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

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)'s stock price gapped down prior to trading 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 traded.

Analysts Set New Price Targets

A number of research firms have issued reports on DOCN. Canaccord Genuity Group raised their target price on DigitalOcean from $45.00 to $49.00 and gave the stock a "buy" rating in a research report on Wednesday, August 6th. Wall Street Zen raised DigitalOcean from a "hold" rating to a "buy" rating in a report on Sunday, June 29th. Morgan Stanley raised their price target on DigitalOcean from $41.00 to $44.00 and gave the stock an "overweight" rating in a report on Wednesday, August 6th. The Goldman Sachs Group dropped 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. Finally, Citigroup dropped their price target on DigitalOcean from $50.00 to $40.00 and set a "buy" rating for the company in a research note on Wednesday, May 7th. One investment 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. Based on data from MarketBeat.com, DigitalOcean currently has a consensus rating of "Hold" and a consensus target price of $41.45.

DigitalOcean Stock Performance

The business has a 50-day moving average price of $29.13 and a 200 day moving average price of $32.60. The stock has a market capitalization of $2.82 billion, a P/E ratio of 23.87, a PEG ratio of 1.78 and a beta of 1.75.

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

Insider Transactions at DigitalOcean

In other DigitalOcean news, insider Bratin Saha sold 3,461 shares of the stock in a transaction dated Wednesday, June 18th. The shares were sold at an average price of $27.77, for a total transaction of $96,111.97. Following the completion of the transaction, the insider owned 294,546 shares of the company's stock, valued at $8,179,542.42. This represents a 1.16% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at the SEC website. Insiders own 0.96% of the company's stock.

Institutional Trading of DigitalOcean

A number of hedge funds and other institutional investors have recently added to or reduced their stakes in the company. Viking Fund Management LLC purchased a new position in shares of DigitalOcean during the first quarter worth approximately $2,170,000. Wesbanco Bank Inc. purchased a new position in DigitalOcean during the first quarter valued at approximately $808,000. Concurrent Investment Advisors LLC purchased a new position in DigitalOcean during the first quarter valued at approximately $265,000. Sumitomo Mitsui Trust Group Inc. increased its holdings in DigitalOcean by 119.6% during the first quarter. Sumitomo Mitsui Trust Group Inc. now owns 16,729 shares of the company's stock valued at $559,000 after buying an additional 9,110 shares during the period. Finally, Northern Trust Corp increased its holdings in DigitalOcean by 14.8% during the fourth quarter. Northern Trust Corp now owns 725,960 shares of the company's stock valued at $24,733,000 after buying an additional 93,347 shares during the period. 49.77% of the stock is owned by hedge funds and other institutional investors.

About DigitalOcean

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).