DigitalOcean (NYSE:DOCN) Shares Down 8.5% – Here’s Why

DigitalOcean Holdings, Inc. (NYSE:DOCN)’s stock price fell 8.5% during trading on Wednesday. The company traded as low as $120.40 and last traded at $117.2780. Approximately 329,792 shares changed hands during mid-day trading, a decline of 91% from the average daily volume of 3,504,538 shares. The stock had previously closed at $128.21.

Wall Street Analysts Forecast Growth

Several research analysts recently commented on the company. UBS Group dropped their price target on DigitalOcean from $155.00 to $140.00 and set a “neutral” rating for the company in a research report on Wednesday, August 5th. Stifel Nicolaus upgraded DigitalOcean from a “hold” rating to a “buy” rating and upped their price objective for the company from $135.00 to $160.00 in a research report on Tuesday, July 21st. William Blair restated an “outperform” rating on shares of DigitalOcean in a research report on Wednesday, July 15th. KeyCorp reaffirmed an “overweight” rating on shares of DigitalOcean in a research note on Tuesday. Finally, Oppenheimer lifted their target price on DigitalOcean from $190.00 to $220.00 and gave the stock an “outperform” rating in a report on Wednesday. One analyst has rated the stock with a Strong Buy rating, thirteen have issued a Buy rating and three have issued a Hold rating to the company’s stock. According to data from MarketBeat, the company has an average rating of “Moderate Buy” and a consensus price target of $154.69.

DigitalOcean Trading Up 0.0%

The company’s 50 day moving average price is $125.56 and its two-hundred day moving average price is $130.00. The firm has a market cap of $11.41 billion, a PE ratio of 49.93, a P/E/G ratio of 92.93 and a beta of 1.70. The company has a quick ratio of 1.31, a current ratio of 1.31 and a debt-to-equity ratio of 1.14.

DigitalOcean (NYSE:DOCN) last released its quarterly earnings results on Tuesday, August 4th. The company reported $0.45 EPS for the quarter, topping analysts’ consensus estimates of $0.26 by $0.19. The firm had revenue of $281.18 million during the quarter, compared to analysts’ expectations of $279.03 million. DigitalOcean had a net margin of 23.26% and a return on equity of 31.01%. The firm’s revenue for the quarter was up 28.6% compared to the same quarter last year. During the same period in the previous year, the company earned $0.39 EPS. 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, sell-side analysts forecast that DigitalOcean Holdings, Inc. will post 0.64 EPS for the current year.

Insider Transactions at DigitalOcean

In related news, Director Warren J. Adelman sold 4,200 shares of the business’s stock in a transaction on Friday, August 7th. The stock was sold at an average price of $124.01, for a total transaction of $520,842.00. Following the completion of the transaction, the director owned 67,433 shares in the company, valued at $8,362,366.33. The trade was a 5.86% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available through this hyperlink. Also, CAO Cherie Barrett sold 3,985 shares of the company’s stock in a transaction on Thursday, September 3rd. The shares were sold at an average price of $105.73, for a total value of $421,334.05. Following the completion of the transaction, the chief accounting officer directly owned 58,399 shares in the company, valued at $6,174,526.27. This trade represents a 6.39% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. 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. Over the last three months, insiders have sold 22,641 shares of company stock worth $2,589,317. 0.96% of the stock is currently owned by company insiders.

Institutional Inflows and Outflows

A number of hedge funds have recently made changes to their positions in the stock. Hilltop National Bank bought a new stake in DigitalOcean during the 2nd quarter valued at about $38,000. Rakuten Securities Inc. bought a new stake in shares of DigitalOcean during the second quarter valued at approximately $43,000. Parallel Advisors LLC boosted its holdings in shares of DigitalOcean by 66.2% in the first quarter. Parallel Advisors LLC now owns 324 shares of the company’s stock valued at $28,000 after purchasing an additional 129 shares during the period. Banque Cantonale Vaudoise purchased a new stake in shares of DigitalOcean in the first quarter valued at approximately $33,000. Finally, LRI Investments LLC bought a new position in DigitalOcean in the second quarter worth approximately $64,000. 49.77% of the stock is currently owned by institutional investors.

DigitalOcean Company Profile

DigitalOcean Holdings, Inc (NYSE:DOCN) provides cloud computing services designed primarily for developers, startups, and small and midsize businesses. Its platform offers on-demand infrastructure and software tools intended to simplify the development, deployment, and management of applications.

The company’s services include cloud compute through Droplets, managed Kubernetes, managed databases, object and block storage, networking, and the App Platform for deploying applications. DigitalOcean also provides developer tools, tutorials, support, and other resources intended to help customers build and scale digital products without managing traditional data-center infrastructure.

Founded in 2011 and headquartered in New York City, DigitalOcean serves customers internationally through cloud infrastructure and data-center regions located in North America, Europe, and Asia.