DigitalOcean (NYSE:DOCN) Rating Lowered to "Hold" at Wall Street Zen

Key Points

• DigitalOcean's stock rating has been downgraded from "buy" to "hold" by analysts at Wall Street Zen, reflecting a shift in sentiment among financial analysts.
• The company reported better-than-expected earnings, with $0.59 earnings per share, surpassing the consensus estimate of $0.47.
• Despite the downgrade, DigitalOcean has a consensus rating of "hold" among analysts, with an average price target set at $41.45.

DigitalOcean (NYSE:DOCN - Get Free Report) was downgraded by analysts at Wall Street Zen from a "buy" rating to a "hold" rating in a report issued on Friday.

Other equities analysts have also recently issued reports about the stock. Weiss Ratings reaffirmed a "hold (c)" rating on shares of DigitalOcean in a research note on Saturday, September 27th. Canaccord Genuity Group upped their target price on DigitalOcean from $45.00 to $49.00 and gave the company a "buy" rating in a research note on Wednesday, August 6th. Barclays boosted their price objective on DigitalOcean from $38.00 to $40.00 and gave the company an "overweight" rating in a report on Wednesday, August 6th. Morgan Stanley increased their target price on DigitalOcean from $41.00 to $44.00 and gave the stock an "overweight" rating in a research note on Wednesday, August 6th. Finally, Stifel Nicolaus set a $36.00 target price on shares of DigitalOcean in a research note on Tuesday, August 5th. Six research analysts have rated the stock with a Buy rating, six have assigned a Hold rating and one has issued a Sell rating to the stock. According to data from MarketBeat, the company has a consensus rating of "Hold" and an average price target of $41.45.

DigitalOcean Price Performance

Shares of NYSE:DOCN traded down $1.29 during trading on Friday, hitting $37.42. The company had a trading volume of 2,216,760 shares, compared to its average volume of 2,782,264. The stock has a market cap of $3.41 billion, a price-to-earnings ratio of 28.78, a price-to-earnings-growth ratio of 2.20 and a beta of 1.76. The company has a fifty day simple moving average of $33.07 and a two-hundred day simple moving average of $30.89. DigitalOcean has a one year low of $25.45 and a one year high of $47.02.

DigitalOcean (NYSE:DOCN - Get Free Report) last released its earnings results on Tuesday, August 5th. The company reported $0.59 earnings per share for the quarter, beating the consensus estimate of $0.47 by $0.12. The firm had revenue of $218.70 million for the quarter, compared to the consensus estimate of $216.62 million. DigitalOcean had a negative return on equity of 73.19% and a net margin of 15.18%.The company's revenue for the quarter was up 13.6% compared to the same quarter last year. During the same quarter in the previous year, the company posted $0.48 EPS. DigitalOcean has set its FY 2025 guidance at 2.050-2.100 EPS. Q3 2025 guidance at 0.450-0.500 EPS. On average, equities research analysts anticipate that DigitalOcean will post 1.01 earnings per share for the current year.

Insider Buying and Selling

In other news, insider Bratin Saha sold 13,010 shares of the business's stock in a transaction dated Wednesday, September 3rd. The shares were sold at an average price of $31.87, for a total value of $414,628.70. Following the completion of the sale, the insider owned 269,465 shares in the company, valued at approximately $8,587,849.55. The trade was a 4.61% decrease in their position. The transaction was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. Company insiders own 0.96% of the company's stock.

Hedge Funds Weigh In On DigitalOcean

A number of large investors have recently bought and sold shares of DOCN. Wesbanco Bank Inc. bought a new stake in DigitalOcean during the 1st quarter valued at $808,000. Fuller & Thaler Asset Management Inc. lifted its stake in shares of DigitalOcean by 28.6% during the 1st quarter. Fuller & Thaler Asset Management Inc. now owns 1,987,177 shares of the company's stock worth $66,352,000 after purchasing an additional 441,535 shares during the last quarter. Nuveen LLC purchased a new stake in shares of DigitalOcean during the 1st quarter worth $5,737,000. Concurrent Investment Advisors LLC bought a new stake in DigitalOcean during the first quarter valued at about $265,000. Finally, Sumitomo Mitsui Trust Group Inc. grew its stake in DigitalOcean by 119.6% in the first quarter. Sumitomo Mitsui Trust Group Inc. now owns 16,729 shares of the company's stock valued at $559,000 after purchasing an additional 9,110 shares during the last quarter. Institutional investors own 49.77% of the company's stock.

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).

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