DIGITALOCEAN HOLDINGS INC (DOCN) Stock Fundamental Analysis
NYSE:DOCN - US25402D1028 - Common Stock
31.53 USD
+1.54 (+5.14%)
31.526 USD
0 (-0.01%)
Taking everything into account, DOCN scores 5 out of 10 in our fundamental rating. DOCN was compared to 83 industry peers in the IT Services industry. Both the profitability and the financial health of DOCN get a neutral evaluation. Nothing too spectacular is happening here. DOCN is not overvalued while it is showing excellent growth. This is an interesting combination.
1. Profitability
1.1 Basic Checks
DOCN had positive earnings in the past year.
DOCN had a positive operating cash flow in the past year.
In multiple years DOCN reported negative net income over the last 5 years.
Each year in the past 5 years DOCN had a positive operating cash flow.
1.2 Ratios
DOCN has a better Return On Assets (7.35%) than 75.90% of its industry peers.
With a decent Return On Invested Capital value of 6.93%, DOCN is doing good in the industry, outperforming 62.65% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.35% | ||
| ROE | N/A | ||
| ROIC | 6.93% |
ROA(3y)1.65%
ROA(5y)-1.22%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
DOCN's Profit Margin of 15.18% is amongst the best of the industry. DOCN outperforms 91.57% of its industry peers.
DOCN has a better Operating Margin (15.66%) than 85.54% of its industry peers.
With an excellent Gross Margin value of 59.67%, DOCN belongs to the best of the industry, outperforming 80.72% of the companies in the same industry.
In the last couple of years the Gross Margin of DOCN has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 15.66% | ||
| PM (TTM) | 15.18% | ||
| GM | 59.67% |
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-0.28%
GM growth 5Y2.79%
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 increased compared to 1 year ago.
Compared to 5 years ago, DOCN has more shares outstanding
DOCN has a better debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 1.65, we must say that DOCN is in the distress zone and has some risk of bankruptcy.
DOCN has a worse Altman-Z score (1.65) than 63.86% of its industry peers.
DOCN has a debt to FCF ratio of 15.86. This is a negative value and a sign of low solvency as DOCN would need 15.86 years to pay back of all of its debts.
DOCN has a Debt to FCF ratio (15.86) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 15.86 | ||
| Altman-Z | 1.65 |
ROIC/WACC0.95
WACC7.32%
2.3 Liquidity
DOCN has a Current Ratio of 2.27. This indicates that DOCN is financially healthy and has no problem in meeting its short term obligations.
Looking at the Current ratio, with a value of 2.27, DOCN is in the better half of the industry, outperforming 69.88% of the companies in the same industry.
A Quick Ratio of 2.27 indicates that DOCN has no problem at all paying its short term obligations.
With a decent Quick ratio value of 2.27, DOCN is doing good in the industry, outperforming 69.88% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.27 | ||
| Quick Ratio | 2.27 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 20.67% over the past year.
DOCN shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 145.35% yearly.
DOCN shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 13.29%.
DOCN shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 25.09% yearly.
EPS 1Y (TTM)20.67%
EPS 3Y145.35%
EPS 5YN/A
EPS Q2Q%22.92%
Revenue 1Y (TTM)13.29%
Revenue growth 3Y22.13%
Revenue growth 5Y25.09%
Sales Q2Q%13.62%
3.2 Future
DOCN is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 10.16% yearly.
DOCN is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 13.41% yearly.
EPS Next Y3.46%
EPS Next 2Y4.36%
EPS Next 3Y10.16%
EPS Next 5YN/A
Revenue Next Year13.59%
Revenue Next 2Y13.84%
Revenue Next 3Y14.55%
Revenue Next 5Y13.41%
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
The estimated forward Revenue growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
4. Valuation
4.1 Price/Earnings Ratio
DOCN is valuated correctly with a Price/Earnings ratio of 14.60.
Based on the Price/Earnings ratio, DOCN is valued a bit cheaper than the industry average as 79.52% of the companies are valued more expensively.
DOCN's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.24.
DOCN is valuated correctly with a Price/Forward Earnings ratio of 15.08.
Based on the Price/Forward Earnings ratio, DOCN is valued a bit cheaper than the industry average as 69.88% of the companies are valued more expensively.
DOCN is valuated cheaply when we compare the Price/Forward Earnings ratio to 35.82, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.6 | ||
| Fwd PE | 15.08 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as DOCN.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of DOCN is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 30.57 | ||
| EV/EBITDA | 14.88 |
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.
