Applied Digital (NASDAQ:APLD) Trading Down 9.4% - Here's What Happened

Key Points

• Applied Digital Corporation experienced a significant decline of 9.4% in stock value, closing at $32.54 after trading as low as $32.08. This decline comes amidst a decrease in trading volume by 28% compared to its average session.
• Several brokerages made notable changes to their ratings for the company, with Wall Street Zen downgrading APLD from a "hold" to a "sell" rating, while others such as Lake Street Capital and HC Wainwright raised their price targets, indicating a mix of optimism and caution among analysts.
• In its latest quarterly earnings report, Applied Digital reported earnings per share of ($0.03), surpassing estimates, although revenue of $38.01 million fell short of expectations, indicating challenges despite an 84.3% year-over-year revenue increase.

Applied Digital Corporation (NASDAQ:APLD - Get Free Report) fell 9.4% during trading on Tuesday . The company traded as low as $32.08 and last traded at $32.54. 26,259,804 shares changed hands during mid-day trading, a decline of 28% from the average session volume of 36,650,391 shares. The stock had previously closed at $35.90.

Analysts Set New Price Targets

Several brokerages have recently issued reports on APLD. Wall Street Zen lowered Applied Digital from a "hold" rating to a "sell" rating in a report on Sunday. Lake Street Capital raised their price objective on shares of Applied Digital from $18.00 to $37.00 and gave the company a "buy" rating in a research report on Friday, October 10th. HC Wainwright lifted their target price on shares of Applied Digital from $20.00 to $40.00 and gave the company a "buy" rating in a research note on Friday, October 10th. Craig Hallum boosted their target price 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 raised their price target on shares of Applied Digital from $12.00 to $16.00 and gave the company a "buy" rating in a report on Thursday, July 31st. One analyst has rated the stock with a Strong Buy rating, eleven have given a Buy rating and one has assigned a Sell rating to the company's stock. According to data from MarketBeat.com, Applied Digital has an average rating of "Moderate Buy" and a consensus target price of $22.10.

Applied Digital Trading Down 9.4%

The stock has a market capitalization of $9.10 billion, a price-to-earnings ratio of -28.80 and a beta of 6.77. The company has a current ratio of 0.65, a quick ratio of 0.65 and a debt-to-equity ratio of 0.29. The company has a fifty day moving average of $21.48 and a two-hundred day moving average of $13.14.

Applied Digital (NASDAQ:APLD - Get Free Report) last announced its quarterly earnings results on Thursday, October 9th. The company reported ($0.03) EPS for the quarter, beating the consensus estimate of ($0.11) by $0.08. The company had revenue of $38.01 million for the quarter, compared to the consensus estimate of $52.25 million. Applied Digital had a negative return on equity of 37.14% and a negative net margin of 111.29%.The company's revenue for the quarter was up 84.3% compared to the same quarter last year. During the same quarter last year, the company posted ($0.15) earnings per share. On average, research analysts expect that Applied Digital Corporation will post -0.96 EPS for the current year.

Insider Activity

In other news, Director Richard N. Nottenburg sold 20,000 shares of Applied Digital stock in a transaction dated Wednesday, September 3rd. The stock was sold at an average price of $15.26, for a total value of $305,200.00. Following the transaction, the director directly owned 297,987 shares in the company, valued at approximately $4,547,281.62. The trade was a 6.29% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is accessible through this hyperlink. Also, CEO Wes Cummins sold 400,000 shares of the stock in a transaction that occurred on Wednesday, September 3rd. The shares were sold at an average price of $15.26, for a total value of $6,104,000.00. Following the sale, the chief executive officer owned 2,659,379 shares of the company's stock, valued at approximately $40,582,123.54. The trade was a 13.07% decrease in their position. The disclosure for this sale can be found here. Over the last ninety days, insiders have sold 506,250 shares of company stock valued at $7,713,675. 9.50% of the stock is owned by insiders.

Institutional Trading of Applied Digital

Hedge funds have recently bought and sold shares of the stock. Farther Finance Advisors LLC raised its position in shares of Applied Digital by 51.8% during the third quarter. Farther Finance Advisors LLC now owns 2,306 shares of the company's stock valued at $53,000 after buying an additional 787 shares during the last quarter. Atlantic Union Bankshares Corp bought a new position in Applied Digital during the second quarter valued at about $25,000. Northwestern Mutual Wealth Management Co. acquired a new position in Applied Digital in the 2nd quarter valued at approximately $26,000. Ameriflex Group Inc. bought a new stake in shares of Applied Digital in the 2nd quarter worth approximately $42,000. Finally, SJS Investment Consulting Inc. acquired a new stake in shares of Applied Digital during the 3rd quarter worth approximately $111,000. 65.67% of the stock is owned by institutional investors.

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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