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
|Historical stock prices|
|Current Share Price||US$86.60|
|52 Week High||US$35.35|
|52 Week Low||US$87.49|
|1 Month Change||69.34%|
|3 Month Change||84.26%|
|1 Year Change||n/a|
|3 Year Change||n/a|
|5 Year Change||n/a|
|Change since IPO||103.77%|
Recent News & Updates
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.
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.
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.
|DOCN||US IT||US Market|
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.
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
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.
Is DigitalOcean Holdings undervalued compared to its fair value and its price relative to the market?
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).
How is DigitalOcean Holdings forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?
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%).
How has DigitalOcean Holdings performed over the past 5 years?
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.
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 ($2.0M).
Debt to Equity History and Analysis
Debt Level: DOCN is debt free.
Reducing Debt: DOCN had no debt 5 years ago.
Cash Runway Analysis
For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.
Stable Cash Runway: DOCN has sufficient cash runway for more than 3 years based on its current free cash flow.
Forecast Cash Runway: Insufficient data to determine if DOCN has enough cash runway if its free cash flow continues to grow or shrink based on historical rates.
What is DigitalOcean Holdings's current dividend yield, its reliability and sustainability?
Dividend Yield vs Market
Notable Dividend: Unable to evaluate DOCN's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.
High Dividend: Unable to evaluate DOCN's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.
Stability and Growth of Payments
Stable Dividend: Insufficient data to determine if DOCN's dividends per share have been stable in the past.
Growing Dividend: Insufficient data to determine if DOCN's dividend payments have been increasing.
Current Payout to Shareholders
Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.
Future Payout to Shareholders
Future Dividend Coverage: No need to calculate the sustainability of DOCN's dividend in 3 years as they are not forecast to pay a notable one for the US market.
How experienced are the management team and are they aligned to shareholders interests?
Average management tenure
Yancey Spruill (53 yo)
Mr. Yancey L. Spruill is Chief Executive Officer and Director at Digitalocean Holdings, Inc. since August 2019. He has been Chief Executive Officer and Director at DigitalOcean, Inc. and DigitalOcean Holdi...
CEO Compensation Analysis
Compensation vs Market: Yancey's total compensation ($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.
Experienced Management: DOCN's management team is considered experienced (2.1 years average tenure).
Experienced Board: DOCN's board of directors are not considered experienced ( 1.5 years average tenure), which suggests a new board.
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
Dilution of Shares: DOCN only recently listed within the past 12 months.
DigitalOcean Holdings, Inc.'s employee growth, exchange listings and data sources
- 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
- DigitalOcean Holdings, Inc.
- 101 6th Avenue
- New York
- New York
- United States
Company Analysis and Financial Data Status
|Data||Last Updated (UTC time)|
|Company Analysis||2021/09/16 22:57|
|End of Day Share Price||2021/09/16 00:00|
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.