DigitalOcean (NYSE:DOCN) Shares Up 7% - Time to Buy?

Key Points

• DigitalOcean shares rose about 7% in Tuesday trading, briefly reaching $132.95 before settling near $131.99, though volume was far below average.
• Analyst sentiment remains mostly positive, with an average “Moderate Buy” rating and a consensus price target of $145.36, even after UBS trimmed its target to $155 and kept a neutral view.
• The company’s latest earnings topped expectations, with Q1 EPS of $0.44 versus the $0.27 estimate and revenue of $257.9 million, up 22.4% year over year.

DigitalOcean Holdings, Inc. (NYSE:DOCN - Get Free Report)'s share price was up 7% during trading on Tuesday . The stock traded as high as $132.95 and last traded at $131.9870. 369,369 shares were traded during mid-day trading, a decline of 90% from the average daily volume of 3,858,257 shares. The stock had previously closed at $123.32.

Analyst Ratings Changes

Several equities analysts have recently weighed in on the company. UBS Group reduced their price target on DigitalOcean from $175.00 to $155.00 and set a "neutral" rating for the company in a report on Wednesday, July 8th. Citizens Jmp raised their price objective on shares of DigitalOcean from $83.00 to $105.00 and gave the company a "market outperform" rating in a research note on Thursday, March 26th. Piper Sandler lifted their target price on shares of DigitalOcean from $98.00 to $155.00 and gave the stock a "neutral" rating in a report on Tuesday, May 5th. The Goldman Sachs Group upped their target price on shares of DigitalOcean from $78.00 to $179.00 and gave the stock a "buy" rating in a research note on Wednesday, May 6th. Finally, Morgan Stanley raised their price target on shares of DigitalOcean from $75.00 to $175.00 and gave the company an "overweight" rating in a research report on Wednesday, May 6th. One research analyst has rated the stock with a Strong Buy rating, ten have issued a Buy rating and two have given a Hold rating to the stock. Based on data from MarketBeat, the stock presently has an average rating of "Moderate Buy" and a consensus price target of $145.36.

DigitalOcean Stock Up 3.8%

The company has a quick ratio of 1.46, a current ratio of 1.46 and a debt-to-equity ratio of 0.92. The company has a market cap of $13.35 billion, a PE ratio of 55.95 and a beta of 1.57. The company's fifty day moving average is $156.90 and its 200-day moving average is $99.37.

DigitalOcean (NYSE:DOCN - Get Free Report) last released its quarterly earnings results on Tuesday, May 5th. The company reported $0.44 earnings per share for the quarter, beating the consensus estimate of $0.27 by $0.17. The firm had revenue of $257.90 million for the quarter, compared to analysts' expectations of $249.76 million. DigitalOcean had a return on equity of 88.86% and a net margin of 24.97%.The company's revenue was up 22.4% compared to the same quarter last year. During the same period in the prior year, the firm earned $0.56 EPS. DigitalOcean has set its Q2 2026 guidance at 0.200-0.230 EPS and its FY 2026 guidance at 1.100-1.200 EPS. On average, analysts predict that DigitalOcean Holdings, Inc. will post 0.55 EPS for the current year.

Insider Buying and Selling at DigitalOcean

In related news, Director Hilary Schneider sold 4,338 shares of the firm's stock in a transaction on Friday, May 15th. The stock was sold at an average price of $156.38, for a total value of $678,376.44. Following the transaction, the director directly owned 24,323 shares of the company's stock, valued at approximately $3,803,630.74. This trade represents a 15.14% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this link. Also, CFO Matt Steinfort sold 25,000 shares of DigitalOcean stock in a transaction on Friday, May 15th. The shares were sold at an average price of $152.50, for a total value of $3,812,500.00. Following the transaction, the chief financial officer owned 573,272 shares in the company, valued at $87,423,980. This trade represents a 4.18% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Insiders have sold a total of 39,338 shares of company stock worth $6,191,576 in the last quarter. Corporate insiders own 0.96% of the company's stock.

Institutional Inflows and Outflows

Several institutional investors have recently made changes to their positions in DOCN. Allworth Financial LP grew its stake in shares of DigitalOcean by 54.4% during the 3rd quarter. Allworth Financial LP now owns 724 shares of the company's stock valued at $25,000 after acquiring an additional 255 shares during the period. Parallel Advisors LLC raised its stake in DigitalOcean by 66.2% during the 1st quarter. Parallel Advisors LLC now owns 324 shares of the company's stock worth $28,000 after acquiring an additional 129 shares during the period. Huntington National Bank lifted its holdings in DigitalOcean by 638.3% during the fourth quarter. Huntington National Bank now owns 598 shares of the company's stock valued at $29,000 after purchasing an additional 517 shares in the last quarter. NBC Securities Inc. bought a new position in shares of DigitalOcean in the fourth quarter worth approximately $32,000. Finally, Banque Cantonale Vaudoise bought a new position in shares of DigitalOcean in the first quarter worth approximately $33,000. Institutional investors own 49.77% of the company's stock.

DigitalOcean Company Profile

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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