DigitalOcean (NYSE:DOCN) Trading 10.3% Higher – Should You Buy?

DigitalOcean Holdings, Inc. (NYSE:DOCN) shot up 10.3% on Wednesday . The stock traded as high as $134.60 and last traded at $133.34. 302,933 shares changed hands during mid-day trading, a decline of 92% from the average session volume of 3,828,114 shares. The stock had previously closed at $120.86.

Analyst Upgrades and Downgrades

Several research firms have weighed in on DOCN. Stifel Nicolaus raised DigitalOcean from a “hold” rating to a “buy” rating and upped their target price for the company from $135.00 to $160.00 in a report on Tuesday, July 21st. Oppenheimer set a $190.00 price objective on shares of DigitalOcean in a research report on Wednesday, May 6th. KeyCorp initiated coverage on shares of DigitalOcean in a report on Tuesday, June 2nd. They set an “overweight” rating and a $200.00 target price for the company. Robert W. Baird initiated coverage on DigitalOcean in a research note on Tuesday, July 21st. They issued an “outperform” rating and a $165.00 target price on the stock. Finally, Canaccord Genuity Group reaffirmed a “buy” rating and set a $200.00 price target on shares of DigitalOcean in a research note on Friday, July 10th. Two research analysts have rated the stock with a Strong Buy rating, eleven have assigned a Buy rating and three have assigned a Hold rating to the stock. According to data from MarketBeat, DigitalOcean has an average rating of “Moderate Buy” and a consensus target price of $151.33.

DigitalOcean Stock Performance

The stock has a 50-day simple moving average of $142.34 and a 200-day simple moving average of $110.03. The stock has a market cap of $14.11 billion, a PE ratio of 61.73, a P/E/G ratio of 121.20 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 EPS for the quarter, beating analysts’ consensus estimates of $0.26 by $0.19. DigitalOcean had a net margin of 23.26% and a return on equity of 31.01%. The business had revenue of $281.18 million for the quarter, compared to the consensus estimate of $279.03 million. During the same quarter last year, the firm posted $0.39 EPS. The business’s revenue for the quarter was up 28.6% compared to the same quarter last year. DigitalOcean has set its FY 2026 guidance at 1.350-1.400 EPS and its Q3 2026 guidance at 0.280-0.300 EPS. Equities analysts predict that DigitalOcean Holdings, Inc. will post 0.58 earnings per share for the current fiscal year.

Insider Activity

In other DigitalOcean news, Director Warren J. Adelman sold 4,200 shares of the firm’s stock in a transaction that occurred 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 sale, the director owned 67,433 shares in the company, valued at $8,362,366.33. This trade represents a 5.86% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available through the SEC website. Also, Director Hilary Schneider sold 4,338 shares of the company’s stock in a transaction on Friday, May 15th. The shares were sold at an average price of $156.38, for a total transaction of $678,376.44. Following the completion of the sale, the director directly owned 24,323 shares in the company, valued at $3,803,630.74. This represents a 15.14% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Insiders have sold 43,538 shares of company stock worth $6,712,418 over the last 90 days. Company insiders own 0.96% of the company’s stock.

Institutional Trading of DigitalOcean

Institutional investors and hedge funds have recently bought and sold shares of the company. Allworth Financial LP raised its position in shares of DigitalOcean by 54.4% during the 3rd quarter. Allworth Financial LP now owns 724 shares of the company’s stock valued at $25,000 after acquiring an additional 255 shares in the last quarter. Parallel Advisors LLC increased its position in DigitalOcean by 66.2% in the first quarter. Parallel Advisors LLC now owns 324 shares of the company’s stock worth $28,000 after buying an additional 129 shares during the period. Huntington National Bank boosted its holdings in shares of DigitalOcean by 638.3% during the fourth quarter. Huntington National Bank now owns 598 shares of the company’s stock valued at $29,000 after acquiring an additional 517 shares during the period. NBC Securities Inc. bought a new position in shares of DigitalOcean during the fourth quarter worth about $32,000. Finally, Banque Cantonale Vaudoise bought a new stake in DigitalOcean in the 1st quarter valued at about $33,000. 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.