Applied Digital (NASDAQ:APLD) Reaches New 1-Year Low - Time to Sell?

Key Points

• Applied Digital shares hit a new 52-week low, trading as low as $17.53, well below their 50-day and 200-day moving averages of $25.02 and $32.18, respectively.
• Analyst sentiment remains mixed but leans positive: MarketBeat reports a “Moderate Buy” consensus and an average price target of $59.75, despite Zacks downgrading the stock to “strong sell” and Needham lowering its target to $70.
• The company posted strong revenue growth of 367.8% year over year and beat quarterly EPS estimates, but remains unprofitable with a negative net margin and return on equity. President Jason Gechen Zhang bought $5.7 million in shares, while a director previously sold $2.3 million.

Shares of Applied Digital Corporation (NASDAQ:APLD - Get Free Report) reached a new 52-week low on Monday. The stock traded as low as $17.53 and last traded at $17.6970, with a volume of 2,196,278 shares. The stock had previously closed at $18.25.

Wall Street Analysts Forecast Growth

APLD has been the subject of several recent research reports. Zacks Research cut Applied Digital from a "hold" rating to a "strong sell" rating in a research report on Wednesday, August 26th. Citigroup reissued a "market outperform" rating on shares of Applied Digital in a report on Thursday, October 8th. UBS Group reissued a "buy" rating on shares of Applied Digital in a research note on Thursday, October 8th. Needham & Company LLC cut their price objective on shares of Applied Digital from $83.00 to $70.00 and set a "buy" rating for the company in a research note on Thursday, October 8th. Finally, Morgan Stanley set a $41.00 price target on shares of Applied Digital and gave the stock an "equal weight" rating in a research note on Friday, October 9th. Three investment analysts have rated the stock with a Strong Buy rating, twelve have issued a Buy rating, two have assigned a Hold rating and two have issued a Sell rating to the stock. According to data from MarketBeat.com, Applied Digital currently has an average rating of "Moderate Buy" and an average price target of $59.75.

Applied Digital Stock Up 0.7%

The company's 50-day simple moving average is $25.02 and its two-hundred day simple moving average is $32.18. The firm has a market capitalization of $5.56 billion, a P/E ratio of -11.10 and a beta of 5.99. The company has a debt-to-equity ratio of 3.90, a current ratio of 2.56 and a quick ratio of 2.56.

Applied Digital (NASDAQ:APLD - Get Free Report) last announced its quarterly earnings data on Wednesday, October 7th. The company reported ($0.01) EPS for the quarter, beating the consensus estimate of ($0.30) by $0.29. Applied Digital had a negative net margin of 51.28% and a negative return on equity of 27.21%. The firm had revenue of $300.39 million for the quarter, compared to the consensus estimate of $116.29 million. During the same period last year, the firm earned ($0.03) EPS. The company's revenue was up 367.8% on a year-over-year basis. As a group, research analysts expect that Applied Digital Corporation will post -2.17 earnings per share for the current year.

Insider Activity at Applied Digital

In related news, Director Richard Nottenburg sold 75,000 shares of the company's stock in a transaction dated Tuesday, August 4th. The stock was sold at an average price of $31.15, for a total value of $2,336,250.00. Following the completion of the transaction, the director owned 133,378 shares of the company's stock, valued at approximately $4,154,724.70. This represents a 35.99% decrease in their position. The transaction was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. Also, President Jason Gechen Zhang purchased 300,000 shares of the stock in a transaction on Friday, October 16th. The shares were acquired at an average price of $18.86 per share, for a total transaction of $5,658,000.00. Following the transaction, the president directly owned 2,839,227 shares of the company's stock, valued at $53,547,821.22. This represents a 11.81% increase in their position. The SEC filing for this purchase provides additional information. 9.50% of the stock is owned by company insiders.

Institutional Investors Weigh In On Applied Digital

Institutional investors and hedge funds have recently added to or reduced their stakes in the business. McGuire Investment Group LLC boosted its holdings in Applied Digital by 1.9% in the third quarter. McGuire Investment Group LLC now owns 158,724 shares of the company's stock valued at $3,868,000 after purchasing an additional 2,950 shares in the last quarter. Inspire Investing LLC purchased a new stake in shares of Applied Digital during the third quarter worth approximately $794,000. Royal Fund Management LLC raised its holdings in Applied Digital by 184.3% during the third quarter. Royal Fund Management LLC now owns 97,950 shares of the company's stock worth $2,387,000 after purchasing an additional 63,500 shares in the last quarter. Root Financial Partners LLC purchased a new stake in shares of Applied Digital in the third quarter valued at approximately $52,000. Finally, SBI Securities Co. Ltd. increased its holdings in shares of Applied Digital by 69.5% in the 3rd quarter. SBI Securities Co. Ltd. now owns 37,333 shares of the company's stock valued at $910,000 after purchasing an additional 15,305 shares in the last quarter. Hedge funds and other institutional investors own 65.67% of the company's stock.

About Applied Digital

Applied Digital Corporation NASDAQ: APLD develops and operates digital infrastructure designed to support high-performance computing and artificial intelligence applications. The company provides data-center capacity, hosting services and related infrastructure for customers that require substantial computing power and energy resources.

Its business includes high-performance computing data centers and cloud services intended to support artificial intelligence, machine learning, cryptocurrency mining and other compute-intensive workloads.

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