Market Pulse44Neutral

DigitalOcean Holdings, Inc.Opportunity Rank #209(DOCN) Intrinsic Value & DCF Analysis (2026)

Sector: Technology

Current Price

$166.24

Last updated: Jun 23, 2026

Price vs Intrinsic Value

$166.24
Price
$113.00
Intrinsic Value
Overvalued by 32%MOS: $90.40

Fundamental Score

46/100
Bearish

Weighted across 6 signals

Narrative Score

56/100
Improving

No change vs previous

Trend Score

87/100
Strong

As of 2026-06-22

The intrinsic value of DigitalOcean Holdings, Inc. (DOCN) is estimated at $113.00 per share based on a 10-year discounted cash flow (DCF) analysis. At the current price of $166.24, the stock appears overvalued relative to its projected cash flow fundamentals. This estimate assumes an 11.47% long-term growth rate and a 10.39% discount rate, reflecting expected future free cash flow and cost of capital.

The intrinsic value of DigitalOcean Holdings, Inc. (DOCN) is estimated at $113.00 per share based on a 10-year discounted cash flow (DCF) analysis. At the current price of $166.24, the stock appears overvalued relative to its projected cash flow fundamentals. This estimate assumes an 11.47% long-term growth rate and a 10.39% discount rate, reflecting expected future free cash flow and cost of capital.

Valuation Details

$113.00
▼ -32.03% downside
20% margin of safety: $90.40
Years: 10Growth Rate: 11.47%
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Capital Efficiency

Average Quarterly ROIC
7.47%
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

46/100
BearishWeighted across 6 signals
DCF Discount
32.0% premium to price
0
FCF Yield
3.3% trailing FCF yield
33
ROIC vs WACC
ROIC 7.5% vs WACC 11.0% (0.7x)
34
Net Debt / FCF
0.3x net debt to FCF
94
Buybacks
Share count growing
30
FCF CAGR (5Y)
26.9% 5Y FCF CAGR
100
Strengths: Net Debt / FCF, FCF CAGR (5Y). Concerns: DCF Discount, FCF Yield.

Narrative Details

56/100
Improving
Vs 6-Month Baseline:Below Avg (32nd pct)Weighted across 5 recent drivers
Trend: StableConfidence: 87%Updated: 24m ago
Sources: 52 (35 News · 17 Analyst)
Drivers(last 30 days)
Upgrade headlines+0.5
30 news sentiment+0.1
3 earnings beat+0.0
Regulatory scrutiny+0.0
17 analyst reiterations0.0

Trend Details

87/100
StrongAs of 2026-06-22308 daily bars used
3M Relative Strength vs SPY+86.4%
6M Relative Strength vs SPY+267.8%
21 EMA vs 50 EMA+15.4%
Price vs 21 EMA50 · +0.0%
Price vs 50 EMA95 · +15.4%
21 EMA vs 50 EMA99 · +15.4%
3M RS vs SPY100 · +86.4%
6M RS vs SPY100 · +267.8%
Distance from 52W High83 · -8.3%

Investment Coach

Updating... 12d ago
AVOIDConfidence: 70%
Thesis
DigitalOcean Holdings, Inc. is currently overvalued with its market price approximately 31.6% above the estimated fair value, and its returns are trailing the estimated cost of capital. The company's fundamentals show a bearish outlook with a negative spread between ROIC and WACC, indicating potential value erosion.
Key Risk
The key risk is that the company's return on invested capital remains below its weighted average cost of capital, which could further depress valuation and investor returns.
Signals To Watch
  • Price moves to at least a mid-teens discount to fair value.
  • Sustained improvement in ROIC versus WACC spread.
  • Meaningful shifts in the narrative trend score direction.
Ask the Coach - Available with
Historical Growth Rates
Free Cash Flow- - -Trend CAGR: 17.07%5 Year CAGR: 18.85%

Free Cash Flow (in millions)

TTM20252024202320222021202020192018
$574$578$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 various operating entities, provides a global cloud computing environment with reach across North America, Europe, Asia, and beyond. This adaptable platform delivers on-demand infrastructure and essential developer tools, specifically designed for individual developers, new start-ups, and small to mid-sized businesses. The company offers fundamental infrastructure components such as computing power, storage, and networking capabilities, while also enabling developers to expand their cloud solutions using a range of fully managed offerings for applications, containers, and databases. Its clientele is diverse, including software engineers, academic researchers, data scientists, system administrators, students, and personal project enthusiasts. Customers from various industries utilize the platform for a multitude of applications, including the development of web and mobile applications, website hosting, e-commerce solutions, media and gaming platforms, personal online projects, and managed services, among others. DigitalOcean Holdings, Inc. was founded in 2012 and has its corporate headquarters situated in New York, New York.