DigitalOcean (NYSE:DOCN) Trading Down 7.7% – Time to Sell?

DigitalOcean Holdings, Inc. (NYSE:DOCN) traded down 7.7% during mid-day trading on Friday . The company traded as low as $129.51 and last traded at $129.9390. 728,863 shares changed hands during mid-day trading, a decline of 81% from the average session volume of 3,888,822 shares. The stock had previously closed at $140.84.

Analyst Ratings Changes

A number of research firms have recently issued reports on DOCN. Morgan Stanley boosted their price target on shares of DigitalOcean from $75.00 to $175.00 and gave the company an “overweight” rating in a report on Wednesday, May 6th. Piper Sandler boosted their price target on shares of DigitalOcean from $98.00 to $155.00 and gave the company a “neutral” rating in a report on Tuesday, May 5th. KeyCorp started coverage on DigitalOcean in a report on Tuesday, June 2nd. They set an “overweight” rating and a $200.00 price target for the company. Weiss Ratings reissued a “hold (c+)” rating on shares of DigitalOcean in a research report on Wednesday, June 24th. Finally, Barclays increased their target price on shares of DigitalOcean from $183.00 to $184.00 and gave the stock an “overweight” rating in a research report on Tuesday. One research analyst has rated the stock with a Strong Buy rating, nine have given a Buy rating and three have given a Hold rating to the company’s stock. According to data from MarketBeat, the company presently has a consensus rating of “Moderate Buy” and a consensus price target of $145.36.

DigitalOcean Price Performance

The company has a quick ratio of 1.46, a current ratio of 1.46 and a debt-to-equity ratio of 0.92. The stock’s 50-day moving average is $156.37 and its 200-day moving average is $98.50. The firm has a market cap of $13.60 billion, a P/E ratio of 56.91 and a beta of 1.57.

DigitalOcean (NYSE:DOCN) last released its earnings results on Tuesday, May 5th. The company reported $0.44 earnings per share for the quarter, topping analysts’ consensus estimates of $0.27 by $0.17. The business had revenue of $257.90 million for the quarter, compared to the consensus estimate of $249.76 million. DigitalOcean had a return on equity of 88.86% and a net margin of 24.97%.The firm’s revenue for the quarter was up 22.4% compared to the same quarter last year. During the same period last year, the business earned $0.56 earnings per share. DigitalOcean has set its Q2 2026 guidance at 0.200-0.230 EPS and its FY 2026 guidance at 1.100-1.200 EPS. As a group, equities analysts anticipate that DigitalOcean Holdings, Inc. will post 0.55 EPS for the current fiscal year.

Insider Buying and Selling

In related news, CFO Matt Steinfort sold 10,000 shares of the business’s stock in a transaction on Tuesday, June 2nd. The stock was sold at an average price of $170.07, for a total value of $1,700,700.00. Following the sale, the chief financial officer owned 538,414 shares of the company’s stock, valued at $91,568,068.98. The trade was a 1.82% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available 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, 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 value of $678,376.44. Following the completion of the sale, the director owned 24,323 shares in the company, valued at $3,803,630.74. This trade represents a 15.14% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders have sold 39,338 shares of company stock worth $6,191,576 over the last ninety days. Company insiders own 0.96% of the company’s stock.

Institutional Trading of DigitalOcean

Several large investors have recently added to or reduced their stakes in DOCN. Principal Financial Group Inc. boosted its stake in DigitalOcean by 155.3% in the first quarter. Principal Financial Group Inc. now owns 1,108,420 shares of the company’s stock worth $95,080,000 after purchasing an additional 674,231 shares in the last quarter. Alyeska Investment Group L.P. bought a new position in shares of DigitalOcean in the third quarter valued at about $21,808,000. Arrowstreet Capital Limited Partnership lifted its position in DigitalOcean by 90.9% during the 4th quarter. Arrowstreet Capital Limited Partnership now owns 1,194,845 shares of the company’s stock worth $57,496,000 after buying an additional 568,823 shares in the last quarter. Franklin Resources Inc. lifted its position in DigitalOcean by 784.2% during the 4th quarter. Franklin Resources Inc. now owns 494,314 shares of the company’s stock worth $23,786,000 after buying an additional 438,411 shares in the last quarter. Finally, Danske Bank A S bought a new stake in DigitalOcean during the 3rd quarter worth about $14,582,000. 49.77% of the stock is owned by institutional investors.

About DigitalOcean

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.