Applied Digital (NASDAQ:APLD) Shares Down 4.8% - Should You Sell?

Key Points

• Applied Digital shares fell 4.8% to $19.41 in mid-day trading, well below the 50-day and 200-day moving averages of $24.45 and $31.54, respectively.
• Despite the decline, analysts maintain a consensus “Moderate Buy” rating with a $59.75 price target; recent ratings include bullish views from Citigroup, B. Riley and Wells Fargo, alongside “strong sell” downgrades from Wall Street Zen and Zacks.
• The company reported stronger-than-expected quarterly results, including $300.4 million in revenue—up 367.8% year over year—and an EPS loss of $0.01 versus expectations for a $0.30 loss. However, Applied Digital remains unprofitable, with a negative net margin of 51.28% and projected full-year EPS of -$2.17.

Applied Digital Corporation (NASDAQ:APLD - Get Free Report)'s share price was down 4.8% during mid-day trading on Thursday. The stock traded as low as $19.16 and last traded at $19.41. Approximately 15,560,499 shares traded hands during mid-day trading, a decline of 33% from the average session volume of 23,116,109 shares. The stock had previously closed at $20.39.

Analyst Upgrades and Downgrades

A number of research firms have commented on APLD. Citigroup reissued a "market outperform" rating on shares of Applied Digital in a report on Thursday, October 8th. Wall Street Zen lowered shares of Applied Digital from a "sell" rating to a "strong sell" rating in a report on Sunday, August 30th. B. Riley Financial reiterated a "buy" rating and issued a $75.00 price target (up from $66.00) on shares of Applied Digital in a research note on Monday, August 3rd. Zacks Research lowered Applied Digital from a "hold" rating to a "strong sell" rating in a research note on Wednesday, August 26th. Finally, Wells Fargo & Company reaffirmed an "overweight" rating and set a $55.00 price target (up from $50.00) on shares of Applied Digital in a research note on Thursday, October 8th. Three investment analysts have rated the stock with a Strong Buy rating, twelve have assigned a Buy rating, two have issued a Hold rating and two have assigned a Sell rating to the company's stock. According to MarketBeat.com, the stock presently has a consensus rating of "Moderate Buy" and a consensus price target of $59.75.

Applied Digital Stock Down 4.8%

The company has a market capitalization of $5.87 billion, a price-to-earnings ratio of -11.84 and a beta of 5.99. The company has a debt-to-equity ratio of 3.90, a quick ratio of 2.56 and a current ratio of 2.56. The business's 50 day moving average is $24.45 and its 200 day moving average is $31.54.

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 business had revenue of $300.39 million during the quarter, compared to analysts' expectations of $116.29 million. During the same period in the previous year, the business posted ($0.03) EPS. The business's quarterly revenue was up 367.8% compared to the same quarter last year. Sell-side analysts anticipate that Applied Digital Corporation will post -2.17 earnings per share for the current year.

Insider Buying and Selling

In other Applied Digital news, President Jason Gechen Zhang bought 300,000 shares of Applied Digital stock in a transaction dated Friday, October 16th. The stock was acquired at an average cost of $18.86 per share, for a total transaction of $5,658,000.00. Following the completion of the transaction, the president directly owned 2,839,227 shares of the company's stock, valued at approximately $53,547,821.22. This represents a 11.81% increase in their ownership of the stock. The purchase was disclosed in a legal filing with the Securities & Exchange Commission, which is available through this link. Also, Director Richard Nottenburg sold 75,000 shares of the stock in a transaction that occurred on Tuesday, August 4th. The shares were sold at an average price of $31.15, for a total value of $2,336,250.00. Following the completion of the sale, the director directly 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 SEC filing for this sale provides additional information. Insiders own 9.50% of the company's stock.

Institutional Inflows and Outflows

A number of hedge funds have recently made changes to their positions in APLD. GAMMA Investing LLC increased its position in Applied Digital by 28.5% in the 2nd quarter. GAMMA Investing LLC now owns 2,092 shares of the company's stock valued at $78,000 after acquiring an additional 464 shares during the period. Krilogy Financial LLC grew its holdings in Applied Digital by 4.1% in the second quarter. Krilogy Financial LLC now owns 14,243 shares of the company's stock valued at $531,000 after purchasing an additional 561 shares during the last quarter. Envestnet Asset Management Inc. raised its stake in shares of Applied Digital by 4.7% during the 2nd quarter. Envestnet Asset Management Inc. now owns 13,333 shares of the company's stock worth $497,000 after buying an additional 596 shares during the last quarter. Handelsbanken Fonder AB raised its position in Applied Digital by 1.0% during the second quarter. Handelsbanken Fonder AB now owns 71,600 shares of the company's stock worth $2,671,000 after acquiring an additional 700 shares during the last quarter. Finally, Valeo Financial Advisors LLC grew its position in shares of Applied Digital by 6.7% in the third quarter. Valeo Financial Advisors LLC now owns 12,343 shares of the company's stock valued at $301,000 after purchasing an additional 773 shares during 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.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.