DigitalOcean (NYSE:DOCN) Shares Gap Up - What's Next?

Key Points

• DigitalOcean shares opened sharply higher, rising from a prior close of $70.70 to $78.40 before trading around $73.60.
• The company beat quarterly expectations, reporting EPS of $0.45 versus $0.32 expected and revenue of $321.19 million versus $306.74 million; revenue grew 39.6% year over year.
• Analyst sentiment remains broadly positive: MarketBeat reports a “Moderate Buy” consensus and an average price target of $141.06, despite some recent target cuts and one downgrade to Sell.

DigitalOcean Holdings, Inc. (NYSE:DOCN - Get Free Report)'s share price gapped up prior to trading on Friday. The stock had previously closed at $70.70, but opened at $78.40. DigitalOcean shares last traded at $73.6020, with a volume of 600,112 shares traded.

Wall Street Analysts Forecast Growth

Several equities analysts have recently issued reports on the company. Robert W. Baird started coverage on DigitalOcean in a research report on Tuesday, July 21st. They issued an "outperform" rating and a $165.00 price target for the company. Citigroup dropped their price target on DigitalOcean from $190.00 to $160.00 and set a "buy" rating on the stock in a research note on Wednesday. William Blair reaffirmed an "outperform" rating on shares of DigitalOcean in a report on Wednesday, July 15th. Canaccord Genuity Group cut their price objective on DigitalOcean from $200.00 to $180.00 and set a "buy" rating for the company in a research note on Wednesday. Finally, Weiss Ratings lowered DigitalOcean from a "hold (c+)" rating to a "sell (d+)" rating in a research note on Wednesday. Two research analysts have rated the stock with a Strong Buy rating, fourteen have assigned a Buy rating, one has issued a Hold rating and one has given a Sell rating to the company's stock. According to MarketBeat.com, the company presently has a consensus rating of "Moderate Buy" and a consensus price target of $141.06.

DigitalOcean Trading Up 3.3%

The stock has a market cap of $7.62 billion, a P/E ratio of 234.72, a P/E/G ratio of 73.25 and a beta of 1.69. The company has a debt-to-equity ratio of 0.61, a quick ratio of 1.31 and a current ratio of 1.15. The stock's fifty day moving average is $117.35 and its 200 day moving average is $111.57.

DigitalOcean (NYSE:DOCN - Get Free Report) last issued its quarterly earnings results on Tuesday, November 3rd. The company reported $0.45 EPS for the quarter, beating the consensus estimate of $0.32 by $0.13. DigitalOcean had a net margin of 3.11% and a return on equity of 15.01%. The company had revenue of $321.19 million for the quarter, compared to the consensus estimate of $306.74 million. During the same period in the prior year, the firm posted $0.54 EPS. The firm's revenue was up 39.6% compared to the same quarter last year. As a group, equities research analysts predict that DigitalOcean Holdings, Inc. will post 0.62 earnings per share for the current fiscal year.

Insider Activity at DigitalOcean

In other news, CAO Cherie Barrett sold 4,456 shares of the company's stock in a transaction on Thursday, August 13th. The stock was sold at an average price of $132.37, for a total transaction of $589,840.72. Following the transaction, the chief accounting officer directly owned 65,487 shares of the company's stock, valued at approximately $8,668,514.19. This represents a 6.37% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which is accessible through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CFO Matt Steinfort sold 10,000 shares of the firm's stock in a transaction dated Thursday, September 3rd. The stock was sold at an average price of $105.73, for a total value of $1,057,300.00. Following the completion of the sale, the chief financial officer directly owned 503,692 shares of the company's stock, valued at approximately $53,255,355.16. This represents a 1.95% 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 quarter, insiders have sold 18,441 shares of company stock valued at $2,068,475. 0.96% of the stock is currently owned by company insiders.

Institutional Inflows and Outflows

Institutional investors and hedge funds have recently added to or reduced their stakes in the business. Eurizon Capital SGR S.p.A. acquired a new stake in shares of DigitalOcean during the 3rd quarter valued at about $77,000. New Mexico Educational Retirement Board boosted its stake in DigitalOcean by 20.6% during the 3rd quarter. New Mexico Educational Retirement Board now owns 20,500 shares of the company's stock worth $2,734,000 after purchasing an additional 3,500 shares during the last quarter. Bingham Private Wealth LLC grew its stake in DigitalOcean by 48.5% during the 3rd quarter. Bingham Private Wealth LLC now owns 1,964 shares of the company's stock valued at $262,000 after acquiring an additional 641 shares in the last quarter. Maryland State Retirement & Pension System grew its position in shares of DigitalOcean by 32.7% in the third quarter. Maryland State Retirement & Pension System now owns 5,883 shares of the company's stock valued at $785,000 after purchasing an additional 1,449 shares in the last quarter. Finally, Illinois Municipal Retirement Fund grew its holdings in DigitalOcean by 82.7% in the 3rd quarter. Illinois Municipal Retirement Fund now owns 41,995 shares of the company's stock valued at $5,602,000 after buying an additional 19,013 shares in the last quarter. 49.77% of the stock is currently owned by institutional investors and hedge funds.

DigitalOcean Company Profile

DigitalOcean Holdings, Inc is a cloud computing company that provides infrastructure and developer-focused services for startups, small and medium-sized businesses, and individual developers. Its platform is designed to simplify the deployment, management, and scaling of applications without requiring customers to build and operate extensive in-house infrastructure.

The company's offerings include Droplets, its virtual machine service; managed Kubernetes; managed databases; object and block storage; networking tools; and application deployment services through App Platform.

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.