DIGITALOCEAN HOLDINGS INC (DOCN) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:DOCN - US25402D1028 - Common Stock
44.62 USD
+0.25 (+0.56%)
44.6 USD
-0.02 (-0.04%)
We assign a fundamental rating of 5 out of 10 to DOCN. DOCN was compared to 85 industry peers in the IT Services industry. While DOCN is still in line with the averages on profitability rating, there are concerns on its financial health. 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.
The reported net income has been mixed in the past 5 years: DOCN reported negative net income in multiple 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 95.29% of its industry peers.
DOCN has a better Return On Invested Capital (8.55%) than 70.59% 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
Looking at the Profit Margin, with a value of 29.15%, DOCN belongs to the top of the industry, outperforming 96.47% of the companies in the same industry.
The Operating Margin of DOCN (17.45%) is better than 89.41% of its industry peers.
Looking at the Gross Margin, with a value of 59.54%, DOCN belongs to the top of the industry, outperforming 82.35% 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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), DOCN is creating some value.
DOCN has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, DOCN has more shares outstanding
Compared to 1 year ago, DOCN has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 2.13 indicates that DOCN is not a great score, but indicates only limited risk for bankruptcy at the moment.
DOCN has a Altman-Z score of 2.13. This is comparable to the rest of the industry: DOCN outperforms 42.35% of its industry peers.
DOCN has a debt to FCF ratio of 9.62. This is a negative value and a sign of low solvency as DOCN would need 9.62 years to pay back of all of its debts.
DOCN's Debt to FCF ratio of 9.62 is in line compared to the rest of the industry. DOCN outperforms 44.71% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 9.62 | ||
| Altman-Z | 2.13 |
ROIC/WACC1.19
WACC7.21%
2.3 Liquidity
A Current Ratio of 1.13 indicates that DOCN should not have too much problems paying its short term obligations.
DOCN's Current ratio of 1.13 is on the low side compared to the rest of the industry. DOCN is outperformed by 68.24% 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.
With a Quick ratio value of 1.13, DOCN is not doing good in the industry: 68.24% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.13 | ||
| Quick Ratio | 1.13 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 16.58% 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
The Revenue has grown by 14.20% 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)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
Based on estimates for the next years, DOCN will show a quite strong growth in Earnings Per Share. The EPS will grow by 13.47% 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 Y10.93%
EPS Next 2Y6.03%
EPS Next 3Y9.87%
EPS Next 5Y13.47%
Revenue Next Year14.71%
Revenue Next 2Y14.67%
Revenue Next 3Y15%
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.
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
With a Price/Earnings ratio of 20.47, DOCN is valued on the expensive side.
63.53% of the companies in the same industry are more expensive than DOCN, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 26.15, DOCN is valued a bit cheaper.
DOCN is valuated rather expensively with a Price/Forward Earnings ratio of 20.67.
DOCN's Price/Forward Earnings is on the same level as the industry average.
Compared to an average S&P500 Price/Forward Earnings ratio of 36.22, DOCN is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.47 | ||
| Fwd PE | 20.67 |
4.2 Price Multiples
DOCN's Enterprise Value to EBITDA is on the same level as the industry average.
DOCN's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 29.67 | ||
| EV/EBITDA | 18.66 |
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)1.87
PEG (5Y)N/A
EPS Next 2Y6.03%
EPS Next 3Y9.87%
5. Dividend
5.1 Amount
DOCN does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
44.62
+0.25 (+0.56%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners68.97%
Inst Owner Change6.29%
Ins Owners0.9%
Ins Owner Change-1.6%
Market Cap4.08B
Revenue(TTM)863.96M
Net Income(TTM)251.87M
Analysts75.79
Price Target53.55 (20.01%)
Short Float %14.18%
Short Ratio3.47
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)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)28.91%
PT rev (3m)29.9%
EPS NQ rev (1m)-17.95%
EPS NQ rev (3m)-18.08%
EPS NY rev (1m)0%
EPS NY rev (3m)0.25%
Revenue NQ rev (1m)1.3%
Revenue NQ rev (3m)1.29%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.06%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.47 | ||
| Fwd PE | 20.67 | ||
| P/S | 4.73 | ||
| P/FCF | 29.67 | ||
| P/OCF | 12.61 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 18.66 |
EPS(TTM)2.18
EY4.89%
EPS(NY)2.16
Fwd EY4.84%
FCF(TTM)1.5
FCFY3.37%
OCF(TTM)3.54
OCFY7.93%
SpS9.44
BVpS-0.76
TBVpS-5.71
PEG (NY)1.87
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 | 2.13 |
F-Score7
WACC7.21%
ROIC/WACC1.19
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 Y10.93%
EPS Next 2Y6.03%
EPS Next 3Y9.87%
EPS Next 5Y13.47%
Revenue 1Y (TTM)14.2%
Revenue growth 3Y22.13%
Revenue growth 5Y25.09%
Sales Q2Q%15.69%
Revenue Next Year14.71%
Revenue Next 2Y14.67%
Revenue Next 3Y15%
Revenue Next 5Y13.41%
EBIT growth 1Y116.93%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year76.06%
EBIT Next 3Y33.76%
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.
What is the valuation status for DOCN stock?
ChartMill assigns a valuation rating of 3 / 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.
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 10.93% in the next year.