DIGITALOCEAN HOLDINGS INC (DOCN) Stock Fundamental Analysis
USA - NYSE:DOCN - US25402D1028 - Common Stock
49.48 USD
+2.4 (+5.1%)
50 USD
+0.52 (+1.05%)
Taking everything into account, DOCN scores 5 out of 10 in our fundamental rating. DOCN was compared to 85 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 valued quite expensively, but it does show have an excellent growth rating.
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 Return On Assets of 7.35%. This is in the better half of the industry: DOCN outperforms 77.65% of its industry peers.
The Return On Invested Capital of DOCN (6.93%) is better than 63.53% 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 91.76% of its industry peers.
DOCN has a Operating Margin of 15.66%. This is amongst the best in the industry. DOCN outperforms 82.35% of its industry peers.
DOCN's Gross Margin of 59.67% is amongst the best of the industry. DOCN outperforms 81.18% of its industry peers.
DOCN's Gross Margin has improved in the last couple of years.
| 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
DOCN has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
Compared to 1 year ago, DOCN has more shares outstanding
Compared to 5 years ago, DOCN has more shares outstanding
DOCN has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 2.14 indicates that DOCN is not a great score, but indicates only limited risk for bankruptcy at the moment.
DOCN has a Altman-Z score (2.14) which is in line with 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 | 2.14 |
ROIC/WACC0.92
WACC7.54%
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.
DOCN has a Current ratio of 2.27. This is in the better half of the industry: DOCN outperforms 67.06% of its industry peers.
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.
The Quick ratio of DOCN (2.27) is better than 67.06% of its industry peers.
| 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 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
Looking at the last year, DOCN shows a quite strong growth in Revenue. The Revenue has grown by 12.66% 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)16.58%
EPS 3Y145.35%
EPS 5YN/A
EPS Q2Q%3.85%
Revenue 1Y (TTM)12.66%
Revenue growth 3Y22.13%
Revenue growth 5Y25.09%
Sales Q2Q%15.69%
3.2 Future
The Earnings Per Share is expected to grow by 9.87% on average over the next years. This is quite good.
Based on estimates for the next years, DOCN will show a quite strong growth in Revenue. The Revenue will grow by 13.41% on average per year.
EPS Next Y10.93%
EPS Next 2Y6.03%
EPS Next 3Y9.87%
EPS Next 5YN/A
Revenue Next Year14.71%
Revenue Next 2Y14.67%
Revenue Next 3Y15%
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.
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
A Price/Earnings ratio of 22.70 indicates a rather expensive valuation of DOCN.
DOCN's Price/Earnings is on the same level as the industry average.
DOCN is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 25.83, which is the current average of the S&P500 Index.
DOCN is valuated rather expensively with a Price/Forward Earnings ratio of 22.92.
DOCN's Price/Forward Earnings is on the same level as the industry average.
DOCN's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 32.68.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.7 | ||
| Fwd PE | 22.92 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as DOCN.
The rest of the industry has a similar Price/Free Cash Flow ratio as DOCN.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 47.98 | ||
| EV/EBITDA | 20.93 |
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.
The decent profitability rating of DOCN may justify a higher PE ratio.
PEG (NY)2.08
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 |
49.48
+2.4 (+5.1%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners68.97%
Inst Owner Change0.54%
Ins Owners0.9%
Ins Owner Change-1.66%
Market Cap4.50B
Revenue(TTM)780.62M
Net Income(TTM)126.45M
Analysts75.79
Price Target42.84 (-13.42%)
Short Float %14.75%
Short Ratio3.9
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)3.12%
PT rev (3m)9.8%
EPS NQ rev (1m)-0.03%
EPS NQ rev (3m)4.79%
EPS NY rev (1m)0.03%
EPS NY rev (3m)7.22%
Revenue NQ rev (1m)0.01%
Revenue NQ rev (3m)1.37%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.99%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.7 | ||
| Fwd PE | 22.92 | ||
| P/S | 5.41 | ||
| P/FCF | 47.98 | ||
| P/OCF | 14.95 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 20.93 |
EPS(TTM)2.18
EY4.41%
EPS(NY)2.16
Fwd EY4.36%
FCF(TTM)1.03
FCFY2.08%
OCF(TTM)3.31
OCFY6.69%
SpS9.15
BVpS-1.92
TBVpS-6.96
PEG (NY)2.08
PEG (5Y)N/A
Graham NumberN/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
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 Turnover0.48
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 | 2.14 |
F-Score7
WACC7.54%
ROIC/WACC0.92
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 5YN/A
Revenue 1Y (TTM)12.66%
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 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%
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.