DigitalOcean (NYSE:DOCN) Shares Gap Up Following Strong Earnings

DigitalOcean Holdings, Inc. (NYSE:DOCN) shares gapped up before the market opened on Tuesday after the company announced better than expected quarterly earnings. 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 for the quarter, beating 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%. The business’s revenue for the quarter was up 13.3% on a year-over-year basis. During the same quarter last year, the business posted $0.44 earnings per share.

Wall Street Analysts Forecast Growth

Several analysts have commented on DOCN shares. JMP Securities lifted their price target on DigitalOcean from $47.00 to $55.00 and gave the company a “market outperform” rating in a report on Monday, January 27th. Stifel Nicolaus upped their price objective on DigitalOcean from $35.00 to $40.00 and gave the stock a “hold” rating in a report on Wednesday, December 18th. Citigroup began coverage on DigitalOcean in a report on Friday, January 24th. They issued a “buy” rating and a $45.00 target price on the stock. Morgan Stanley upgraded DigitalOcean from an “equal weight” rating to an “overweight” rating and upped their price target for the stock from $40.00 to $41.00 in a research note on Thursday, January 16th. Finally, Needham & Company LLC reaffirmed a “hold” rating on shares of DigitalOcean in a research note on Tuesday, November 5th. Six analysts have rated the stock with a hold rating and five have given a buy rating to the company. According to data from MarketBeat.com, the stock currently has an average rating of “Hold” and an average price target of $42.40.

Insiders Place Their Bets

In other DigitalOcean news, insider Bratin Saha sold 4,289 shares of the firm’s stock in a transaction dated Tuesday, January 21st. The shares were sold at an average price of $36.80, for a total transaction of $157,835.20. Following the transaction, the insider now owns 372,762 shares of the company’s stock, valued at approximately $13,717,641.60. This trade represents a 1.14 % decrease in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available at this hyperlink. 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 sale, the chief financial officer now directly owns 517,498 shares of the company’s stock, valued at approximately $20,699,920. This represents a 2.36 % decrease in their ownership of the stock. The disclosure for this sale can be found here. Insiders sold a total of 20,255 shares of company stock valued at $790,163 in the last ninety days. Corporate insiders own 0.74% of the company’s stock.

Institutional Inflows and Outflows

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

DigitalOcean Stock Performance

The stock has a 50-day moving average of $38.64 and a 200 day moving average of $39.05. The firm has a market capitalization of $3.83 billion, a P/E ratio of 50.14, a price-to-earnings-growth 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).