DigitalOcean (NYSE:DOCN) Shares Gap Up After Earnings Beat

DigitalOcean Holdings, Inc. (NYSE:DOCN)’s share price gapped up before the market opened on Tuesday following a stronger than expected earnings report. The stock had previously closed at $37.17, but opened at $45.00. DigitalOcean shares last traded at $42.10, with a volume of 977,750 shares traded.

The company reported $0.49 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $0.34 by $0.15. The business had revenue of $204.90 million during the quarter, compared to analysts’ expectations of $200.54 million. DigitalOcean had a negative return on equity of 43.11% and a net margin of 10.86%. DigitalOcean’s quarterly revenue was up 13.3% compared to the same quarter last year. During the same period in the prior year, the firm posted $0.44 EPS.

Analyst Upgrades and Downgrades

A number of equities research analysts recently issued reports on DOCN shares. Stifel Nicolaus increased their target price on shares of DigitalOcean from $35.00 to $40.00 and gave the stock a “hold” rating in a research report on Wednesday, December 18th. Morgan Stanley raised shares of DigitalOcean from an “equal weight” rating to an “overweight” rating and raised their price objective for the stock from $40.00 to $41.00 in a report on Thursday, January 16th. Citigroup started coverage on DigitalOcean in a report on Friday, January 24th. They issued a “buy” rating and a $45.00 target price on the stock. Cantor Fitzgerald began coverage on DigitalOcean in a report on Friday, January 17th. They set a “neutral” rating and a $39.00 price target for the company. Finally, Needham & Company LLC reiterated a “hold” rating on shares of DigitalOcean in a research report on Tuesday, November 5th. Six research analysts have rated the stock with a hold rating and five have given a buy rating to the company’s stock. According to MarketBeat.com, DigitalOcean currently has an average rating of “Hold” and an average target price of $42.40.

Insider Activity

In other news, insider Bratin Saha sold 4,289 shares of DigitalOcean stock in a transaction that occurred on Tuesday, January 21st. The shares were sold at an average price of $36.80, for a total transaction of $157,835.20. Following the completion of the sale, the insider now owns 372,762 shares in the company, valued at $13,717,641.60. The trade was a 1.14 % decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available through this link. Also, CFO Matt Steinfort sold 12,498 shares of the stock in a transaction that occurred on Wednesday, December 4th. The shares were sold at an average price of $40.00, for a total transaction of $499,920.00. Following the completion of the transaction, the chief financial officer now owns 517,498 shares in the company, valued at $20,699,920. This represents a 2.36 % decrease in their ownership of the stock. The disclosure for this sale can be found here. In the last ninety days, insiders sold 20,255 shares of company stock valued at $790,163. Company insiders own 0.74% of the company’s stock.

Institutional Investors Weigh In On DigitalOcean

A number of institutional investors have recently made changes to their positions in the stock. Vanguard Group Inc. boosted its holdings in DigitalOcean by 1.4% during the fourth quarter. Vanguard Group Inc. now owns 8,434,555 shares of the company’s stock worth $287,365,000 after buying an additional 117,133 shares during the last quarter. Jacobs Levy Equity Management Inc. boosted its stake in DigitalOcean by 16.6% during the 4th quarter. Jacobs Levy Equity Management Inc. now owns 1,628,995 shares of the company’s stock worth $55,500,000 after acquiring an additional 231,407 shares during the last quarter. Fuller & Thaler Asset Management Inc. increased its stake in DigitalOcean by 7.3% in the fourth quarter. Fuller & Thaler Asset Management Inc. now owns 1,545,642 shares of the company’s stock valued at $52,660,000 after purchasing an additional 105,235 shares in the last quarter. First Trust Advisors LP increased its stake in DigitalOcean by 6.2% in the fourth quarter. First Trust Advisors LP now owns 1,533,699 shares of the company’s stock valued at $52,253,000 after purchasing an additional 89,349 shares in the last quarter. Finally, Geode Capital Management LLC raised its holdings in DigitalOcean by 0.6% in the fourth quarter. Geode Capital Management LLC now owns 1,473,421 shares of the company’s stock worth $50,211,000 after purchasing an additional 9,088 shares during the period. 49.77% of the stock is owned by institutional investors and hedge funds.

DigitalOcean Price Performance

The business’s 50-day moving average price is $38.70 and its two-hundred day moving average price is $39.10. The company has a market capitalization of $3.75 billion, a P/E ratio of 47.83, a PEG ratio of 3.12 and a beta of 1.81.

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).