DigitalOcean DOCN
United StatesTechnology · Software - InfrastructureUSD
175.20 USD (+37.6%)
15 analysts
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DigitalOcean is a cloud infrastructure provider (servers, storage, and networking) aimed at developers, startups, and small and medium-sized businesses, with a pay-as-you-go model and simplified pricing compared to the large hyperscalers.
Key points
from its scores- ✓Good share-price trend9.8
- ✕Little or no dividend1.5
- ✕Demanding valuation1.9
- ✕Unfavourable risk and backdrop3.0
AI analysis
bottom line, main risk, context and newsStrong momentum and revenue growth do not compensate for an extreme valuation and a leveraged balance sheet in a rising rate environment; it would only be attractive after a significant price correction or a clear improvement in cash generation.
DigitalOcean is growing strongly (revenue +28.6%) and maintains a high gross margin (57.2%), but its valuation is very demanding (P/E 58.65, EV/EBITDA 52.41) and its balance sheet is leveraged (Net Debt/EBITDA 3.92) with negative free cash flow conversion (-7.72%), which in a rising rate environment pressures its attractiveness. Momentum is exceptional (+229.7% in 12 months), but fundamentals do not justify the current multiple.
The main risk is the combination of an extreme valuation (P/E 58.65) with a leveraged balance sheet (Net Debt/EBITDA 3.92) and negative free cash flow, leaving little room for error if growth decelerates or rates continue to rise.
Context and risks
DigitalOcean has no material exposure to current macro factors: its cloud infrastructure business for developers and SMBs does not depend on commodities, shipping routes, or tariffs. The rise in long-term US rates is a market factor already reflected in its high-duration valuation (P/E 58.65) and leverage (Net Debt/EBITDA 3.92), but it does not constitute a company-specific risk beyond what quantitative metrics already capture.
Is DigitalOcean stock cheap or expensive?
at the analysis dateOn P/E and EV / EBITDA, it trades 122% above the Technology median on average.
| Multiple | Company | Sector | Difference |
|---|---|---|---|
| P/E | 58.7 | 31.3 | +87% |
| EV / EBITDA | 52.4 | 20.4 | +157% |
| Price / book | 14.4 | 6.3 | +128% |
| Price / sales | 14.7 | 5.3 | +179% |
Sector: median of the 283 Technology companies analysed. In bold, the multiples used for the comparison.
Valuation score: 1.9 out of 10 (median for Technology: 5.3).
Average analyst target: 175.20 USD, +37.6% versus the price.
A premium can be justified if the company is of higher quality or grows faster than its sector: Quality / Moat 4.7 (sector 6.4), Growth 5.1 (sector 7.5).
Classic formulas with standard assumptions (0.0% growth, 8-9% discount rate). Indicative only: they change a lot with the assumptions and are not a recommendation.
Work out its fair value yourself →How much would you have made investing every month? →
Comparing it with its sector does not say whether it is a good buy: this is not investment advice.
Score by category
0 to 10 · hover overtap each one to see what it measuresKey metrics
at the analysis date · compared with the Technology medianValuation
- P/E
- 58.7
- Forward P/E
- 69.1
- EV / EBITDA
- 52.4
- Price / book
- 14.4
- Price / sales
- 14.7
- PEG
- 1.54
- Market cap
- 14.9B USD
- Enterprise value
- 16.2B USD
Profitability
- ROE
- 62.3%
- ROA
- 3.9%
- ROIC (approx.)
- 3.5%
- Gross margin
- 57.2%
- Operating margin
- 10.4%
- Net margin
- 23.3%
- Free cash flow
- −23.8M USD
- FCF yield
- −0.2%
- Cash conversion
- −8%
Solvency
- Total debt
- 2.0B USD
- Net debt
- 1.2B USD
- Cash
- 767.0M USD
- EBITDA
- 308.6M USD
- Net debt / EBITDA
- 3.92
- Debt / equity
- 212.51
- Current ratio
- 1.31
- Quick ratio
- 1.14
Growth
- Revenue growth
- +28.6%
- Earnings growth
- −24.5%
- EPS (TTM)
- 2.17 USD
- EPS (forward)
- 1.84 USD
Dividend
- Dividend yield
- 0.0%
- Payout
- 0.0%
Risk and market
- Beta
- 1.70
- Analyst consensus
- none (15)
- Target price
- 175.20 USD
- 52-week range
- 37.09 – 187.50
Recent news
All DOCN news →Compare it with its sector
All 283 in Technology →Frequently asked questions about DigitalOcean
Is DigitalOcean stock cheap or expensive?
On P/E and EV / EBITDA, it trades 122% above the Technology median on average. Valuation score: 1.9 out of 10 (median for Technology: 5.3). Average analyst target: 175.20 USD, +37.6% versus the price. This is not investment advice.
What score does DigitalOcean get on MeridIAn Screener?
It scores 4.1 out of 10, rank 1,951 of 2,130 (better than 8% of the companies analysed). Its strongest category is Momentum (9.8) and its weakest, Dividend (1.5). Analysis of 08/10/2026.
What is DigitalOcean's P/E ratio?
Its P/E is 58.7: the share price equals 58.7 times earnings per share over the last 12 months. The Technology median is 31.3. Based on the earnings analysts expect, the forward P/E is 69.1.
How much is DigitalOcean worth on the stock market?
Its market capitalisation is 14.9B USD and its enterprise value, debt included, is 16.2B USD.
How much debt does DigitalOcean have?
Its net debt (debt minus cash) is 1.2B USD. That is 3.92 times its EBITDA; the Technology median is 0.20.
Does DigitalOcean pay a dividend?
It pays no dividend, or almost none.
How has DigitalOcean stock performed over the last year?
It has risen 241.3% over the last year, excluding dividends. Over the last 52 weeks it has traded between 37.09 and 187.50 USD. Past performance does not guarantee future results.
What do analysts think of DigitalOcean?
15 analysts cover it; their average recommendation is “none” and their average target is 175.20 USD (+37.6% versus the price). It is an estimate, not market data.