Texas Capital Upgrades Applied Digital (NASDAQ:APLD) to Strong-Buy

Key Points

• Texas Capital upgraded Applied Digital (NASDAQ:APLD) to a Strong-Buy, joining several brokers that have raised targets (e.g., HC Wainwright to $40, B. Riley to $53); the consensus rating is Buy with an average target of $33.27.
• In the latest quarter APLD reported $126.59 million in revenue (up 250.1% YoY) beating estimates, but posted EPS of ($0.11) vs. ($0.09) expected and remains unprofitable with analysts forecasting about ($0.96) for the fiscal year.
• Insiders have been net sellers — 526,641 shares (~$18.6M) sold in the last 90 days, including CEO Wes Cummins selling 165,000 shares — while insiders own about 9.5% and institutions hold roughly 65.7% of the stock.

Applied Digital (NASDAQ:APLD - Get Free Report) was upgraded by analysts at Texas Capital to a "strong-buy" rating in a research note issued on Tuesday,Zacks.com reports.

A number of other brokerages have also recently issued reports on APLD. HC Wainwright upped their price objective on Applied Digital from $20.00 to $40.00 and gave the stock a "buy" rating in a research note on Friday, October 10th. Arete Research started coverage on shares of Applied Digital in a research report on Wednesday, January 7th. They set a "buy" rating on the stock. Needham & Company LLC reissued a "buy" rating and issued a $41.00 price objective on shares of Applied Digital in a research report on Thursday, January 8th. Craig Hallum raised their target price on shares of Applied Digital to $39.00 and gave the company a "buy" rating in a research note on Thursday, October 23rd. Finally, B. Riley boosted their price target on Applied Digital to $53.00 and gave the stock a "buy" rating in a research report on Friday, January 9th. Three equities research analysts have rated the stock with a Strong Buy rating, twelve have given a Buy rating and one has issued a Sell rating to the company's stock. According to data from MarketBeat.com, the company currently has a consensus rating of "Buy" and an average target price of $33.27.

Applied Digital Price Performance

NASDAQ APLD opened at $35.06 on Tuesday. The company has a market capitalization of $9.80 billion, a PE ratio of -64.93 and a beta of 6.89. The firm's 50 day moving average is $28.25 and its 200-day moving average is $23.29. The company has a quick ratio of 4.82, a current ratio of 4.82 and a debt-to-equity ratio of 1.79. Applied Digital has a 12-month low of $3.31 and a 12-month high of $40.20.

Applied Digital (NASDAQ:APLD - Get Free Report) last released its earnings results on Wednesday, January 7th. The company reported ($0.11) earnings per share (EPS) for the quarter, missing analysts' consensus estimates of ($0.09) by ($0.02). Applied Digital had a negative net margin of 43.49% and a negative return on equity of 13.53%. The company had revenue of $126.59 million during the quarter, compared to analyst estimates of $82.22 million. During the same period in the prior year, the firm posted ($0.06) EPS. Applied Digital's revenue was up 250.1% compared to the same quarter last year. Equities research analysts anticipate that Applied Digital will post -0.96 earnings per share for the current fiscal year.

Insiders Place Their Bets

In related news, CEO Wes Cummins sold 165,000 shares of the firm's stock in a transaction on Friday, January 16th. The stock was sold at an average price of $36.42, for a total value of $6,009,300.00. Following the transaction, the chief executive officer owned 4,176,329 shares in the company, valued at approximately $152,101,902.18. This trade represents a 3.80% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this link. Also, Director Chuck Hastings sold 25,000 shares of the business's stock in a transaction dated Friday, October 31st. The shares were sold at an average price of $34.27, for a total value of $856,750.00. Following the completion of the transaction, the director directly owned 426,612 shares of the company's stock, valued at approximately $14,619,993.24. This trade represents a 5.54% decrease in their position. The SEC filing for this sale provides additional information. Over the last ninety days, insiders have sold 526,641 shares of company stock worth $18,606,039. 9.50% of the stock is currently owned by insiders.

Hedge Funds Weigh In On Applied Digital

Hedge funds and other institutional investors have recently made changes to their positions in the company. Atlantic Union Bankshares Corp acquired a new stake in shares of Applied Digital during the 2nd quarter worth approximately $25,000. Noble Wealth Management PBC bought a new stake in Applied Digital during the fourth quarter worth $25,000. Albion Financial Group UT acquired a new stake in shares of Applied Digital in the 4th quarter valued at $25,000. Larson Financial Group LLC increased its stake in shares of Applied Digital by 56,450.0% in the 3rd quarter. Larson Financial Group LLC now owns 1,131 shares of the company's stock valued at $26,000 after purchasing an additional 1,129 shares during the last quarter. Finally, Northwestern Mutual Wealth Management Co. acquired a new position in shares of Applied Digital during the 2nd quarter worth $26,000. 65.67% of the stock is currently owned by institutional investors and hedge funds.

Applied Digital Company Profile

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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