DigitalOcean (NYSE:DOCN) Stock Price Expected to Rise, Morgan Stanley Analyst Says

Key Points

• Morgan Stanley raised DigitalOcean's price target from $41.00 to $44.00, indicating a potential upside of 20.35% and maintaining an "overweight" rating on the stock.
• DigitalOcean's recent quarterly earnings surpassed expectations, reporting $0.59 EPS and $218.70 million in revenue, with a year-over-year revenue increase of 13.6%.
• Several analysts have different ratings for DigitalOcean, with five rating it as a hold, seven as a buy, and one as a sell, leading to a consensus rating of "Hold."

DigitalOcean (NYSE:DOCN - Free Report) had its target price boosted by Morgan Stanley from $41.00 to $44.00 in a research note issued to investors on Wednesday,Benzinga reports. The firm currently has an overweight rating on the stock.

Several other brokerages also recently commented on DOCN. Barclays upped their target price on DigitalOcean from $38.00 to $40.00 and gave the company an "overweight" rating in a report on Wednesday. The Goldman Sachs Group reduced their price objective on DigitalOcean from $46.00 to $41.00 and set a "buy" rating for the company in a research note on Wednesday, May 7th. Needham & Company LLC reaffirmed a "hold" rating on shares of DigitalOcean in a research note on Tuesday, May 6th. Stifel Nicolaus set a $36.00 target price on DigitalOcean in a report on Tuesday, August 5th. Finally, Wall Street Zen upgraded shares of DigitalOcean from a "hold" rating to a "buy" rating in a report on Sunday, June 29th. One equities research analyst has rated the stock with a sell rating, five have assigned a hold rating and seven have given a buy rating to the stock. According to MarketBeat, the company currently has an average rating of "Hold" and a consensus target price of $41.45.

DigitalOcean Price Performance

Shares of NYSE DOCN traded down $1.31 during midday trading on Wednesday, reaching $33.02. 2,592,369 shares of the company traded hands, compared to its average volume of 2,506,635. The stock has a 50-day moving average price of $28.97 and a 200 day moving average price of $32.85. The company has a market cap of $3.01 billion, a price-to-earnings ratio of 25.40, a PEG ratio of 2.36 and a beta of 1.75. DigitalOcean has a 52 week low of $25.45 and a 52 week high of $47.02.

DigitalOcean (NYSE:DOCN - Get Free Report) last issued its quarterly earnings results on Tuesday, August 5th. The company reported $0.59 EPS for the quarter, topping the consensus estimate of $0.47 by $0.12. DigitalOcean had a net margin of 15.18% and a negative return on equity of 73.19%. The firm had revenue of $218.70 million for the quarter, compared to analysts' expectations of $216.62 million. During the same period in the previous year, the business earned $0.48 earnings per share. DigitalOcean's revenue for the quarter was up 13.6% compared to the same quarter last year. As a group, analysts expect that DigitalOcean will post 1.01 EPS for the current year.

Insider Activity

In other DigitalOcean news, insider Bratin Saha sold 3,461 shares of the stock in a transaction that occurred on Wednesday, June 18th. The stock was sold at an average price of $27.77, for a total transaction of $96,111.97. Following the transaction, the insider owned 294,546 shares in the company, valued at $8,179,542.42. This trade represents a 1.16% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which is available at the SEC website. Company insiders own 0.74% of the company's stock.

Hedge Funds Weigh In On DigitalOcean

A number of institutional investors have recently made changes to their positions in the business. Viking Fund Management LLC bought a new position in shares of DigitalOcean during the 1st quarter worth about $2,170,000. Wesbanco Bank Inc. acquired a new stake in shares of DigitalOcean in the 1st quarter valued at $808,000. Concurrent Investment Advisors LLC bought a new stake in shares of DigitalOcean in the 1st quarter worth about $265,000. Sumitomo Mitsui Trust Group Inc. increased its position in shares of DigitalOcean by 119.6% during the 1st quarter. Sumitomo Mitsui Trust Group Inc. now owns 16,729 shares of the company's stock worth $559,000 after purchasing an additional 9,110 shares in the last quarter. Finally, Northern Trust Corp lifted its holdings in DigitalOcean by 14.8% during the 4th quarter. Northern Trust Corp now owns 725,960 shares of the company's stock valued at $24,733,000 after purchasing an additional 93,347 shares during the last quarter. 49.77% of the stock is currently owned by institutional investors.

DigitalOcean Company Profile

DigitalOcean Holdings, Inc, through its subsidiaries, operates a cloud computing platform in North America, Europe, Asia, and internationally. The company's platform provides on-demand infrastructure and platform tools for developers, start-ups, and small and growing digital businesses. It also offers infrastructure-as-a-service (IaaS) solutions comprising compute and storage services, as well as networking projects, including Cloud Firewalls software, Managed Load Balancers software, and Virtual Private Cloud (VPC).