Applied Digital (NASDAQ:APLD) Shares Up 7.4% - Should You Buy?

Key Points

• Applied Digital shares rose 7.4% to $28.31 in midday trading, although trading volume was 15% below the average.
• Analyst sentiment remains broadly positive, with a consensus “Moderate Buy” rating and an average price target of $68.15; targets include $75 from B. Riley and $90 from Lake Street.
• The company’s quarterly revenue surged 406.3% year over year to $240.35 million, but it reported an adjusted loss of $0.39 per share versus the expected $0.09 loss. Applied Digital also has a negative net margin, high debt-to-equity ratio of 2.88, and substantial share-price volatility.

Applied Digital Corporation (NASDAQ:APLD - Get Free Report) shares were up 7.4% during mid-day trading on Tuesday . The company traded as high as $29.15 and last traded at $28.31. 19,753,909 shares traded hands during trading, a decline of 15% from the average daily volume of 23,225,363 shares. The stock had previously closed at $26.37.

Analysts Set New Price Targets

APLD has been the topic of a number of recent research reports. Lake Street Capital lifted their price target on shares of Applied Digital from $70.00 to $90.00 and gave the company a "buy" rating in a research report on Tuesday, June 9th. Weiss Ratings reissued a "sell (d-)" rating on shares of Applied Digital in a research report on Tuesday, July 21st. Citigroup reissued a "market outperform" rating on shares of Applied Digital in a research note on Monday, August 3rd. Zacks Research cut shares of Applied Digital from a "hold" rating to a "strong sell" rating in a research report on Wednesday, August 26th. Finally, B. Riley Financial reaffirmed a "buy" rating and set a $75.00 price target (up from $66.00) on shares of Applied Digital in a research report on Monday, August 3rd. Three analysts have rated the stock with a Strong Buy rating, eleven have issued a Buy rating, one has issued a Hold rating and two have given a Sell rating to the company's stock. According to data from MarketBeat.com, the stock has a consensus rating of "Moderate Buy" and an average target price of $68.15.

Applied Digital Price Performance

The business's 50 day moving average price is $28.92 and its 200-day moving average price is $32.90. The company has a quick ratio of 4.01, a current ratio of 4.01 and a debt-to-equity ratio of 2.88. The company has a market cap of $8.25 billion, a PE ratio of -31.81 and a beta of 5.72.

Applied Digital (NASDAQ:APLD - Get Free Report) last announced its earnings results on Monday, July 27th. The company reported ($0.39) earnings per share for the quarter, missing the consensus estimate of ($0.09) by ($0.30). Applied Digital had a negative net margin of 37.78% and a negative return on equity of 16.42%. The firm had revenue of $240.35 million during the quarter, compared to analysts' expectations of $96.85 million. During the same quarter last year, the company posted ($0.24) earnings per share. Applied Digital's revenue for the quarter was up 406.3% compared to the same quarter last year. As a group, analysts forecast that Applied Digital Corporation will post -1.09 earnings per share for the current year.

Insiders Place Their Bets

In other news, Director Richard Nottenburg sold 75,000 shares of the firm's stock in a transaction dated Tuesday, August 4th. The stock was sold at an average price of $31.15, for a total transaction of $2,336,250.00. Following the completion of the sale, the director directly owned 133,378 shares in the company, valued at $4,154,724.70. This trade represents a 35.99% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available at this hyperlink. 9.50% of the stock is currently owned by insiders.

Institutional Inflows and Outflows

Institutional investors and hedge funds have recently bought and sold shares of the business. Independent Advisor Alliance increased its holdings in Applied Digital by 4.6% during the 4th quarter. Independent Advisor Alliance now owns 9,215 shares of the company's stock worth $226,000 after purchasing an additional 407 shares during the last quarter. GAMMA Investing LLC grew its position in shares of Applied Digital by 28.5% during the second quarter. GAMMA Investing LLC now owns 2,092 shares of the company's stock worth $78,000 after buying an additional 464 shares in the last quarter. Krilogy Financial LLC grew its position in shares of Applied Digital by 4.1% during the second quarter. Krilogy Financial LLC now owns 14,243 shares of the company's stock worth $531,000 after buying an additional 561 shares in the last quarter. Vermillion Wealth Management Inc. increased its stake in shares of Applied Digital by 29.4% in the first quarter. Vermillion Wealth Management Inc. now owns 2,563 shares of the company's stock worth $61,000 after buying an additional 583 shares during the last quarter. Finally, Federation des caisses Desjardins du Quebec increased its stake in shares of Applied Digital by 28.4% in the fourth quarter. Federation des caisses Desjardins du Quebec now owns 3,069 shares of the company's stock worth $75,000 after buying an additional 678 shares during the last quarter. Hedge funds and other institutional investors own 65.67% of the company's stock.

About Applied Digital

Applied Digital NASDAQ: APLD is a technology company specializing in the development and operation of large-scale digital infrastructure and sustainable Bitcoin mining solutions. Through its integrated platform, the company designs, builds and manages turnkey data center facilities while also providing comprehensive hosting services for cloud, colocation and enterprise computing needs. Applied Digital's modular approach to facility design enables rapid deployment of capacity and streamlined integration of power, cooling and network connectivity.

In addition to its data center business, Applied Digital operates a network of Bitcoin mining sites that leverage vertically integrated capabilities, including hardware procurement, mining farm engineering, energy management and real-time performance monitoring.

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