DigitalOcean (NYSE:DOCN) Stock Price Up 7.1% – Still a Buy?

Shares of DigitalOcean Holdings, Inc. (NYSE:DOCN) were up 7.1% during mid-day trading on Tuesday. The company traded as high as $82.90 and last traded at $83.8270. 461,316 shares traded hands during trading, a decline of 87% from the average daily volume of 3,571,922 shares. The stock had previously closed at $78.30.

Analyst Upgrades and Downgrades

A number of analysts have commented on the company. Canaccord Genuity Group decreased their price objective on DigitalOcean from $200.00 to $180.00 and set a “buy” rating for the company in a report on Wednesday, November 4th. Weiss Ratings lowered DigitalOcean from a “hold (c+)” rating to a “sell (d+)” rating in a research report on Wednesday, November 4th. Citigroup dropped their price objective on DigitalOcean from $190.00 to $160.00 and set a “buy” rating on the stock in a research note on Wednesday, November 4th. Barclays dropped their price objective on DigitalOcean from $161.00 to $140.00 and set an “overweight” rating on the stock in a research note on Wednesday, November 4th. Finally, UBS Group reduced their target price on shares of DigitalOcean from $105.00 to $100.00 and set a “neutral” rating for the company in a research note on Wednesday, November 4th. Two analysts have rated the stock with a Strong Buy rating, fourteen have assigned a Buy rating, one has given a Hold rating and one has issued a Sell rating to the company’s stock. According to data from MarketBeat.com, the stock currently has an average rating of “Moderate Buy” and an average target price of $141.06.

DigitalOcean Price Performance

The firm’s 50 day moving average price is $114.64 and its two-hundred day moving average price is $112.11. The company has a debt-to-equity ratio of 0.61, a current ratio of 1.15 and a quick ratio of 1.15. The stock has a market cap of $10.30 billion, a PE ratio of 281.49, a P/E/G ratio of 88.37 and a beta of 1.69.

DigitalOcean (NYSE:DOCN) last posted its earnings results on Tuesday, November 3rd. The company reported $0.45 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.32 by $0.13. DigitalOcean had a return on equity of 15.01% and a net margin of 3.11%. The firm had revenue of $321.19 million for the quarter, compared to the consensus estimate of $306.74 million. During the same quarter in the prior year, the business posted $0.54 earnings per share. The business’s quarterly revenue was up 39.6% on a year-over-year basis. On average, research analysts expect that DigitalOcean Holdings, Inc. will post 0.73 earnings per share for the current year.

Insiders Place Their Bets

In other DigitalOcean news, CFO Matt Steinfort sold 10,000 shares of DigitalOcean stock in a transaction that occurred 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 transaction, the chief financial officer directly owned 503,692 shares of the company’s stock, valued at approximately $53,255,355.16. This trade represents a 1.95% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which can be accessed through this hyperlink. 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 firm’s stock in a transaction that occurred on Thursday, September 3rd. The stock was sold at an average price of $105.73, for a total value of $421,334.05. Following the transaction, the chief accounting officer owned 58,399 shares in the company, valued at approximately $6,174,526.27. The trade was 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. Company insiders own 0.96% of the company’s stock.

Institutional Trading of DigitalOcean

A number of institutional investors and hedge funds have recently added to or reduced their stakes in DOCN. Bank of America Corp DE purchased a new position in DigitalOcean during the 2nd quarter valued at $241,945,000. First Trust Advisors LP increased its position in shares of DigitalOcean by 9.3% during the first 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 during the period. Stephens Investment Management Group LLC bought a new position in DigitalOcean in the third quarter worth about $98,056,000. Bank of New York Mellon Corp bought a new position in DigitalOcean in the second quarter worth about $98,011,000. Finally, Principal Financial Group Inc. raised its stake in DigitalOcean by 155.3% in the first 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 in the last quarter. Hedge funds and other institutional investors own 49.77% of the company’s stock.

About DigitalOcean

DigitalOcean Holdings, Inc. provides cloud computing services designed primarily for developers, startups, and small and midsize businesses. Founded in 2011, the company focuses on making it easier for customers to build, deploy, and scale applications without managing their own physical infrastructure. Its platform includes virtual machines known as Droplets, managed Kubernetes, an application platform, managed databases, object storage, and networking and monitoring tools. These services support tasks ranging from hosting websites and applications to developing and running cloud-native software.