Considering DigitalOcean Holdings Inc. (DOCN) as a potential investment: What Should You Do?

After closing at $41.00 in the most recent trading day, DigitalOcean Holdings Inc. (NYSE: DOCN) closed at 38.79, down -5.39%. In other words, the price has decreased by $-2.21 from its previous closing price. On the day, 1017624 shares were traded. DOCN reached its highest trading level at $41.02 during the session, while it also had its lowest trading level at $38.70.

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Our goal is to gain a better understanding of DOCN by taking a closer look at its different ratios. It provided that stocks Price–to–Cash (P/C) ratio for the trailing twelve months (TTM) is standing at 3.42 whereas its Price-to-Free Cash Flow (P/FCF) for the term is 28.40. For the most recent quarter (mrq), Quick Ratio is recorded 16.60 and its Current Ratio is at 16.60. In the meantime, Its Debt-to-Equity ratio is 30.36 whereas as Long-Term Debt/Eq ratio is at 30.36.

Upgrades & Downgrades

In addition, analysts’ ratings and any changes thereto give investors an idea of the stock’s future direction. In the most recent recommendation for the company, Goldman on July 13, 2022, Downgraded its rating to Sell and sets its target price to $40 from $54 previously.

On July 11, 2022, Morgan Stanley Downgraded its rating to Underweight which previously was Equal-Weight but kept the price unchanged to $45.

On May 12, 2022, Goldman started tracking the stock assigning a Buy rating and target price of $49.Goldman initiated its Buy rating on May 12, 2022, with a $49 target price.

Insider Transactions:

The insider trade also gives investors a glimpse into the future direction of stock prices, which can be beneficial to investors. A recent insider transaction in this stock occurred on Aug 17 when Brantz Carly D sold 1,774 shares for $45.97 per share. The transaction valued at 81,551 led to the insider holds 100,897 shares of the business.

Butte Amy sold 5,000 shares of DOCN for $250,000 on Aug 10. The Director now owns 34,760 shares after completing the transaction at $50.00 per share. On Jun 16, another insider, Brantz Carly D, who serves as the Chief Marketing Officer of the company, sold 16,610 shares for $40.40 each. As a result, the insider received 671,044 and left with 102,671 shares of the company.

Valuation Measures:

For the stock, the TTM Price-to-Sale (P/S) ratio is 8.11 while its Price-to-Book (P/B) ratio in mrq is 82.53.

Stock Price History:

Over the past 52 weeks, DOCN has reached a high of $133.40, while it has fallen to a 52-week low of $30.05. The 50-Day Moving Average of the stock is 42.65, while the 200-Day Moving Average is calculated to be 51.58.

Shares Statistics:

The stock has traded on average 1.61M shares per day over the past 3-months and 1.63M shares per day over the last 10 days, according to various share statistics. A total of 102.50M shares are outstanding, with a floating share count of 69.04M. Insiders hold about 4.60% of the company’s shares, while institutions hold 53.80% stake in the company. Shares short for DOCN as of Jul 14, 2022 were 8.68M with a Short Ratio of 5.08, compared to 8.31M on Jun 14, 2022. Therefore, it implies a Short% of Shares Outstanding of 8.50% and a Short% of Float of 11.66%.

Earnings Estimates

Its stock is currently analyzed by 12 different market analysts. On average, analysts expect EPS of $0.1 for the current quarter, with a high estimate of $0.13 and a low estimate of $0.09, while EPS last year was $0.08. The consensus estimate for the next quarter is $0.22, with high estimates of $0.28 and low estimates of $0.14.

Analysts are recommending an EPS of between $0.79 and $0.51 for the fiscal current year, implying an average EPS of $0.66. EPS for the following year is $1.14, with 12 analysts recommending between $1.57 and $0.74.

Revenue Estimates

11 analysts predict $134.45M in revenue for the current quarter. It ranges from a high estimate of $136M to a low estimate of $133.3M. As of the current estimate, DigitalOcean Holdings Inc.’s year-ago sales were $98.25M, an estimated increase of 36.80% from the year-ago figure.

A total of 12 analysts have provided revenue estimates for DOCN’s current fiscal year. The highest revenue estimate was $582M, while the lowest revenue estimate was $554.84M, resulting in an average revenue estimate of $566.68M. In the same quarter a year ago, actual revenue was $428.56M, up 32.20% from the average estimate. Based on 12 analysts’ estimates, the company’s revenue will be $746.4M in the next fiscal year. The high estimate is $771.1M and the low estimate is $710.25M. The average revenue growth estimate for next year is up 31.70% from the average revenue estimate for this year.