Key Points
- CEO Wes Cummins purchased 55,803 Applied Digital shares at an average price of $18.04, investing approximately $1.01 million and increasing his stake to 5.87 million shares.
- Applied Digital reported quarterly revenue of $300.39 million, up 367.8% year over year, and beat EPS expectations; however, it remained unprofitable with a negative net margin and return on equity.
- Analysts hold a “Moderate Buy” consensus rating with an average price target of $62.25, but substantial debt, sharply higher interest expense and recent stock volatility remain key risks.
Applied Digital Corporation (NASDAQ:APLD - Get Free Report) CEO Wes Cummins acquired 55,803 shares of the firm's stock in a transaction dated Friday, October 16th. The shares were purchased at an average cost of $18.04 per share, with a total value of $1,006,686.12. Following the completion of the transaction, the chief executive officer owned 5,874,453 shares in the company, valued at approximately $105,975,132.12. The trade was a 0.96% increase in their position. The transaction was disclosed in a document filed with the SEC, which is available through this hyperlink.
Applied Digital Trading Up 6.6%
Shares of APLD stock opened at $19.25 on Tuesday. The company has a current ratio of 2.56, a quick ratio of 2.56 and a debt-to-equity ratio of 3.90. The firm has a fifty day moving average price of $25.92 and a 200 day moving average price of $32.32. Applied Digital Corporation has a 12 month low of $17.65 and a 12 month high of $50.72.
Applied Digital (NASDAQ:APLD - Get Free Report) last posted its earnings results on Wednesday, October 7th. The company reported ($0.01) EPS for the quarter, beating the consensus estimate of ($0.30) by $0.29. Applied Digital had a negative return on equity of 27.21% and a negative net margin of 51.28%. The firm had revenue of $300.39 million for the quarter, compared to analyst estimates of $116.29 million. During the same quarter in the prior year, the company posted ($0.03) earnings per share. Applied Digital's revenue for the quarter was up 367.8% compared to the same quarter last year. As a group, sell-side analysts expect that Applied Digital Corporation will post -2.06 earnings per share for the current year.
Wall Street Analysts Forecast Growth
APLD has been the subject of a number of analyst reports. Morgan Stanley set a $41.00 price objective on shares of Applied Digital and gave the stock an "equal weight" rating in a research report on Friday, October 9th. Zacks Research downgraded shares of Applied Digital from a "hold" rating to a "strong sell" rating in a report on Wednesday, August 26th. Weiss Ratings reiterated a "sell (d-)" rating on shares of Applied Digital in a research note on Tuesday, July 21st. Citigroup reissued a "market outperform" rating on shares of Applied Digital in a report on Thursday, October 8th. Finally, B. Riley Financial reissued a "buy" rating and set a $75.00 price target (up from $66.00) on shares of Applied Digital in a report on Monday, August 3rd. Three analysts have rated the stock with a Strong Buy rating, twelve have given a Buy rating, two have issued a Hold rating and two have issued a Sell rating to the company's stock. According to MarketBeat, Applied Digital has a consensus rating of "Moderate Buy" and an average price target of $62.25.
View Our Latest Research Report on APLD
Key Stories Impacting Applied Digital
Here are the key news stories impacting Applied Digital this week:
- Positive Sentiment: CEO Wes Cummins and President Jason Gechen Zhang purchased approximately $6.66 million of Applied Digital stock in open-market transactions. The purchases may signal management’s confidence in the company’s contracted backlog and long-term growth prospects, although they do not guarantee that the recent selloff has ended. Applied Digital CEO and President Buy $6.66 Million in Shares
- Positive Sentiment: Applied Digital benefited from a rebound across AI infrastructure stocks after Goldman Sachs upgraded CoreWeave, a tenant of Applied Digital, to Buy. The move improved sentiment toward companies developing power-backed data centers, even though Applied Digital did not announce a new catalyst of its own. Applied Digital and AI Infrastructure Stocks Rebound
- Positive Sentiment: The company has secured access to as much as 1 gigawatt of potential power capacity in Finland for a future AI data center campus. Investors view permitted power and data center capacity as scarce strategic assets, particularly as hyperscalers expand their AI workloads. Applied Digital Stock and Finland AI Campus
- Neutral Sentiment: Applied Digital’s reported revenue reached $341.88 million, but it also recorded a $237.08 million net loss. The results highlight strong demand growth while underscoring the company’s lack of current profitability.
- Negative Sentiment: Analysts continue to focus on approximately $6.4 billion of debt and an 866% surge in interest expense. Heavy financing costs could limit cash flow and delay profitability despite rapidly growing AI-related revenue. Applied Digital Interest Costs and Profitability
- Negative Sentiment: A recent director stock sale had previously intensified selling pressure, though its impact was outweighed by the much larger CEO and president purchases.
Hedge Funds Weigh In On Applied Digital
Institutional investors have recently added to or reduced their stakes in the business. Whitaker Myers Wealth Managers LTD. purchased a new stake in shares of Applied Digital in the second quarter worth about $1,841,000. Cambridge Investment Research Advisors Inc. grew its stake in shares of Applied Digital by 39.6% in the second quarter. Cambridge Investment Research Advisors Inc. now owns 146,633 shares of the company's stock valued at $5,469,000 after buying an additional 41,562 shares in the last quarter. Dimensional Fund Advisors LP purchased a new stake in shares of Applied Digital during the 1st quarter valued at about $1,970,000. Situational Awareness LP raised its holdings in shares of Applied Digital by 14.1% during the 2nd quarter. Situational Awareness LP now owns 15,384,616 shares of the company's stock valued at $574,000 after buying an additional 1,906,178 shares during the period. Finally, TFR Capital LLC. raised its holdings in shares of Applied Digital by 425.3% during the 1st quarter. TFR Capital LLC. now owns 372,960 shares of the company's stock valued at $9,497,000 after buying an additional 301,954 shares during the period. 65.67% of the stock is currently owned by institutional investors and hedge funds.
Applied Digital Company Profile
(
Get Free Report)
Applied Digital Corporation (NASDAQ: APLD) develops and operates digital infrastructure designed to support high-performance computing and artificial intelligence applications. The company provides data-center capacity, hosting services and related infrastructure for customers that require substantial computing power and energy resources.
Its business includes high-performance computing data centers and cloud services intended to support artificial intelligence, machine learning, cryptocurrency mining and other compute-intensive workloads.
Further Reading
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