DIGITALOCEAN HOLDINGS INC (DOCN) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:DOCN - US25402D1028 - Common Stock
52.47 USD
-1.09 (-2.04%)
52.47 USD
0 (0%)
Taking everything into account, DOCN scores 5 out of 10 in our fundamental rating. DOCN was compared to 88 industry peers in the IT Services industry. DOCN has a medium profitability rating, but doesn't score so well on its financial health evaluation. DOCN shows excellent growth, but is valued quite expensive already.
1. Profitability
1.1 Basic Checks
In the past year DOCN was profitable.
In the past year DOCN had a positive cash flow from operations.
In multiple years DOCN reported negative net income over the last 5 years.
DOCN had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
DOCN has a better Return On Assets (14.60%) than 94.32% of its industry peers.
DOCN has a Return On Invested Capital of 8.55%. This is in the better half of the industry: DOCN outperforms 72.73% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.6% | ||
| ROE | N/A | ||
| ROIC | 8.55% |
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 has a better Profit Margin (29.15%) than 96.59% of its industry peers.
Looking at the Operating Margin, with a value of 17.45%, DOCN belongs to the top of the industry, outperforming 89.77% of the companies in the same industry.
Looking at the Gross Margin, with a value of 59.54%, DOCN belongs to the top of the industry, outperforming 82.95% of the companies in the same industry.
DOCN's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 17.45% | ||
| PM (TTM) | 29.15% | ||
| GM | 59.54% |
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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so DOCN is still creating some 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
DOCN has an Altman-Z score of 2.37. This is not the best score and indicates that DOCN is in the grey zone with still only limited risk for bankruptcy at the moment.
With a Altman-Z score value of 2.37, DOCN perfoms like the industry average, outperforming 47.73% of the companies in the same industry.
The Debt to FCF ratio of DOCN is 9.62, which is on the high side as it means it would take DOCN, 9.62 years of fcf income to pay off all of its debts.
With a Debt to FCF ratio value of 9.62, DOCN perfoms like the industry average, outperforming 47.73% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 9.62 | ||
| Altman-Z | 2.37 |
ROIC/WACC1.07
WACC7.98%
2.3 Liquidity
DOCN has a Current Ratio of 1.13. This is a normal value and indicates that DOCN is financially healthy and should not expect problems in meeting its short term obligations.
DOCN has a worse Current ratio (1.13) than 69.32% of its industry peers.
DOCN has a Quick Ratio of 1.13. This is a normal value and indicates that DOCN is financially healthy and should not expect problems in meeting its short term obligations.
DOCN's Quick ratio of 1.13 is on the low side compared to the rest of the industry. DOCN is outperformed by 69.32% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.13 | ||
| Quick Ratio | 1.13 |
3. Growth
3.1 Past
DOCN shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 16.58%, which is quite good.
DOCN shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 145.35% yearly.
Looking at the last year, DOCN shows a quite strong growth in Revenue. The Revenue has grown by 14.20% in the last year.
The Revenue has been growing by 25.09% on average over the past years. This is a very strong growth!
EPS 1Y (TTM)16.58%
EPS 3Y145.35%
EPS 5YN/A
EPS Q2Q%3.85%
Revenue 1Y (TTM)14.2%
Revenue growth 3Y22.13%
Revenue growth 5Y25.09%
Sales Q2Q%15.69%
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 13.47% yearly.
The Revenue is expected to grow by 13.41% on average over the next years. This is quite good.
EPS Next Y8.89%
EPS Next 2Y2.29%
EPS Next 3Y9.78%
EPS Next 5Y13.47%
Revenue Next Year15.53%
Revenue Next 2Y17.17%
Revenue Next 3Y17.49%
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.
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
DOCN is valuated rather expensively with a Price/Earnings ratio of 24.07.
Compared to the rest of the industry, the Price/Earnings ratio of DOCN indicates a somewhat cheap valuation: DOCN is cheaper than 60.23% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.00, DOCN is valued at the same level.
A Price/Forward Earnings ratio of 26.12 indicates a quite expensive valuation of DOCN.
Compared to the rest of the industry, the Price/Forward Earnings ratio of DOCN is on the same level as its industry peers.
DOCN's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 23.70.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.07 | ||
| Fwd PE | 26.12 |
4.2 Price Multiples
DOCN's Enterprise Value to EBITDA ratio is in line with the industry average.
