QualityDipStocks / Technology · Software & internet services
DigitalOcean DOCN
Outside our quality screen, so we don’t track its dips. It’s 51% below its 52-week high.
Outside our quality screen, trading well above our fair value estimate, 25% under its Market Value.
- Fair value est.
- $47.41−47%
- Market Value
- $119.97price −25%
- Off 52-wk high
- −51%
- Risk vs market
- Highbeta 2.86
5 bullish · 5 bearish See why
Key levels
Every level vs today’s $89.65
- 52-wk lowlowest close, 1 year$37.94−57.7%
- Fair value est.base case$47.41−47.1%
- PriceFri Oct 30 close$89.65you are here
- Market Valueavg paid since Sep 10$119.97+33.8%
- 52-wk highhighest close, 1 year$181.29+102.2%
Fair value estimate
How the range is computed
Ten-year free-cash-flow DCF. Same 10-year free-cash-flow model as the base: discount rate 9.5% ±1 point and growth 15.0% ±2 points. Bear = 10.5% and 13.0%; bull = 8.5% and 17.0% (both fade to 3%). A model estimate from public filings, not a forecast of where the price will go.
Price is above even the bull case.
What the price implies To be worth today’s price, DOCN’s free cash flow would need to grow about 27% a year for five years; our estimate uses 15%.
Risk vs market
How risk vs market is measured
One year of daily returns (Oct 30 to Oct 30, 252 sessions). Beta = how much DOCN moved for each 1% move in the S&P 500 (SPY); 1.0 moves with the market. Volatility is the yearly standard deviation of daily returns. Past behavior, not a forecast.
Swings much more than the market, and its own price swings are 6.9× the S&P 500’s.
- Beta vs S&P 500
- 2.86
- Volatility
- 89% vs 13% SPY
- Correlation SPY
- 0.41
- Correlation QQQ
- 0.50
Bull vs bear
Rule-based from the data on this page, strongest first. Not advice.
Top bullish points 5 of 5
GrowthDiluted EPS grew 183% to $2.52 in FY2025.
ProfitabilityOperating margin widened to 17.4% in FY2025 from 1.7% in FY2023 (SEC filings).
ProfitabilityReturn on equity of 62% over the last 12 months.
Cash returnsFree cash flow grew 88% over the last 12 months vs the 12 months before.
ValuationTrades 25.3% below its Market Value of $119.97, the average price paid since the Sep 10 filing.
Top bearish points 5 of 5
ValuationOur DCF fair value estimate is $47.41, 47% below the price.
Cash returnsShare count up 25.8% in a year: existing holders are being diluted.
ValuationPrice / free cash flow of 58×: a rich price for the cash it generates today.
QualityDoesn’t pass our quality screen: net debt 3.9× EBITDA (limit 3×).
RiskSwings hard: beta 2.86 vs the S&P 500 and 89% yearly volatility (SPY 13%).
Who’s talking about it
Notable investors, executives, analysts and public figures on DigitalOcean in the last 48 hours. Headlines as published, each linked. Their words, not ours.
No notable mentions in the last 48 hours. Checked Nov 1, 9:09 PM ET.
Compare with peers
Closest in size in Software & internet services
All fundamentals
P/E 48.2 · FCF yield 1.7% · ROE 62%
Valuation
- P/E
- 48.2×Technology median 33.9×
- Price / FCF
- 58.3×
- FCF yield
- 1.7%
- EV / EBITDA
- 35.7×
- Price / sales
- 11.22×
- Price / book
- 12.19×
- Market cap
- $11.3Bprice × diluted shares
- Enterprise value
- $11.5B
Growth
- Revenue, 12 months
- $1.0B
- Sales growth, 12 months
- +21.4%vs the 12 months before
- Sales growth, 3 yrs
- +16.1%/yrfrom FY2022
- Diluted EPS, 12 months
- $2.20
- EPS growth, last FY
- +183.1%
- Net income, 12 months
- $235M
- Net income growth
- +86%12 months vs before
Profitability
- Gross margin
- 57.2%
- Operating margin
- 14.8%
- Net margin
- 23.3%
- FCF margin
- 19.2%
- Return on equity
- 62%
- Return on invested capital
- 14%
Balance sheet
- Cash & short-term inv.
- $767M
- Total debt
- $921M
- Net cash
- −$154M
- Debt / equity
- 0.99×
- Interest coverage
- 4.8×operating income / interest
Cash flow & returns
- Free cash flow, 12 months
- $194M
- FCF growth, 12 months
- +88%
- Dividend yield
- 0%
- Payout ratio
- n/anot reported in its SEC filings
- Buybacks, 12 months
- $3M0.0% of market cap
- Share count, 1 year
- +25.8%diluted shares vs a year ago
- Stock-based comp
- $95M
Trailing 12 months to Jun 30, 2026; balance sheet at Jun 30, 2026. From DigitalOcean’s SEC filings. Sparklines show up to six fiscal years. n/a means we don’t hold that number, with the reason. How each is computed.
Valuation details
DCF $47.41 · MV $119.97
Assumes 15.0% growth for 5 years (revenue grew 16.1% a year FY22–FY25; capped at 15%), fading to 3%; 9.5% discount rate, 3% terminal growth. FCF base $1.54 a share (trailing 12 months to Jun 30, 2026), from the 10-Q filed Aug 4, 2026. Net debt $154M, not deducted.
Setup & signals
No setup armed
No setup armed, so there’s no trigger or stop to track yet. Reversal signal rules only run on companies that pass our quality screen.
Momentum & 52-week range
RSI 34 · 5 days −3.8%
The business
FCF $-0.0B · Sales +29%
- Free cash flow, 12 months−$0.0B
- Free-cash-flow yield−0.2%
- Free-cash-flow margin−2%
- Gross margin57%
- Operating margin10%
- Return on invested capital4%
- Return on equity62%
- Sales growth (latest quarter vs year-ago quarter)+29%
- Net debt / EBITDA3.9×
Next report
Nov 3
- DateTue Nov 3, before the open
- Consensus EPS$0.11
- Year-ago EPS$0.38
- QuarterSep/2026
From Nasdaq’s earnings calendar. A report resets Market Value.
Information only, not investment advice. Fair value estimates and talking points are rule-based model output from public data and can be wrong; stop levels are reference points, not orders. How every number is computed.
DOCN is outside our quality screen
One text when a published rule fires on one of the 333 quality companies we track: the ticker, the price, the stop and a link to the numbers. Nothing else.