Market Pulse59Neutral

DigitalOcean Holdings, Inc.Opportunity Rank #162(DOCN) Intrinsic Value & DCF Analysis (2026)

Sector: Technology

Current Price

$150.58

Last updated: May 08, 2026

Price vs Intrinsic Value

$150.58
Price
$100.14
Intrinsic Value
Overvalued by 33%MOS: $80.11

Fundamental Score

45/100
Bearish

Weighted across 6 signals

Narrative Score

80/100
Strong

No change vs previous

Trend Score

100/100
Strong

As of 2026-05-08

The intrinsic value of DigitalOcean Holdings, Inc. (DOCN) is estimated at $100.14 per share based on a 10-year discounted cash flow (DCF) analysis. At the current price of $150.58, the stock appears overvalued relative to its projected cash flow fundamentals. This estimate assumes an 11.60% long-term growth rate and a 9.78% discount rate, reflecting expected future free cash flow and cost of capital.

The intrinsic value of DigitalOcean Holdings, Inc. (DOCN) is estimated at $100.14 per share based on a 10-year discounted cash flow (DCF) analysis. At the current price of $150.58, the stock appears overvalued relative to its projected cash flow fundamentals. This estimate assumes an 11.60% long-term growth rate and a 9.78% discount rate, reflecting expected future free cash flow and cost of capital.

Valuation Details

$100.14
▼ -33.50% downside
20% margin of safety: $80.11
Years: 10Growth Rate: 11.60%
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Capital Efficiency

Average Quarterly ROIC
8.12%
Cost of Capital (estimated)11%
Value StatusUnderperforming Capital

The company is earning below its required return. This may indicate inefficient use of capital or excess cash that isn't being reinvested.

Complete historical ROIC is available with
.

Fundamental Details

45/100
BearishWeighted across 6 signals
DCF Discount
33.5% premium to price
0
FCF Yield
2.9% trailing FCF yield
23
ROIC vs WACC
ROIC 8.1% vs WACC 11.0% (0.7x)
37
Net Debt / FCF
0.3x net debt to FCF
93
Buybacks
Share count growing
30
FCF CAGR (5Y)
21.5% 5Y FCF CAGR
100
Strengths: Net Debt / FCF, FCF CAGR (5Y). Concerns: DCF Discount, FCF Yield.

Narrative Details

80/100
Strong
Vs 6-Month Baseline:High (99th pct)Weighted across 6 recent drivers
Trend: Improving upConfidence: 100%Updated: 17h ago
Sources: 72 (48 News · 24 Analyst)
Drivers(last 30 days)
38 news sentiment+2.5
4 earnings beat+0.7
4 regulatory scrutiny+0.5
Margin pressure+0.0
Downgrade headlines+0.0
24 analyst reiterations0.0

Trend Details

100/100
StrongAs of 2026-05-08311 daily bars used
Price vs 50 EMA+75.9%
3M Relative Strength vs SPY+153.8%
6M Relative Strength vs SPY+249.0%
Price vs 21 EMA100 · +45.2%
Price vs 50 EMA100 · +75.9%
21 EMA vs 50 EMA100 · +21.1%
3M RS vs SPY100 · +153.8%
6M RS vs SPY100 · +249.0%
Distance from 52W High100 · 0.0%

Investment Coach

Updating... 1d ago
AVOIDConfidence: 63%
Thesis
DigitalOcean Holdings, Inc. is currently overvalued by approximately 31.7% relative to its estimated fair value, with returns trailing its cost of capital despite a strong and improving narrative score. The company shows bearish fundamentals with a negative spread between ROIC and WACC, suggesting limited value creation at the current price.
Key Risk
The primary risk is that the company's returns may not improve sufficiently to justify the current premium valuation, leading to potential price declines.
Signals To Watch
  • Monitor for the stock price to reach at least a mid-teens discount to fair value.
  • Track the ROIC versus WACC spread for signs of sustained improvement.
  • Follow the narrative score trend for meaningful directional shifts.
Ask the Coach - Available with
Historical Growth Rates
Free Cash Flow- - -Trend CAGR: 14.84%5 Year CAGR: 13.75%

Free Cash Flow (in millions)

TTM20252024202320222021202020192018
$461$449$469$360$315$242$174$110$99

How Intrinziq Estimates Fair Value

Intrinziq estimates DigitalOcean Holdings, Inc.'s intrinsic value using a discounted cash flow (DCF) model based on free cash flow trends and a market-based discount rate. The model projects future cash flows over ten years and discounts them using a market return assumption to estimate fair value.

DigitalOcean Holdings, Inc.Technology

DigitalOcean Holdings, Inc., through its subsidiaries, operates a cloud computing platform in North America, Europe, Asia, and internationally. Its platform provides on-demand infrastructure and platform tools for developers, start-ups, and small and medium size businesses. The company offers infrastructure solutions across compute, storage, and networking, as well as enables developers to extend the native capabilities of its cloud with fully managed application, container, and database offerings. Its users include software engineers, researchers, data scientists, system administrators, students, and hobbyists. The company's customers use its platform in various industry verticals and for a range of use cases, such as web and mobile applications, website hosting, e-commerce, media and gaming, personal web projects, managed services, and others. DigitalOcean Holdings, Inc. was incorporated in 2012 and is headquartered in New York, New York.