DigitalOcean (NYSE:DOCN) Stock Price Up 5.8% - Still a Buy?

Key Points

• DigitalOcean shares rose 5.8% to $124.66, although trading volume was 86% below the average session volume.
• Analysts remain broadly bullish, with a consensus “Moderate Buy” rating and a $152.81 average price target; recent targets range from $160 to $200.
• The company exceeded quarterly expectations, reporting $0.45 EPS and $281.18 million in revenue, up 28.6% year over year, while insiders have sold more than $2.5 million of stock over the past 90 days.

DigitalOcean Holdings, Inc. (NYSE:DOCN - Get Free Report)'s stock price shot up 5.8% on Wednesday . The stock traded as high as $125.09 and last traded at $124.66. 514,239 shares were traded during trading, a decline of 86% from the average session volume of 3,622,517 shares. The stock had previously closed at $117.85.

Wall Street Analyst Weigh In

Several analysts have recently issued reports on the stock. Truist Financial initiated coverage on shares of DigitalOcean in a research note on Thursday, August 27th. They issued a "buy" rating and a $175.00 target price for the company. Citigroup raised their price target on shares of DigitalOcean from $185.00 to $190.00 and gave the company a "buy" rating in a research report on Wednesday, August 5th. Canaccord Genuity Group restated a "buy" rating and set a $200.00 price target on shares of DigitalOcean in a report on Friday, July 10th. Robert W. Baird assumed coverage on shares of DigitalOcean in a research report on Tuesday, July 21st. They issued an "outperform" rating and a $165.00 price objective for the company. Finally, Stifel Nicolaus upgraded shares of DigitalOcean from a "hold" rating to a "buy" rating and increased their price objective for the company from $135.00 to $160.00 in a research note on Tuesday, July 21st. Two research analysts have rated the stock with a Strong Buy rating, twelve have issued a Buy rating and three have issued a Hold rating to the company's stock. Based on data from MarketBeat.com, DigitalOcean currently has a consensus rating of "Moderate Buy" and a consensus price target of $152.81.

DigitalOcean Price Performance

The firm has a market cap of $13.01 billion, a PE ratio of 56.90, a P/E/G ratio of 102.91 and a beta of 1.57. The company has a debt-to-equity ratio of 1.14, a current ratio of 1.31 and a quick ratio of 1.31. The business's fifty day moving average is $122.20 and its 200-day moving average is $120.23.

DigitalOcean (NYSE:DOCN - Get Free Report) last released its 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 net margin of 23.26% and a return on equity of 31.01%. The firm had revenue of $281.18 million for the quarter, compared to analysts' expectations of $279.03 million. During the same period in the previous year, the company earned $0.39 earnings per share. The company'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. On average, research analysts predict that DigitalOcean Holdings, Inc. will post 0.63 earnings per share for the current fiscal year.

Insider Buying and Selling at DigitalOcean

In other DigitalOcean news, Director Warren Adelman sold 4,200 shares of the firm's stock in a transaction on Friday, August 7th. The stock was sold at an average price of $124.01, for a total value of $520,842.00. Following the completion of the sale, the director directly owned 67,433 shares of the company's stock, valued at $8,362,366.33. This trade represents a 5.86% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which is available through this link. Also, CFO Matt Steinfort sold 10,000 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 value of $1,057,300.00. Following the completion of the sale, the chief financial officer owned 503,692 shares in the company, valued at approximately $53,255,355.16. The trade was a 1.95% 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 ninety days, insiders sold 22,641 shares of company stock valued at $2,589,317. Company insiders own 0.96% of the company's stock.

Institutional Investors Weigh In On DigitalOcean

A number of hedge funds and other institutional investors have recently added to or reduced their stakes in DOCN. Bank of America Corp DE bought a new position in DigitalOcean during the second quarter worth about $241,945,000. First Trust Advisors LP lifted its stake in shares of DigitalOcean by 9.3% during the 1st quarter. First Trust Advisors LP now owns 1,441,151 shares of the company's stock valued at $123,622,000 after buying an additional 122,675 shares in the last quarter. Bank of New York Mellon Corp bought a new position in DigitalOcean in the 2nd quarter worth approximately $98,011,000. Principal Financial Group Inc. boosted its holdings in DigitalOcean by 155.3% in the 1st quarter. Principal Financial Group Inc. now owns 1,108,420 shares of the company's stock worth $95,080,000 after buying an additional 674,231 shares during the period. Finally, Allspring Global Investments Holdings LLC grew its stake in DigitalOcean by 81.3% in the 1st quarter. Allspring Global Investments Holdings LLC now owns 683,707 shares of the company's stock valued at $59,947,000 after buying an additional 306,529 shares in the last quarter. 49.77% of the stock is currently owned by institutional investors.

About DigitalOcean

DigitalOcean Holdings, Inc provides cloud computing services designed primarily for developers, startups, and small and medium-sized businesses. Its platform offers on-demand infrastructure and developer tools intended to simplify the process of building, deploying, and scaling applications.

The company's products include virtual machines known as Droplets, managed Kubernetes, managed databases, object storage through Spaces, block storage, networking services, and App Platform, a platform-as-a-service offering for application deployment.

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