DigitalOcean (NYSE:DOCN) Shares Gap Down – Time to Sell?

DigitalOcean Holdings, Inc. (NYSE:DOCN) gapped down before the market opened on Tuesday . The stock had previously closed at $127.17, but opened at $119.80. DigitalOcean shares last traded at $132.1080, with a volume of 1,634,190 shares.

Wall Street Analysts Forecast Growth

DOCN has been the subject of a number of research analyst reports. Weiss Ratings lowered DigitalOcean from a “buy (b-)” rating to a “hold (c+)” rating in a report on Tuesday, July 28th. Bank of America lifted their price target on DigitalOcean from $103.00 to $107.00 and gave the company a “buy” rating in a report on Thursday, April 9th. Morgan Stanley upped their price target on DigitalOcean from $75.00 to $175.00 and gave the company an “overweight” rating in a research report on Wednesday, May 6th. Stifel Nicolaus upgraded DigitalOcean from a “hold” rating to a “buy” rating and raised their price objective for the stock from $135.00 to $160.00 in a research report on Tuesday, July 21st. Finally, Oppenheimer set a $190.00 target price on DigitalOcean in a report on Wednesday, May 6th. Two investment analysts have rated the stock with a Strong Buy rating, eleven have assigned a Buy rating and three have given a Hold rating to the stock. According to MarketBeat.com, the company currently has an average rating of “Moderate Buy” and an average price target of $151.33.

DigitalOcean Stock Down 3.6%

The stock has a market cap of $12.97 billion, a price-to-earnings ratio of 56.75 and a beta of 1.61. The business has a fifty day moving average of $145.46 and a 200 day moving average of $107.98. The company has a debt-to-equity ratio of 1.14, a current ratio of 1.31 and a quick ratio of 1.46.

DigitalOcean (NYSE:DOCN) last posted its earnings results on Tuesday, August 4th. The company reported $0.45 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $0.26 by $0.19. The firm had revenue of $281.18 million during the quarter, compared to analysts’ expectations of $279.03 million. DigitalOcean had a net margin of 23.26% and a return on equity of 31.01%. The company’s revenue was up 28.6% compared to the same quarter last year. During the same period in the previous year, the company 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. On average, equities analysts predict that DigitalOcean Holdings, Inc. will post 0.57 earnings per share for the current year.

Insider Buying and Selling at DigitalOcean

In other news, CFO Matt Steinfort sold 25,000 shares of the stock in a transaction dated Friday, May 15th. The stock was sold at an average price of $152.50, for a total transaction of $3,812,500.00. Following the transaction, the chief financial officer owned 573,272 shares of the company’s stock, valued at approximately $87,423,980. This represents a 4.18% decrease in their position. The sale was disclosed in a legal filing with the SEC, which is accessible through this link. Also, Director Hilary Schneider sold 4,338 shares of the business’s stock in a transaction that occurred on Friday, May 15th. The stock was sold at an average price of $156.38, for a total value of $678,376.44. Following the completion of the sale, the director owned 24,323 shares of the company’s stock, valued at approximately $3,803,630.74. This trade represents a 15.14% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders have sold 39,338 shares of company stock worth $6,191,576 over the last three months. Company insiders own 0.96% of the company’s stock.

Hedge Funds Weigh In On DigitalOcean

Institutional investors have recently modified their holdings of the company. State of New Jersey Common Pension Fund D bought a new stake in DigitalOcean in the 4th quarter valued at $2,358,000. New York State Teachers Retirement System boosted its position in shares of DigitalOcean by 33.0% during the 4th quarter. New York State Teachers Retirement System now owns 49,310 shares of the company’s stock valued at $2,373,000 after acquiring an additional 12,229 shares in the last quarter. Legato Capital Management LLC bought a new stake in DigitalOcean in the fourth quarter valued at about $1,365,000. Campbell Newman Asset Management Inc. bought a new stake in DigitalOcean in the fourth quarter valued at about $2,101,000. Finally, Fortis Capital Advisors LLC acquired a new position in DigitalOcean in the fourth quarter worth about $1,020,000. Institutional investors 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.