Applied Digital (NASDAQ:APLD) Shares Down 8.2% After Analyst Downgrade

Key Points

• Applied Digital shares fell 8.2% to $17.82 after B. Riley cut its price target from $75 to $51, although it maintained a buy rating. Trading volume was about 14% above average.
• Analyst sentiment remains mixed, but MarketBeat reports a consensus “Moderate Buy” rating and an average price target of $57.75; other recent ratings ranged from strong sell to buy.
• Company insiders recently purchased shares, including 300,000 shares bought by President Jason Gechen Zhang and 55,803 shares acquired by CEO Wes Cummins. Applied Digital also reported quarterly revenue of $300.39 million, up 367.8% year over year, while remaining unprofitable.

Applied Digital Corporation (NASDAQ:APLD - Get Free Report)'s share price fell 8.2% during mid-day trading on Friday after B. Riley Financial lowered their price target on the stock from $75.00 to $51.00. B. Riley Financial currently has a buy rating on the stock. Applied Digital traded as low as $17.20 and last traded at $17.82. 26,468,952 shares were traded during trading, an increase of 14% from the average session volume of 23,135,891 shares. The stock had previously closed at $19.41.

Other analysts have also recently issued reports about the company. Zacks Research cut Applied Digital from a "hold" rating to a "strong sell" rating in a research note on Wednesday, August 26th. Rothschild & Co Redburn set a $22.00 price objective on Applied Digital and gave the stock a "neutral" rating in a research report on Monday, September 21st. Wall Street Zen downgraded Applied Digital from a "sell" rating to a "strong sell" rating in a report on Sunday, August 30th. Roth Capital set a $35.00 target price on Applied Digital and gave the stock a "buy" rating in a research report on Wednesday, October 21st. Finally, UBS Group restated a "buy" rating on shares of Applied Digital in a research note on Thursday, October 8th. Three 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 given a Sell rating to the stock. Based on data from MarketBeat.com, Applied Digital currently has a consensus rating of "Moderate Buy" and a consensus target price of $57.75.

Insider Activity at Applied Digital

In related news, President Jason Gechen Zhang purchased 300,000 shares of Applied Digital stock in a transaction that occurred on Friday, October 16th. The stock was purchased at an average cost of $18.86 per share, with a total value of $5,658,000.00. Following the completion of the transaction, the president directly owned 2,839,227 shares in the company, valued at approximately $53,547,821.22. The trade was a 11.81% increase in their ownership of the stock. The acquisition was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this hyperlink. Also, CEO Wes Cummins acquired 55,803 shares of the company's stock in a transaction on Friday, October 16th. The shares were purchased at an average cost of $18.04 per share, for a total transaction of $1,006,686.12. Following the acquisition, the chief executive officer owned 5,874,453 shares of the company's stock, valued at approximately $105,975,132.12. The trade was a 0.96% increase in their position. Additional details regarding this purchase are available in the official SEC disclosure. 9.50% of the stock is owned by corporate insiders.

Institutional Inflows and Outflows

Institutional investors have recently added to or reduced their stakes in the company. Situational Awareness LP grew its position in Applied Digital by 18.9% during the 1st quarter. Situational Awareness LP now owns 13,478,438 shares of the company's stock worth $319,978,000 after purchasing an additional 2,139,378 shares during the last quarter. Equitec Proprietary Markets LLC purchased a new stake in shares of Applied Digital in the second quarter valued at about $312,349,000. Hsbc Holdings PLC purchased a new stake in shares of Applied Digital in the fourth quarter valued at about $29,510,000. Sei Investments Co. raised its holdings in shares of Applied Digital by 33.0% in the first quarter. Sei Investments Co. now owns 1,093,701 shares of the company's stock valued at $25,964,000 after buying an additional 271,618 shares during the last quarter. Finally, UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC boosted its stake in shares of Applied Digital by 32.7% during the second quarter. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC now owns 581,255 shares of the company's stock worth $21,681,000 after buying an additional 143,308 shares during the period. Institutional investors and hedge funds own 65.67% of the company's stock.

Applied Digital Stock Down 8.2%

The company has a debt-to-equity ratio of 3.90, a current ratio of 2.56 and a quick ratio of 2.56. The firm's 50 day moving average price is $24.27 and its two-hundred day moving average price is $31.45. The firm has a market cap of $5.39 billion, a price-to-earnings ratio of -10.87 and a beta of 5.99.

Applied Digital (NASDAQ:APLD - Get Free Report) last released its quarterly earnings results on Wednesday, October 7th. The company reported ($0.01) EPS for the quarter, topping the consensus estimate of ($0.30) by $0.29. Applied Digital had a negative return on equity of 27.21% and a negative net margin of 51.28%. The business had revenue of $300.39 million during the quarter, compared to analysts' expectations of $116.29 million. During the same quarter in the prior year, the business earned ($0.03) earnings per share. The company's quarterly revenue was up 367.8% compared to the same quarter last year. As a group, sell-side analysts forecast that Applied Digital Corporation will post -2.17 earnings per share for the current fiscal year.

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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