DigitalOcean (NYSE:DOCN) Trading 5.8% Higher – Time to Buy?

DigitalOcean Holdings, Inc. (NYSE:DOCN) shot up 5.8% on Wednesday . The stock traded as high as $125.09 and last traded at $124.66. Approximately 514,239 shares were traded during mid-day trading, a decline of 86% from the average session volume of 3,622,517 shares. The stock had previously closed at $117.85.

Wall Street Analyst Weigh In

DOCN has been the subject of several analyst reports. Barclays raised their target price on DigitalOcean from $160.00 to $161.00 and gave the stock an “overweight” rating in a research note on Wednesday, August 5th. 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. Citigroup upped their target price on shares of DigitalOcean from $185.00 to $190.00 and gave the stock a “buy” rating in a report on Wednesday, August 5th. William Blair reissued an “outperform” rating on shares of DigitalOcean in a report on Wednesday, July 15th. Finally, Canaccord Genuity Group reaffirmed a “buy” rating and issued a $200.00 price target on shares of DigitalOcean in a report on Friday, July 10th. Two research analysts have rated the stock with a Strong Buy rating, twelve have given a Buy rating and three have given a Hold rating to the stock. According to data from MarketBeat.com, DigitalOcean has a consensus rating of “Moderate Buy” and an average target price of $152.81.

DigitalOcean Trading Up 5.8%

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 firm has a market cap of $13.01 billion, a PE ratio of 56.90, a PEG ratio of 102.91 and a beta of 1.57. The stock’s 50 day simple moving average is $122.20 and its 200 day simple moving average is $120.23.

DigitalOcean (NYSE:DOCN) last posted its quarterly earnings data on Tuesday, August 4th. The company reported $0.45 earnings per share for the quarter, beating the consensus estimate of $0.26 by $0.19. The firm had revenue of $281.18 million for 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 business’s quarterly revenue was up 28.6% on a year-over-year basis. During the same quarter last year, the company posted $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. On average, sell-side analysts forecast that DigitalOcean Holdings, Inc. will post 0.63 earnings per share for the current fiscal year.

Insider Activity at DigitalOcean

In related news, CAO Cherie Barrett sold 4,456 shares of the stock in a transaction 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 transaction, the chief accounting officer owned 65,487 shares of the company’s stock, valued at $8,668,514.19. This represents a 6.37% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CFO Matt Steinfort sold 10,000 shares of the firm’s stock in a transaction dated Thursday, September 3rd. The shares were sold at an average price of $105.73, for a total value of $1,057,300.00. Following the sale, the chief financial officer owned 503,692 shares in the company, valued at $53,255,355.16. The trade was a 1.95% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. 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. Insiders have sold a total of 22,641 shares of company stock valued at $2,589,317 over the last 90 days. 0.96% of the stock is owned by insiders.

Hedge Funds Weigh In On DigitalOcean

A number of large investors have recently modified their holdings of DOCN. Bank of America Corp DE purchased a new position in shares of DigitalOcean in the second quarter worth $241,945,000. Principal Financial Group Inc. boosted its position in 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 during the period. Bank of New York Mellon Corp bought a new stake in DigitalOcean in the 2nd quarter worth $98,011,000. Allspring Global Investments Holdings LLC grew 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 acquiring an additional 306,529 shares during the last quarter. Finally, Summit Partners Public Asset Management LLC purchased a new position in shares of DigitalOcean in the fourth quarter valued at about $13,666,000. 49.77% of the stock is owned by hedge funds and other institutional investors.

About DigitalOcean

DigitalOcean Holdings, Inc provides cloud computing services designed primarily for developers, startups, and small and medium-sized businesses. Its platform offers on-demand infrastructure and developer tools intended to simplify the process of building, deploying, and scaling applications.

The company’s products include virtual machines known as Droplets, managed Kubernetes, managed databases, object storage through Spaces, block storage, networking services, and App Platform, a platform-as-a-service offering for application deployment.