DigitalOcean (NYSE:DOCN) Trading Down 8.9% – Should You Sell?

Shares of DigitalOcean Holdings, Inc. (NYSE:DOCN) fell 8.9% on Wednesday . The company traded as low as $115.30 and last traded at $114.1330. Approximately 263,135 shares changed hands during mid-day trading, a decline of 93% from the average daily volume of 3,772,779 shares. The stock had previously closed at $125.25.

Analyst Ratings Changes

DOCN has been the topic of several recent analyst reports. Barclays lifted their price target on DigitalOcean from $160.00 to $161.00 and gave the company an “overweight” rating in a research note on Wednesday, August 5th. Morgan Stanley raised their price objective on DigitalOcean from $75.00 to $175.00 and gave the company an “overweight” rating in a research note on Wednesday, May 6th. Stifel Nicolaus upgraded DigitalOcean from a “hold” rating to a “buy” rating and lifted their target price for the company from $135.00 to $160.00 in a research report on Tuesday, July 21st. Piper Sandler boosted their target price on DigitalOcean from $98.00 to $155.00 and gave the stock a “neutral” rating in a research note on Tuesday, May 5th. Finally, William Blair reissued an “outperform” rating on shares of DigitalOcean in a report on Wednesday, July 15th. Two equities research analysts have rated the stock with a Strong Buy rating, twelve have assigned a Buy rating and two have assigned a Hold rating to the stock. According to MarketBeat, the company has an average rating of “Buy” and an average target price of $151.33.

DigitalOcean Stock Performance

The company has a market cap of $12.22 billion, a price-to-earnings ratio of 53.37, a P/E/G ratio of 111.22 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. The company has a fifty day moving average of $138.21 and a two-hundred day moving average of $112.62.

DigitalOcean (NYSE:DOCN) last issued its 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. The business had revenue of $281.18 million during the quarter, compared to analysts’ expectations of $279.03 million. DigitalOcean had a return on equity of 31.01% and a net margin of 23.26%.The business’s revenue for the quarter was up 28.6% compared to the same quarter last year. During the same quarter in the prior year, the firm earned $0.39 EPS. 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 year.

Insider Transactions at DigitalOcean

In other news, Director Warren J. Adelman sold 4,200 shares of the company’s stock in a transaction that occurred on Friday, August 7th. The stock was sold at an average price of $124.01, for a total value of $520,842.00. Following the completion of the transaction, 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 transaction was disclosed in a filing with the SEC, which is available through this hyperlink. Also, CFO Matt Steinfort sold 10,000 shares of the firm’s 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 completion of the transaction, the chief financial officer owned 538,414 shares of the company’s stock, valued at approximately $91,568,068.98. This trade represents a 1.82% decrease in their position. The SEC filing for this sale provides additional information. 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. Over the last three months, insiders have sold 18,656 shares of company stock worth $2,811,383. Insiders own 0.96% of the company’s stock.

Hedge Funds Weigh In On DigitalOcean

A number of hedge funds have recently modified their holdings of DOCN. State of New Jersey Common Pension Fund D acquired a new stake in DigitalOcean in the fourth quarter valued at $2,358,000. New York State Teachers Retirement System lifted its holdings in DigitalOcean by 33.0% during the 4th quarter. New York State Teachers Retirement System now owns 49,310 shares of the company’s stock worth $2,373,000 after buying an additional 12,229 shares during the period. Legato Capital Management LLC acquired a new position in DigitalOcean during the 4th quarter worth about $1,365,000. Summit Creek Advisors LLC bought a new stake in shares of DigitalOcean in the 4th quarter valued at about $7,126,000. Finally, Wealth High Governance Asset Management Ltda. bought a new stake in shares of DigitalOcean in the 1st quarter valued at about $8,986,000. Institutional investors and hedge funds own 49.77% of the company’s stock.

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.