DIGITALOCEAN HOLDINGS INC (DOCN) Stock Fundamental Analysis
NYSE:DOCN - New York Stock Exchange, Inc. - US25402D1028 - Common Stock - Currency: USD
Taking everything into account, DOCN scores 4 out of 10 in our fundamental rating. DOCN was compared to 82 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 quite expensive at the moment. It does show a decent growth rate.
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 the past 5 years DOCN reported 4 times negative net income.
In the past 5 years DOCN always reported a positive cash flow from operatings.
1.2 Ratios
With a decent Return On Assets value of 5.38%, DOCN is doing good in the industry, outperforming 68.35% of the companies in the same industry.
DOCN's Return On Invested Capital of 3.73% is in line compared to the rest of the industry. DOCN outperforms 58.23% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.38% | ||
| ROE | N/A | ||
| ROIC | 3.73% |
ROA(3y)-0.38%
ROA(5y)-4.92%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
With a decent Profit Margin value of 10.86%, DOCN is doing good in the industry, outperforming 79.75% of the companies in the same industry.
DOCN's Operating Margin of 9.18% is fine compared to the rest of the industry. DOCN outperforms 68.35% of its industry peers.
Looking at the Gross Margin, with a value of 60.18%, DOCN is in the better half of the industry, outperforming 79.75% of the companies in the same industry.
In the last couple of years the Gross Margin of DOCN has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 9.18% | ||
| PM (TTM) | 10.86% | ||
| GM | 60.18% |
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y2.82%
GM growth 5Y2.47%
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 reduced compared to 1 year ago.
The number of shares outstanding for DOCN has been increased compared to 5 years ago.
The debt/assets ratio for DOCN is higher compared to a year ago.
2.2 Solvency
An Altman-Z score of 1.97 indicates that DOCN is not a great score, but indicates only limited risk for bankruptcy at the moment.
DOCN has a worse Altman-Z score (1.97) than 60.76% of its industry peers.
DOCN has a debt to FCF ratio of 15.01. This is a negative value and a sign of low solvency as DOCN would need 15.01 years to pay back of all of its debts.
DOCN has a Debt to FCF ratio of 15.01. This is in the lower half of the industry: DOCN underperforms 62.03% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 15.01 | ||
| Altman-Z | 1.97 |
ROIC/WACC0.4
WACC9.29%
2.3 Liquidity
DOCN has a Current Ratio of 3.14. This indicates that DOCN is financially healthy and has no problem in meeting its short term obligations.
DOCN's Current ratio of 3.14 is amongst the best of the industry. DOCN outperforms 86.08% of its industry peers.
DOCN has a Quick Ratio of 3.14. This indicates that DOCN is financially healthy and has no problem in meeting its short term obligations.
With an excellent Quick ratio value of 3.14, DOCN belongs to the best of the industry, outperforming 86.08% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.14 | ||
| Quick Ratio | 3.14 |
3. Growth
3.1 Past
DOCN shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 29.86%, which is quite impressive.
The Revenue has grown by 12.08% in the past year. This is quite good.
Measured over the past years, DOCN shows a very strong growth in Revenue. The Revenue has been growing by 27.81% on average per year.
EPS 1Y (TTM)29.86%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%18.18%
Revenue 1Y (TTM)12.08%
Revenue growth 3Y29.59%
Revenue growth 5Y27.81%
Sales Q2Q%12.1%
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 11.45% yearly.
Based on estimates for the next years, DOCN will show a quite strong growth in Revenue. The Revenue will grow by 13.69% on average per year.
EPS Next Y11.73%
EPS Next 2Y8.49%
EPS Next 3Y11.12%
EPS Next 5Y11.45%
Revenue Next Year12.48%
Revenue Next 2Y12.76%
Revenue Next 3Y13.02%
Revenue Next 5Y13.69%
3.3 Evolution
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
The Price/Earnings ratio is 22.44, which indicates a rather expensive current valuation of DOCN.
Compared to the rest of the industry, the Price/Earnings ratio of DOCN indicates a somewhat cheap valuation: DOCN is cheaper than 72.15% of the companies listed in the same industry.
DOCN is valuated rather cheaply when we compare the Price/Earnings ratio to 28.42, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 22.29, DOCN is valued on the expensive side.
