Here's Why Applied Digital Shares Are Tanking 33% On Tuesday

Applied Digital Corp APLD shares are tumbling on Tuesday after the company reported weak revenue for the third quarter. Multiple analysts cut price targets in the wake of earnings.

• Q3 Revenue: $52.9 million, versus estimates of $63.42 million

• Q3 EPS: Loss of 8 cents, versus estimates for loss of 11 cents

Applied Digital reported total revenue growth of 22% year-over-year as Cloud Services revenue boomed 220% to $17.8 million. The company’s Data Center Hosting business generated $35.2 million in revenue during the quarter, down 7% year-over-year.

Applied Digital reported third-quarter adjusted EBITDA of $10 million, versus a loss of $1.3 million in the prior year’s quarter. The digital infrastructure company ended the quarter with $261.2 million in cash, cash equivalents and restricted cash.

“We are confident in the progress we are making and remain committed to delivering sustainable, long-term value for our investors,” said Wes Cummins, chairman and CEO of Applied Digital.

Analyst Changes:

• HC Wainwright & Co. analyst Kevin Dede maintained Applied Digital with a Buy rating and lowered the price target from $12 to $7.

• Needham analyst John Todaro maintained Applied Digital with a Buy rating and lowered the price target from $11 to $10.

• Cantor Fitzgerald analyst Brett Knoblauch maintained Applied Digital with an Overweight and lowered the price target from $14 to $7.

Is APLD A Good Stock To Buy?

Wall Street analysts view Applied Digital on the whole as a Buy, given the history of coverage over the past three months.

But looking at how the market as a whole thinks of the stock, you can reference historical price action for views on whether investors feel strongly about the stock one way or another. In the past three months, Applied Digital fell 54.56%, which indicates that opinion soured on the business and how attractive it is to own based on either its stock price, or underlying fundamentals, like revenue, which rose 22.08% over the past year.

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APLD Price Action: Applied Digital shares were down 33.2% at $3.58 at the time of publication Tuesday, according to Benzinga Pro.

This illustration was generated using artificial intelligence via Midjourney.