US$45.46 - That's What Analysts Think DigitalOcean Holdings, Inc. (NYSE:DOCN) Is Worth After These Results

Investors in DigitalOcean Holdings, Inc. (NYSE:DOCN) had a good week, as its shares rose 9.0% to close at US$42.85 following the release of its full-year results. The result was positive overall - although revenues of US$781m were in line with what the analysts predicted, DigitalOcean Holdings surprised by delivering a statutory profit of US$0.89 per share, modestly greater than expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for DigitalOcean Holdings

After the latest results, the 14 analysts covering DigitalOcean Holdings are now predicting revenues of US$883.7m in 2025. If met, this would reflect a meaningful 13% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to reduce 5.6% to US$0.87 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$877.7m and earnings per share (EPS) of US$0.85 in 2025. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 8.4% to US$45.46. It looks as though they previously had some doubts over whether the business would live up to their expectations. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic DigitalOcean Holdings analyst has a price target of US$55.00 per share, while the most pessimistic values it at US$31.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await DigitalOcean Holdings shareholders.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that DigitalOcean Holdings' revenue growth is expected to slow, with the forecast 13% annualised growth rate until the end of 2025 being well below the historical 22% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 9.4% per year. Even after the forecast slowdown in growth, it seems obvious that DigitalOcean Holdings is also expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple DigitalOcean Holdings analysts - going out to 2027, and you can see them free on our platform here.

Plus, you should also learn about the 2 warning signs we've spotted with DigitalOcean Holdings .

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.