DigitalOcean (NYSE:DOCN) Shares Gap Up After Analyst Upgrade

DigitalOcean Holdings, Inc. (NYSE:DOCN)’s stock price gapped up prior to trading on Tuesday after Bank of America raised their price target on the stock from $60.00 to $72.00. The stock had previously closed at $58.94, but opened at $63.09. Bank of America currently has a buy rating on the stock. DigitalOcean shares last traded at $62.4420, with a volume of 1,731,511 shares.

Several other research firms have also recently weighed in on DOCN. Barclays raised their price objective on shares of DigitalOcean from $49.00 to $63.00 and gave the company an “overweight” rating in a research report on Monday, January 12th. Weiss Ratings restated a “hold (c+)” rating on shares of DigitalOcean in a research report on Monday, December 29th. Oppenheimer initiated coverage on DigitalOcean in a research note on Monday, November 10th. They set an “outperform” rating and a $60.00 price target for the company. UBS Group increased their price objective on DigitalOcean from $40.00 to $48.00 and gave the company a “neutral” rating in a research report on Thursday, November 6th. Finally, Piper Sandler boosted their target price on DigitalOcean from $47.00 to $50.00 and gave the stock a “neutral” rating in a research report on Monday, January 5th. Seven equities research analysts have rated the stock with a Buy rating and seven have assigned a Hold rating to the company’s stock. According to data from MarketBeat, the stock presently has an average rating of “Moderate Buy” and an average target price of $50.50.

Institutional Investors Weigh In On DigitalOcean

A number of hedge funds and other institutional investors have recently added to or reduced their stakes in the company. Belpointe Asset Management LLC grew its holdings in shares of DigitalOcean by 155.0% during the 4th quarter. Belpointe Asset Management LLC now owns 34,527 shares of the company’s stock worth $1,661,000 after acquiring an additional 20,985 shares during the period. Fortis Capital Advisors LLC bought a new stake in shares of DigitalOcean during the fourth quarter valued at approximately $1,020,000. Bayforest Capital Ltd raised its holdings in DigitalOcean by 77,914.3% in the fourth quarter. Bayforest Capital Ltd now owns 5,461 shares of the company’s stock worth $263,000 after purchasing an additional 5,454 shares in the last quarter. CUSHING ASSET MANAGEMENT LP dba NXG INVESTMENT MANAGEMENT bought a new position in DigitalOcean in the fourth quarter worth $5,582,000. Finally, Campbell Newman Asset Management Inc. purchased a new position in DigitalOcean during the fourth quarter valued at $2,101,000. 49.77% of the stock is currently owned by institutional investors.

DigitalOcean Trading Up 2.4%

The stock’s fifty day moving average price is $48.92 and its 200 day moving average price is $40.29. The stock has a market cap of $5.52 billion, a P/E ratio of 24.32, a PEG ratio of 7.70 and a beta of 1.76.

DigitalOcean (NYSE:DOCN) last issued its quarterly earnings results on Wednesday, November 5th. The company reported $0.54 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $0.31 by $0.23. DigitalOcean had a net margin of 29.15% and a negative return on equity of 92.51%. The company had revenue of $229.63 million during the quarter, compared to analysts’ expectations of $226.55 million. During the same period last year, the company posted $0.52 EPS. DigitalOcean’s revenue was up 15.9% on a year-over-year basis. DigitalOcean has set its Q4 2025 guidance at 0.350-0.400 EPS and its FY 2025 guidance at 2.000-2.050 EPS. As a group, sell-side analysts forecast that DigitalOcean Holdings, Inc. will post 1.01 earnings per share for the current year.

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.