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

DigitalOcean Holdings, Inc. (NYSE:DOCN)’s share price gapped up before the market opened on Friday . The stock had previously closed at $38.73, but opened at $40.00. DigitalOcean shares last traded at $39.81, with a volume of 190,459 shares changing hands.

Analyst Upgrades and Downgrades

Several research firms recently weighed in on DOCN. Canaccord Genuity Group raised their target price on shares of DigitalOcean from $42.00 to $48.00 and gave the company a “buy” rating in a research note on Friday, October 4th. Stifel Nicolaus lifted their target price on DigitalOcean from $35.00 to $40.00 and gave the stock a “hold” rating in a report on Wednesday, December 18th. JPMorgan Chase & Co. increased their price target on DigitalOcean from $32.00 to $40.00 and gave the company a “neutral” rating in a research note on Friday, October 25th. Barclays upped their price objective on DigitalOcean from $38.00 to $48.00 and gave the stock an “overweight” rating in a report on Friday, October 11th. Finally, Citigroup initiated coverage on shares of DigitalOcean in a research report on Friday. They issued a “buy” rating and a $45.00 price target on the stock. Six investment analysts have rated the stock with a hold rating and six have given a buy rating to the company. According to MarketBeat.com, the stock has a consensus rating of “Moderate Buy” and a consensus price target of $42.00.

DigitalOcean Trading Up 7.8 %

The company has a 50-day moving average of $36.77 and a 200-day moving average of $37.26. The company has a market capitalization of $3.85 billion, a price-to-earnings ratio of 49.14, a price-to-earnings-growth ratio of 2.77 and a beta of 1.78.

DigitalOcean (NYSE:DOCN) last issued its earnings results on Monday, November 4th. The company reported $0.52 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $0.40 by $0.12. DigitalOcean had a negative return on equity of 43.11% and a net margin of 10.86%. The company had revenue of $198.50 million during the quarter, compared to analyst estimates of $196.64 million. During the same quarter last year, the business posted $0.17 EPS. The firm’s quarterly revenue was up 12.1% on a year-over-year basis. On average, research analysts expect that DigitalOcean Holdings, Inc. will post 1.01 EPS for the current year.

Insider Transactions at DigitalOcean

In related news, insider Bratin Saha sold 16,989 shares of the stock in a transaction on Monday, November 18th. The stock was sold at an average price of $36.85, for a total value of $626,044.65. Following the completion of the transaction, the insider now directly owns 390,296 shares of the company’s stock, valued at approximately $14,382,407.60. This represents a 4.17 % decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through the SEC website. Also, CFO Matt Steinfort sold 12,498 shares of the firm’s stock in a transaction on Wednesday, December 4th. The stock was sold at an average price of $40.00, for a total value of $499,920.00. Following the completion of the sale, the chief financial officer now directly owns 517,498 shares of the company’s stock, valued at $20,699,920. This trade represents a 2.36 % decrease in their ownership of the stock. The disclosure for this sale can be found here. Insiders have sold 37,244 shares of company stock worth $1,416,208 over the last quarter. 0.74% of the stock is currently owned by insiders.

Institutional Investors Weigh In On DigitalOcean

A number of institutional investors and hedge funds have recently bought and sold shares of the stock. Jacobs Levy Equity Management Inc. lifted its position in DigitalOcean by 32.8% in the third quarter. Jacobs Levy Equity Management Inc. now owns 1,397,588 shares of the company’s stock valued at $56,449,000 after purchasing an additional 345,119 shares during the period. University of Texas Texas AM Investment Management Co. acquired a new stake in shares of DigitalOcean during the 2nd quarter worth about $11,712,000. Dimensional Fund Advisors LP grew its stake in DigitalOcean by 23.4% in the 2nd quarter. Dimensional Fund Advisors LP now owns 1,079,579 shares of the company’s stock worth $37,512,000 after acquiring an additional 205,007 shares during the period. Principal Financial Group Inc. increased its stake in DigitalOcean by 10.4% in the third quarter. Principal Financial Group Inc. now owns 1,301,499 shares of the company’s stock valued at $52,568,000 after purchasing an additional 122,651 shares during the last quarter. Finally, Public Sector Pension Investment Board acquired a new stake in shares of DigitalOcean in the second quarter worth approximately $4,108,000. 49.77% of the stock is owned by hedge funds and other institutional investors.

About DigitalOcean

DigitalOcean Holdings, Inc, through its subsidiaries, operates a cloud computing platform in North America, Europe, Asia, and internationally. The company’s platform provides on-demand infrastructure and platform tools for developers, start-ups, and small and growing digital businesses. It also offers infrastructure-as-a-service (IaaS) solutions comprising compute and storage services, as well as networking projects, including Cloud Firewalls software, Managed Load Balancers software, and Virtual Private Cloud (VPC).