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

Key Points

• DigitalOcean's stock price gapped down significantly, opening at $31.30 after closing at $33.05, and is currently trading near $30.23 with high trading volume.
• Several equities analysts have revised their price targets for DigitalOcean, with Goldman Sachs lowering it to $41 and Morgan Stanley raising it to $44, while the stock maintains a consensus rating of "Hold".
• Recent earnings results showed that DigitalOcean beat analysts' estimates, reporting $0.59 earnings per share and $218.70 million in revenue, up 13.6% year-over-year.

DigitalOcean Holdings, Inc. (NYSE:DOCN - Get Free Report) gapped down before the market opened on Monday . The stock had previously closed at $33.05, but opened at $31.30. DigitalOcean shares last traded at $30.23, with a volume of 1,413,463 shares trading hands.

Analysts Set New Price Targets

A number of equities research analysts have weighed in on DOCN shares. UBS Group lowered their price target on DigitalOcean from $44.00 to $32.00 and set a "neutral" rating on the stock in a research report on Thursday, May 8th. The Goldman Sachs Group lowered their price target on DigitalOcean from $46.00 to $41.00 and set a "buy" rating on the stock in a research report on Wednesday, May 7th. Barclays raised their price target on DigitalOcean from $38.00 to $40.00 and gave the company an "overweight" rating in a research report on Wednesday, August 6th. Morgan Stanley raised their price target on DigitalOcean from $41.00 to $44.00 and gave the company an "overweight" rating in a research report on Wednesday, August 6th. Finally, Wall Street Zen upgraded DigitalOcean from a "hold" rating to a "buy" rating in a research report on Sunday, June 29th. One research analyst has rated the stock with a sell rating, five have given a hold rating and seven have assigned a buy rating to the company's stock. Based on data from MarketBeat, the company presently has a consensus rating of "Hold" and an average target price of $41.45.

DigitalOcean Stock Down 3.9%

The stock has a market cap of $2.78 billion, a PE ratio of 23.47, a P/E/G ratio of 2.13 and a beta of 1.75. The company has a fifty day moving average price of $29.08 and a 200 day moving average price of $32.68.

DigitalOcean (NYSE:DOCN - Get Free Report) last released its quarterly earnings data 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 negative return on equity of 73.19% and a net margin of 15.18%. The firm had revenue of $218.70 million for the quarter, compared to the consensus estimate of $216.62 million. During the same quarter in the previous year, the business earned $0.48 earnings per share. The company's quarterly revenue was up 13.6% on a year-over-year basis. As a group, research analysts predict that DigitalOcean Holdings, Inc. will post 1.01 earnings per share for the current year.

Insider Transactions at DigitalOcean

In related news, insider Bratin Saha sold 3,461 shares of the business's stock in a transaction dated 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. The trade was a 1.16% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. 0.96% of the stock is currently owned by corporate insiders.

Institutional Inflows and Outflows

A number of hedge funds have recently bought and sold shares of the business. CX Institutional boosted its position in DigitalOcean by 780.5% during the 2nd quarter. CX Institutional now owns 1,039 shares of the company's stock valued at $30,000 after acquiring an additional 921 shares in the last quarter. GAMMA Investing LLC boosted its position in DigitalOcean by 336.1% during the 1st quarter. GAMMA Investing LLC now owns 1,064 shares of the company's stock valued at $36,000 after acquiring an additional 820 shares in the last quarter. Farther Finance Advisors LLC boosted its position in DigitalOcean by 135,100.0% during the 1st quarter. Farther Finance Advisors LLC now owns 1,352 shares of the company's stock valued at $46,000 after acquiring an additional 1,351 shares in the last quarter. SVB Wealth LLC bought a new stake in DigitalOcean during the 1st quarter valued at approximately $48,000. Finally, Advisors Asset Management Inc. boosted its position in DigitalOcean by 39.6% during the 1st quarter. Advisors Asset Management Inc. now owns 2,229 shares of the company's stock valued at $74,000 after acquiring an additional 632 shares in the last quarter. Hedge funds and other 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).