Upside case
Bull case
$237+47.3%
DOCN would need investors to value it at roughly 232x earnings — about 74x more generous than today's 157x forward P/E. That requires meaningful multiple expansion on top of continued earnings growth.
Analysis OverviewBuyUpdated May 1, 2026
DigitalOcean Holdings, Inc. (DOCN) Stock Analysis
Wall Street verdict, consensus price target, and analyst rating breakdown — everything needed to frame the risk/reward at today's price.
Analyst consensus
Buy
Covering
19
analysts
12 bullish · 0 bearish · 19 covering DOCN
Strong Buy
0
Buy
12
Hold
7
Sell
0
Strong Sell
0
Consensus Target
$81
-49.6% vs today
Scenario Range
— – $237
Model bear to bull value window
Coverage
19
Published analyst ratings
Valuation Context
157.4x
Forward P/E · Market cap $16.5B
DOCN price targets
Three scenarios for where DOCN stock could go
Current
~$161
Confidence
70 / 100
Updated
May 1, 2026
Where we are now
Current · $161
Base
$178
Bull
$237
Market caseClosest to today
Base case
$178+10.5%
This is close to how the market is already pricing DOCN — at roughly 174x forward earnings. No dramatic re-rating needed, just steady execution on the core business.
Stress case
Bear case
—
The bear case reflects a scenario where earnings shortfalls or multiple compression combine to materially reduce the stock from its current level.
Not financial advice. Model confidence reflects internal scenario assumptions, not a guarantee of returns. Past performance does not predict future results.
DigitalOcean Holdings, Inc.
DOCN · NYSETechnologySoftware - InfrastructureDecember year-end
DigitalOcean is a cloud computing platform that provides infrastructure and developer tools primarily for startups, small businesses, and individual developers. It generates revenue through subscription-based cloud services — including compute instances, storage, databases, and networking — with infrastructure-as-a-service accounting for the majority of its income. The company's competitive advantage lies in its developer-friendly simplicity and transparent pricing, which appeals to smaller customers who find larger cloud providers overly complex.
Market Cap
$16.5B
Revenue TTM
$949M
Net Income TTM
$254M
Net Margin
26.8%
DOCN Revenue and Earnings Performance
Quarterly beat-or-miss track record against analyst estimates, plus forward revenue and EPS outlook for the next two fiscal years.
EPS Beat Rate
100%Exceptional
12 quarters tracked
Revenue Beat Rate
50%Exceptional
vs consensus estimates
Avg EPS Surprise
+24.4%
above Street consensus
Beat / Miss Record
BeatMissLeft = EPS · Right = Revenue
Q3 2025
Q4 2025
Q1 2026
Q2 2026
Last 4 Quarters
EPS beats: 4 of 4Q3 2025
EPS
$0.59/$0.47
Revenue
$219M/$226M
Q4 2025
EPS
$0.33/$0.31
Revenue
$230M/$238M
Q1 2026
EPS
$0.44/$0.38
Revenue
$242M/$238M
Q2 2026
EPS
$0.44/$0.27
Revenue
$258M/$250M
| Quarter | EPS (Actual / Est) | EPS Surprise | Revenue (Actual / Est) | Rev Surprise |
|---|---|---|---|---|
| Q3 2025 | $0.59/$0.47 | +25.5% | $219M/$226M | -3.4% |
| Q4 2025 | $0.33/$0.31 | +6.5% | $230M/$238M | -3.4% |
| Q1 2026 | $0.44/$0.38 | +15.8% | $242M/$238M | +2.0% |
| Q2 2026 | $0.44/$0.27 | +63.0% | $258M/$250M | +3.3% |
FY1–FY2 Estimates
Revenue Outlook
FY1
$1.1B
+16.8% YoY
FY2
$1.3B
+19.7% YoY
EPS Outlook
FY1
$2.35
+3.3% YoY
FY2
$2.79
+18.7% YoY
Trailing FCF (TTM)$38M
FCF Margin: 4.0%
Next Earnings
—
Expected EPS
—
Expected Revenue
—
DOCN beat EPS estimates in 4 of 4 tracked quarters. A perfect track record raises the bar for the upcoming report.
