Cloud-computing platform DigitalOcean (NYSE: DOCN) reported financial results for the second quarter of 2024 on Aug. 8 and investors celebrated the report by sending the stock higher.
To be sure, DigitalOcean's Q2 results were strong in key areas. For example, the company's revenue grew 13% year over year, which represents its second consecutive quarter of accelerating growth. Moreover, it had adjusted free cash flow (a key measure of profitability) of $37 million. This number may have been down from the prior year. But it's still a strong 19% margin.
DigitalOcean stock rose following the report, which would seem to suggest that things are good for the business and its outlook. However, investors are prone to overreaction. Therefore, there's more digging to do when trying to determine if DigitalOcean stock is a buy.
Source Fool.com