DigitalOcean (NYSE:DOCN) Shares Gap Down - Here's What Happened

Key Points

• Shares gapped down: DigitalOcean opened at $78.80 premarket after a $84.92 close, and later traded around $86.89 on volume of about 6.38 million shares.
• Analyst sentiment is cautiously positive: the consensus rating is a “Moderate Buy” (9 Buys, 5 Holds) with a consensus target of $70.38 and recent price-targets in the $57–$69 range.
• Insiders have been selling: the CAO sold 22,000 shares at ~$54.77 and the CFO sold 20,000 shares at ~$55.40 (insiders now own 0.74% while institutions own ~49.8%).

Shares of DigitalOcean Holdings, Inc. (NYSE:DOCN - Get Free Report) gapped down before the market opened on Wednesday . The stock had previously closed at $84.92, but opened at $78.80. DigitalOcean shares last traded at $86.8890, with a volume of 6,384,351 shares traded.

Wall Street Analysts Forecast Growth

Several research analysts have issued reports on the company. Barclays increased their price target on DigitalOcean from $63.00 to $69.00 and gave the stock an "overweight" rating in a report on Wednesday, February 25th. Stifel Nicolaus set a $57.00 price objective on DigitalOcean in a report on Tuesday, February 24th. Piper Sandler reiterated a "neutral" rating and issued a $67.00 target price on shares of DigitalOcean in a report on Tuesday, February 24th. Royal Bank Of Canada set a $60.00 price target on shares of DigitalOcean in a research report on Tuesday, February 24th. Finally, Citigroup restated a "buy" rating on shares of DigitalOcean in a research note on Friday, February 13th. Nine investment analysts have rated the stock with a Buy rating and five have assigned a Hold rating to the company. According to data from MarketBeat, DigitalOcean presently has a consensus rating of "Moderate Buy" and a consensus target price of $70.38.

DigitalOcean Stock Performance

The company's 50 day moving average price is $62.52 and its 200-day moving average price is $50.13. The stock has a market cap of $7.90 billion, a P/E ratio of 33.96, a price-to-earnings-growth ratio of 83.60 and a beta of 1.76.

Insider Transactions at DigitalOcean

In other news, CAO Cherie Barrett sold 22,000 shares of the company's stock in a transaction that occurred on Monday, March 2nd. The stock was sold at an average price of $54.77, for a total value of $1,204,940.00. Following the completion of the transaction, the chief accounting officer directly owned 62,469 shares of the company's stock, valued at $3,421,427.13. This represents a 26.05% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is available at this hyperlink. Also, CFO Matt Steinfort sold 20,000 shares of DigitalOcean stock in a transaction on Tuesday, March 3rd. The stock was sold at an average price of $55.40, for a total value of $1,108,000.00. Following the sale, the chief financial officer owned 545,916 shares in the company, valued at $30,243,746.40. This trade represents a 3.53% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Corporate insiders own 0.74% of the company's stock.

Institutional Investors Weigh In On DigitalOcean

A number of hedge funds have recently modified their holdings of the stock. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC grew its holdings in DigitalOcean by 5.0% during the first quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC now owns 339,670 shares of the company's stock valued at $11,342,000 after purchasing an additional 16,162 shares during the period. Intech Investment Management LLC lifted its position in shares of DigitalOcean by 59.2% during the 1st quarter. Intech Investment Management LLC now owns 39,429 shares of the company's stock valued at $1,317,000 after buying an additional 14,655 shares during the last quarter. PNC Financial Services Group Inc. grew its stake in shares of DigitalOcean by 6.5% during the 2nd quarter. PNC Financial Services Group Inc. now owns 10,242 shares of the company's stock worth $293,000 after acquiring an additional 628 shares during the period. Police & Firemen s Retirement System of New Jersey increased its holdings in DigitalOcean by 9.3% in the 2nd quarter. Police & Firemen s Retirement System of New Jersey now owns 15,272 shares of the company's stock worth $436,000 after acquiring an additional 1,299 shares during the last quarter. Finally, Rhumbline Advisers raised its stake in DigitalOcean by 1.6% in the 2nd quarter. Rhumbline Advisers now owns 180,034 shares of the company's stock valued at $5,142,000 after acquiring an additional 2,784 shares during the period. Institutional investors own 49.77% of the company's stock.

About DigitalOcean

DigitalOcean Holdings, Inc is a cloud infrastructure provider that focuses on simplicity, performance and developer experience. The company offers a range of cloud services designed to help software developers, startups and small- to medium-sized businesses deploy, manage and scale applications. Its flagship offering, Droplets, provides virtual private servers that can be configured with various CPU, memory and storage options. In addition to compute instances, DigitalOcean's platform includes managed Kubernetes, scalable object and block storage, managed databases, load balancers and networking capabilities such as Virtual Private Cloud (VPC) and Floating IPs.

Founded in 2011 and headquartered in New York City, DigitalOcean was created with the goal of making cloud computing more accessible to individual developers and smaller teams.

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