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Why Is DigitalOcean (DOCN) Stock Down 20% Today?

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  • DigitalOcean (DOCN) stock is falling on Friday with the release of its second-quarter earnings report.
  • The company didn’t report EPS due to tax issues.
  • However, its revenue failed to reach Wall Street’s estimate.
DOCN Stock - Why Is DigitalOcean (DOCN) Stock Down 20% Today?

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DigitalOcean (NYSE:DOCN) stock isn’t doing so hot on Friday following the release of its earnings report for the second quarter of 2023.

The first red flag from the company is its lack of earnings per share data. DigitalOcean says that, due to tax expense errors, it isn’t ready to provide these results yet. Instead, the company intends to release that information in a later filing.

Despite that, DigitalOcean did include revenue of $169.81 million in its latest earnings report. Unfortunately for DOCN stock investors, though, that missed Wall Street’s estimate of $169.92 million for the quarter — even if it does mark a 27% increase year-over-year (YOY) from $133.88 million.

Yancey Spruill, CEO of DigitalOcean, remained positive about the company’s future in the latest earnings report:

“We made good progress in the quarter, accelerating our profitability margins towards our long-term targets while delivering solid revenue growth […] Our ability to deliver profitable growth regardless of the market growth environment, coupled with our strong balance sheet, enabled us to invest in both organic and exciting inorganic growth levers.”

DOCN Stock Outlook

Another blow to DOCN stock today comes from its guidance in the Q2 earnings report. The company expects revenue for Q3 to range from $172.5 million to $174 million. That would have it missing analysts’ estimate of $179.51 million for the period.

DigitalOcean ‘s revenue outlook for the full year of 2023 isn’t looking any better. That has it expecting revenue between $680 million and $685 million. Yet again, that would fail to reach Wall Street’s estimate of $704.14 million for the year.

DOCN stock is down 20.1% as of Friday morning.

Investors will want to keep reading for breakdowns of the other top stock market stories today.

We offer up deep dives into the hottest stock market news traders need to know about on Friday! That includes why shares of Assertio (NASDAQ:ASRT) stock, Polished.com (NYSEMKT:POL) stock and Tupperware Brands (NYSE:TUP) stock are moving today. You can catch up on all of that news at the links below!

More Stock Market News for Friday

On the date of publication, William White did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.


Article printed from InvestorPlace Media, https://investorplace.com/2023/08/why-is-digitalocean-docn-stock-down-20-today/.

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