DOCN

DigitalOcean HoldingsNYSE:DOCN Stock Report

Market Cap

US$9.3b

7D

25.4%

1Y

n/a

Updated

16 Sep, 2021

Data

Company Financials +
DOCN fundamental analysis
Snowflake Score
Valuation0/6
Future Growth5/6
Past Performance0/6
Financial Health5/6
Dividends0/6

DOCN Overview

DigitalOcean Holdings, Inc. operates a cloud computing platform that offers infrastructure and platform tools for developers, start-ups, and small and medium-sized businesses in North America, Europe, Asia, and internationally.

DigitalOcean Holdings Competitors

Price History & Performance

Summary of all time highs, changes and price drops for DigitalOcean Holdings
Historical stock prices
Current Share PriceUS$86.60
52 Week HighUS$35.35
52 Week LowUS$87.49
Beta0
1 Month Change69.34%
3 Month Change84.26%
1 Year Changen/a
3 Year Changen/a
5 Year Changen/a
Change since IPO103.77%

Recent News & Updates

Sep 16

DigitalOcean: An Overlooked Cloud Computing Play

DigitalOcean can be considered as the "AWS" for developers, start-ups and small and medium-sized businesses, or SMBs. The company showed accelerating revenue growth in Q2 with 35% YoY revenue growth, which is faster than their targeted market's growth of 27% CAGR. Currently, many analysts are underestimating the need for DigitalOcean's services in their core market and analysts will eventually be forced to raise their growth estimates. DigitalOcean is NOT "a growth at all costs" company and has a goal of adjusted EBITDA margins of at least 30%, in addition to their revenue growth goals. Aggressive growth investors should put DigitalOcean on their buy list.

Sep 07

DigitalOcean: Key Metrics Are Accelerating

DigitalOcean provides cloud services, primarily targeting small and medium-sized businesses. DigitalOcean is seeing a significant acceleration of key financial metrics, discussed in detail below. The company also intends to increase sales & marketing efforts. Because of its stickiness, affordability, and ease-of-use, one can anticipate DigitalOcean will continue to be a beneficiary of major tailwinds behind cloud services. Stock in DigitalOcean is primed for major appreciation in the coming quarters. Risks include competition, management missteps, lack of profitability, and the unforeseen.

Aug 31

Digital Ocean-Come On In, The Water's Fine

Digital Ocean is a fairly recent IPO, which has not seen its valuation spike to unreasonable levels. The company was identified by well known short seller, Andrew Left, as the next Shopify. More pertinently, in my judgement, was the company's earnings release in early August which showed the company achieving accelerating growth as well as improving profitability metrics. Digital Ocean is a web hosting company with many twists. Those twists have resulted in an unexpected competitive moat that should foster long-term growth and profitability. While investors may be dubious about any small company trying to compete in the web hosting space, this company has a unique combination of curated services that differentiate its offering and appeal to a specific class of user.

Shareholder Returns

DOCNUS ITUS Market
7D25.4%-0.8%-0.6%
1Yn/a26.4%33.6%

Return vs Industry: Insufficient data to determine how DOCN performed against the US IT industry.

Return vs Market: Insufficient data to determine how DOCN performed against the US Market.

Price Volatility

Is DOCN's price volatile compared to industry and market?
DOCN volatility
DOCN Beta0
Industry Beta1.18
Market Beta1

Stable Share Price: DOCN is more volatile than 75% of US stocks over the past 3 months, typically moving +/- 10% a week.

Volatility Over Time: DOCN's weekly volatility (10%) has been stable over the past year, but is still higher than 75% of US stocks.

About the Company

FoundedEmployeesCEOWebsite
2012581Yancey Spruillhttps://www.digitalocean.com

DigitalOcean Holdings, Inc. operates a cloud computing platform that offers infrastructure and platform tools for developers, start-ups, and small and medium-sized businesses in North America, Europe, Asia, and internationally. It offers infrastructure solutions across compute, storage, and networking fields, as well as managed application, container, and database offerings to developers. The company’s users include software engineers, researchers, data scientists, system administrators, students, and hobbyists.

