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

Shares of DigitalOcean Holdings, Inc. (NYSE:DOCN) gapped down before the market opened on Thursday. The stock had previously closed at $109.29, but opened at $101.24. DigitalOcean shares last traded at $98.5380, with a volume of 822,525 shares traded.

Analyst Ratings Changes

DOCN has been the topic of several research reports. UBS Group cut their price target on shares of DigitalOcean from $155.00 to $140.00 and set a “neutral” rating on the stock in a report on Wednesday, August 5th. Robert W. Baird started coverage on DigitalOcean in a report on Tuesday, July 21st. They set an “outperform” rating and a $165.00 target price for the company. Citigroup reissued a “market outperform” rating on shares of DigitalOcean in a research note on Thursday. Truist Financial initiated coverage on DigitalOcean in a report on Thursday, August 27th. They issued a “buy” rating and a $175.00 target price for the company. Finally, Stifel Nicolaus raised DigitalOcean from a “hold” rating to a “buy” rating and raised their target price for the stock from $135.00 to $160.00 in a research note on Tuesday, July 21st. One equities research analyst has rated the stock with a Strong Buy rating, thirteen have assigned a Buy rating and three have given a Hold rating to the company. Based on data from MarketBeat, the company presently has a consensus rating of “Moderate Buy” and a consensus price target of $154.69.

DigitalOcean Price Performance

The company’s 50 day moving average is $125.82 and its 200 day moving average is $129.80. The stock has a market cap of $10.69 billion, a price-to-earnings ratio of 46.96, a PEG ratio of 109.02 and a beta of 1.70. The company has a debt-to-equity ratio of 1.14, a current ratio of 1.31 and a quick ratio of 1.31.

DigitalOcean (NYSE:DOCN) last released its quarterly earnings results on Tuesday, August 4th. The company reported $0.45 EPS for the quarter, beating the consensus estimate of $0.26 by $0.19. The business had revenue of $281.18 million for the quarter, compared to analyst estimates of $279.03 million. DigitalOcean had a net margin of 23.26% and a return on equity of 31.01%. The company’s quarterly revenue was up 28.6% on a year-over-year basis. During the same period in the prior year, the business earned $0.39 earnings per share. DigitalOcean has set its FY 2026 guidance at 1.350-1.400 EPS and its Q3 2026 guidance at 0.280-0.300 EPS. Research analysts forecast that DigitalOcean Holdings, Inc. will post 0.64 earnings per share for the current fiscal year.

Insider Activity at DigitalOcean

In other news, 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 transaction of $1,057,300.00. Following the completion of the sale, the chief financial officer directly owned 503,692 shares of the company’s stock, valued at $53,255,355.16. The trade was a 1.95% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available at this link. 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, Director Warren Adelman sold 4,200 shares of the company’s stock in a transaction dated Friday, August 7th. The stock was sold at an average price of $124.01, for a total value of $520,842.00. Following the sale, the director owned 67,433 shares of the company’s stock, valued at $8,362,366.33. This represents a 5.86% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Over the last three months, insiders sold 22,641 shares of company stock worth $2,589,317. 0.96% of the stock is owned by company insiders.

Institutional Investors Weigh In On DigitalOcean

Several hedge funds and other institutional investors have recently bought and sold shares of the business. Bank of America Corp DE acquired a new stake in shares of DigitalOcean in the 2nd quarter valued at about $241,945,000. First Trust Advisors LP grew its position in shares of DigitalOcean by 9.3% in the 1st quarter. First Trust Advisors LP now owns 1,441,151 shares of the company’s stock worth $123,622,000 after acquiring an additional 122,675 shares in the last quarter. Principal Financial Group Inc. grew its position in shares of 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 acquiring an additional 674,231 shares in the last quarter. Allspring Global Investments Holdings LLC increased its holdings in shares of 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 acquiring an additional 306,529 shares during the last quarter. Finally, Bank of New York Mellon Corp bought a new stake in shares of DigitalOcean in the 2nd quarter valued at approximately $98,011,000. 49.77% of the stock is currently owned by hedge funds and other institutional investors.

About DigitalOcean

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.