DIGITALOCEAN HOLDINGS INC (DOCN)
US25402D1028 - Common Stock
DOCN gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 86 industry peers in the IT Services industry. DOCN has only an average score on both its financial health and profitability. DOCN shows excellent growth, but is valued quite expensive already.
1. Profitability
1.1 Basic Checks
In the past year DOCN was profitable.
DOCN had a positive operating cash flow in the past year.
DOCN had negative earnings in 4 of the past 5 years.
Each year in the past 5 years DOCN had a positive operating cash flow.
1.2 Ratios
DOCN has a Return On Assets (1.33%) which is in line with its industry peers.
DOCN has a Return On Invested Capital (1.87%) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.33% | ||
| ROE | N/A | ||
| ROIC | 1.87% |
ROA(3y)-0.31%
ROA(5y)-4.89%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
With a decent Profit Margin value of 2.80%, DOCN is doing good in the industry, outperforming 60.71% of the companies in the same industry.
The Operating Margin of DOCN (4.73%) is comparable to the rest of the industry.
DOCN has a better Gross Margin (59.03%) than 77.38% of its industry peers.
In the last couple of years the Gross Margin of DOCN has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 4.73% | ||
| PM (TTM) | 2.8% | ||
| GM | 59.03% |
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y2.83%
GM growth 5Y2.47%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), DOCN is destroying value.
The number of shares outstanding for DOCN has been reduced compared to 1 year ago.
DOCN has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, DOCN has a worse debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 1.50, we must say that DOCN is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of DOCN (1.50) is worse than 60.71% of its industry peers.
DOCN has a debt to FCF ratio of 13.73. This is a negative value and a sign of low solvency as DOCN would need 13.73 years to pay back of all of its debts.
With a Debt to FCF ratio value of 13.73, DOCN perfoms like the industry average, outperforming 40.48% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 13.73 | ||
| Altman-Z | 1.5 |
ROIC/WACC0.19
WACC10.09%
2.3 Liquidity
A Current Ratio of 2.61 indicates that DOCN has no problem at all paying its short term obligations.
With a decent Current ratio value of 2.61, DOCN is doing good in the industry, outperforming 76.19% of the companies in the same industry.
DOCN has a Quick Ratio of 2.61. This indicates that DOCN is financially healthy and has no problem in meeting its short term obligations.
DOCN has a better Quick ratio (2.61) than 76.19% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.61 | ||
| Quick Ratio | 2.61 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 72.04% over the past year.
DOCN shows a strong growth in Revenue. In the last year, the Revenue has grown by 20.22%.
The Revenue has been growing by 27.82% on average over the past years. This is a very strong growth!
EPS 1Y (TTM)72.04%
EPS 3YN/A
EPS 5YN/A
EPS growth Q2Q57.14%
Revenue 1Y (TTM)20.22%
Revenue growth 3Y29.59%
Revenue growth 5Y27.82%
Revenue growth Q2Q10.97%
3.2 Future
Based on estimates for the next years, DOCN will show a quite strong growth in Earnings Per Share. The EPS will grow by 15.38% on average per year.
Based on estimates for the next years, DOCN will show a quite strong growth in Revenue. The Revenue will grow by 13.69% on average per year.
EPS Next Y3.49%
EPS Next 2Y8.77%
EPS Next 3Y11.96%
EPS Next 5Y15.38%
Revenue Next Year11.12%
Revenue Next 2Y12.12%
Revenue Next 3Y12.49%
Revenue Next 5Y13.69%
3.3 Evolution
Although the future Revenue growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 20.98 indicates a rather expensive valuation of DOCN.
Compared to the rest of the industry, the Price/Earnings ratio of DOCN indicates a somewhat cheap valuation: DOCN is cheaper than 61.90% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of DOCN to the average of the S&P500 Index (24.84), we can say DOCN is valued inline with the index average.
The Price/Forward Earnings ratio is 20.27, which indicates a rather expensive current valuation of DOCN.
65.48% of the companies in the same industry are more expensive than DOCN, based on the Price/Forward Earnings ratio.
DOCN is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 21.35, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.98 | ||
| Fwd PE | 20.27 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as DOCN.
DOCN's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 28.32 | ||
| EV/EBITDA | 26.65 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates DOCN does not grow enough to justify the current Price/Earnings ratio.
PEG (NY)6.01
PEG (5Y)N/A
EPS Next 2Y8.77%
EPS Next 3Y11.96%
5. Dividend
5.1 Amount
No dividends for DOCN!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
DIGITALOCEAN HOLDINGS INC
NYSE:DOCN (4/29/2024, 10:36:27 AM)
33.57
+0.06 (+0.18%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap3.05B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
Max EPS beat(4)
EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
Max Revenue beat(4)
Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.98 | ||
| Fwd PE | 20.27 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)6.01
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.33% | ||
| ROE | N/A | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 4.73% | ||
| PM (TTM) | 2.8% | ||
| GM | 59.03% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.47
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 2.61 | ||
| Quick Ratio | 2.61 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)72.04%
EPS 3YN/A
EPS 5Y
EPS growth Q2Q
EPS Next Y3.49%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)20.22%
Revenue growth 3Y29.59%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y