Research Recommendations For DigitalOcean Holdings Inc. (DOCN): Here is What You Should Know

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DigitalOcean Holdings Inc. (NYSE:DOCN) saw a downside of -6.09% to $26.66 after subtracting -$1.73 on Wednesday. The 5-day average trading volume is 712,983 shares of the company’s common stock. It has gained $29.26 in the past week and touched a new high 4 times within the past 5 days. An average of 958,786 shares of the company has been traded in the last 20 days, and the 50-day average volume stands at 1,123,034.

DOCN’s 1-month performance is 9.44% or $1.74 on its low of $23.38 reached on 12/28/22. The company’s shares have touched a 52-week low of $23.38 and high of $66.28, with the stock’s rally to the 52-week high happening on 01/18/23. YTD, DOCN has achieved 11.46% or $1.02 and has reached a new high 6 times. However, the current price is down -59.78% from the 52-week high price.

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Insider Transactions

DOCN stock investors last saw insider trading activity on Dec 01.Norman Harold Matthew (Chief People Officer) most recently sold 17,500 shares at $29.28 per share on Dec 01. This transaction cost the insider $512,400. Chief Marketing Officer, Brantz Carly D, sold 1,773 shares at a price of $31.60 on Nov 16. Then, on Oct 04, Chief Product Officer Monroy Gabriel sold 3,495 shares at a price of $40.10 per share. This transaction amounted to $140,150.

Valuation Metrics

Moving on to other valuation ratios, the trailing price-to-sales (P/S) ratio is 4.91 while the price-to-book (PB) in the most recent quarter is 91.58, with the price to cash flow ratio at 16.87.

DigitalOcean Holdings Inc.’s quick ratio for the period ended September 29 was 9.20, with the current ratio over the same period at 9.20. As well, the company’s long term debt to equity for the quarter ending September 29 was 48.62, while the total debt to equity was 48.62. In terms of profitability, the gross margin trailing 12 months is 63.80%. The firm’s gross profit as reported stood at $257.97 million against revenue of $428.56 million.

Earnings Surprise

For the quarterly period ending September 29 this year, DigitalOcean Holdings Inc.’s cash and short-term investments amounted to $800.54 million against total debt of $1.47 billion. Net income and sales went up compared to those figures reported in the previous quarter. Net income grew 118.32% to $10.1 million, while revenue of -$6.19 million was 161.29% off the previous quarter. Analysts expected DOCN to announce $0.23 per share in earnings in its latest quarter, but it posted $0.38, representing a 65.20% surprise. EBITDA for the quarter stood at more than $32.95 million. DOCN stock balance sheet for the quarter ending September 29 shows that total liabilities totaled 1.59 billion, with total debt at $1.47 billion. Shareholders hold equity totaling $96.3 million.

Let’s look briefly at DigitalOcean Holdings Inc. (DOCN) price momentum from a technical analysis perspective. The 9-day relative strength index as at close on 24 January was 45.99% to suggest the stock is trending Neutral, with historical volatility in this time period at 57.62%.

The stock’s 5-day moving average is $27.54, reflecting a -4.92% or -$1.37 change from its current price. DOCN is currently trading +7.03% above its 20-day SMA, -37.06% above its 100-day SMA. However, the stock’s current price level is away from the SMA50 by -11.02% and SMA200 by-51.16%.

Stochastic %K and %D was 73.22% and 73.81% and the average true range (ATR) pointed at 1.57. The RSI (14) points at 46.91%, while the 14-day stochastic is at 50.24% with the period’s ATR at 1.57. The stock’s 9-day MACD Oscillator is pointing at 0.31 and 1.09 on the 14-day charts.

Analyst Ratings

In the most recent analyst report for DigitalOcean Holdings Inc. (NYSE: DOCN), Piper Sandler downgraded it to a Neutral rating. They previously had an Overweight rating on the stock. Analysts offering their rating for DOCN stock have a consensus rating for the stock as Overweight. Currently, 2 brokerage advisors rate DOCN as a “sell,”, while 5 advise that investors “Hold.” 0 analysts have rated the stock as underweight. 1 rates the stock as overweight while 6 have offered a “buy” rating.

What is DOCN’s price target for the next 12 months?

Analysts have a consensus price target ranging from a low of $27.00 and a high of $63.00, with their median price target at $31.50. Looking at these predictions, the average price target given by analysts is for DigitalOcean Holdings Inc. (DOCN) stock is $36.17.

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