DigitalOcean (NYSE:DOCN) Shares Gap Up - Here's Why

Key Points

• DigitalOcean shares jumped 3.7%, opening at $120.63 after closing at $114.99, with the latest trading price reported at $121.68.
• Wall Street analysts maintain a broadly positive view, with an average rating of “Buy” and a consensus price target of $152.81; recent target changes ranged as high as $190.
• The company exceeded quarterly expectations, reporting adjusted EPS of $0.45 versus a $0.26 consensus and revenue of $281.18 million, up 28.6% year over year.

DigitalOcean Holdings, Inc. (NYSE:DOCN - Get Free Report)'s stock price gapped up prior to trading on Thursday . The stock had previously closed at $114.99, but opened at $120.63. DigitalOcean shares last traded at $121.68, with a volume of 276,566 shares changing hands.

Wall Street Analysts Forecast Growth

Several equities analysts have issued reports on DOCN shares. Oppenheimer set a $190.00 target price on DigitalOcean in a research report on Wednesday, May 6th. Barclays increased their price objective on DigitalOcean from $160.00 to $161.00 and gave the stock an "overweight" rating in a research report on Wednesday, August 5th. William Blair reissued an "outperform" rating on shares of DigitalOcean in a report on Wednesday, July 15th. Piper Sandler boosted their target price on shares of DigitalOcean from $98.00 to $155.00 and gave the stock a "neutral" rating in a research report on Tuesday, May 5th. Finally, Stifel Nicolaus upgraded shares of DigitalOcean from a "hold" rating to a "buy" rating and increased their price target for the company from $135.00 to $160.00 in a report on Tuesday, July 21st. Two research analysts have rated the stock with a Strong Buy rating, thirteen have issued a Buy rating and two have given a Hold rating to the company's stock. Based on data from MarketBeat.com, the company has an average rating of "Buy" and a consensus price target of $152.81.

DigitalOcean Stock Up 3.7%

The firm has a market capitalization of $12.45 billion, a PE ratio of 54.50, a price-to-earnings-growth ratio of 96.37 and a beta of 1.61. The firm's 50-day moving average is $130.98 and its 200 day moving average is $115.03. The company has a debt-to-equity ratio of 1.14, a quick ratio of 1.31 and a current ratio of 1.31.

DigitalOcean (NYSE:DOCN - Get Free Report) last posted its earnings results on Tuesday, August 4th. The company reported $0.45 earnings per share for the quarter, beating the consensus estimate of $0.26 by $0.19. DigitalOcean had a net margin of 23.26% and a return on equity of 31.01%. The firm had revenue of $281.18 million during the quarter, compared to the consensus estimate of $279.03 million. During the same period last year, the firm posted $0.39 EPS. The firm's revenue for the quarter was up 28.6% on a year-over-year basis. DigitalOcean has set its FY 2026 guidance at 1.350-1.400 EPS and its Q3 2026 guidance at 0.280-0.300 EPS. As a group, research analysts forecast that DigitalOcean Holdings, Inc. will post 0.63 earnings per share for the current fiscal year.

Insider Buying and Selling at DigitalOcean

In related news, Director Warren J. Adelman sold 4,200 shares of DigitalOcean stock in a transaction dated Friday, August 7th. The stock was sold at an average price of $124.01, for a total transaction of $520,842.00. Following the completion of the sale, the director owned 67,433 shares in the company, valued at approximately $8,362,366.33. This trade represents a 5.86% decrease in their position. The transaction was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. Also, CFO Matt Steinfort sold 10,000 shares of the business's stock in a transaction dated Tuesday, June 2nd. The shares were sold at an average price of $170.07, for a total transaction of $1,700,700.00. Following the completion of the transaction, the chief financial officer directly owned 538,414 shares of the company's stock, valued at $91,568,068.98. The trade was a 1.82% decrease in their position. 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 have sold 18,656 shares of company stock worth $2,811,383. 0.96% of the stock is owned by insiders.

Hedge Funds Weigh In On DigitalOcean

Institutional investors and hedge funds have recently modified their holdings of the company. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC raised its holdings in DigitalOcean by 5.0% in the 1st quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC now owns 339,670 shares of the company's stock valued at $11,342,000 after acquiring an additional 16,162 shares during the last quarter. Intech Investment Management LLC lifted its position in DigitalOcean by 59.2% during the first quarter. Intech Investment Management LLC now owns 39,429 shares of the company's stock worth $1,317,000 after buying an additional 14,655 shares during the period. Amundi lifted its position in DigitalOcean by 126,552.2% during the second quarter. Amundi now owns 29,130 shares of the company's stock worth $827,000 after buying an additional 29,107 shares during the period. Jump Financial LLC acquired a new stake in DigitalOcean in the 2nd quarter worth about $3,212,000. Finally, Qube Research & Technologies Ltd boosted its stake in DigitalOcean by 69.7% in the 2nd quarter. Qube Research & Technologies Ltd now owns 414,643 shares of the company's stock worth $11,842,000 after buying an additional 170,339 shares during the last quarter. Hedge funds and other institutional investors own 49.77% of the company's stock.

DigitalOcean Company Profile

DigitalOcean Holdings, Inc is a cloud infrastructure provider that focuses on simplicity, performance and developer experience. The company offers a range of cloud services designed to help software developers, startups and small- to medium-sized businesses deploy, manage and scale applications. Its flagship offering, Droplets, provides virtual private servers that can be configured with various CPU, memory and storage options. In addition to compute instances, DigitalOcean's platform includes managed Kubernetes, scalable object and block storage, managed databases, load balancers and networking capabilities such as Virtual Private Cloud (VPC) and Floating IPs.

Founded in 2011 and headquartered in New York City, DigitalOcean was created with the goal of making cloud computing more accessible to individual developers and smaller teams.

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