Based on the Price/Forward Earnings ratio, DOCN is valued a bit cheaper than the industry average as 70.89% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of DOCN to the average of the S&P500 Index (24.39), we can say DOCN is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.44 | ||
| Fwd PE | 22.29 |
4.2 Price Multiples
DOCN's Enterprise Value to EBITDA is on the same level as the industry average.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of DOCN is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 39.23 | ||
| EV/EBITDA | 23.63 |
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.
PEG (NY)1.91
PEG (5Y)N/A
EPS Next 2Y8.49%
EPS Next 3Y11.12%
5. Dividend
5.1 Amount
No dividends for DOCN!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
DIGITALOCEAN HOLDINGS INC
NYSE:DOCN (1/28/2025, 8:04:00 PM)
After market: 41.97 0 (0%)41.97
+1.83 (+4.56%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners59.96%
Inst Owner Change0.18%
Ins Owners2.33%
Ins Owner Change0.45%
Market Cap3.88B
Analysts74.74
Price Target42.01 (0.1%)
Short Float %9.22%
Short Ratio6.39
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)22.95%
Min EPS beat(2)19.72%
Max EPS beat(2)26.19%
EPS beat(4)4
Avg EPS beat(4)18.6%
Min EPS beat(4)10.7%
Max EPS beat(4)26.19%
EPS beat(8)7
Avg EPS beat(8)17.04%
EPS beat(12)10
Avg EPS beat(12)21.27%
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)1
Avg Revenue beat(2)-0.51%
Min Revenue beat(2)-1.07%
Max Revenue beat(2)0.05%
Revenue beat(4)1
Avg Revenue beat(4)-0.48%
Min Revenue beat(4)-1.07%
Max Revenue beat(4)0.05%
Revenue beat(8)2
Avg Revenue beat(8)-0.75%
Revenue beat(12)3
Avg Revenue beat(12)-0.91%
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)1.12%
PT rev (3m)-0.63%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-19.03%
EPS NY rev (1m)0%
EPS NY rev (3m)4.86%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.35%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.29%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.44 | ||
| Fwd PE | 22.29 | ||
| P/S | 5.13 | ||
| P/FCF | 39.23 | ||
| P/OCF | 13.29 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 23.63 |
EPS(TTM)1.87
EY4.46%
EPS(NY)1.88
Fwd EY4.49%
FCF(TTM)1.07
FCFY2.55%
OCF(TTM)3.16
OCFY7.53%
SpS8.19
BVpS-2.29
TBVpS-7.4
PEG (NY)1.91
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.38% | ||
| ROE | N/A | ||
| ROCE | 5.15% | ||
| ROIC | 3.73% | ||
| ROICexc | 5.53% | ||
| ROICexgc | 11.48% | ||
| OM | 9.18% | ||
| PM (TTM) | 10.86% | ||
| GM | 60.18% | ||
| FCFM | 13.07% |
ROA(3y)-0.38%
ROA(5y)-4.92%
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 3Y2.82%
GM growth 5Y2.47%
F-Score9
Asset Turnover0.5
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 15.01 | ||
| Debt/EBITDA | 7.38 | ||
| Cap/Depr | 146.68% | ||
| Cap/Sales | 25.52% | ||
| Interest Coverage | 60.68 | ||
| Cash Conversion | 145.16% | ||
| Profit Quality | 120.32% | ||
| Current Ratio | 3.14 | ||
| Quick Ratio | 3.14 | ||
| Altman-Z | 1.97 |
F-Score9
WACC9.29%
ROIC/WACC0.4
Cap/Depr(3y)118.12%
Cap/Depr(5y)128.31%
Cap/Sales(3y)21.88%
Cap/Sales(5y)27.03%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)29.86%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%18.18%
EPS Next Y11.73%
EPS Next 2Y8.49%
EPS Next 3Y11.12%
EPS Next 5Y11.45%
Revenue 1Y (TTM)12.08%
Revenue growth 3Y29.59%
Revenue growth 5Y27.81%
Sales Q2Q%12.1%
Revenue Next Year12.48%
Revenue Next 2Y12.76%
Revenue Next 3Y13.02%
Revenue Next 5Y13.69%
EBIT growth 1Y567.65%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year85.18%
EBIT Next 3Y33.32%
EBIT Next 5Y27.26%
FCF growth 1Y176.32%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y76.86%
OCF growth 3Y58.99%
OCF growth 5Y43.99%