DOCN Valuation Snapshot
Current multiples compared to the S&P 500, the company's sector, and its own five-year average.
Relative Value Signal
Slightly Overvalued
Fair value est. $97 — implies -5.3% from today's price.
Premium to Fair Value
5.3%
above fair value
Deep DiscountFair ValueVery Expensive
vs S&P 500 Trailing P/E
DOCN
63.9x
vs
S&P 500
25.2x
+153% premium
vs Technology Trailing P/E
DOCN
63.9x
vs
Technology
27.5x
+133% premium
vs DOCN 5Y Avg P/E
Today
63.9x
vs
5Y Average
80.3x
20% discount
Forward PE
157.4x
S&P 500
19.1x
+726%
Technology
21.7x
+626%
5Y Avg
—
—
Trailing PE
63.9x
S&P 500
25.2x
+153%
Technology
27.5x
+133%
5Y Avg
80.3x
-20%
PEG Ratio
—
S&P 500
1.75x
—
Technology
1.47x
—
5Y Avg
—
—
EV/EBITDA
57.6x
S&P 500
15.3x
+278%
Technology
17.4x
+232%
5Y Avg
32.4x
+78%
Price/FCF
97.1x
S&P 500
21.3x
+355%
Technology
19.8x
+391%
5Y Avg
32.4x
+199%
Price/Sales
18.3x
S&P 500
3.1x
+484%
Technology
2.4x
+658%
5Y Avg
7.9x
+132%
Dividend Yield
—
S&P 500
1.88%
—
Technology
1.18%
—
5Y Avg
—
—
| Metric | DOCN | S&P 500 | Technology | 5Y Avg DOCN |
|---|---|---|---|---|
| Forward PE | 157.4x | 19.1x+726% | 21.7x+626% | — |
| Trailing PE | 63.9x | 25.2x+153% | 27.5x+133% | 80.3x-20% |
| PEG Ratio | — | 1.75x | 1.47x | — |
| EV/EBITDA | 57.6x | 15.3x+278% | 17.4x+232% | 32.4x+78% |
| Price/FCF | 97.1x | 21.3x+355% | 19.8x+391% | 32.4x+199% |
| Price/Sales | 18.3x | 3.1x+484% | 2.4x+658% | 7.9x+132% |
| Dividend Yield | — | 1.88% | 1.18% | — |
DOCN trades above S&P 500 benchmarks on 5 of 5 measured multiples — commands a broad premium across most valuation dimensions.
Forward P/E and PEG reflect analyst consensus estimates. Historical averages use trailing ratios where forward data is unavailable.S&P 500 and sector benchmarks both use trailing median P/E — similar readings indicate the broader index and sector are priced alike.
Open valuation toolDOCN Financial Health
Verdict
Adequate
DOCN 15.6% ROIC signals a durable competitive advantage.
Cash Engine
Revenue, margins, and cash generation
Revenue (TTM)
Trailing-twelve-month sales base
$949M
Revenue Growth
TTM vs prior year
+17.6%
Gross Margin
Gross profit as a share of revenue
58.5%
Operating Margin
Operating income divided by revenue
16.4%
Net Margin
Net income divided by revenue
26.8%
EPS (TTM)
Diluted earnings per share, trailing twelve months
$2.27
Free Cash Flow (TTM)
Cash generation after capex
$38M
FCF Margin
FCF as share of revenue — the primary cash quality signal
4.0%
Capital Quality
ROIC, leverage, and debt serviceability
ROIC
Return on invested capital — primary competitive quality signal
15.6%
ROA
Return on assets, trailing twelve months
13.0%
Cash & Equivalents
Liquid assets on the balance sheet
$254M
Net Debt
Total debt minus cash
$476M
Debt Serviceability
Net debt as a multiple of annual free cash flow
12.6× FCF
~12.6 years to full repayment at current FCF run-rate
ROE *
Return on equity, trailing twelve months
165.7%
* Elevated by buyback-compressed equity — compare ROIC (15.6%) for an undistorted picture of capital efficiency.