DOCN's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 34.89 | ||
| EV/EBITDA | 21.25 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
DOCN has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)2.71
PEG (5Y)N/A
EPS Next 2Y2.29%
EPS Next 3Y9.78%
5. Dividend
5.1 Amount
DOCN does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
52.47
-1.09 (-2.04%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners73.8%
Inst Owner Change0.15%
Ins Owners0.82%
Ins Owner Change-0.99%
Market Cap4.80B
Revenue(TTM)863.96M
Net Income(TTM)251.87M
Analysts80
Price Target53.98 (2.88%)
Short Float %13.17%
Short Ratio3.95
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
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)15.49%
Min EPS beat(2)7.4%
Max EPS beat(2)23.58%
EPS beat(4)4
Avg EPS beat(4)24.07%
Min EPS beat(4)7.4%
Max EPS beat(4)41.38%
EPS beat(8)8
Avg EPS beat(8)21.33%
EPS beat(12)11
Avg EPS beat(12)19.38%
EPS beat(16)14
Avg EPS beat(16)21.97%
Revenue beat(2)0
Avg Revenue beat(2)-0.82%
Min Revenue beat(2)-1.01%
Max Revenue beat(2)-0.63%
Revenue beat(4)1
Avg Revenue beat(4)-0.6%
Min Revenue beat(4)-1.01%
Max Revenue beat(4)0.2%
Revenue beat(8)2
Avg Revenue beat(8)-0.54%
Revenue beat(12)3
Avg Revenue beat(12)-0.7%
Revenue beat(16)4
Avg Revenue beat(16)-0.83%
PT rev (1m)0.79%
PT rev (3m)29.93%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-18.08%
EPS NY rev (1m)0%
EPS NY rev (3m)-1.81%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.29%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.71%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.07 | ||
| Fwd PE | 26.12 | ||
| P/S | 5.56 | ||
| P/FCF | 34.89 | ||
| P/OCF | 14.83 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 21.25 |
EPS(TTM)2.18
EY4.15%
EPS(NY)2.01
Fwd EY3.83%
FCF(TTM)1.5
FCFY2.87%
OCF(TTM)3.54
OCFY6.74%
SpS9.44
BVpS-0.76
TBVpS-5.71
PEG (NY)2.71
PEG (5Y)N/A
Graham NumberN/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.6% | ||
| ROE | N/A | ||
| ROCE | 10.76% | ||
| ROIC | 8.55% | ||
| ROICexc | 10.29% | ||
| ROICexgc | 16.85% | ||
| OM | 17.45% | ||
| PM (TTM) | 29.15% | ||
| GM | 59.54% | ||
| FCFM | 15.93% |
ROA(3y)1.65%
ROA(5y)-1.22%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexgc growth 3YN/A
ROICexgc 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 Turnover0.5
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 9.62 | ||
| Debt/EBITDA | 4.71 | ||
| Cap/Depr | 147.37% | ||
| Cap/Sales | 21.54% | ||
| Interest Coverage | 51.16 | ||
| Cash Conversion | 116.85% | ||
| Profit Quality | 54.63% | ||
| Current Ratio | 1.13 | ||
| Quick Ratio | 1.13 | ||
| Altman-Z | 2.37 |
F-Score7
WACC7.98%
ROIC/WACC1.07
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)16.58%
EPS 3Y145.35%
EPS 5YN/A
EPS Q2Q%3.85%
EPS Next Y8.89%
EPS Next 2Y2.29%
EPS Next 3Y9.78%
EPS Next 5Y13.47%
Revenue 1Y (TTM)14.2%
Revenue growth 3Y22.13%
Revenue growth 5Y25.09%
Sales Q2Q%15.69%
Revenue Next Year15.53%
Revenue Next 2Y17.17%
Revenue Next 3Y17.49%
Revenue Next 5Y13.41%
EBIT growth 1Y116.93%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year81.76%
EBIT Next 3Y35.15%
EBIT Next 5Y25.38%
FCF growth 1Y20.08%
FCF growth 3Y58.83%
FCF growth 5YN/A
OCF growth 1Y48.98%
OCF growth 3Y28.54%
OCF growth 5Y47.94%
DIGITALOCEAN HOLDINGS INC / DOCN FAQ
What is the fundamental rating for DOCN stock?
ChartMill assigns a fundamental rating of 5 / 10 to DOCN.
Can you provide the valuation status for DIGITALOCEAN HOLDINGS INC?
ChartMill assigns a valuation rating of 2 / 10 to DIGITALOCEAN HOLDINGS INC (DOCN). This can be considered as Overvalued.
Can you provide the profitability details for DIGITALOCEAN HOLDINGS INC?
DIGITALOCEAN HOLDINGS INC (DOCN) has a profitability rating of 6 / 10.
What is the valuation of DIGITALOCEAN HOLDINGS INC based on its PE and PB ratios?
The Price/Earnings (PE) ratio for DIGITALOCEAN HOLDINGS INC (DOCN) is 24.07 and the Price/Book (PB) ratio is -68.95.
Can you provide the expected EPS growth for DOCN stock?
The Earnings per Share (EPS) of DIGITALOCEAN HOLDINGS INC (DOCN) is expected to grow by 8.89% in the next year.