Logo image of DOCN

DIGITALOCEAN HOLDINGS INC (DOCN) Stock Fundamental Analysis

NYSE:DOCN - New York Stock Exchange, Inc. - US25402D1028 - Common Stock - Currency: USD

32.76  +0.2 (+0.61%)

Premarket: 32.7 -0.06 (-0.18%)

Fundamental Rating

4

Overall DOCN gets a fundamental rating of 4 out of 10. We evaluated DOCN against 82 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 is valued quite expensive, but it does show an excellent growth.


Dividend Valuation Growth Profitability Health

Quickly go to:

4

1. Profitability

1.1 Basic Checks

DOCN had positive earnings in the past year.
In the past year DOCN had a positive cash flow from operations.
The reported net income has been mixed in the past 5 years: DOCN reported negative net income in multiple years.
In the past 5 years DOCN always reported a positive cash flow from operatings.
DOCN Yearly Net Income VS EBIT VS OCF VS FCFDOCN Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2018 2019 2020 2021 2022 2023 2024 0 100M 200M

1.2 Ratios

The Return On Assets of DOCN (5.16%) is better than 68.29% of its industry peers.
DOCN has a Return On Invested Capital (5.10%) which is comparable to the rest of the industry.
Industry RankSector Rank
ROA 5.16%
ROE N/A
ROIC 5.1%
ROA(3y)1.65%
ROA(5y)-1.22%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)N/A
ROIC(5y)N/A
DOCN Yearly ROA, ROE, ROICDOCN Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2018 2019 2020 2021 2022 2023 2024 0 -20 -40 -60

1.3 Margins

DOCN has a better Profit Margin (10.82%) than 79.27% of its industry peers.
With a decent Operating Margin value of 11.66%, DOCN is doing good in the industry, outperforming 71.95% of the companies in the same industry.
DOCN has a better Gross Margin (60.84%) than 79.27% of its industry peers.
DOCN's Gross Margin has improved in the last couple of years.
Industry RankSector Rank
OM 11.66%
PM (TTM) 10.82%
GM 60.84%
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%
DOCN Yearly Profit, Operating, Gross MarginsDOCN Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2018 2019 2020 2021 2022 2023 2024 0 20 40 60

More info and screens

3

2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so DOCN is destroying value.
The number of shares outstanding for DOCN has been increased compared to 1 year ago.
The number of shares outstanding for DOCN has been increased compared to 5 years ago.
DOCN has a better debt/assets ratio than last year.
DOCN Yearly Shares OutstandingDOCN Yearly Shares OutstandingYearly Shares Outstanding 2018 2019 2020 2021 2022 2023 2024 20M 40M 60M 80M 100M
DOCN Yearly Total Debt VS Total AssetsDOCN Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2018 2019 2020 2021 2022 2023 2024 500M 1B 1.5B 2B

2.2 Solvency

DOCN has an Altman-Z score of 1.65. This is a bad value and indicates that DOCN is not financially healthy and even has some risk of bankruptcy.
The Altman-Z score of DOCN (1.65) is worse than 62.20% of its industry peers.
DOCN has a debt to FCF ratio of 15.44. This is a negative value and a sign of low solvency as DOCN would need 15.44 years to pay back of all of its debts.
The Debt to FCF ratio of DOCN (15.44) is worse than 60.98% of its industry peers.
Industry RankSector Rank
Debt/Equity N/A
Debt/FCF 15.44
Altman-Z 1.65
ROIC/WACC0.59
WACC8.65%
DOCN Yearly LT Debt VS Equity VS FCFDOCN Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2018 2019 2020 2021 2022 2023 2024 0 500M 1B

2.3 Liquidity

A Current Ratio of 2.45 indicates that DOCN has no problem at all paying its short term obligations.
Looking at the Current ratio, with a value of 2.45, DOCN is in the better half of the industry, outperforming 75.61% of the companies in the same industry.
A Quick Ratio of 2.45 indicates that DOCN has no problem at all paying its short term obligations.
Looking at the Quick ratio, with a value of 2.45, DOCN is in the better half of the industry, outperforming 75.61% of the companies in the same industry.
Industry RankSector Rank
Current Ratio 2.45
Quick Ratio 2.45
DOCN Yearly Current Assets VS Current LiabilitesDOCN Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2018 2019 2020 2021 2022 2023 2024 500M 1B 1.5B

More info and screens

8

3. Growth

3.1 Past

DOCN shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 20.00%, which is quite good.
Measured over the past years, DOCN shows a very strong growth in Earnings Per Share. The EPS has been growing by 145.35% on average per year.
The Revenue has grown by 12.66% in the past year. This is quite good.
The Revenue has been growing by 25.09% on average over the past years. This is a very strong growth!
EPS 1Y (TTM)20%
EPS 3Y145.35%
EPS 5YN/A
EPS Q2Q%11.36%
Revenue 1Y (TTM)12.66%
Revenue growth 3Y22.13%
Revenue growth 5Y25.09%
Sales Q2Q%13.3%

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 11.18% yearly.
The Revenue is expected to grow by 13.41% on average over the next years. This is quite good.
EPS Next Y1.48%
EPS Next 2Y8.08%
EPS Next 3Y11.18%
EPS Next 5YN/A
Revenue Next Year13.71%
Revenue Next 2Y13.78%
Revenue Next 3Y14.36%
Revenue Next 5Y13.41%

