DigitalOcean (NYSE:DOCN) Stock Falls 8.5% – What’s Next?

DigitalOcean Holdings, Inc. (NYSE:DOCN)’s stock price fell 8.5% during trading on Wednesday. The company traded as low as $120.40 and last traded at $117.2780. 329,792 shares were traded during mid-day trading, a decline of 91% from the average daily volume of 3,504,538 shares. The stock had previously closed at $128.21.

Analysts Set New Price Targets

A number of equities research analysts recently weighed in on DOCN shares. Stifel Nicolaus upgraded DigitalOcean from a “hold” rating to a “buy” rating and upped their price target for the stock from $135.00 to $160.00 in a report on Tuesday, July 21st. Truist Financial assumed coverage on shares of DigitalOcean in a research report on Thursday, August 27th. They issued a “buy” rating and a $175.00 price objective for the company. William Blair restated an “outperform” rating on shares of DigitalOcean in a research note on Wednesday, July 15th. Weiss Ratings cut shares of DigitalOcean from a “buy (b-)” rating to a “hold (c+)” rating in a report on Wednesday, September 9th. Finally, Canaccord Genuity Group restated a “buy” rating and issued a $200.00 target price on shares of DigitalOcean in a research report on Friday, July 10th. One equities research analyst has rated the stock with a Strong Buy rating, thirteen have assigned a Buy rating and three have issued a Hold rating to the company. According to MarketBeat.com, the stock has an average rating of “Moderate Buy” and a consensus target price of $154.69.

DigitalOcean Stock Performance

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’s 50-day moving average price is $126.13 and its 200 day moving average price is $129.63. The company has a market cap of $11.71 billion, a P/E ratio of 50.56, a price-to-earnings-growth ratio of 111.74 and a beta of 1.70.

DigitalOcean (NYSE:DOCN) last released its quarterly earnings data on Tuesday, August 4th. The company reported $0.45 earnings per share for the quarter, beating analysts’ consensus estimates of $0.26 by $0.19. The company had revenue of $281.18 million for the quarter, compared to the consensus estimate of $279.03 million. DigitalOcean had a return on equity of 31.01% and a net margin of 23.26%. The company’s quarterly revenue was up 28.6% on a year-over-year basis. During the same period in the previous 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. As a group, research analysts expect that DigitalOcean Holdings, Inc. will post 0.64 EPS for the current fiscal year.

Insider Buying and Selling

In other news, CFO Matt Steinfort sold 10,000 shares of DigitalOcean 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 transaction, the chief financial officer owned 503,692 shares in the company, valued at approximately $53,255,355.16. The trade was a 1.95% decrease in their ownership of the stock. The sale was disclosed in a document filed 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 business’s stock in a transaction 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 completion of the transaction, the chief accounting officer owned 65,487 shares in the company, valued at approximately $8,668,514.19. The trade was a 6.37% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last three months, insiders have sold 22,641 shares of company stock valued at $2,589,317. 0.96% of the stock is owned by insiders.

Hedge Funds Weigh In On DigitalOcean

Institutional investors have recently modified their holdings of the business. Bank of America Corp DE purchased a new position in DigitalOcean in the second quarter valued at about $241,945,000. First Trust Advisors LP boosted its position in DigitalOcean by 9.3% during the first quarter. First Trust Advisors LP now owns 1,441,151 shares of the company’s stock worth $123,622,000 after purchasing an additional 122,675 shares during the period. Bank of New York Mellon Corp purchased a new position in shares of DigitalOcean in the second quarter worth about $98,011,000. Principal Financial Group Inc. lifted its stake in shares of DigitalOcean by 155.3% during the 1st quarter. Principal Financial Group Inc. now owns 1,108,420 shares of the company’s stock valued at $95,080,000 after buying an additional 674,231 shares in the last quarter. Finally, Allspring Global Investments Holdings LLC boosted its holdings in DigitalOcean by 81.3% in the 1st quarter. Allspring Global Investments Holdings LLC now owns 683,707 shares of the company’s stock worth $59,947,000 after buying an additional 306,529 shares during the period. 49.77% of the stock is owned by institutional investors.

DigitalOcean Company Profile

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.