Applied Digital (NASDAQ:APLD) Stock Price Takes a Dive - Is It Time to Sell?

Shares of Applied Digital Co. (NASDAQ:APLD) experienced a decline of 2.9% during Thursday's trading session. The stock dipped to a low of $7.02 before finishing the day at $7.47. A total of 7,564,279 shares changed hands, a notable drop of 73% compared to the average daily volume of 28,243,416 shares. The previous closing price was $7.69.

Analyst Ratings Updates

Several financial analysts have provided updates regarding Applied Digital's stock. Recently, Northland Securities raised its price target from $12.00 to $20.00 and granted the stock an "outperform" rating. HC Wainwright also increased their target from $10.00 to $12.00, giving a "buy" rating in a note published on January 15th. Additionally, Compass Point initiated coverage with a "buy" rating and set a price target of $10.00. Needham & Company reaffirmed a "buy" rating with an $11.00 target on February 24th, while Cantor Fitzgerald lowered their target from $15.00 to $14.00, maintaining an "overweight" rating. Overall, nine analysts have rated Applied Digital as a buy, leading to a consensus rating of "Buy" and an average price target of $12.11 according to MarketBeat.

Price Movement and Stock Performance

As of now, Applied Digital's 50-day moving average stands at $8.26, alongside a 200-day moving average of $7.73. The company has a debt-to-equity ratio of 1.22. Quick and current ratios are both registered at 0.77. Applied Digital has a market capitalization of approximately $1.62 billion, with a price-to-earnings ratio of -4.20 and a beta of 4.69.

On January 14th, Applied Digital released its earnings results, reporting a loss of $0.06 per share, which was better than the consensus estimate of a $0.14 loss. The company experienced a negative return on equity of 117.67% and a negative net margin of 127.86%. Revenue for the quarter was $63.87 million, exceeding the analyst expectations of $62.41 million. Year-over-year, the revenue showed a growth of 51.3%. Analysts forecast that Applied Digital will report earnings of -0.96 per share for the current year.

Insider Trading Activity

In recent insider trading news, Director Richard N. Nottenburg sold 20,000 shares at an average price of $8.85, totaling $177,000 on January 17th. Post-sale, he retains 342,923 shares, which are valued at around $3,034,868.55. Nottenburg's transaction represents a 5.51% reduction in his stake. Currently, insiders hold about 11.81% of the company's stock.

Institutional Investment Trends

Recent activity from institutional investors shows that Wilmington Savings Fund Society FSB doubled its holdings in Applied Digital during the fourth quarter, acquiring an additional 2,000 shares and bringing its total to 4,000 shares worth $31,000. Other institutions such as R Squared Ltd and US Bancorp DE also made new purchases during the same quarter, with several buying stakes that value around $36,000 to $43,000. Overall, institutional investors own around 65.67% of Applied Digital's shares.

Company Overview

Applied Digital Corporation specializes in designing, developing, and operating data centers across North America. These facilities provide digital infrastructure solutions tailored for the high-performance computing sector. They also offer cloud services for artificial intelligence, and hosting services for high-performance computing as well as cryptocurrency applications.

Final Thoughts

Investors may be questioning whether now is the right time to buy or sell shares of Applied Digital considering its recent performance and analyst ratings. Reviewing the overall market sentiment toward tech stocks, and specifically those involving high-performance computing and digital infrastructure, may provide additional insights.

Shares, Analysts, Market, Investors, Company