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DOCN: Takeover Chatter And AI Partnerships Will Shape Balanced Outlook

Digital Transformation And AI Adoption Will Spur Expansion Despite Risks

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DOCN
AnalystConsensusTarget
Not Invested
Published 04 Sep 2024

Update shared on 09 Dec 2025

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AnalystConsensusTarget's Fair Value
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1Y
25.0%
7D
-1.3%

Analysts have nudged their price target for DigitalOcean Holdings slightly higher to approximately $53.33 per share from roughly $53.33 per share, citing marginal improvements in the company’s discount rate assumptions and stable expectations for revenue growth, profit margins, and future valuation multiples.

What's in the News

  • Betaville blog highlighted market chatter about a potential takeover bid for DigitalOcean, drawing investor attention to the stock (Betaville via The Fly).
  • The company reported completion of a major share repurchase program announced in February 2024, buying back about 4.21% of shares outstanding for roughly $139.49 million.
  • Management raised full year 2025 revenue guidance to a range of $896 million to $897 million, signaling stronger than previously expected growth.
  • DigitalOcean issued fourth quarter 2025 guidance, projecting revenue between $237 million and $238 million as it scales its cloud and AI offerings.
  • DigitalOcean expanded its strategic AI partnerships and ecosystem, including deeper collaboration with fal and the formal launch of its AI Partner Program to attract more AI native workloads.

Valuation Changes

  • Fair Value Estimate remains unchanged at approximately $53.33 per share, reflecting stable long term expectations.
  • The Discount Rate edged down slightly from about 10.16 percent to roughly 10.11 percent, modestly lowering the implied cost of capital.
  • Revenue Growth is effectively unchanged at around 18.63 percent, indicating steady expectations for top line expansion.
  • Net Profit Margin is essentially flat at roughly 7.89 percent, signaling no material shift in anticipated profitability.
  • The Future P/E ticked down marginally from about 55.75x to roughly 55.67x, suggesting a very small reduction in the assumed valuation multiple.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.