Sometimes all it takes to light a fire under a stock is a little analyst love. For DigitalOcean (NYSE:DOCN), cloud computing stock great, that was indeed all it took. Morgan Stanley gave DigitalOcean a little extra boost, and the share price got one as well, up over 3% in Friday afternoon’s trading.
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The word from Morgan Stanley analysts pushed DigitalOcean up from “underweight” to “equal weight,” and also put a little extra steam into the price target. That got raised from $30 to $36. Morgan Stanley’s analysts cited a recently-lowered growth outlook, along with some likewise lowered margin forecasts, that now look like they’re within the realm of possibility. Moreover, Morgan Stanley analysts asserted that current prices on DigitalOcean stock are roughly appropriate given everything else that’s facing the company right now.
Of course, DigitalOcean isn’t resting on its laurels and being satisfied with being “fairly priced.” Just recently, DigitalOcean picked up Paperspace, a rival in the cloud computing space, for $111 million. With Paperspace’s acquisition, DigitalOcean will be able to open up its product line to more users for testing, and give Paperspace customers ready access to a wider range of products. That’s good news all around, and should help DigitalOcean improve its positions, and share price, from here.
Meanwhile, analysts are somewhat split on DigitalOcean’s overall future. With five Buy ratings, three Hold and one Sell, DigitalOcean stock rates a Moderate Buy by analyst consensus. Further, with an average price target of $42.12, DigitalOcean stock offers a 16.77 upside potential.
