Is DigitalOcean (DOCN) Fairly Priced After Strong One Year Share Price Gains?

Simply Wall St.02-06

If you are wondering whether DigitalOcean Holdings is priced attractively today, this article walks through the numbers behind the stock rather than relying on headlines or hype. The shares recently ...

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The shares recently ...</p>\n\n<a href=\"https://simplywall.st/stocks/us/software/nyse-docn/digitalocean-holdings/news/is-digitalocean-docn-fairly-priced-after-strong-one-year-sha\">Source Link</a>\n\n</div>\n","source":"simplywall_highlight","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Is DigitalOcean (DOCN) Fairly Priced After Strong One Year Share Price Gains?</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nIs DigitalOcean (DOCN) Fairly Priced After Strong One Year Share Price Gains?\n</h2>\n\n<h4 class=\"meta\">\n\n\n2026-02-06 06:43 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://simplywall.st/stocks/us/software/nyse-docn/digitalocean-holdings/news/is-digitalocean-docn-fairly-priced-after-strong-one-year-sha><strong>Simply Wall St.</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>If you are wondering whether DigitalOcean Holdings is priced attractively today, this article walks through the numbers behind the stock rather than relying on headlines or hype. The shares recently ...</p>\n\n<a href=\"https://simplywall.st/stocks/us/software/nyse-docn/digitalocean-holdings/news/is-digitalocean-docn-fairly-priced-after-strong-one-year-sha\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"DCF","symbol_name":"Dreyfus Alcentra Global Credit Income 2024 Target Term Fund, Inc","start_time":0,"source_url":"https://simplywall.st/stocks/us/software/nyse-docn/digitalocean-holdings/news/is-digitalocean-docn-fairly-priced-after-strong-one-year-sha","article_id":"2609534860","we_media_id":null,"thumbnails":["https://images.simplywall.st/asset/industry/8041000-choice2-main-header/1585186556238"],"rights":{"source":"simplywall_highlight","url":"https://simplywall.st/stocks/us/software/nyse-docn/digitalocean-holdings/news/is-digitalocean-docn-fairly-priced-after-strong-one-year-sha","rn_cache_url":null,"directOrigin":true},"url":"https://stock-news.laohu8.com/highlight/detail?id=2609534860","pubTimestamp":1770331394,"columns":[],"sourceInfo":{"source_id":"simplywall_highlight","name":"Simply Wall St."},"weMediaInfo":null,"summary":"If you are wondering whether DigitalOcean Holdings is priced attractively today, this article walks through the numbers behind the stock rather than relying on headlines or hype.\nThe shares recently closed at US$57.66, with returns of 2.7% over the last 7 days, 6.8% over 30 days, 17.7% year to date, and 31.1% over the past year. This gives useful context before comparing that price to underlying value.\nRecent coverage of DigitalOcean has focused on its position as a cloud platform for...","collect":0,"end_time":0,"defaultTopTitle":"simplywall.st","property":[],"viewcount":null,"language":"en","relate_stocks":{"DCF":"Dreyfus Alcentra Global Credit Income 2024 Target Term Fund, Inc","DOCN":"DigitalOcean Holdings, Inc.","BK4116":"互联网服务与基础架构","BK4588":"碎股","BK4585":"ETF&股票定投概念"},"translate_title":"DigitalOcean(DOCN)股价一年强劲上涨后的定价是否合理？","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"DOCN":1.5,"DCF":1},"content_text":"If you are wondering whether DigitalOcean Holdings is priced attractively today, this article walks through the numbers behind the stock rather than relying on headlines or hype. The shares recently closed at US$57.66, with returns of 2.7% over the last 7 days, 6.8% over 30 days, 17.7% year to date, and 31.1% over the past year. This gives useful context before comparing that price to underlying value. Recent coverage of DigitalOcean has focused on its position as a cloud platform for developers and small businesses, as well as how that niche fits within the broader software and infrastructure space. This backdrop helps frame why investors may have reassessed the stock and what expectations could be reflected in the current share price. On our checks, DigitalOcean scores a 3 out of 6 valuation score, which suggests some measures point to potential undervaluation while others look more balanced. Next, we will compare different valuation approaches before finishing with a perspective that can help you put all these methods into a single, clearer story.  