DigitalOcean Holdings Inc. (DOCN): Here Are Some Research Recommendations

DigitalOcean Holdings Inc. (NYSE:DOCN) finished Wednesday with an addition of $5.23 to close at $91.09, an upside of 6.09 percent. An average of 1,751,740 shares of common stock have been traded in the last five days. There was a gain of $8.70 in the past week. The last 20 days have seen an average of 2,566,950 shares traded, while the 50-day average volume stands at 2,479,156.

DOCN stock has increased by 18.65% in the last month. The company shares reached their 1-month lowest point of $73.66 on 09/14/21. Shares of the company touched a low of $35.35 and a high of $88.48 in 52 weeks. In spite of this, the price is up 2.95% from the 52-week high.


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Insider Transactions

7 days have passed since DigitalOcean Holdings Inc. (DOCN) last reported insider trading activity. Guy Jeffrey Scott, who is Chief Operating Officer, most recently acquired $6,000 shares at $84.51 per share on Oct 07. In this transaction, the insider spent $507,060. General Counsel, SHAPIRO ALAN, disposed of 64,451 shares at a price of $86.84 on Sep 23. The insider now owns more than $5,596,925 worth of shares. Prior to that, Chief People Officer Norman Harold Matthew went on to Sale 17,838 shares at $72.09 each on Sep 07. An amount of $1,285,941 was transacted.

Valuation Metrics

DigitalOcean Holdings Inc. (DOCN) has a trailing price-to-earnings (P/E) ratio of 29.20 for the broader industry and 37.24 for the sector. Other valuation ratios to consider include the trailing price-to-sales (P/S) ratio at 27.14, the price-to-book (PB) ratio at 11.33.

The quick ratio of DigitalOcean Holdings Inc. for the three months ended June 29 was 11.40, and the current ratio was 11.40, indicating that the company is able to meet its debt obligations. Further, the company has a long term debt to equity ratio of 0.00 and a total debt to equity ratio of 0.00 for the quarter ending June 29. Its gross profit as reported stood at $172.85 million compared to revenue of $318.38 million.

For investors, determining the potential profitability of the investment also depends on the performance of the company’s management. For the broader industry, ROE averaged 3.34 over the past year.

Earnings Surprise

The analyst consensus anticipated DigitalOcean Holdings Inc.’s latest quarter earnings to come in at $0.05 per share, but it turned out to be $0.08, a 60.00% surprise. For the quarter, EBITDA amounted to -$2.63 million. At the end of the quarter ending June 29, DigitalOcean Holdings Inc.’s stock balance sheet showed total liabilities of 57.35 million. Shareholders own equity worth $107.34 million.

Technical Picture

From a technical analysis perspective, let’s take a brief look at DigitalOcean Holdings Inc. (DOCN) price momentum. RSI 9-day as of the close on 13 October was 72.90%, suggesting the stock is Overbought, with historical volatility in this time frame at 44.15%.

As of today, DOCN’s price is $85.98 +10.56% or $8.70 from its 5-day moving average. DOCN is currently trading +11.68% higher than its 20-day SMA and +111.99% higher than its 100-day SMA. However, the stock’s current price level is +50.04% above the SMA50.

The stochastic %K and %D were 80.05% and 73.79%, respectively, and the average true range (ATR) was 4.79. With the 14-day stochastic at 92.20% and the average true range at 4.77, the RSI (14) stands at 69.13%. The stock has reached 3.56 on the 9-day MACD Oscillator while the 14-day reading was at 4.89.

Analyst Ratings

Morgan Stanley reiterated its an Equal-weight rating on DigitalOcean Holdings Inc. (NYSE: DOCN), but raised their price target to $50, indicating a potential price decrease of -45.11% for the stock.

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