DigitalOcean (NYSE:DOCN) Stock Price Down 8.9% – What’s Next?

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

Analyst Ratings Changes

A number of equities research analysts have recently issued reports on DOCN shares. Weiss Ratings upgraded DigitalOcean from a “hold (c+)” rating to a “buy (b-)” rating in a research note on Tuesday, August 11th. Stifel Nicolaus raised shares of DigitalOcean from a “hold” rating to a “buy” rating and raised their target price for the company from $135.00 to $160.00 in a research note on Tuesday, July 21st. KeyCorp initiated coverage on shares of DigitalOcean in a report on Tuesday, June 2nd. They set an “overweight” rating and a $200.00 target price on the stock. Robert W. Baird began coverage on shares of DigitalOcean in a research report on Tuesday, July 21st. They set an “outperform” rating and a $165.00 price target on the stock. Finally, Citigroup increased their price target on shares of DigitalOcean from $185.00 to $190.00 and gave the company a “buy” rating in a research note on Wednesday, August 5th. Two analysts have rated the stock with a Strong Buy rating, twelve have given a Buy rating and two have issued a Hold rating to the company. According to MarketBeat.com, the stock has an average rating of “Buy” and a consensus price target of $151.33.

DigitalOcean Stock Performance

The company has a debt-to-equity ratio of 1.14, a current ratio of 1.31 and a quick ratio of 1.31. The stock has a 50-day moving average price of $138.21 and a 200-day moving average price of $112.62. The company has a market capitalization of $12.22 billion, a price-to-earnings ratio of 53.37, a PEG ratio of 111.22 and a beta of 1.61.

DigitalOcean (NYSE:DOCN) last posted its earnings results on Tuesday, August 4th. The company reported $0.45 earnings per share for the quarter, topping analysts’ consensus estimates of $0.26 by $0.19. DigitalOcean had a return on equity of 31.01% and a net margin of 23.26%.The business had revenue of $281.18 million for the quarter, compared to analyst estimates of $279.03 million. During the same period in the previous year, the firm earned $0.39 EPS. The firm’s revenue was up 28.6% compared to the same quarter last year. 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, analysts forecast that DigitalOcean Holdings, Inc. will post 0.63 earnings per share for the current year.

Insider Activity at DigitalOcean

In related news, CFO Matt Steinfort sold 10,000 shares of the company’s stock in a transaction dated Tuesday, June 2nd. The shares were sold at an average price of $170.07, for a total value of $1,700,700.00. Following the transaction, the chief financial officer owned 538,414 shares in the company, valued at approximately $91,568,068.98. This represents a 1.82% decrease in their position. The sale was disclosed in a filing 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, Director Warren J. Adelman sold 4,200 shares of the business’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 sale, the director owned 67,433 shares of the company’s stock, valued at approximately $8,362,366.33. This represents a 5.86% decrease in their position. The disclosure for this sale is available in the SEC filing. In the last 90 days, insiders have sold 18,656 shares of company stock worth $2,811,383. Insiders own 0.96% of the company’s stock.

Institutional Inflows and Outflows

Several large investors have recently added to or reduced their stakes in the company. State of New Jersey Common Pension Fund D bought a new position in DigitalOcean in the 4th quarter valued at about $2,358,000. New York State Teachers Retirement System lifted its holdings 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 worth $2,373,000 after acquiring an additional 12,229 shares during the period. Legato Capital Management LLC bought a new stake in shares of DigitalOcean during the 4th quarter worth approximately $1,365,000. Summit Creek Advisors LLC acquired a new stake in shares of DigitalOcean during the 4th quarter worth approximately $7,126,000. Finally, Wealth High Governance Asset Management Ltda. acquired a new stake in shares of DigitalOcean during the 1st quarter worth approximately $8,986,000. Institutional investors own 49.77% of the company’s stock.

About DigitalOcean

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.