DigitalOcean upgraded to Buy from Sell at Goldman Sachs

Goldman Sachs double upgraded DigitalOcean to Buy from Sell with an unchanged price target of $33. The analyst believes cyclical risks are priced in with the shares down 7% year-to-date while the company’s structural improvements are underappreciated. The business is now approaching a “cyclical trough,” based on indicators in the small business ecosystem am contributions from DigitalOcean’s newer initiatives such as the recent acquisition of Paperspace and continued ramping of Cloudways, the analyst tells investors in a research note. Goldman expects better revenue growth and continued free cash flow margin expansion.