DigitalOcean (NYSE:DOCN) Trading Down 6.5% – Should You Sell?

DigitalOcean Holdings, Inc. (NYSE:DOCN) was down 6.5% during mid-day trading on Wednesday . The company traded as low as $120.47 and last traded at $120.47. 233,015 shares changed hands during trading, a decline of 94% from the average daily volume of 3,874,960 shares. The stock had previously closed at $128.89.

Wall Street Analyst Weigh In

DOCN has been the topic of several research reports. Morgan Stanley boosted their price target on shares of DigitalOcean from $75.00 to $175.00 and gave the stock an “overweight” rating in a research report on Wednesday, May 6th. Weiss Ratings cut shares of DigitalOcean from a “buy (b-)” rating to a “hold (c+)” rating in a research note on Tuesday, July 28th. Robert W. Baird initiated coverage on shares of DigitalOcean in a report on Tuesday, July 21st. They issued an “outperform” rating and a $165.00 target price on the stock. Bank of America increased their target price on shares of DigitalOcean from $103.00 to $107.00 and gave the company a “buy” rating in a research note on Thursday, April 9th. Finally, UBS Group reduced their target price on shares of DigitalOcean from $155.00 to $140.00 and set a “neutral” rating for the company in a report on Wednesday. Two analysts have rated the stock with a Strong Buy rating, eleven have issued a Buy rating and three have given a Hold rating to the company’s stock. Based on data from MarketBeat.com, the company has an average rating of “Moderate Buy” and an average target price of $151.33.

DigitalOcean Stock Performance

The company has a current ratio of 1.31, a quick ratio of 1.46 and a debt-to-equity ratio of 1.14. The company has a market capitalization of $13.14 billion, a price-to-earnings ratio of 57.47, a price-to-earnings-growth ratio of 113.39 and a beta of 1.61. The firm has a 50-day simple moving average of $144.88 and a two-hundred day simple moving average of $108.47.

DigitalOcean (NYSE:DOCN) last posted its earnings results on Tuesday, August 4th. The company reported $0.45 EPS for the quarter, topping the consensus estimate of $0.26 by $0.19. The firm had revenue of $281.18 million for the quarter, compared to the consensus estimate of $279.03 million. DigitalOcean had a net margin of 23.26% and a return on equity of 31.01%. The business’s quarterly revenue was up 28.6% on a year-over-year basis. During the same period in the prior year, the business posted $0.39 earnings per share. 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 0.59 earnings per share for the current fiscal year.

Insider Buying and Selling at DigitalOcean

In other news, CFO Matt Steinfort sold 25,000 shares of DigitalOcean stock in a transaction dated Friday, May 15th. The shares were sold at an average price of $152.50, for a total transaction of $3,812,500.00. Following the sale, the chief financial officer directly owned 573,272 shares in the company, valued at approximately $87,423,980. The trade was a 4.18% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through the SEC website. Also, Director Hilary Schneider sold 4,338 shares of the company’s stock in a transaction that occurred on Friday, May 15th. The shares were sold at an average price of $156.38, for a total value of $678,376.44. Following the completion of the sale, the director owned 24,323 shares in the company, valued at approximately $3,803,630.74. This represents a 15.14% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Over the last ninety days, insiders sold 39,338 shares of company stock valued at $6,191,576. 0.96% of the stock is owned by company insiders.

Institutional Trading of DigitalOcean

A number of hedge funds and other institutional investors have recently modified their holdings of the stock. State of New Jersey Common Pension Fund D purchased a new stake in DigitalOcean in the 4th quarter worth approximately $2,358,000. New York State Teachers Retirement System raised its holdings in shares of DigitalOcean by 33.0% during the fourth quarter. New York State Teachers Retirement System now owns 49,310 shares of the company’s stock valued at $2,373,000 after acquiring an additional 12,229 shares in the last quarter. Legato Capital Management LLC purchased a new stake in DigitalOcean in the fourth quarter worth $1,365,000. Campbell Newman Asset Management Inc. bought a new stake in DigitalOcean in the fourth quarter valued at $2,101,000. Finally, Fortis Capital Advisors LLC bought a new stake in DigitalOcean in the fourth quarter valued at $1,020,000. Institutional investors and hedge funds own 49.77% of the company’s stock.

DigitalOcean Company Profile

DigitalOcean Holdings, Inc is a cloud infrastructure provider that focuses on simplicity, performance and developer experience. The company offers a range of cloud services designed to help software developers, startups and small- to medium-sized businesses deploy, manage and scale applications. Its flagship offering, Droplets, provides virtual private servers that can be configured with various CPU, memory and storage options. In addition to compute instances, DigitalOcean’s platform includes managed Kubernetes, scalable object and block storage, managed databases, load balancers and networking capabilities such as Virtual Private Cloud (VPC) and Floating IPs.

Founded in 2011 and headquartered in New York City, DigitalOcean was created with the goal of making cloud computing more accessible to individual developers and smaller teams.