DigitalOcean Holdings, Inc. $DOCN Stock: CenterBook Partners LP Cuts Holdings

Key Points

• CenterBook Partners LP cut its DigitalOcean stake by 84.3% in the third quarter, selling 69,625 shares and retaining 12,972 shares valued at about $1.73 million.
• DigitalOcean reported quarterly EPS of $0.45, beating the $0.32 consensus, while revenue of $321.19 million exceeded estimates and rose 39.6% year over year.
• Analyst sentiment remains a Moderate Buy, with a consensus price target of $141.06, although several firms recently lowered their targets.

CenterBook Partners LP lowered its position in shares of DigitalOcean Holdings, Inc. (NYSE:DOCN - Free Report) by 84.3% in the third quarter, according to its most recent filing with the Securities and Exchange Commission (SEC). The fund owned 12,972 shares of the company's stock after selling 69,625 shares during the period. CenterBook Partners LP's holdings in DigitalOcean were worth $1,730,000 as of its most recent filing with the Securities and Exchange Commission (SEC).

Several other institutional investors have also recently made changes to their positions in the company. Bank of America Corp DE purchased a new position in DigitalOcean in the second quarter worth approximately $241,945,000. First Trust Advisors LP increased its stake in DigitalOcean by 9.3% during the first quarter. First Trust Advisors LP now owns 1,441,151 shares of the company's stock worth $123,622,000 after acquiring an additional 122,675 shares during the last quarter. Bank of New York Mellon Corp purchased a new stake in DigitalOcean in the second quarter valued at $98,011,000. Principal Financial Group Inc. raised its position in DigitalOcean by 155.3% in the first quarter. Principal Financial Group Inc. now owns 1,108,420 shares of the company's stock valued at $95,080,000 after purchasing an additional 674,231 shares during the period. Finally, Allspring Global Investments Holdings LLC lifted its stake in shares of DigitalOcean by 81.3% in the 1st quarter. Allspring Global Investments Holdings LLC now owns 683,707 shares of the company's stock valued at $59,947,000 after purchasing an additional 306,529 shares during the last quarter. Hedge funds and other institutional investors own 49.77% of the company's stock.

DigitalOcean Trading Down 0.3%

Shares of DOCN stock opened at $72.23 on Monday. The company has a debt-to-equity ratio of 0.61, a quick ratio of 1.15 and a current ratio of 1.15. The stock has a market capitalization of $8.52 billion, a P/E ratio of 233.00, a price-to-earnings-growth ratio of 89.34 and a beta of 1.69. The company has a 50 day moving average price of $116.36 and a 200 day moving average price of $111.68. DigitalOcean Holdings, Inc. has a fifty-two week low of $41.96 and a fifty-two week high of $187.50.

DigitalOcean (NYSE:DOCN - Get Free Report) last released its earnings results on Tuesday, November 3rd. The company reported $0.45 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $0.32 by $0.13. DigitalOcean had a net margin of 3.11% and a return on equity of 15.01%. The company had revenue of $321.19 million for the quarter, compared to analyst estimates of $306.74 million. During the same period in the prior year, the business earned $0.54 EPS. The firm's quarterly revenue was up 39.6% on a year-over-year basis. Equities research analysts predict that DigitalOcean Holdings, Inc. will post 0.65 EPS for the current fiscal year.

Analyst Upgrades and Downgrades

A number of equities analysts have recently weighed in on the company. The Goldman Sachs Group lowered their price target on DigitalOcean from $178.00 to $156.00 and set a "buy" rating for the company in a report on Thursday. William Blair reaffirmed an "outperform" rating on shares of DigitalOcean in a research report on Wednesday, July 15th. Piper Sandler raised shares of DigitalOcean from a "neutral" rating to an "overweight" rating and decreased their target price for the company from $142.00 to $126.00 in a research report on Wednesday, October 21st. Morgan Stanley lowered their target price on shares of DigitalOcean from $175.00 to $150.00 and set an "overweight" rating for the company in a research note on Wednesday. Finally, Zacks Research upgraded shares of DigitalOcean from a "hold" rating to a "strong-buy" rating in a research report on Monday, October 19th. Two research analysts have rated the stock with a Strong Buy rating, fourteen have given a Buy rating, one has given a Hold rating and one has given a Sell rating to the company. Based on data from MarketBeat.com, DigitalOcean presently has an average rating of "Moderate Buy" and a consensus target price of $141.06.

DigitalOcean News Summary

Here are the key news stories impacting DigitalOcean this week:

• Positive Sentiment: DigitalOcean announced a collaboration with Box, which could expand the reach of its cloud services. The announcement provides no further details in the supplied headline. DigitalOcean announces collaboration with Box
• Positive Sentiment: Earlier coverage pointed to higher guidance and AI revenue growth as reasons for investor optimism. DigitalOcean Stock Jumps On Higher Guidance And AI Revenue Growth
• Neutral Sentiment: Goldman Sachs lowered its price target from $178 to $156 but kept a Buy rating, signaling continued optimism alongside a more cautious valuation. Goldman Sachs price-target update
• Negative Sentiment: UBS, Canaccord Genuity and Citigroup were reported to have cut their price targets or issued a more pessimistic outlook, adding pressure to sentiment. Canaccord nevertheless maintained a Buy rating. UBS Group price-target cut Canaccord Genuity price-target cut Citigroup forecast
• Negative Sentiment: Coverage also highlighted a $1 billion offering and argued DOCN could be substantially below fair value after its results. The offering may raise concerns about financing and potential dilution. DigitalOcean Holdings Could Be 62% Below Fair Value Following Results And $1b Offering

Insider Buying and Selling at DigitalOcean

In other news, CAO Cherie Barrett sold 4,456 shares of the company's stock in a transaction on Thursday, August 13th. The stock was sold at an average price of $132.37, for a total transaction of $589,840.72. Following the sale, the chief accounting officer owned 65,487 shares of the company's stock, valued at approximately $8,668,514.19. This represents a 6.37% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CFO Matt Steinfort sold 10,000 shares of the stock in a transaction on Thursday, September 3rd. The shares were sold at an average price of $105.73, for a total value of $1,057,300.00. Following the completion of the sale, the chief financial officer owned 503,692 shares in the company, valued at approximately $53,255,355.16. The trade was a 1.95% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. 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. In the last 90 days, insiders sold 18,441 shares of company stock valued at $2,068,475. Insiders own 0.96% of the company's stock.

DigitalOcean Company Profile

DigitalOcean Holdings, Inc provides cloud computing services designed primarily for developers, startups, and small and midsize businesses. Founded in 2011, the company focuses on making it easier for customers to build, deploy, and scale applications without managing their own physical infrastructure.

Its platform includes virtual machines known as Droplets, managed Kubernetes, an application platform, managed databases, object storage, and networking and monitoring tools. These services support tasks ranging from hosting websites and applications to developing and running cloud-native software.

DigitalOcean serves customers around the world through its cloud platform and data center infrastructure.

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