The Stock Of The Week: DigitalOcean Holdings Inc. (DOCN)

As of Friday close, DigitalOcean Holdings Inc.’s (NYSE:DOCN) stock was up $4.12, moving up 12.23 percent to $37.80. The average number of shares traded per day over the past five days has been 4,369,320 shares. 2 times new highs have been achieved over the past 5 days, with a $1.98 gain in that time frame. In the last twenty days, the average volume was 3,024,990, while in the previous 50 days, it was 2,268,104.

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Since last month, DOCN stock retreated -30.39%. Shares of the company fell to $30.05 on 05/12/22, the lowest level in the past month. A 52-week high of $133.40 was reached on 01/03/22 after having rallying from a 52-week low of $30.05. Since the beginning of this year, DOCN’s stock price has dropped by -52.94% or -$42.53, and marked a new high 1 time. However, the stock has declined by -71.66% since its 52-week high.

DigitalOcean Holdings Inc. (DOCN) last reported insider trading activity 39 days ago on Apr 05. Butte Amy, the Director of the company, disposed of 5,000 shares for $57.66 on Apr 05. It resulted in a $288,300 divestment by the insider. SORENSON WILLIAM G sold 30,000 shares at an average price of $60.92 on Mar 02. The insider now owns 151,740 shares following the transaction. On Mar 02, General Counsel SHAPIRO ALAN sold 40,456 shares at $60.80 apiece. The transaction was valued at $2,459,814.

Financial Health

In the three months ended September 29, DigitalOcean Holdings Inc.’s quick ratio stood at 30.40, while its current ratio was 30.40, showing that the company is able to pay off its debt. According to company report, the long-term debt-to-equity ratio for the quarter ending September 29 was 2.53, and the total debt-to-equity ratio was 2.53. On the profitability front, the trailing twelve-month gross margin is 61.50% percent. In the year ended September 29, operating margins totaled -0.70%. Based on annual data, DOCN earned $257.97 million in gross profit and brought in $428.56 million in revenue.

A company’s management is another factor that investors consider when determining the profitability of an investment. In the past year, return on investment (ROI) was -0.80%. Return on equity (ROE) for the past 12 months was -2.70%.

In DigitalOcean Holdings Inc.’s quarter-end financial report for September 29, it reported total debt of $1.46 billion against cash and short-term investments of $1.09 billion. According to the earnings report, the company had a higher net income in the recent quarter than it did in the previous quarter. DOCN’s revenue rose 26.44% to $119.66 million during the quarter, while net income inched up to $127.33 million. While analysts expected DigitalOcean Holdings Inc. to report $0.07 quarterly earnings, the actual figure was $0.12 per share, beating the consensus estimate by 71.40%. During the quarter, the company generated $10.68 million in EBITDA. The liabilities of DigitalOcean Holdings Inc. were 1.53 billion at the end of its most recent quarter ended September 29, and its total debt was $1.46 billion. The value of shareholders’ equity is $106.06 million.

Technical Picture

This quick technical analysis looks at DigitalOcean Holdings Inc.’s (DOCN) price momentum. With a historical volatility rate of 147.99%, the RSI 9-day stood at 46.67% on 13 May.

With respect to its five-day moving average, the current DigitalOcean Holdings Inc. price is up by +5.53% percent or $1.98. At present, DOCN shares trade -28.25% below its 20-day simple moving average and -48.22% percent below its 100-day simple moving average. However, the stock is currently trading approximately -36.11% below its SMA50 and -26.83% below its SMA200.

Stochastic coefficient K was 26.06% and Stochastic coefficient D was 14.82%, while ATR was 4.47. Given the Stochastic reading of 51.43% for the 14-day period, the RSI (14) reading has been calculated as 43.12%. As of today, the MACD Oscillator reading stands at -1.82, while the 14-day reading stands at -3.85.

Analyst Ratings

Goldman launched its rating on DigitalOcean Holdings Inc. (NYSE: DOCN) to a Buy in a note to investors on May 12, 2022. DigitalOcean Holdings Inc. (DOCN) has been rated Buy by analysts. According to 0 brokerage firms, DOCN is a sell, and 2 firms recommend it is a Hold. There are 0 analysts who say the stock is underweight. A total of 1 analyst rate DigitalOcean Holdings Inc. stock as buy, with 9 recommending it as overweight.

With a median target price of $55.00, the current consensus forecast for the stock is $42.00 – $80.00. Based on these forecasts, analysts predict DigitalOcean Holdings Inc. (DOCN) will achieve an average price target of $57.82.


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