DigitalOcean price target lowered to $40 from $50 at Citi

Citi lowered the firm’s price target on DigitalOcean (DOCN) to $40 from $50 and keeps a Buy rating on the shares following the Q1 report. The quarter’s free cash flow miss “draws caution” on the 2025 ramp while management’s evaluation of funding methods for growth capital raises concerns of incremental investments required, the analyst tells investors in a research note. The firm sees this pressuring the shares, but believes DigitalOcean’s “healthy business momentum” and enterprise-level traction “are undeniable.”