DigitalOcean (NYSE:DOCN) Stock Jumps 7.7% - Here's Why

Key Points

• DigitalOcean shares jumped 7.7% to about $133.46 in midday trading, though volume was roughly 80% below the average daily level.
• The company’s latest quarterly results exceeded expectations, with EPS of $0.45 versus the $0.26 consensus estimate and revenue of $281.18 million, up 28.6% year over year.
• Analysts maintain a “Moderate Buy” consensus rating with an average price target of $152.81, while recent insider sales were conducted under pre-arranged plans to cover tax obligations.

DigitalOcean Holdings, Inc. (NYSE:DOCN - Get Free Report)'s stock price was up 7.7% during mid-day trading on Friday. The company traded as high as $133.27 and last traded at $133.4560. Approximately 704,008 shares were traded during trading, a decline of 80% from the average daily volume of 3,531,696 shares. The stock had previously closed at $123.90.

Analyst Ratings Changes

DOCN has been the subject of a number of research reports. Weiss Ratings cut shares of DigitalOcean from a "buy (b-)" rating to a "hold (c+)" rating in a report on Wednesday, September 9th. Barclays raised their price target on shares of DigitalOcean from $160.00 to $161.00 and gave the company an "overweight" rating in a research report on Wednesday, August 5th. Canaccord Genuity Group reaffirmed a "buy" rating and set a $200.00 price objective on shares of DigitalOcean in a research report on Friday, July 10th. UBS Group reduced their price objective on DigitalOcean from $155.00 to $140.00 and set a "neutral" rating on the stock in a research note on Wednesday, August 5th. Finally, Stifel Nicolaus upgraded DigitalOcean from a "hold" rating to a "buy" rating and lifted their target price for the company from $135.00 to $160.00 in a report on Tuesday, July 21st. Two analysts have rated the stock with a Strong Buy rating, twelve have assigned a Buy rating and three have given a Hold rating to the company's stock. According to MarketBeat, the stock presently has a consensus rating of "Moderate Buy" and a consensus target price of $152.81.

DigitalOcean Stock Up 7.6%

The firm's fifty day simple moving average is $125.73 and its 200 day simple moving average is $128.67. The company has a current ratio of 1.31, a quick ratio of 1.31 and a debt-to-equity ratio of 1.14. The company has a market cap of $13.91 billion, a price-to-earnings ratio of 60.78, a PEG ratio of 108.22 and a beta of 1.70.

DigitalOcean (NYSE:DOCN - Get Free Report) last posted its quarterly earnings results on Tuesday, August 4th. The company reported $0.45 earnings per share for the quarter, beating analysts' consensus estimates of $0.26 by $0.19. DigitalOcean had a return on equity of 31.01% and a net margin of 23.26%.The company had revenue of $281.18 million for the quarter, compared to analysts' expectations of $279.03 million. During the same period last year, the firm earned $0.39 earnings per share. DigitalOcean's quarterly revenue 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. Sell-side analysts predict that DigitalOcean Holdings, Inc. will post 0.64 earnings per share for the current year.

Insiders Place Their Bets

In related news, CFO Matt Steinfort sold 10,000 shares of DigitalOcean stock in a transaction on Thursday, September 3rd. The shares were sold at an average price of $105.73, for a total transaction of $1,057,300.00. Following the sale, the chief financial officer directly owned 503,692 shares in the company, valued at $53,255,355.16. This trade represents a 1.95% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website. 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. Also, CAO Cherie Barrett sold 3,985 shares of the business's stock in a transaction on Thursday, September 3rd. The shares were sold at an average price of $105.73, for a total transaction of $421,334.05. Following the completion of the sale, the chief accounting officer directly owned 58,399 shares of the company's stock, valued at approximately $6,174,526.27. This trade represents a 6.39% decrease in their ownership of the stock. 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. Over the last quarter, insiders have sold 22,641 shares of company stock valued at $2,589,317. 0.96% of the stock is owned by corporate insiders.

Institutional Investors Weigh In On DigitalOcean

A number of institutional investors and hedge funds have recently added to or reduced their stakes in DOCN. Wedmont Private Capital purchased a new stake in DigitalOcean in the 3rd quarter valued at $455,000. GAMMA Investing LLC increased its stake in DigitalOcean by 18.8% in the third quarter. GAMMA Investing LLC now owns 3,099 shares of the company's stock valued at $413,000 after purchasing an additional 491 shares during the period. CoreCap Advisors LLC increased its stake in DigitalOcean by 43.1% in the third quarter. CoreCap Advisors LLC now owns 3,648 shares of the company's stock valued at $487,000 after purchasing an additional 1,098 shares during the period. Ausbil Investment Management Ltd purchased a new stake in shares of DigitalOcean in the third quarter valued at about $3,401,000. Finally, Elevation Wealth Partners LLC lifted its position in DigitalOcean by 175.0% during the 3rd quarter. Elevation Wealth Partners LLC now owns 616 shares of the company's stock worth $82,000 after acquiring an additional 392 shares during the period. Hedge funds and other institutional investors own 49.77% of the company's stock.

DigitalOcean Company Profile

DigitalOcean Holdings, Inc NYSE: DOCN provides cloud computing services designed primarily for developers, startups, and small and midsize businesses. Its platform offers on-demand infrastructure and software tools intended to simplify the development, deployment, and management of applications.

The company's services include cloud compute through Droplets, managed Kubernetes, managed databases, object and block storage, networking, and the App Platform for deploying applications. DigitalOcean also provides developer tools, tutorials, support, and other resources intended to help customers build and scale digital products without managing traditional data-center infrastructure.

Founded in 2011 and headquartered in New York City, DigitalOcean serves customers internationally through cloud infrastructure and data-center regions located in North America, Europe, and Asia.

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