DigitalOcean (NYSE:DOCN) Stock Price Up 10.3% - What's Next?

Key Points

• DigitalOcean shares jumped 10.3% to $133.34, reaching an intraday high of $134.60, though trading volume was 92% below the average.
• The company beat quarterly expectations with adjusted EPS of $0.45 versus $0.26 forecast and revenue of $281.18 million, up 28.6% year over year. Analysts maintain a “Moderate Buy” consensus with an average price target of $151.33.
• Insiders sold 43,538 shares worth $6.7 million over the past quarter, while institutional investors and hedge funds own approximately 49.77% of the stock.

DigitalOcean Holdings, Inc. (NYSE:DOCN - Get Free Report)'s stock price shot up 10.3% during trading on Wednesday . The company traded as high as $134.60 and last traded at $133.34. 302,933 shares traded hands during trading, a decline of 92% from the average daily volume of 3,828,114 shares. The stock had previously closed at $120.86.

Wall Street Analysts Forecast Growth

A number of research firms recently weighed in on DOCN. Barclays upped their price target on DigitalOcean from $160.00 to $161.00 and gave the stock an "overweight" rating in a report on Wednesday, August 5th. KeyCorp started coverage on DigitalOcean in a research report on Tuesday, June 2nd. They set an "overweight" rating and a $200.00 target price on the stock. Oppenheimer set a $190.00 price target on shares of DigitalOcean in a research note on Wednesday, May 6th. Weiss Ratings cut shares of DigitalOcean from a "buy (b-)" rating to a "hold (c+)" rating in a research report on Tuesday, July 28th. Finally, Piper Sandler increased their price objective on shares of DigitalOcean from $98.00 to $155.00 and gave the company a "neutral" rating in a report on Tuesday, May 5th. Two research analysts have rated the stock with a Strong Buy rating, eleven have issued a Buy rating and three have issued a Hold rating to the company. According to data from MarketBeat, the company currently has a consensus rating of "Moderate Buy" and an average target price of $151.33.

DigitalOcean Stock Up 11.8%

The stock has a market capitalization of $14.11 billion, a price-to-earnings ratio of 61.73, a price-to-earnings-growth ratio of 121.20 and a beta of 1.61. The company has a quick ratio of 1.31, a current ratio of 1.31 and a debt-to-equity ratio of 1.14. The business's 50-day moving average is $142.34 and its two-hundred day moving average is $110.03.

DigitalOcean (NYSE:DOCN - Get Free Report) last released its quarterly earnings data on Tuesday, August 4th. The company reported $0.45 EPS for the quarter, beating analysts' consensus estimates of $0.26 by $0.19. DigitalOcean had a net margin of 23.26% and a return on equity of 31.01%. The company had revenue of $281.18 million during the quarter, compared to the consensus estimate of $279.03 million. During the same quarter in the prior year, the firm earned $0.39 EPS. DigitalOcean's quarterly revenue was up 28.6% on a year-over-year basis. DigitalOcean has set its FY 2026 guidance at 1.350-1.400 EPS and its Q3 2026 guidance at 0.280-0.300 EPS. Equities analysts anticipate that DigitalOcean Holdings, Inc. will post 0.58 EPS for the current year.

Insider Activity at DigitalOcean

In related news, CFO Matt Steinfort sold 10,000 shares of the firm's stock in a transaction dated Tuesday, June 2nd. The shares were sold at an average price of $170.07, for a total transaction of $1,700,700.00. Following the completion of the sale, the chief financial officer directly owned 538,414 shares in the company, valued at approximately $91,568,068.98. This trade represents a 1.82% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, Director Warren J. Adelman sold 4,200 shares of DigitalOcean stock in a transaction that occurred on Friday, August 7th. The shares were sold at an average price of $124.01, for a total transaction of $520,842.00. Following the sale, the director directly owned 67,433 shares in the company, valued at approximately $8,362,366.33. The trade was a 5.86% decrease in their position. The SEC filing for this sale provides additional information. Over the last quarter, insiders sold 43,538 shares of company stock valued at $6,712,418. 0.96% of the stock is owned by company insiders.

Institutional Inflows and Outflows

Large investors have recently added to or reduced their stakes in the company. State of New Jersey Common Pension Fund D purchased a new position in shares of DigitalOcean in the fourth quarter valued at approximately $2,358,000. New York State Teachers Retirement System boosted its position in shares of DigitalOcean by 33.0% in the 4th quarter. New York State Teachers Retirement System now owns 49,310 shares of the company's stock valued at $2,373,000 after purchasing an additional 12,229 shares during the period. Legato Capital Management LLC purchased a new position in DigitalOcean during the 4th quarter worth $1,365,000. Campbell Newman Asset Management Inc. acquired a new position in shares of DigitalOcean in the fourth quarter valued at approximately $2,101,000. Finally, Fortis Capital Advisors LLC acquired a new position in shares of DigitalOcean during the fourth quarter worth about $1,020,000. 49.77% of the stock is currently owned by institutional investors and hedge funds.

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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