DigitalOcean (NYSE:DOCN) Shares Down 7.9% – Should You Sell?

DigitalOcean Holdings, Inc. (NYSE:DOCN)’s stock price dropped 7.9% during mid-day trading on Friday . The stock traded as low as $111.89 and last traded at $112.02. 697,734 shares changed hands during trading, a decline of 81% from the average session volume of 3,709,936 shares. The stock had previously closed at $121.68.

Wall Street Analyst Weigh In

Several equities research analysts have recently commented on DOCN shares. Citigroup lifted their target price on DigitalOcean from $185.00 to $190.00 and gave the company a “buy” rating in a research note on Wednesday, August 5th. Morgan Stanley upped their price target on DigitalOcean from $75.00 to $175.00 and gave the company an “overweight” rating in a research note on Wednesday, May 6th. Truist Financial initiated coverage on DigitalOcean in a research report on Thursday. They issued a “buy” rating and a $175.00 price objective for the company. Stifel Nicolaus raised DigitalOcean from a “hold” rating to a “buy” rating and boosted their price objective for the stock from $135.00 to $160.00 in a report on Tuesday, July 21st. Finally, Weiss Ratings upgraded shares of DigitalOcean from a “hold (c+)” rating to a “buy (b-)” rating in a research report on Tuesday, August 11th. Two investment analysts have rated the stock with a Strong Buy rating, thirteen have assigned a Buy rating and two have given a Hold rating to the company’s stock. According to MarketBeat.com, the company currently has an average rating of “Buy” and an average target price of $152.81.

DigitalOcean Trading Down 8.5%

The business has a 50 day moving average of $129.95 and a 200 day moving average of $115.44. The firm has a market capitalization of $11.62 billion, a price-to-earnings ratio of 50.86, a PEG ratio of 98.44 and a beta of 1.61. The company has a debt-to-equity ratio of 1.14, a current ratio of 1.31 and a quick ratio of 1.31.

DigitalOcean (NYSE:DOCN) last issued its earnings results on Tuesday, August 4th. The company reported $0.45 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $0.26 by $0.19. The firm had revenue of $281.18 million for the quarter, compared to analysts’ expectations of $279.03 million. DigitalOcean had a return on equity of 31.01% and a net margin of 23.26%.The company’s revenue was up 28.6% compared to the same quarter last year. During the same quarter last year, the business earned $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, research analysts predict that DigitalOcean Holdings, Inc. will post 0.63 earnings per share for the current fiscal year.

Insider Activity at DigitalOcean

In other news, CAO Cherie Barrett sold 4,456 shares of DigitalOcean stock in a transaction on Thursday, August 13th. The shares were sold at an average price of $132.37, for a total transaction of $589,840.72. Following the transaction, the chief accounting officer directly owned 65,487 shares of the company’s stock, valued at $8,668,514.19. This trade represents a 6.37% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which is available through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Warren J. Adelman sold 4,200 shares of the business’s stock in a transaction dated Friday, August 7th. The shares were sold at an average price of $124.01, for a total value of $520,842.00. Following the completion of the transaction, the director directly owned 67,433 shares of the company’s stock, valued at approximately $8,362,366.33. The trade was a 5.86% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Over the last 90 days, insiders sold 18,656 shares of company stock worth $2,811,383. 0.96% of the stock is currently owned by company insiders.

Institutional Inflows and Outflows

Several institutional investors and hedge funds have recently made changes to their positions in DOCN. California State Teachers Retirement System boosted its stake in DigitalOcean by 16,016.1% in the 2nd quarter. California State Teachers Retirement System now owns 14,211,058 shares of the company’s stock worth $2,231,562,000 after purchasing an additional 14,122,879 shares during the period. Fuller & Thaler Asset Management Inc. raised its stake in shares of DigitalOcean by 11.6% during the 4th quarter. Fuller & Thaler Asset Management Inc. now owns 2,420,341 shares of the company’s stock worth $116,467,000 after purchasing an additional 252,303 shares in the last quarter. Lazard Asset Management LLC raised its position in DigitalOcean by 34.5% during the second quarter. Lazard Asset Management LLC now owns 1,660,731 shares of the company’s stock worth $47,430,000 after acquiring an additional 426,264 shares in the last quarter. Van Berkom & Associates Inc. lifted its stake in DigitalOcean by 2.9% in the 4th quarter. Van Berkom & Associates Inc. now owns 1,610,671 shares of the company’s stock valued at $77,505,000 after purchasing an additional 45,680 shares during the last quarter. Finally, Bank of America Corp DE acquired a new stake in shares of DigitalOcean in the second quarter valued at approximately $241,945,000. 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.