Shareholder Returns
How capital is returned to owners
Total shareholder yield
0.5%
Dividend
—
Buyback
0.5%
Share Repurchases
Trailing buyback outflow — dollar magnitude of capital returned
$82M
Dividend / Share
Annualized trailing dividend per share
—
Payout Ratio
Share of earnings distributed as dividends
—
Shares Outstanding
Declining as buybacks retire shares
102M
All figures from the trailing twelve months. ROIC uses invested capital (equity + net debt). ROE marked * where buyback-compressed equity base may inflate the figure.
Open full ratios pageDOCN Stock Risk Factors
Key factors that could pressure the stock price, compress the multiple, or weigh on future results.
Based on the latest company results, valuation, and market data
High Risk
Valuation de-rating
DOCN trades at 63.9x trailing earnings versus 25.2x for the S&P 500 and 27.5x for its sector. If earnings delivery or sentiment slips, the stock could re-rate lower and move closer to the bear case target of —.
Medium
Estimate execution
The next fiscal year requires Street estimates of $1.1B in revenue (16.8% growth) and $2.35 in EPS. Missing those operating targets would undermine the premium multiple investors are paying today.
Lower
Capital return support
Part of the per-share support comes from capital returns, backed by $38M in trailing free cash flow, a 0.5% buyback yield. If cash generation softens, the EPS lift and downside cushion from repurchases can narrow.
These are risk mechanisms, not predictions. The key question is which would force a cut to earnings estimates or a lower multiple than the market currently prices in.
Why DOCN Stock Could Outperform
Structural drivers behind the upside case and why the stock could outperform over the next 12 months.
Based on recent company results and analyst estimates
High-margin cash engine
DigitalOcean Holdings, Inc. already operates from a position of scale, with 58.5% gross margin, 16.4% operating margin, and $38M in trailing free cash flow. That combination gives management room to keep funding product investment without relying on outside capital.
Multiple growth levers remain
DigitalOcean Holdings, Inc. still has room to compound if management converts its existing scale into steadier revenue growth and margin discipline. The bull case does not require perfection; it requires the core business to keep translating operating strength into higher per-share earnings.
Upside and capital returns align
Consensus still points to $81, or -49.6% upside, while the modeled bull target reaches $237. If $1.1B in forward revenue and $2.35 in EPS are delivered, ongoing shareholder returns running at 0.5% can amplify the equity upside.
A real bull case compounds — each driver matters most when it strengthens margins, supports capital returns, and keeps the company above the market's minimum growth bar simultaneously.
DOCN Stock Price Performance
52-week range context and price returns across multiple time horizons. Dividend contribution is shown separately in the Capital Return section.
Current Price
$161.01
52W Range Position
99%
52-Week Range
Current price plotted between the 52-week low and high.
52-Week Low
$25.56
+529.9% from the low
52-Week High
$161.96
-0.6% from the high
1 Month
+84.92%
3 Month
+155.90%
YTD
+228.8%
1 Year
+469.9%
3Y CAGR
+69.2%
5Y CAGR
+30.7%
10Y CAGR
+14.2%
Range context matters because valuation compression and earnings misses rarely hit from the same starting point. A stock already far below its high can still fall, but it is no longer carrying the same embedded optimism as one pressing a fresh peak.
DOCN vs Peers
Valuation, growth, and margin comparison against the closest publicly traded peers for this company.