Valuation

Is DigitalOcean Holdings undervalued compared to its fair value and its price relative to the market?

10.83x

Price to Book (PB) ratio


Share Price vs. Fair Value

Below Fair Value: DOCN ($86.6) is trading above our estimate of fair value ($25.03)

Significantly Below Fair Value: DOCN is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: DOCN is unprofitable, so we can't compare its PE Ratio to the US IT industry average.

PE vs Market: DOCN is unprofitable, so we can't compare its PE Ratio to the US market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate DOCN's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: DOCN is overvalued based on its PB Ratio (10.8x) compared to the US IT industry average (5.5x).


Future Growth

How is DigitalOcean Holdings forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

120.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: DOCN is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (2%).

Earnings vs Market: DOCN is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: DOCN's is expected to become profitable in the next 3 years.

Revenue vs Market: DOCN's revenue (27.7% per year) is forecast to grow faster than the US market (9.7% per year).

High Growth Revenue: DOCN's revenue (27.7% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: DOCN's Return on Equity is forecast to be low in 3 years time (11.2%).


Past Performance

How has DigitalOcean Holdings performed over the past 5 years?

29.5%

Last years earnings growth


Earnings and Revenue History

Quality Earnings: DOCN is currently unprofitable.

Growing Profit Margin: DOCN is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: Insufficient data to determine if DOCN's year-on-year earnings growth rate was positive over the past 5 years.

Accelerating Growth: Unable to compare DOCN's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: DOCN is unprofitable, making it difficult to compare its past year earnings growth to the IT industry (28%).


Return on Equity

High ROE: DOCN has a negative Return on Equity (-3.45%), as it is currently unprofitable.


Financial Health

How is DigitalOcean Holdings's financial position?


Financial Position Analysis

Short Term Liabilities: DOCN's short term assets ($629.1M) exceed its short term liabilities ($55.4M).

Long Term Liabilities: DOCN's short term assets ($629.1M) exceed its long term liabilities ($2.0M).


Debt to Equity History and Analysis

Debt Level: DOCN is debt free.

Reducing Debt: DOCN had no debt 5 years ago.


Balance Sheet


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: DOCN has sufficient cash runway for more than 3 years based on its current free cash flow.

Forecast Cash Runway: Insufficient data to determine if DOCN has enough cash runway if its free cash flow continues to grow or shrink based on historical rates.


Dividend

What is DigitalOcean Holdings's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

Notable Dividend: Unable to evaluate DOCN's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate DOCN's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if DOCN's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if DOCN's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of DOCN's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.1yrs

Average management tenure


CEO

Yancey Spruill (53 yo)

2.08yrs

Tenure

US$1,090,247

Compensation

Mr. Yancey L. Spruill is Chief Executive Officer and Director at Digitalocean Holdings, Inc. since August 2019. He has been Chief Executive Officer and Director at DigitalOcean, Inc. and DigitalOcean Holdi...


CEO Compensation Analysis

Compensation vs Market: Yancey's total compensation ($USD1.09M) is below average for companies of similar size in the US market ($USD6.50M).

Compensation vs Earnings: Insufficient data to compare Yancey's compensation with company performance.


Leadership Team

Experienced Management: DOCN's management team is considered experienced (2.1 years average tenure).


Board Members

Experienced Board: DOCN's board of directors are not considered experienced ( 1.5 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: DOCN insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: DOCN only recently listed within the past 12 months.


Top Shareholders

Company Information

DigitalOcean Holdings, Inc.'s employee growth, exchange listings and data sources


Key Information

  • Name: DigitalOcean Holdings, Inc.
  • Ticker: DOCN
  • Exchange: NYSE
  • Founded: 2012
  • Industry: Internet Services and Infrastructure
  • Sector: Software
  • Market Cap: US$9.296b
  • Shares outstanding: 107.34m
  • Website: https://www.digitalocean.com

Number of Employees


Location

  • DigitalOcean Holdings, Inc.
  • 101 6th Avenue
  • New York
  • New York
  • 10013
  • United States

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/09/16 22:57
End of Day Share Price2021/09/16 00:00
Earnings2021/06/30
Annual Earnings2020/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.