DigitalOcean Holdings delivered 31.1% returns over the last year. See how this stacks up to the rest of the IT industry. AdvertisementApproach 1: DigitalOcean Holdings Discounted Cash Flow (DCF) Analysis A Discounted Cash Flow, or DCF, model estimates what a company could be worth by projecting its future cash flows and then discounting those back to today into a single value. For DigitalOcean Holdings, the model used is a 2 Stage Free Cash Flow to Equity approach, based on cash flow projections in $. The latest twelve month free cash flow is about $152.7 million. Analysts provide near term estimates, and Simply Wall St then extrapolates further, with projections reaching around $483.0 million in free cash flow by 2035. When all of these projected cash flows are discounted back to today, the DCF model produces an estimated intrinsic value of about $58.94 per share. Compared with the recent share price of $57.66, the model implies the stock is around 2.2% undervalued, which sits well within a normal margin of error for this kind of analysis. Result: ABOUT RIGHT DigitalOcean Holdings is fairly valued according to our Discounted Cash Flow (DCF), but this can change at a moment's notice. Track the value in your watchlist or portfolio and be alerted on when to act. DOCN Discounted Cash Flow as at Feb 2026 Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for DigitalOcean Holdings. Approach 2: DigitalOcean Holdings Price vs Earnings For a profitable company, the P/E ratio is a useful way to see how much you are paying for each dollar of earnings. It is simple to interpret and ties directly to what ultimately matters to equity holders, which is the company’s ability to generate earnings over time. What counts as a “normal” P/E depends on how quickly earnings are expected to grow and how risky those earnings are. Higher expected growth or lower perceived risk can justify a higher P/E, while slower growth or higher risk usually points to a lower multiple. DigitalOcean Holdings currently trades on a P/E of 20.95x, compared with the IT industry average of about 26.09x and a peer group average of 42.32x. Simply Wall St’s Fair Ratio is a proprietary estimate of what P/E might be reasonable given DigitalOcean’s earnings growth profile, industry, profit margins, market cap and risk factors. This tailored view can be more informative than a simple comparison with peers or the broad industry because it adjusts for company specific traits. For DigitalOcean, the Fair Ratio is 16.91x, which is below the current P/E of 20.95x, suggesting the shares are trading above this modelled fair level. Result: OVERVALUED NYSE:DOCN P/E Ratio as at Feb 2026 P/E ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1433 companies where insiders are betting big on explosive growth. Upgrade Your Decision Making: Choose your DigitalOcean Holdings Narrative Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, which let you write a clear story about DigitalOcean Holdings that sits behind your numbers such as fair value, revenue, earnings and margin assumptions. A Narrative links what you believe about the business, such as its role serving developers and small businesses, to a simple financial forecast and then to a fair value that you can compare with the current share price. On Simply Wall St, millions of investors build and share these Narratives in the Community page, where each one is an easy to read combination of a company story, a set of forecasts and an automatically calculated fair value that updates when new information such as news or earnings is added. This helps you decide whether DigitalOcean looks interesting to you by comparing your Narrative fair value with the live market price. You will often see a wide spread of views. For example, one DigitalOcean Narrative might assume a relatively low fair value while another assumes a much higher fair value based on different expectations for future performance. Do you think there's more to the story for DigitalOcean Holdings? Head over to our Community to see what others are saying! NYSE:DOCN 1-Year Stock Price Chart  This article by Simply Wall St is general in nature. We provide commentary based on historical data\n    and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your\n    financial situation. We aim to bring you long-term focused analysis driven by fundamental data.\n    Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.\n    Simply Wall St has no position in any stocks mentioned.New: Manage All Your Stock Portfolios in One PlaceWe've created the ultimate portfolio companion for stock investors, and it's free.• Connect an unlimited number of Portfolios and see your total in one currency• Be alerted to new Warning Signs or Risks via email or mobile• Track the Fair Value of your stocksTry a Demo Portfolio for FreeHave feedback on this article? Concerned about the content? Get in touch with us directly. 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