DigitalOcean (NYSE:DOCN) Shares Gap Up – What’s Next?

DigitalOcean Holdings, Inc. (NYSE:DOCN)’s share price gapped up before the market opened 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.

Analyst Upgrades and Downgrades

DOCN has been the topic of a number of recent research reports. Morgan Stanley upped their target price on shares of DigitalOcean from $75.00 to $175.00 and gave the stock an “overweight” rating in a research report on Wednesday, May 6th. Canaccord Genuity Group reissued a “buy” rating and set a $200.00 price target on shares of DigitalOcean in a research report on Friday, July 10th. Piper Sandler boosted their price objective on shares of DigitalOcean from $98.00 to $155.00 and gave the stock a “neutral” rating in a research note on Tuesday, May 5th. Weiss Ratings upgraded shares of DigitalOcean from a “hold (c+)” rating to a “buy (b-)” rating in a report on Tuesday, August 11th. Finally, Stifel Nicolaus raised shares of DigitalOcean from a “hold” rating to a “buy” rating and raised their target price for the company from $135.00 to $160.00 in a research note on Tuesday, July 21st. Two equities 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, DigitalOcean has an average rating of “Buy” and an average target price of $152.81.

DigitalOcean Price Performance

The firm has a fifty day moving average price of $128.72 and a two-hundred day moving average price of $115.41. The company has a quick ratio of 1.31, a current ratio of 1.31 and a debt-to-equity ratio of 1.14. The stock has a market capitalization of $11.64 billion, a P/E ratio of 50.91, a P/E/G ratio of 104.17 and a beta of 1.61.

DigitalOcean (NYSE:DOCN) last announced its quarterly earnings results on Tuesday, August 4th. The company reported $0.45 earnings per share (EPS) for the quarter, topping 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 company had revenue of $281.18 million for the quarter, compared to analysts’ expectations of $279.03 million. During the same quarter in the previous year, the business posted $0.39 EPS. DigitalOcean’s revenue was up 28.6% compared to the same quarter last year. 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, analysts expect that DigitalOcean Holdings, Inc. will post 0.63 EPS for the current year.

Insider Activity

In other news, CFO Matt Steinfort sold 10,000 shares of the stock in a transaction that occurred on 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 sale, the chief financial officer owned 538,414 shares in the company, valued at $91,568,068.98. This represents a 1.82% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, 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 4,456 shares of the firm’s stock in a transaction that occurred on Thursday, August 13th. The shares were sold at an average price of $132.37, for a total transaction of $589,840.72. Following the sale, the chief accounting officer directly owned 65,487 shares of the company’s stock, valued at $8,668,514.19. This trade represents a 6.37% 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. Insiders have sold a total of 18,656 shares of company stock worth $2,811,383 over the last 90 days. 0.96% of the stock is currently owned by insiders.

Institutional Inflows and Outflows

A number of hedge funds and other institutional investors have recently modified their holdings of the business. Allworth Financial LP increased its holdings in DigitalOcean by 54.4% in the 3rd quarter. Allworth Financial LP now owns 724 shares of the company’s stock worth $25,000 after buying an additional 255 shares in the last quarter. Parallel Advisors LLC lifted its stake in DigitalOcean by 66.2% during the 1st quarter. Parallel Advisors LLC now owns 324 shares of the company’s stock valued at $28,000 after acquiring an additional 129 shares during the period. Huntington National Bank lifted its stake in DigitalOcean by 638.3% during the 4th quarter. Huntington National Bank now owns 598 shares of the company’s stock valued at $29,000 after acquiring an additional 517 shares during the period. Banque Cantonale Vaudoise purchased a new stake in shares of DigitalOcean during the 1st quarter valued at about $33,000. Finally, Optiver Holding B.V. boosted its holdings in shares of DigitalOcean by 1,063.9% during the 1st quarter. Optiver Holding B.V. now owns 419 shares of the company’s stock valued at $36,000 after acquiring an additional 383 shares during the last quarter. 49.77% of the stock is owned by institutional investors.

About DigitalOcean

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.