Rankings Software, cloud & internet DigitalOcean
DigitalOcean
57
15070100
A view of the same findings, not a new score. How it works
A good business with a real question mark: the price, a crack, or both.
Biggest deductions
- Multiples vs own history−25
- Capital intensity and ROIC−5
- Absolute price level−5
Strengths
- Raised guidance+3
- Order book+2
How the score is built
From 100 to 57, step by step: points off for the business, the price and the cracks, back for documented strengths, then three data adjustments.
Start
Score
Hover or select a step to see what drove it. Steps with findings open them below.
Key numbers
As of 2 Nov 2026. Analyst targets tend to be optimistic; read upside as a hint, not a forecast.
- Price
- 89.79 USD
- Median analyst target
- 175.00 USD
- Upside to median
- +94.9%
- Analysts
- 17
- Target range
- 105.00 – 220.00 USD
- 52-week change
- +121%
- P/E (trailing)
- 42.7
- Forward P/E
- 66.8
- PEG
- 36.04
Findings
Every deduction and every plus, with its source. Open a step to read them.
Business
Is the company getting stronger, not just bigger? · 3 findings−13 of −30
- −4MarginGross margin has fallen to 57.2% TTM (approx. 55% in Q2) from 59.9% in 2025, because data-center costs are growing faster than revenue. FCF margin has fallen from 13-17% (2023-24) to 1.6%.
- −5Capital intensity and ROICCapex was 294m $ TTM (29% of revenue versus 17% in 2023), so FCF was only 16m $. After deducting stock-based compensation (95m $), FCF is approx. -79m $. ROIC is 7.9% versus a WACC of 12.3%. The business is getting bigger but earns less cash per dollar of revenue.
- −4DilutionThe share count has risen 16% over a year (13% in the latest quarter). Approx. 12m shares were issued in March 2026, and in July a directed issue to convertible holders followed in connection with the buyback of 472m $ of the 2030 notes. Shares issued for 898m $ TTM.
Price
Today's multiples against the company's own history and its peers. · 2 findings−30 of −35
- −25Multiples vs own historyP/S 15.7 versus 4.0-4.9 in 2022-25, forward P/E 100 versus 20-26, EV/EBITDA 55 versus 19-25 and P/FCF 986 versus 27-82. The multiples are 3-4 times own history after a 256% rise in 52 weeks.
- −5Absolute price levelFCF yield 0.1% and earnings yield 1.5% at an EV of $17.1bn and revenue of $1.0bn. The price assumes that growth of over 50% in 2027 becomes reality.
Cracks
Cash flow, customers, debt, insiders, guidance and what sits behind the headline numbers. · 3 findings−9 of −35
- −5Debt and fixed obligationsNet debt is $1.2bn (debt/EBITDA 4.3, interest coverage 3.8). There are $312m in convertible notes maturing in December 2026, $578m in finance leases and about $2.8bn in data centre leases not yet commenced. The fixed costs lock the company in if AI demand fails.
- −2Insider sellingThe CEO, CFO, CAO and a director have sold approx. 6-8m $ over 90 days (91% via 10b5-1 plans), and sales of approx. 9.6m $ (62,996 shares at approx. 152 $) were filed for 21/9. There are no insider purchases.
- −2Quality of AI demandGrowth is driven by AI customers (ARR +212% to USD 234m) and customers above USD 1m (ARR +214%), often venture-funded AI start-ups. This is a more concentrated and less loyal customer base than the small developers, and short interest is 7.4%.
Plus
Only documented strengths. · 2 findings+5 of +15
- +3Raised guidanceQ2 revenue of $281m (+29%) was above the top of guidance. Full-year growth has been raised to about 30.5% and Q4 to at least 35%.
- +2Order bookRPO rose to USD 894m, more than 12 times the level a year earlier. 85% of AI ARR comes from inference and the core cloud, not from bare-metal rental.
Caveats
What the score does not capture, or where the data is weak.
The stock has risen 256% over a year on AI inference. AI customer ARR (234m $) is approx. 20% of revenue but accounts for most of the growth. TTM net income is lifted by a tax benefit (-61m $ in tax), and analysts expect adjusted EPS to fall 31% in 2026. The lease liability figure (2.8bn $) is from a secondary summary of the 10-Q and was not checked in the 10-Q itself. Q3 comes 4/11.
Also in Software, cloud & internet
The highest scores in the same industry.
