DigitalOcean (NYSE:DOCN) Stock Rating Raised to “Strong-Buy” at Zacks Research

DigitalOcean (NYSE:DOCN) was upgraded by stock analysts at Zacks Research from a “hold” rating to a “strong-buy” rating in a note issued to investors on Monday, Zacks reports.

A number of other equities research analysts also recently weighed in on the company. William Blair reaffirmed an “outperform” rating on shares of DigitalOcean in a research note on Wednesday, July 15th. Stifel Nicolaus upgraded DigitalOcean from a “hold” rating to a “buy” rating and lifted their price target for the company from $135.00 to $160.00 in a report on Tuesday, July 21st. Robert W. Baird initiated coverage on DigitalOcean in a research note on Tuesday, July 21st. They issued an “outperform” rating and a $165.00 price target for the company. Canaccord Genuity Group reissued a “buy” rating and issued a $200.00 price target on shares of DigitalOcean in a research note on Friday, July 10th. Finally, Piper Sandler upgraded DigitalOcean from a “neutral” rating to an “overweight” rating and set a $126.00 price objective on the stock in a report on Wednesday. Two research analysts have rated the stock with a Strong Buy rating, fourteen have given a Buy rating and two have issued a Hold rating to the stock. According to data from MarketBeat.com, DigitalOcean currently has a consensus rating of “Buy” and a consensus price target of $152.88.

DigitalOcean Price Performance

Shares of NYSE:DOCN opened at $99.54 on Monday. The company has a current ratio of 1.31, a quick ratio of 1.31 and a debt-to-equity ratio of 1.14. DigitalOcean has a 1 year low of $37.83 and a 1 year high of $187.50. The business has a fifty day simple moving average of $124.02 and a 200 day simple moving average of $130.32. The firm has a market cap of $10.39 billion, a price-to-earnings ratio of 45.45, a P/E/G ratio of 85.34 and a beta of 1.70.

DigitalOcean (NYSE:DOCN) last released its quarterly earnings data on Tuesday, August 4th. The company reported $0.45 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $0.26 by $0.19. DigitalOcean had a return on equity of 31.01% and a net margin of 23.26%. The firm had revenue of $281.18 million during the quarter, compared to analysts’ expectations of $279.03 million. During the same quarter last year, the firm earned $0.39 earnings per share. The business’s revenue for the quarter was up 28.6% on a year-over-year basis. 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 predict that DigitalOcean will post 0.64 earnings per share for the current fiscal year.

Insider Activity

In other news, CFO Matt Steinfort sold 10,000 shares of the business’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 $1,057,300.00. Following the completion of the sale, the chief financial officer directly owned 503,692 shares in the company, valued at approximately $53,255,355.16. The trade was a 1.95% decrease in their ownership of the stock. The sale was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through this hyperlink. 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. Also, CAO Cherie Barrett sold 4,456 shares of the business’s stock in a transaction on Thursday, August 13th. The stock was sold at an average price of $132.37, for a total transaction of $589,840.72. Following the completion of the sale, the chief accounting officer owned 65,487 shares of the company’s stock, valued at $8,668,514.19. The trade was a 6.37% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold a total of 22,641 shares of company stock valued at $2,589,317 over the last 90 days. 0.96% of the stock is currently owned by company insiders.

Institutional Inflows and Outflows

Several institutional investors have recently bought and sold shares of DOCN. Bank of America Corp DE acquired a new position in DigitalOcean during the 2nd quarter worth $241,945,000. Principal Financial Group Inc. boosted its holdings in DigitalOcean by 155.3% during the first quarter. Principal Financial Group Inc. now owns 1,108,420 shares of the company’s stock valued at $95,080,000 after acquiring an additional 674,231 shares during the period. Bank of New York Mellon Corp acquired a new stake in shares of DigitalOcean in the second quarter valued at about $98,011,000. Allspring Global Investments Holdings LLC grew its position in shares of DigitalOcean by 81.3% in the first quarter. Allspring Global Investments Holdings LLC now owns 683,707 shares of the company’s stock valued at $59,947,000 after purchasing an additional 306,529 shares during the last quarter. Finally, Sei Investments Co. grew its position in shares of DigitalOcean by 82.8% in the first quarter. Sei Investments Co. now owns 370,223 shares of the company’s stock valued at $31,758,000 after purchasing an additional 167,659 shares during the last quarter. Institutional investors own 49.77% of the company’s stock.

About DigitalOcean

DigitalOcean Holdings, Inc is a cloud computing company that provides infrastructure and developer-focused services for startups, small and medium-sized businesses, and individual developers. Its platform is designed to simplify the deployment, management, and scaling of applications without requiring customers to build and operate extensive in-house infrastructure.

The company’s offerings include Droplets, its virtual machine service; managed Kubernetes; managed databases; object and block storage; networking tools; and application deployment services through App Platform.