DOCN has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)4.22
PEG (5Y)N/A
EPS Next 2Y4.36%
EPS Next 3Y10.16%
5. Dividend
5.1 Amount
No dividends for DOCN!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
31.53
+1.54 (+5.14%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners65.32%
Inst Owner Change5.6%
Ins Owners0.95%
Ins Owner Change0.14%
Market Cap2.87B
Analysts77
Price Target39.02 (23.76%)
Short Float %12.38%
Short Ratio3.44
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)23.75%
Min EPS beat(2)23.58%
Max EPS beat(2)23.93%
EPS beat(4)4
Avg EPS beat(4)28.77%
Min EPS beat(4)23.58%
Max EPS beat(4)41.38%
EPS beat(8)8
Avg EPS beat(8)22.77%
EPS beat(12)11
Avg EPS beat(12)23.98%
EPS beat(16)14
Avg EPS beat(16)25.95%
Revenue beat(2)0
Avg Revenue beat(2)-0.98%
Min Revenue beat(2)-1.01%
Max Revenue beat(2)-0.95%
Revenue beat(4)1
Avg Revenue beat(4)-0.71%
Min Revenue beat(4)-1.07%
Max Revenue beat(4)0.2%
Revenue beat(8)3
Avg Revenue beat(8)-0.44%
Revenue beat(12)4
Avg Revenue beat(12)-0.65%
Revenue beat(16)5
Avg Revenue beat(16)-0.75%
PT rev (1m)0%
PT rev (3m)-8.02%
EPS NQ rev (1m)3.67%
EPS NQ rev (3m)-0.59%
EPS NY rev (1m)0%
EPS NY rev (3m)1.48%
Revenue NQ rev (1m)0.92%
Revenue NQ rev (3m)0.38%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.02%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.6 | ||
| Fwd PE | 15.08 | ||
| P/S | 3.45 | ||
| P/FCF | 30.57 | ||
| P/OCF | 9.53 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 14.88 |
EPS(TTM)2.16
EY6.85%
EPS(NY)2.09
Fwd EY6.63%
FCF(TTM)1.03
FCFY3.27%
OCF(TTM)3.31
OCFY10.5%
SpS9.15
BVpS-1.92
TBVpS-6.96
PEG (NY)4.22
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.35% | ||
| ROE | N/A | ||
| ROCE | 8.72% | ||
| ROIC | 6.93% | ||
| ROICexc | 9.36% | ||
| ROICexgc | 15.96% | ||
| OM | 15.66% | ||
| PM (TTM) | 15.18% | ||
| GM | 59.67% | ||
| FCFM | 11.27% |
ROA(3y)1.65%
ROA(5y)-1.22%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-0.28%
GM growth 5Y2.79%
F-Score7
Asset Turnover0.48
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 15.86 | ||
| Debt/EBITDA | 5.79 | ||
| Cap/Depr | 163.25% | ||
| Cap/Sales | 24.9% | ||
| Interest Coverage | 179.62 | ||
| Cash Conversion | 117.02% | ||
| Profit Quality | 74.24% | ||
| Current Ratio | 2.27 | ||
| Quick Ratio | 2.27 | ||
| Altman-Z | 1.65 |
F-Score7
WACC7.32%
ROIC/WACC0.95
Cap/Depr(3y)124.77%
Cap/Depr(5y)130.2%
Cap/Sales(3y)21.36%
Cap/Sales(5y)25.18%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)20.67%
EPS 3Y145.35%
EPS 5YN/A
EPS Q2Q%22.92%
EPS Next Y3.46%
EPS Next 2Y4.36%
EPS Next 3Y10.16%
EPS Next 5YN/A
Revenue 1Y (TTM)13.29%
Revenue growth 3Y22.13%
Revenue growth 5Y25.09%
Sales Q2Q%13.62%
Revenue Next Year13.59%
Revenue Next 2Y13.84%
Revenue Next 3Y14.55%
Revenue Next 5Y13.41%
EBIT growth 1Y63.2%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year71.62%
EBIT Next 3Y33.49%
EBIT Next 5Y25.38%
FCF growth 1Y-10.19%
FCF growth 3Y58.83%
FCF growth 5YN/A
OCF growth 1Y37.51%
OCF growth 3Y28.54%
OCF growth 5Y47.94%