DIGITALOCEAN HOLDINGS INC (DOCN) Stock Fundamental Analysis
USA - NYSE:DOCN - US25402D1028 - Common Stock
39.54 USD
+1.7 (+4.49%)
40.15 USD
+0.61 (+1.54%)
DOCN gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 86 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 growing strongly while it is still valued neutral. This is a good combination!
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.
Each year in the past 5 years DOCN had a positive operating cash flow.
1.2 Ratios
The Return On Assets of DOCN (7.35%) is better than 76.74% of its industry peers.
DOCN has a Return On Invested Capital of 6.93%. This is in the better half of the industry: DOCN outperforms 62.79% of its industry peers.
| 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 has a better Profit Margin (15.18%) than 91.86% of its industry peers.
Looking at the Operating Margin, with a value of 15.66%, DOCN belongs to the top of the industry, outperforming 84.88% of the companies in the same industry.
DOCN has a Gross Margin of 59.67%. This is amongst the best in the industry. DOCN outperforms 81.40% of its industry peers.
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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so DOCN is destroying value.
DOCN has more shares outstanding than it did 1 year ago.
The number of shares outstanding for DOCN has been increased compared to 5 years ago.
Compared to 1 year ago, DOCN has an improved debt to assets ratio.
2.2 Solvency
DOCN has an Altman-Z score of 1.87. 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.
DOCN has a Altman-Z score of 1.87. This is in the lower half of the industry: DOCN underperforms 63.95% of its industry peers.
The Debt to FCF ratio of DOCN is 15.86, which is on the high side as it means it would take DOCN, 15.86 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of DOCN (15.86) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 15.86 | ||
| Altman-Z | 1.87 |
ROIC/WACC0.99
WACC6.97%
2.3 Liquidity
A Current Ratio of 2.27 indicates that DOCN has no problem at all paying its short term obligations.
With a decent Current ratio value of 2.27, DOCN is doing good in the industry, outperforming 66.28% of the companies in the same industry.
DOCN has a Quick Ratio of 2.27. This indicates that DOCN is financially healthy and has no problem in meeting its short term obligations.
Looking at the Quick ratio, with a value of 2.27, DOCN is in the better half of the industry, outperforming 67.44% 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.
The Earnings Per Share has been growing by 145.35% on average over the past years. This is a very strong growth
Looking at the last year, DOCN shows a quite strong growth in Revenue. The Revenue has grown by 13.29% in the last year.
Measured over the past years, DOCN shows a very strong growth in Revenue. The Revenue has been growing by 25.09% on average per year.
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
Based on estimates for the next years, DOCN will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.98% on average per year.
The Revenue is expected to grow by 13.41% on average over the next years. This is quite good.
EPS Next Y10.9%
EPS Next 2Y6.28%
EPS Next 3Y9.98%
EPS Next 5YN/A
Revenue Next Year14.71%
Revenue Next 2Y14.61%
Revenue Next 3Y14.97%
Revenue Next 5Y13.41%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last 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
With a Price/Earnings ratio of 18.31, DOCN is valued on the expensive side.
Compared to the rest of the industry, the Price/Earnings ratio of DOCN indicates a somewhat cheap valuation: DOCN is cheaper than 70.93% of the companies listed in the same industry.
DOCN is valuated rather cheaply when we compare the Price/Earnings ratio to 27.70, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 18.23, DOCN is valued on the expensive side.
Based on the Price/Forward Earnings ratio, DOCN is valued a bit cheaper than 68.60% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 23.15, DOCN is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.31 | ||
| Fwd PE | 18.23 |
4.2 Price Multiples
DOCN's Enterprise Value to EBITDA is on the same level as the industry average.
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 | 38.34 | ||
| EV/EBITDA | 17.66 |
4.3 Compensation for Growth
DOCN's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The decent profitability rating of DOCN may justify a higher PE ratio.
PEG (NY)1.68
PEG (5Y)N/A
EPS Next 2Y6.28%
EPS Next 3Y9.98%
5. Dividend
5.1 Amount
DOCN does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
39.54
+1.7 (+4.49%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners68.97%
Inst Owner Change0%
Ins Owners0.9%
Ins Owner Change-1.73%
Market Cap3.60B
Analysts75.79
Price Target41.54 (5.06%)
Short Float %15.78%
Short Ratio3.66
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)0.77%
PT rev (3m)6.48%
EPS NQ rev (1m)0%
EPS NQ rev (3m)4.67%
EPS NY rev (1m)0.22%
EPS NY rev (3m)7.61%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.37%
Revenue NY rev (1m)0.06%
Revenue NY rev (3m)1%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.31 | ||
| Fwd PE | 18.23 | ||
| P/S | 4.32 | ||
| P/FCF | 38.34 | ||
| P/OCF | 11.95 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 17.66 |
EPS(TTM)2.16
EY5.46%
EPS(NY)2.17
Fwd EY5.48%
FCF(TTM)1.03
FCFY2.61%
OCF(TTM)3.31
OCFY8.37%
SpS9.15
BVpS-1.92
TBVpS-6.96
PEG (NY)1.68
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 | 1.87 |
F-Score7
WACC6.97%
ROIC/WACC0.99
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 Y10.9%
EPS Next 2Y6.28%
EPS Next 3Y9.98%
EPS Next 5YN/A
Revenue 1Y (TTM)13.29%
Revenue growth 3Y22.13%
Revenue growth 5Y25.09%
Sales Q2Q%13.62%
Revenue Next Year14.71%
Revenue Next 2Y14.61%
Revenue Next 3Y14.97%
Revenue Next 5Y13.41%
EBIT growth 1Y63.2%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year76.06%
EBIT Next 3Y33.76%
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%