Why DigitalOcean (DOCN) Stock Is Up Today

What Happened:
Shares of cloud computing provider DigitalOcean (NYSE: DOCN)
jumped 13.1% in the morning session after the company reported an impressive “beat and raise” quarter. Third quarter results came in ahead of analysts’ revenue and EPS expectations. Revenue guidance for the next quarter also beat Consensus estimates. Similarly, the full year revenue guidance beat and was raised. However, net revenue retention declined, but the company maintained positive free cash flow and anticipates a strong free cash flow of 21% to 22% of revenue for the fiscal year 2023, despite ongoing investments in Paperspace integration.

It’s important to note that the company is actively seeking a new CEO with cloud infrastructure expertise, and they are making progress in this regard, although no specific timeline has been given. In summary, DigitalOcean delivered a robust quarter.

Is now the time to buy DigitalOcean? Find out by reading the original article on StockStory.

What is the market telling us:
DigitalOcean’s shares are very volatile and over the last year have had 35 moves greater than 5%. But moves this big are very rare even for DigitalOcean and that is indicating to us that this news had a significant impact on the market’s perception of the business.

The biggest move we wrote about over the last year was two months ago, when the company dropped 11.8% on the news that it announced a succession plan to identify the next CEO. Current CEO Yancey Spruill, will be leaving the company and the Board of Directors once a successor is found. A Board-appointed committee and Spencer Stuart, an executive search firm, will lead the search for the next CEO. In the meantime, Warren Adelman, a board member since 2020 and lead independent director since 2022, will serve as Executive Chairman of the Board. DigitalOcean also confirmed its Q3 and FY 2023 guidance, as previously stated.

DigitalOcean is down 4.23% since the beginning of the year, and at $24.50 per share it is trading 50.9% below its 52-week high of $49.90 from July 2023. Investors who bought $1,000 worth of DigitalOcean’s shares at the IPO in March 2021 would now be looking at an investment worth $575.76.