DIGITALOCEAN HOLDINGS INC (DOCN) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:DOCN - US25402D1028 - Common Stock
49.17 USD
+0.24 (+0.49%)
49.2 USD
+0.03 (+0.06%)
DOCN gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 88 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 is valued quite expensively, but it does show have an excellent growth rating.
1. Profitability
1.1 Basic Checks
In the past year DOCN was profitable.
DOCN had a positive operating cash flow in the past year.
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
Looking at the Return On Assets, with a value of 14.60%, DOCN belongs to the top of the industry, outperforming 94.32% of the companies in the same industry.
DOCN's Return On Invested Capital of 8.55% is fine compared to the rest 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 95.45% of its industry peers.
DOCN has a Operating Margin of 17.45%. This is amongst the best in the industry. DOCN outperforms 89.77% of its industry peers.
DOCN has a Gross Margin of 59.54%. This is amongst the best in the industry. DOCN outperforms 81.82% of its industry peers.
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
DOCN has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some 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.
2.2 Solvency
An Altman-Z score of 2.27 indicates that DOCN is not a great score, but indicates only limited risk for bankruptcy at the moment.
DOCN has a Altman-Z score (2.27) which is in line with its industry peers.
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 | 2.27 |
ROIC/WACC1.1
WACC7.79%
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 68.18% 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 has a worse Quick ratio (1.13) than 68.18% of its industry peers.
| 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
DOCN shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 14.20%.
DOCN shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 25.09% yearly.
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 Y8.89%
EPS Next 2Y2.29%
EPS Next 3Y9.75%
EPS Next 5Y13.47%
Revenue Next Year15.53%
Revenue Next 2Y17.17%
Revenue Next 3Y17.43%
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
With a Price/Earnings ratio of 22.56, DOCN is valued on the expensive side.
Based on the Price/Earnings ratio, DOCN is valued a bit cheaper than the industry average as 62.50% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of DOCN to the average of the S&P500 Index (26.59), we can say DOCN is valued inline with the index average.
With a Price/Forward Earnings ratio of 24.48, DOCN is valued on the expensive side.
DOCN's Price/Forward Earnings ratio is in line with the industry average.
When comparing the Price/Forward Earnings ratio of DOCN to the average of the S&P500 Index (24.03), we can say DOCN is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.56 | ||
| Fwd PE | 24.48 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of DOCN is on the same level as its industry peers.
The rest of the industry has a similar Price/Free Cash Flow ratio as DOCN.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 32.7 | ||
| EV/EBITDA | 20.16 |
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)2.54
PEG (5Y)N/A
EPS Next 2Y2.29%
EPS Next 3Y9.75%
5. Dividend
5.1 Amount
DOCN does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
49.17
+0.24 (+0.49%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners73.75%
Inst Owner Change6.29%
Ins Owners0.86%
Ins Owner Change-0.96%
Market Cap4.50B
Revenue(TTM)863.96M
Net Income(TTM)251.87M
Analysts80
Price Target53.55 (8.91%)
Short Float %14.57%
Short Ratio3.71
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)25%
PT rev (3m)28.91%
EPS NQ rev (1m)-0.71%
EPS NQ rev (3m)-18.08%
EPS NY rev (1m)-1.84%
EPS NY rev (3m)-1.59%
Revenue NQ rev (1m)0.01%
Revenue NQ rev (3m)1.29%
Revenue NY rev (1m)0.71%
Revenue NY rev (3m)0.71%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.56 | ||
| Fwd PE | 24.48 | ||
| P/S | 5.21 | ||
| P/FCF | 32.7 | ||
| P/OCF | 13.9 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 20.16 |
EPS(TTM)2.18
EY4.43%
EPS(NY)2.01
Fwd EY4.09%
FCF(TTM)1.5
FCFY3.06%
OCF(TTM)3.54
OCFY7.19%
SpS9.44
BVpS-0.76
TBVpS-5.71
PEG (NY)2.54
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 | 2.27 |
F-Score7
WACC7.79%
ROIC/WACC1.1
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 3Y9.75%
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 3Y17.43%
Revenue Next 5Y13.41%
EBIT growth 1Y116.93%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year81.29%
EBIT Next 3Y34.8%
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 8.89% in the next year.