Applied Digital (NASDAQ:APLD) Gains 15.2% - What Lies Ahead?

Applied Digital Co. (NASDAQ:APLD) experienced a surge of 15.2% during midday trading on Monday. The stock hit a peak price of $9.28 before settling at $9.11. In total, around 42,892,479 shares changed hands, representing a significant increase of 69% compared to the average daily trading volume of 25,388,150 shares. The previous closing price was $7.91.

Insights from Wall Street Analysts

Market analysts have conducted reviews on the recent performance of APLD shares. Notably, HC Wainwright raised their target price from $10.00 to $12.00, maintaining a "buy" rating. Compass Point also initiated coverage, establishing a "buy" rating along with a $10.00 price objective. Needham & Company reaffirmed their "buy" rating with an $11.00 target price. Additionally, Northland Securities increased their target price from $12.00 to $20.00, issuing an "outperform" rating. Conversely, Cantor Fitzgerald lowered their target from $15.00 to $14.00 while keeping an "overweight" rating. Overall, nine analysts have rated APLD as a buy, with MarketBeat indicating an average rating of "Buy" and a consensus target price of $12.11.

Performance Metrics of Applied Digital

Applied Digital currently boasts a market capitalization of $2.22 billion, with a price-to-earnings ratio of -5.75 and a beta of 4.77. Its 50-day moving average stands at $8.39, while the 200-day moving average is at $7.35. The quick and current ratios are both calculated at 0.77, and it has a debt-to-equity ratio of 1.22.

The company recently reported its quarterly earnings on January 14th. It recorded an earnings per share (EPS) of ($0.06), outpacing the consensus estimate of ($0.14) by $0.08. Its revenue for the quarter was $63.87 million, surpassing expectations of $62.41 million. The year-over-year revenue growth was impressive, up by 51.3%. However, the negative return on equity was noted at 117.67% alongside a net margin of -127.86%. Analysts forecast that Applied Digital will have an EPS of -0.96 for the current financial year.

Insider Trading Activities

In the latest updates on insider trading, CEO Wes Cummins sold 200,000 shares at an average price of $9.20 on November 27, amounting to $1,840,000. Post this transaction, he retains 3,875,955 shares, valued at approximately $35,658,786, reflecting a 4.91% decrease in his stake. In another transaction, Director Richard N. Nottenburg sold 20,000 shares for about $177,000, reducing his ownership by 5.51% as he now holds 342,923 shares valued at roughly $3,034,868.55. In total, insiders have offloaded 270,000 shares in the past 90 days, representing an investment from corporate insiders of 11.81% in the company's stock.

Investments from Institutions

Institutional investors are actively buying and selling shares of Applied Digital. Wilmington Savings Fund Society FSB doubled its stake in the fourth quarter, acquiring a total of 4,000 shares valued at $31,000. Other institutional movements included R Squared Ltd and US Bancorp DE, with both entities making new stakes valued at $36,000 and $37,000, respectively. Approximately 65.67% of the company's stock is owned by institutional investors and hedge funds.

Company Overview

Applied Digital Corporation specializes in designing, developing, and operating data centers across North America. It offers digital infrastructure solutions geared towards the high-performance computing sector. Their services encompass artificial intelligence cloud services, high-performance computing data center hosting, and crypto data center hosting.

Final Thoughts

Investors should consider the recent jumps in stock price alongside the strong support from analysts and institutional backing as potential indicators of future performance. However, it's essential to stay informed about any upcoming developments that may influence stock movements.

Applied, Digital, Stock