3.3 Evolution

Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of 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.
DOCN Yearly Revenue VS EstimatesDOCN Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 500M 1B 1.5B
DOCN Yearly EPS VS EstimatesDOCN Yearly EPS VS EstimatesYearly EPS VS Estimates 2021 2022 2023 2024 2025 2026 2027 0.5 1 1.5 2 2.5

More info and screens

3

4. Valuation

4.1 Price/Earnings Ratio

DOCN is valuated rather expensively with a Price/Earnings ratio of 17.06.
DOCN's Price/Earnings ratio is a bit cheaper when compared to the industry. DOCN is cheaper than 70.73% of the companies in the same industry.
DOCN is valuated rather cheaply when we compare the Price/Earnings ratio to 28.10, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 16.81, which indicates a correct valuation of DOCN.
Based on the Price/Forward Earnings ratio, DOCN is valued a bit cheaper than the industry average as 70.73% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 20.74, DOCN is valued at the same level.
Industry RankSector Rank
PE 17.06
Fwd PE 16.81
DOCN Price Earnings VS Forward Price EarningsDOCN Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 10 20 30 40 50

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 RankSector Rank
P/FCF 31.04
EV/EBITDA 18.29
DOCN Per share dataDOCN EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 5 -5

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
PEG (NY)11.56
PEG (5Y)N/A
EPS Next 2Y8.08%
EPS Next 3Y11.18%

More info and screens

0

5. Dividend

5.1 Amount

No dividends for DOCN!.
Industry RankSector Rank
Dividend Yield N/A

More info and screens

DIGITALOCEAN HOLDINGS INC

NYSE:DOCN (5/5/2025, 8:05:01 PM)

Premarket: 32.7 -0.06 (-0.18%)

32.76

+0.2 (+0.61%)

Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)02-25 2025-02-25/bmo
Earnings (Next)05-06 2025-05-06/bmo
Inst Owners62.81%
Inst Owner Change-0.57%
Ins Owners2.24%
Ins Owner Change0.69%
Market Cap2.99B
Analysts76.19
Price Target42.42 (29.49%)
Short Float %10.56%
Short Ratio4.46
Dividend
Industry RankSector 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)33.78%
Min EPS beat(2)26.19%
Max EPS beat(2)41.38%
EPS beat(4)4
Avg EPS beat(4)24.49%
Min EPS beat(4)10.7%
Max EPS beat(4)41.38%
EPS beat(8)7
Avg EPS beat(8)17.18%
EPS beat(12)10
Avg EPS beat(12)24.08%
EPS beat(16)12
Avg EPS beat(16)-45.65%
Revenue beat(2)1
Avg Revenue beat(2)-0.44%
Min Revenue beat(2)-1.07%
Max Revenue beat(2)0.2%
Revenue beat(4)2
Avg Revenue beat(4)-0.37%
Min Revenue beat(4)-1.07%
Max Revenue beat(4)0.2%
Revenue beat(8)3
Avg Revenue beat(8)-0.63%
Revenue beat(12)4
Avg Revenue beat(12)-0.77%
Revenue beat(16)7
Avg Revenue beat(16)-0.3%
PT rev (1m)-8.52%
PT rev (3m)-0.4%
EPS NQ rev (1m)-0.07%
EPS NQ rev (3m)5.64%
EPS NY rev (1m)-0.21%
EPS NY rev (3m)3.52%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.42%
Revenue NY rev (1m)-0.09%
Revenue NY rev (3m)0.6%
Valuation
Industry RankSector Rank
PE 17.06
Fwd PE 16.81
P/S 3.83
P/FCF 31.04
P/OCF 10.56
P/B N/A
P/tB N/A
EV/EBITDA 18.29
EPS(TTM)1.92
EY5.86%
EPS(NY)1.95
Fwd EY5.95%
FCF(TTM)1.06
FCFY3.22%
OCF(TTM)3.1
OCFY9.47%
SpS8.56
BVpS-2.23
TBVpS-7.34
PEG (NY)11.56
PEG (5Y)N/A
Profitability
Industry RankSector Rank
ROA 5.16%
ROE N/A
ROCE 6.42%
ROIC 5.1%
ROICexc 7.31%
ROICexgc 13.83%
OM 11.66%
PM (TTM) 10.82%
GM 60.84%
FCFM 12.32%
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-Score8
Asset Turnover0.48
Health
Industry RankSector Rank
Debt/Equity N/A
Debt/FCF 15.44
Debt/EBITDA 6.72
Cap/Depr 143.42%
Cap/Sales 23.89%
Interest Coverage 250
Cash Conversion 127.9%
Profit Quality 113.86%
Current Ratio 2.45
Quick Ratio 2.45
Altman-Z 1.65
F-Score8
WACC8.65%
ROIC/WACC0.59
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%
EPS 3Y145.35%
EPS 5YN/A
EPS Q2Q%11.36%
EPS Next Y1.48%
EPS Next 2Y8.08%
EPS Next 3Y11.18%
EPS Next 5YN/A
Revenue 1Y (TTM)12.66%
Revenue growth 3Y22.13%
Revenue growth 5Y25.09%
Sales Q2Q%13.3%
Revenue Next Year13.71%
Revenue Next 2Y13.78%
Revenue Next 3Y14.36%
Revenue Next 5Y13.41%
EBIT growth 1Y177.6%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year71.5%
EBIT Next 3Y33.72%
EBIT Next 5Y25.38%
FCF growth 1Y-10.62%
FCF growth 3Y58.83%
FCF growth 5YN/A
OCF growth 1Y20.34%
OCF growth 3Y28.54%
OCF growth 5Y47.94%