DigitalOcean (NYSE:DOCN) Trading Down 5.1% – Should You Sell?

DigitalOcean Holdings, Inc. (NYSE:DOCN)’s share price fell 5.1% during trading on Monday . The company traded as low as $38.65 and last traded at $39.35. 472,863 shares traded hands during trading, a decline of 53% from the average session volume of 1,016,459 shares. The stock had previously closed at $41.48.

Analysts Set New Price Targets

Several equities research analysts have recently issued reports on the company. JPMorgan Chase & Co. raised their target price on DigitalOcean from $32.00 to $40.00 and gave the company a “neutral” rating in a research report on Friday, October 25th. Stifel Nicolaus lifted their price objective 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 increased their target price for the company from $40.00 to $41.00 in a research report on Thursday, January 16th. Barclays raised their price target on shares of DigitalOcean from $38.00 to $48.00 and gave the stock an “overweight” rating in a research note on Friday, October 11th. Finally, Needham & Company LLC reissued a “hold” rating on shares of DigitalOcean in a report on Tuesday, November 5th. Six analysts have rated the stock with a hold rating and six have assigned a buy rating to the company’s stock. According to MarketBeat.com, DigitalOcean presently has a consensus rating of “Moderate Buy” and a consensus price target of $42.73.

DigitalOcean Price Performance

The company has a 50 day moving average price of $37.23 and a two-hundred day moving average price of $37.75. The stock has a market cap of $3.96 billion, a PE ratio of 50.54, a PEG ratio of 3.01 and a beta of 1.81.

DigitalOcean (NYSE:DOCN) last issued its quarterly earnings results on Monday, November 4th. The company reported $0.52 earnings per share for the quarter, topping the consensus estimate of $0.40 by $0.12. The business had revenue of $198.50 million for the quarter, compared to analysts’ expectations of $196.64 million. DigitalOcean had a net margin of 10.86% and a negative return on equity of 43.11%. The company’s revenue was up 12.1% compared to the same quarter last year. During the same quarter last year, the company posted $0.17 EPS. As a group, equities analysts predict that DigitalOcean Holdings, Inc. will post 1.01 earnings per share for the current fiscal year.

Insiders Place Their Bets

In related news, 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 completion of the sale, the chief financial officer now directly owns 517,498 shares in the company, valued at $20,699,920. This trade represents a 2.36 % decrease in their ownership of the stock. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available through this hyperlink. Also, insider Bratin Saha sold 4,289 shares of the firm’s stock in a transaction that occurred on Tuesday, January 21st. The stock was sold at an average price of $36.80, for a total value of $157,835.20. Following the sale, the insider now directly owns 372,762 shares of the company’s stock, valued at $13,717,641.60. This represents a 1.14 % decrease in their ownership of the stock. The disclosure for this sale can be found here. In the last 90 days, insiders have sold 37,244 shares of company stock worth $1,416,208. Company insiders own 0.74% of the company’s stock.

Institutional Trading of DigitalOcean

A number of large investors have recently modified their holdings of DOCN. Versor Investments LP acquired a new stake in DigitalOcean in the third quarter valued at approximately $751,000. FORA Capital LLC purchased a new position in DigitalOcean during the third quarter valued at $1,149,000. Victory Capital Management Inc. raised its stake in DigitalOcean by 79.8% in the 3rd quarter. Victory Capital Management Inc. now owns 31,169 shares of the company’s stock valued at $1,259,000 after purchasing an additional 13,837 shares during the last quarter. Public Sector Pension Investment Board lifted its position in DigitalOcean by 13.5% during the third quarter. Public Sector Pension Investment Board now owns 134,214 shares of the company’s stock worth $5,421,000 after buying an additional 16,000 shares in the last quarter. Finally, Jacobs Levy Equity Management Inc. raised its position in shares of DigitalOcean by 32.8% during the 3rd quarter. Jacobs Levy Equity Management Inc. now owns 1,397,588 shares of the company’s stock valued at $56,449,000 after buying an additional 345,119 shares during the period. Hedge funds and other institutional investors own 49.77% of the company’s stock.

DigitalOcean Company Profile

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).