MODEL VERDICT
DigitalOcean Holdings, Inc. (DOCN) — Relative Valuation
Peer multiples, Monte Carlo simulation & quality-adjusted fair value
Popular:
Peer multiples, Monte Carlo simulation & quality-adjusted fair value
Composite score derived from valuation, quality, and risk factors
Quantitative model thresholds · For educational and research purposes only
Each row records the model's monthly assessment. High Conviction = the model detected notable undervaluation vs peers. Neutral = no notable divergence was found. The return column shows the actual price change over 90 days for reference. This is a quantitative observation log — not investment advice.
| Date | Assessment | Score | Price | Status | 90d Fwd Return |
|---|---|---|---|---|---|
| Feb 28, 2026 | MODERATE | 0.67 | $56.06 | CURRENT | — |
| Feb 21, 2026 | NEUTRAL | 0.18 | $63.63 | CURRENT | — |
| Feb 14, 2026 | NEUTRAL | 0.18 | $68.16 | CURRENT | — |
| Feb 11, 2026 | NEUTRAL | 0.18 | $64.08 | CURRENT | — |
| Jan 11, 2026 | NEUTRAL | 0.35 | $53.20 | Below threshold | +21.7% |
Historical model observations for research purposes only. Past quantitative patterns do not predict future results. Not a recommendation to buy, sell, or hold any security.
| Methodology | Fair Value | vs Current | Weight | Quality | Status |
|---|---|---|---|---|---|
| Forward P/E 71 analyst estimates | $15.81 | -71.8% | 20% | A- | Analyst Est. |
| EV/EBITDA 55 industry peers | $48.98 | -12.6% | 20% | A- | Peer Data |
| Industry Median P/E 45 industry peers | $57.90 | +3.3% | 15% | A | Peer Data |
| Price / Free Cash Flow 67 industry peers | $43.07 | -23.2% | 15% | B+ | Peer Data |
| EV/EBIT 51 industry peers | $20.72 | -63.0% | 8% | B+ | Peer Data |
| EV/FCF 68 industry peers | $42.73 | -23.8% | 7% | B | Model Driven |
| EV To Revenue 78 industry peers | $22.89 | -59.2% | 4% | B | Data |
| Price / Sales 79 industry peers | $23.76 | -57.6% | 3% | B | Model Driven |
| Earnings Yield 50 industry peers | $65.20 | +16.3% | 2% | B | Data |
| FCF Yield 67 industry peers | $44.85 | -20.0% | 1% | B | Data |
| Weighted Output Blended model output | $74.95 | +33.7% | 100% | 74 | SIGNIFICANTLY UNDERVALUED |
| EPS Growth ↓ | P/E Multiple → | 18× | 20× | 22× (Current) | 24× | 26× |
|---|---|---|---|---|---|
| Bear Case (4%) | $47 | $52 | $58 | $63 | $68 |
| Conservative (7%) | $48 | $54 | $59 | $64 | $70 |
| Base Case (10.0%) | $50 | $55 | $61 | $67 | $72 |
| Bull Case (14%) | $51 | $57 | $63 | $69 | $74 |
Cross-sectional regression predicting expected multiples based on growth, margins, ROIC, and beta.
| Multiple | Avg | Median | Min | Max | Std |
|---|---|---|---|---|---|
| P/E Ratio | 80.28 | 38.28 | 19.10 | 183.45 | 89.87 |
| EV/EBIT | 67.73 | 42.00 | 24.69 | 136.49 | 60.18 |
| EV/EBITDA | 47.62 | 37.57 | 18.83 | 108.33 | 36.71 |
| P/FCF | 94.97 | 33.47 | 16.37 | 358.61 | 147.56 |
| P/FFO | 42.62 | 25.77 | 12.78 | 125.05 | 46.90 |
| P/S Ratio | 7.88 | 5.11 | 4.12 | 20.10 | 6.85 |
Based on our peer multiples analysis with 26 valuation metrics, the model estimates DOCN's fair value at $74.95 vs the current price of $56.06, implying +33.7% upside potential. Model verdict: Significantly Undervalued. Confidence: 74/100. This is a quantitative estimate, not a recommendation.
The blended fair value of $74.95 is calculated using four lenses: industry median multiples (40%), historical multiples (30%), forward estimates (20%), and quality-adjusted multiples (10%). Monte Carlo simulation (10,000 iterations) gives a range of $49.32 (P10) to $126.73 (P90), with a median of $82.35.
DOCN's current P/E of 22.2x compares to the industry median of 23.0x (45 peers in the group). This represents a -3.2% discount to the industry. The historical average P/E is 80.3x over 3 years. Signal: Fair Value.
19 analysts cover DOCN with a consensus rating of Buy. The consensus price target is $65.83 (range: $57.00 — $80.00), implying +17.4% upside from the current price. Grade breakdown: Strong Buy (0), Buy (12), Hold (7), Sell (0), Strong Sell (0).
The model confidence score is 74/100, based on: data completeness (27), peer quality (25), historical depth (16), earnings stability (4), and model agreement (2). Cyclicality penalty: -0 points. The model shows strong agreement across inputs.
The model flags several key risks: (1) Margin reversion: Current net margin of 28.8% is 28.0 percentage points above the 3-year average (0.7%), with a Z-score of +1.8σ. If margins normalize, fair value could drop to ~$5. (2) Macro/regulatory risks are not captured in this model but remain material.
Peak earnings risk refers to the possibility that DOCN's current profitability is above its sustainable long-term trend. The model detects a margin Z-score of +1.8σ, meaning margins are 1.8 standard deviations above their historical average. If margins revert to the 3-year mean (0.7%), the model estimates fair value drops by 9100.0% to approximately $5. This isn't a prediction — it's a scenario analysis.
No. This dashboard is a quantitative research tool for educational and informational purposes only. It is not investment advice, a solicitation, or a recommendation to buy, sell, or hold any security. The operator of this platform is not a registered investment advisor (RIA), broker-dealer, or financial planner. All model outputs, fair value estimates, signals, and scenarios are the result of automated quantitative computations and should not be construed as professional financial guidance. You should consult a qualified, licensed financial advisor before making any investment decisions. Past model performance is not indicative of future results.