Applied Digital (NASDAQ:APLD) Releases Quarterly Earnings Results, Misses Estimates By $0.30 EPS

Applied Digital (NASDAQ:APLD) released its quarterly earnings results on Monday, July 27th. The company reported ($0.39) earnings per share (EPS) for the quarter, missing analysts’ consensus estimates of ($0.09) by ($0.30), Zacks reports. Applied Digital had a negative return on equity of 16.42% and a negative net margin of 37.78%.The company had revenue of $240.35 million during the quarter, compared to the consensus estimate of $96.85 million. During the same period in the previous year, the company earned ($0.24) earnings per share. Applied Digital’s quarterly revenue was up 406.3% on a year-over-year basis.

Here are the key takeaways from Applied Digital’s conference call:

• Contracted lease value more than quintupled to approximately $36 billion, representing 1.41 gigawatts of contracted critical IT load across five campuses. More than 80% of the contracted capacity is leased to investment-grade customers, according to management.
• Management is negotiating roughly 250 megawatts of expansion leases with existing customers at materially higher rates and potentially longer terms, which could add more than $6 billion of contracted revenue based on current pricing.
• The company reported $258.7 million of fourth-quarter revenue, up 407% from the comparable prior quarter, while adjusted EBITDA increased to $42.4 million. Management expects a significant financial ramp as additional HPC capacity comes online and now anticipates reaching its $1 billion NOI run-rate goal next year, three years ahead of its prior target.
• Applied Digital secured financing for the full 400 megawatts at Polaris Forge 1 and 200 megawatts at Polaris Forge 2, including $1.59 billion of notes at 7%, substantially below its earlier financing cost. Management said Macquarie’s equity funding and improving project-level debt access should support a repeatable, lower-cost financing model.
• Despite strong operating growth, the company recorded a $111.6 million net loss, driven partly by $116.8 million of stock-based compensation, including one-time ChronoScale-related awards and performance stock units. Capital spending is expected to reach approximately $600 million in the upcoming quarter, while power availability and supply-chain capacity remain the primary constraints on expansion.

Applied Digital Stock Performance

Applied Digital stock opened at $26.42 on Monday. Applied Digital has a twelve month low of $17.25 and a twelve month high of $50.72. The company has a quick ratio of 4.01, a current ratio of 4.01 and a debt-to-equity ratio of 2.88. The company has a market capitalization of $7.70 billion, a P/E ratio of -29.69 and a beta of 5.72. The stock’s 50 day moving average is $28.30 and its 200 day moving average is $32.79.

Insider Activity at Applied Digital

In other news, Director Richard Nottenburg sold 75,000 shares of Applied Digital stock in a transaction dated Tuesday, August 4th. The stock was sold at an average price of $31.15, for a total value of $2,336,250.00. Following the completion of the transaction, the director owned 133,378 shares of the company’s stock, valued at $4,154,724.70. The trade was a 35.99% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available through the SEC website. Corporate insiders own 9.50% of the company’s stock.

Institutional Trading of Applied Digital

A number of institutional investors and hedge funds have recently bought and sold shares of the company. Federation des caisses Desjardins du Quebec increased its position in shares of Applied Digital by 28.4% during the 4th quarter. Federation des caisses Desjardins du Quebec now owns 3,069 shares of the company’s stock valued at $75,000 after purchasing an additional 678 shares during the last quarter. Truvestments Capital LLC boosted its holdings in shares of Applied Digital by 26.4% in the fourth quarter. Truvestments Capital LLC now owns 3,476 shares of the company’s stock worth $85,000 after buying an additional 726 shares during the last quarter. State of Wyoming grew its position in Applied Digital by 37.4% during the fourth quarter. State of Wyoming now owns 3,326 shares of the company’s stock valued at $82,000 after buying an additional 905 shares during the period. Newbridge Financial Services Group Inc. grew its position in Applied Digital by 40.0% during the third quarter. Newbridge Financial Services Group Inc. now owns 3,500 shares of the company’s stock valued at $80,000 after buying an additional 1,000 shares during the period. Finally, McMillan Office Inc. purchased a new stake in Applied Digital during the fourth quarter valued at approximately $25,000. 65.67% of the stock is currently owned by institutional investors.

Analysts Set New Price Targets

APLD has been the topic of a number of research analyst reports. Compass Point reiterated a “buy” rating and set a $70.00 target price on shares of Applied Digital in a report on Friday, May 22nd. Lake Street Capital lifted their price target on Applied Digital from $70.00 to $90.00 and gave the company a “buy” rating in a research report on Tuesday, June 9th. Morgan Stanley upped their price target on Applied Digital from $36.50 to $37.50 and gave the stock an “equal weight” rating in a research note on Thursday, August 6th. Citigroup reiterated a “market outperform” rating on shares of Applied Digital in a report on Monday, August 3rd. Finally, Wall Street Zen lowered Applied Digital from a “sell” rating to a “strong sell” rating in a research report on Sunday, August 30th. Three equities research analysts have rated the stock with a Strong Buy rating, eleven have assigned a Buy rating, one has issued a Hold rating and two have assigned a Sell rating to the company. According to data from MarketBeat, the stock has an average rating of “Moderate Buy” and a consensus price target of $68.15.

Applied Digital Company Profile

Applied Digital Corporation (NASDAQ:APLD) develops and operates digital infrastructure designed to support high-performance computing (HPC), artificial intelligence (AI) and other compute-intensive applications. The company provides data center capacity and related services to customers that require substantial computing power, connectivity and energy resources.

The company’s facilities are designed to support advanced computing workloads, including AI model development, cloud computing and digital asset-related applications.