DIGITALOCEAN HOLDINGS INC (DOCN) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:DOCN - US25402D1028 - Common Stock
50.03 USD
-2.73 (-5.17%)
50 USD
-0.03 (-0.06%)
We assign a fundamental rating of 5 out of 10 to DOCN. DOCN was compared to 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
- DOCN had positive earnings in the past year.
- 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.
- In the past 5 years DOCN always reported a positive cash flow from operatings.
1.2 Ratios
- DOCN's Return On Assets of 14.60% is amongst the best of the industry. DOCN outperforms 94.32% of its industry peers.
- The Return On Invested Capital of DOCN (8.55%) is better than 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 Profit Margin of 29.15%. This is amongst the best in the industry. DOCN outperforms 96.59% of its industry peers.
- DOCN has a better Operating Margin (17.45%) than 89.77% of its industry peers.
- DOCN has a Gross Margin of 59.54%. This is amongst the best in the industry. DOCN outperforms 82.95% of its industry peers.
- In the last couple of years the Gross Margin of DOCN has grown nicely.
| 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.
- The number of shares outstanding for DOCN has been increased compared to 1 year ago.
- DOCN has more shares outstanding than it did 5 years ago.
- DOCN has a better debt/assets ratio than last year.
2.2 Solvency
- An Altman-Z score of 2.38 indicates that DOCN is not a great score, but indicates only limited risk for bankruptcy at the moment.
- DOCN has a Altman-Z score (2.38) which is comparable to the rest of the industry.
- 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.
- DOCN has a Debt to FCF ratio of 9.62. This is comparable to the rest of the industry: DOCN outperforms 46.59% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 9.62 | ||
| Altman-Z | 2.38 |
ROIC/WACC1.09
WACC7.86%
2.3 Liquidity
- A Current Ratio of 1.13 indicates that DOCN should not have too much problems paying its short term obligations.
- Looking at the Current ratio, with a value of 1.13, DOCN is doing worse than 69.32% of the companies in the same industry.
- 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.
- The Quick ratio of DOCN (1.13) is worse than 69.32% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.13 | ||
| Quick Ratio | 1.13 |
3. Growth
3.1 Past
- DOCN shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 16.58%, 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.
- Looking at the last year, DOCN shows a quite strong growth in Revenue. The Revenue has grown by 14.20% 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)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 3Y9.78%
EPS Next 5Y13.47%
Revenue Next Year15.53%
Revenue Next 2Y17.23%
Revenue Next 3Y17.89%
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
- Based on the Price/Earnings ratio of 22.95, the valuation of DOCN can be described as rather expensive.
- Based on the Price/Earnings ratio, DOCN is valued a bit cheaper than 60.23% of the companies in the same industry.
- DOCN is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 26.94, which is the current average of the S&P500 Index.
- A Price/Forward Earnings ratio of 24.91 indicates a rather expensive valuation of DOCN.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of DOCN is on the same level as its industry peers.
- DOCN's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 23.94.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.95 | ||
| Fwd PE | 24.91 |
4.2 Price Multiples
- DOCN's Enterprise Value to EBITDA ratio is in line with the industry average.
- The rest of the industry has a similar Price/Free Cash Flow ratio as DOCN.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 33.27 | ||
| EV/EBITDA | 21.35 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
- DOCN has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)2.58
PEG (5Y)N/A
EPS Next 2Y2.29%
EPS Next 3Y9.78%
5. Dividend
5.1 Amount
- DOCN does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
50.03
-2.73 (-5.17%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)11-05 2025-11-05/bmo
Earnings (Next)02-23 2026-02-23/amc
Inst Owners73.8%
Inst Owner Change0.68%
Ins Owners0.82%
Ins Owner Change-0.97%
Market Cap4.58B
Revenue(TTM)863.96M
Net Income(TTM)251.87M
Analysts80
Price Target55.42 (10.77%)
Short Float %13.15%
Short Ratio4.23
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)3.49%
PT rev (3m)33.41%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-17.95%
EPS NY rev (1m)0%
EPS NY rev (3m)-1.81%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.3%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.71%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.95 | ||
| Fwd PE | 24.91 | ||
| P/S | 5.3 | ||
| P/FCF | 33.27 | ||
| P/OCF | 14.14 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 21.35 |
EPS(TTM)2.18
EY4.36%
EPS(NY)2.01
Fwd EY4.02%
FCF(TTM)1.5
FCFY3.01%
OCF(TTM)3.54
OCFY7.07%
SpS9.44
BVpS-0.76
TBVpS-5.71
PEG (NY)2.58
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 | 2.38 |
F-Score7
WACC7.86%
ROIC/WACC1.09
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 3Y9.78%
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 2Y17.23%
Revenue Next 3Y17.89%
Revenue Next 5Y13.41%
EBIT growth 1Y116.93%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year81.76%
EBIT Next 3Y35.15%
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.
Can you provide the valuation status for DIGITALOCEAN HOLDINGS INC?
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.
What is the valuation of DIGITALOCEAN HOLDINGS INC based on its PE and PB ratios?
The Price/Earnings (PE) ratio for DIGITALOCEAN HOLDINGS INC (DOCN) is 22.95 and the Price/Book (PB) ratio is -65.75.
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.