DigitalOcean (NYSE:DOCN) Shares Gap Up – Still a Buy?

DigitalOcean Holdings, Inc. (NYSE:DOCN) shares gapped up prior to trading 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 trading hands.

Analysts Set New Price Targets

Several brokerages recently weighed in on DOCN. Oppenheimer set a $190.00 target price on DigitalOcean in a research report on Wednesday, May 6th. Citigroup boosted their target price on DigitalOcean from $185.00 to $190.00 and gave the stock a “buy” rating in a report on Wednesday, August 5th. Piper Sandler increased their target price on shares of DigitalOcean from $98.00 to $155.00 and gave the stock a “neutral” rating in a research report on Tuesday, May 5th. Stifel Nicolaus upgraded shares of DigitalOcean from a “hold” rating to a “buy” rating and raised their price target for the company from $135.00 to $160.00 in a report on Tuesday, July 21st. Finally, Canaccord Genuity Group reaffirmed a “buy” rating and set a $200.00 price target on shares of DigitalOcean in a research report on Friday, July 10th. Two investment analysts have rated the stock with a Strong Buy rating, thirteen have issued a Buy rating and two have issued a Hold rating to the company’s stock. Based on data from MarketBeat.com, the stock currently has an average rating of “Buy” and an average price target of $152.81.

DigitalOcean Stock Up 3.7%

The firm has a fifty day simple moving average of $130.98 and a 200-day simple moving average of $115.03. The company has a market capitalization of $12.45 billion, a PE ratio of 54.50, a P/E/G ratio of 96.37 and a beta of 1.61. The company has a debt-to-equity ratio of 1.14, a quick ratio of 1.31 and a current ratio of 1.31.

DigitalOcean (NYSE:DOCN) last released its quarterly earnings results on Tuesday, August 4th. The company reported $0.45 earnings per share 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 business had revenue of $281.18 million during the quarter, compared to the consensus estimate of $279.03 million. During the same quarter last year, the company earned $0.39 earnings per share. The business’s quarterly 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. Equities research analysts anticipate that DigitalOcean Holdings, Inc. will post 0.63 EPS for the current fiscal year.

Insider Activity

In related news, CFO Matt Steinfort sold 10,000 shares of the stock in a transaction dated Tuesday, June 2nd. The shares were sold at an average price of $170.07, for a total value of $1,700,700.00. Following the sale, the chief financial officer owned 538,414 shares of the company’s stock, valued at $91,568,068.98. This trade represents a 1.82% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible 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 stock in a transaction that occurred on Thursday, August 13th. The stock was sold at an average price of $132.37, for a total value of $589,840.72. Following the completion of the transaction, 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 ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last quarter, insiders sold 18,656 shares of company stock valued at $2,811,383. 0.96% of the stock is currently owned by company insiders.

Institutional Inflows and Outflows

Several hedge funds and other institutional investors have recently made changes to their positions in DOCN. Amundi boosted its position in shares of DigitalOcean by 31.7% in the second quarter. Amundi now owns 30,674 shares of the company’s stock worth $4,817,000 after buying an additional 7,389 shares during the period. VIRGINIA RETIREMENT SYSTEMS ET Al acquired a new stake in DigitalOcean in the second quarter valued at approximately $2,560,000. California State Teachers Retirement System grew its position in DigitalOcean by 16,016.1% in the second quarter. California State Teachers Retirement System now owns 14,211,058 shares of the company’s stock worth $2,231,562,000 after acquiring an additional 14,122,879 shares in the last quarter. AlphaGrep UK Ltd acquired a new position in shares of DigitalOcean during the 2nd quarter worth $604,000. Finally, Three Seasons Wealth LLC bought a new position in shares of DigitalOcean during the 2nd quarter valued at $985,000. 49.77% of the stock is currently owned by institutional investors and hedge funds.

DigitalOcean Company Profile

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.