DigitalOcean Holdings, Inc.

NYSE:DOCN Stock Report

Market Cap: US$3.4b

DigitalOcean Holdings Valuation

Is DOCN undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of DOCN when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: DOCN ($36.85) is trading below our estimate of fair value ($39.89)

Significantly Below Fair Value: DOCN is trading below fair value, but not by a significant amount.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for DOCN?

Key metric: As DOCN is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for DOCN. This is calculated by dividing DOCN's market cap by their current earnings.
What is DOCN's PE Ratio?
PE Ratio41.4x
EarningsUS$82.17m
Market CapUS$3.40b

Price to Earnings Ratio vs Peers

How does DOCN's PE Ratio compare to its peers?

The above table shows the PE ratio for DOCN vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average52.2x
CD Chindata Group Holdings
26.6x25.6%US$3.1b
WIX Wix.com
137.2x32.2%US$10.1b
AKAM Akamai Technologies
25x16.5%US$13.1b
VRSN VeriSign
20.2x2.7%US$17.4b
DOCN DigitalOcean Holdings
41.4x18.2%US$3.4b

Price-To-Earnings vs Peers: DOCN is good value based on its Price-To-Earnings Ratio (41.4x) compared to the peer average (52.3x).

Price to Earnings Ratio vs Industry

How does DOCN's PE Ratio compare vs other companies in the US IT Industry?

5 CompaniesPrice / EarningsEstimated GrowthMarket Cap
TAOP Taoping
1.1xn/aUS$2.39m
GTCH GBT Technologies
0.1xn/aUS$1.68m
DLTI DLT Resolution
0.3xn/aUS$228.03k
TMNA Agri-Fintech Holdings
0.0004xn/aUS$129.25k
DOCN 41.4xIndustry Avg. 45.6xNo. of Companies5PE020406080100+
5 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: DOCN is good value based on its Price-To-Earnings Ratio (41.4x) compared to the US IT industry average (45.6x).

Price to Earnings Ratio vs Fair Ratio

What is DOCN's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

DOCN PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio41.4x
Fair PE Ratio31.1x

Price-To-Earnings vs Fair Ratio: DOCN is expensive based on its Price-To-Earnings Ratio (41.4x) compared to the estimated Fair Price-To-Earnings Ratio (31.1x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst DOCN forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentUS$36.85
US$40.73
+10.5%
14.5%US$48.00US$28.00n/a11
Nov ’25US$40.83
US$40.09
-1.8%
17.5%US$48.00US$25.00n/a11
Oct ’25US$38.63
US$37.64
-2.6%
16.5%US$47.00US$25.00n/a11
Sep ’25US$37.43
US$37.64
+0.6%
16.5%US$47.00US$25.00n/a11
Aug ’25US$30.85
US$38.82
+25.8%
16.5%US$47.00US$25.00n/a11
Jul ’25US$34.67
US$39.18
+13.0%
15.9%US$47.00US$25.00n/a11
Jun ’25US$37.05
US$39.18
+5.8%
15.9%US$47.00US$25.00n/a11
May ’25US$35.53
US$38.87
+9.4%
15.6%US$47.00US$25.00n/a11
Apr ’25US$38.17
US$38.87
+1.8%
15.6%US$47.00US$25.00n/a11
Mar ’25US$38.40
US$38.80
+1.0%
16.4%US$47.00US$25.00n/a10
Feb ’25US$34.64
US$35.20
+1.6%
20.7%US$47.00US$25.00n/a10
Jan ’25US$36.69
US$32.80
-10.6%
21.4%US$47.00US$25.00n/a10
Dec ’24US$30.85
US$31.90
+3.4%
21.1%US$47.00US$25.00n/a10
Nov ’24US$19.82
US$30.44
+53.6%
22.4%US$47.00US$22.00US$40.839
Oct ’24US$24.03
US$36.44
+51.7%
23.0%US$52.00US$25.00US$38.639
Sep ’24US$26.76
US$38.60
+44.2%
19.5%US$52.00US$29.00US$37.4310
Aug ’24US$48.40
US$44.20
-8.7%
26.4%US$63.00US$30.00US$30.8510
Jul ’24US$40.14
US$39.20
-2.3%
23.4%US$63.00US$30.00US$34.6710
Jun ’24US$39.65
US$39.20
-1.1%
23.4%US$63.00US$30.00US$37.0510
May ’24US$31.72
US$38.60
+21.7%
24.9%US$63.00US$30.00US$35.5310
Apr ’24US$39.17
US$39.27
+0.3%
23.9%US$63.00US$30.00US$38.1711
Mar ’24US$31.75
US$39.33
+23.9%
22.8%US$63.00US$30.00US$38.4012
Feb ’24US$31.47
US$36.17
+14.9%
28.7%US$63.00US$27.00US$34.6412
Jan ’24US$25.47
US$37.33
+46.6%
27.1%US$63.00US$27.00US$36.6912
Dec ’23US$30.30
US$37.45
+23.6%
28.2%US$63.00US$27.00US$30.8511
Nov ’23US$35.28
US$52.30
+48.2%
21.0%US$67.00US$34.00US$19.8210

Analyst Forecast: Target price is less than 20% higher than the current share price.

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