DigitalOcean (NYSE:DOCN) Raised to Strong-Buy at Zacks Research

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

DOCN has been the topic of a number of other reports. Stifel Nicolaus raised DigitalOcean from a “hold” rating to a “buy” rating and upped their target price for the stock from $135.00 to $160.00 in a research report on Tuesday, July 21st. Weiss Ratings lowered DigitalOcean from a “buy (b-)” rating to a “hold (c+)” rating in a research report on Wednesday, September 9th. Truist Financial began coverage on shares of DigitalOcean in a report on Thursday, August 27th. They set a “buy” rating and a $175.00 price objective on the stock. UBS Group dropped their price target on shares of DigitalOcean from $155.00 to $140.00 and set a “neutral” rating on the stock in a research report on Wednesday, August 5th. Finally, William Blair reiterated an “outperform” rating on shares of DigitalOcean in a research note on Wednesday, July 15th. Two equities research analysts have rated the stock with a Strong Buy rating, fourteen have given a Buy rating and two have assigned a Hold rating to the company. According to data from MarketBeat, the stock has an average rating of “Buy” and a consensus target price of $152.88.

DigitalOcean Price Performance

DigitalOcean stock opened at $99.54 on Monday. The firm has a market cap of $10.39 billion, a P/E ratio of 45.45, a P/E/G ratio of 85.34 and a beta of 1.70. DigitalOcean has a one year low of $37.83 and a one year high of $187.50. The company has a debt-to-equity ratio of 1.14, a current ratio of 1.31 and a quick ratio of 1.31. The stock’s 50 day moving average is $124.02 and its 200 day moving average is $130.32.

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

Insider Buying and Selling

In related news, CFO Matt Steinfort sold 10,000 shares of the firm’s stock in a transaction dated Thursday, September 3rd. The stock was sold at an average price of $105.73, for a total transaction of $1,057,300.00. Following the transaction, the chief financial officer directly owned 503,692 shares of the company’s stock, valued at approximately $53,255,355.16. This trade represents a 1.95% decrease in their position. The sale was disclosed in a filing with the SEC, which is accessible through this link. 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, Director Warren Adelman sold 4,200 shares of the business’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 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 SEC filing for this sale provides additional information. Over the last ninety days, insiders sold 22,641 shares of company stock worth $2,589,317. Corporate insiders own 0.96% of the company’s stock.

Hedge Funds Weigh In On DigitalOcean

A number of institutional investors have recently bought and sold shares of DOCN. Parallel Advisors LLC boosted its stake in DigitalOcean by 66.2% in the 1st quarter. Parallel Advisors LLC now owns 324 shares of the company’s stock worth $28,000 after purchasing an additional 129 shares in the last quarter. Banque Cantonale Vaudoise bought a new position in DigitalOcean in the 1st quarter valued at approximately $33,000. Optiver Holding B.V. boosted its stake in DigitalOcean by 1,063.9% during the 1st quarter. Optiver Holding B.V. now owns 419 shares of the company’s stock valued at $36,000 after purchasing an additional 383 shares during the last quarter. SSI Investment Management LLC bought a new stake in shares of DigitalOcean in the 2nd quarter worth $37,000. Finally, Hilltop National Bank bought a new position in shares of DigitalOcean during the second quarter valued at $38,000. 49.77% of the stock is owned by institutional investors.

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.