Peer Set
Accurate peer set
Forward PE
157.4x
vs 35.3x median
+346% above peer median
Revenue Growth
+16.8%
vs +10.0% median
+68% above peer median
Net Margin
26.8%
vs 2.0% median
+1266% above peer median
| Company | Mkt Cap | Fwd PE | Rev Grw | Margin | Rating | Upside |
|---|---|---|---|---|---|---|
DOC DOCN DigitalOcean Holdings, Inc. | $16.5B | 157.4x | +16.8% | 26.8% | Buy | -49.6% |
FSL FSLY Fastly, Inc. | $4.9B | 118.4x | +12.9% | -15.8% | Hold | -38.2% |
NET NET Cloudflare, Inc. | $87.8B | 221.4x | +27.1% | -4.7% | Buy | -12.9% |
AKA AKAM Akamai Technologies, Inc. | $18.3B | 17.8x | +5.7% | 10.7% | Hold | -8.9% |
BAN BAND Bandwidth Inc. | $1.5B | 26.1x | -9.3% | 2.0% | Buy | -1.0% |
AMZ AMZN Amazon.com, Inc. | $2.96T | 35.3x | +10.0% | 12.2% | Buy | +11.6% |
This peer comparison reflects companies with similar business models, product lines, or market positioning, supplemented by industry grouping when direct matches are limited.
DOCN Dividend and Capital Return
DOCN returns 0.5% annually — null% through dividends and 0.5% through buybacks.
Dividend UnknownFCF Unknown
Total Shareholder Yield
0.5%
Dividend + buyback return per year
Buyback Yield
0.5%
Dividend Yield
—
Payout Ratio
—
Dividend Profile
Yield, cadence, and growth quality
Dividend / Share
Trailing annualized cash dividend
$0.00
Growth Streak
Consecutive years of dividend increases
0Y
3Y Div CAGR
—
5Y Div CAGR
—
Ex-Dividend Date
—
Payment Cadence
—
0 payments over the last 12 months
Buyback Engine
How much per-share support comes from repurchases
Repurchases (TTM)
Cash used for buybacks in the latest trailing period
$82M
Estimated Shares Retired
510.1K
Approx. Share Reduction
0.5%
Shares Outstanding
Current diluted share count from the screening snapshot
102M
FAQ
7 questionsDOCN Investor Questions
Common questions answered from live analyst data and company financials.
01Is DigitalOcean Holdings, Inc. (DOCN) stock a buy or sell in 2026?
DigitalOcean Holdings, Inc. (DOCN) is rated Buy by Wall Street analysts as of 2026. Of 19 analysts covering the stock, 12 rate it Buy or Strong Buy, 7 rate it Hold, and 0 rate it Sell or Strong Sell. The consensus 12-month price target is $81, implying -49.6% from the current price of $161.
02What is the DOCN stock price target for 2026?
The Wall Street consensus price target for DOCN is $81 based on 19 analyst estimates. The high-end target is $115 (-28.6% from today), and the low-end target is $57 (-64.6%). The base case model target is $178.
03Is DigitalOcean Holdings, Inc. (DOCN) stock overvalued in 2026?
DOCN trades at 157.4x times forward earnings. The stock trades at a notable premium to the broad market, which is typical for businesses with strong free cash flow and above-average growth expectations. Based on current multiples versus the peer group, the relative model signals slightly overvalued. Whether the stock is over or undervalued ultimately depends on whether consensus earnings estimates are achievable.
04What are the main risks for DigitalOcean Holdings, Inc. (DOCN) stock in 2026?
The primary risks for DOCN in 2026 are: (1) Valuation de-rating — DOCN trades at 63. (2) Estimate execution — The next fiscal year requires Street estimates of $1. (3) Capital return support — Part of the per-share support comes from capital returns, backed by $38M in trailing free cash flow, a 0. Each factor has the potential to pressure earnings or compress the stock's valuation multiple.
05What is DigitalOcean Holdings, Inc.'s revenue and earnings forecast?
Analyst consensus estimates DOCN will report consensus revenue of $1.1B (+16.8% year-over-year) and EPS of $2.35 (+3.3% year-over-year) for the upcoming fiscal year. The following year, analysts project $1.3B in revenue.
06When does DigitalOcean Holdings, Inc. (DOCN) report its next earnings?
A confirmed upcoming earnings date for DOCN is not yet available. Check the Earnings section above for the most recent quarterly report dates and forward estimates.
07How much free cash flow does DigitalOcean Holdings, Inc. generate?
DigitalOcean Holdings, Inc. (DOCN) generated $38M in free cash flow over the trailing twelve months — a free cash flow margin of 4.0%. DOCN returns capital to shareholders through and share repurchases ($82M TTM).