $432,375.00. Following the completion of the transaction, the director owned 208,378 shares in the company, valued at approximately $7,207,795.02. This represents a 5.66% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Insiders sold 35,000 shares of company stock worth $1,182,175 in the last ninety days. 9.50% of the stock is currently owned by corporate insiders.

Institutional Investors Weigh In On Applied Digital

Hedge funds have recently added to or reduced their stakes in the business. Newbridge Financial Services Group Inc. lifted its holdings in Applied Digital by 8.6% during the 4th quarter. Newbridge Financial Services Group Inc. now owns 3,800 shares of the company's stock worth $93,000 after buying an additional 300 shares during the last quarter. Concurrent Investment Advisors LLC increased its holdings in shares of Applied Digital by 1.5% in the 4th quarter. Concurrent Investment Advisors LLC now owns 21,332 shares of the company's stock valued at $523,000 after acquiring an additional 318 shares during the last quarter. Brookstone Capital Management raised its position in shares of Applied Digital by 3.6% during the 4th quarter. Brookstone Capital Management now owns 9,275 shares of the company's stock worth $227,000 after acquiring an additional 321 shares in the last quarter. Independent Advisor Alliance raised its position in shares of Applied Digital by 4.6% during the 4th quarter. Independent Advisor Alliance now owns 9,215 shares of the company's stock worth $226,000 after acquiring an additional 407 shares in the last quarter. Finally, PNC Financial Services Group Inc. lifted its stake in Applied Digital by 7.4% during the third quarter. PNC Financial Services Group Inc. now owns 5,951 shares of the company's stock worth $137,000 after purchasing an additional 408 shares during the last quarter. 65.67% of the stock is currently owned by institutional investors and hedge funds.

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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