Stock fact sheet · data as of
DigitalOcean Holdings, Inc. (DOCN): fair value, margin of safety and Wheel Score
Technology · Software - Infrastructure · United States · High Growth
Is DOCN undervalued?
DOCN closed at 109.47 on 16 Oct 2026, more than 30% above the GLS average fair value of 52.60. Only 2 of the 8 models that produced a value sit above the price. By our models the shares are priced well beyond what the filed earnings, cash flow and book value support; the Sunday Scan drops names like this at the "below fair value" rule.
The 8 models disagree widely: Payback Time gives 5.63 while GLS Growth gives 137.67. A spread that wide means the average is sensitive to which methods you trust; the model table below shows where each one lands, and the Quote page lets you switch any of them off.
The nightly engine files DOCN under High Growth: revenue and earnings growing fast enough that the growth-based models carry the valuation.
Nine valuation models for DOCN
Each model turns the latest filed numbers into a value per share; the GLS fair value is the simple average of the ones that produce a positive number. The last two rows are shown for reference and never enter the average. The Quote page lets you switch any model off and add your own margin of safety.
| Model | Value | vs price | What it measures |
|---|---|---|---|
| DCF | 32.92 | -70% | Present value of the projected free cash flows, discounted at the cost of capital |
| Graham Number | 21.22 | -81% | The most a defensive investor pays for the earnings and book value per share |
| Graham Growth | 128.63 | +17% | Graham's growth formula: EPS × (8.5 + 2 × growth), adjusted for bond yields |
| Lynch | 56.22 | -49% | EPS × the earnings growth rate (PEG of 1), growth capped at 25% |
| GLS Growth | 137.67 | +26% | EPS compounded ten years at the blended growth rate, discounted back at 15% a year |
| 10 Cap | 13.51 | -88% | Owner's earnings (operating cash flow less maintenance capex) capitalised at 10% |
| Payback Time | 5.63 | -95% | Eight years of compounded free cash flow: the price at which the business pays for itself |
| DDM | - | - | Dividend discount model: next year's dividend ÷ (10% − 3% growth); needs a dividend; no value tonight |
| EPV | 24.99 | -77% | Earnings power value: current EPS capitalised at 9% with no growth |
| Zombie (liquidation) | -12.24 | -111% | Current assets less all liabilities, per share: the balance-sheet floor. Not in the average |
| Wall St target | 175.45 | +60% | Analysts' average 12-month price target. Not in the average |
Quality and financial health
Financial health is average - DOCN passes 5 of the nine Piotroski tests, which falls one point short of the Sunday Scan's "6 or more" rule. The Financials tab on the Quote page shows which tests fail. The GLS Moat score is 6.7 out of 10: a ten-year record that is consistent in some of the metrics the score tracks (revenue, earnings, margins, cash flow, returns on capital) and patchy in others.
Returns on capital are high - ROIC 36.9%, ROE -903.7%, ROA 14.1% - with debt at -25.46 times equity and a free-cash-flow yield of 0.1%.
DigitalOcean Holdings, Inc. pays no dividend, so the DDM model does not apply and a covered-call holder earns only the premium and any price gain.
Institutional ownership scores 10/10, insider activity 1/10 and Congressional trading 5/10 on the GLS smart-money scales; the last recorded insider buy was on 30 Sep 2026.
| Piotroski F-score | 5 / 9 | ROIC | 36.9% |
|---|---|---|---|
| GLS Moat | 6.7 / 10 | ROE | -903.7% |
| Debt / equity | -25.46 | ROA | 14.1% |
| Free-cash-flow yield | 0.1% | Payout ratio | 0% |
| Institutions | 10 / 10 | Insiders · Congress | 1 · 5 / 10 |
Wheel Score 48: Weak
DOCN scores 48 out of 100 on the Wheel Score, in the Weak band (under 50). Value 0/25, Health 11/20, Moat 10/15, Premium 9/20, Stability 18/20. The score is not a judgement on the company; it says the price, quality and premium do not line up for selling puts on it today.
Implied volatility is 106% on the near-the-money contracts 20-60 days out - above the 60% ceiling of the sweet spot. Premiums are large, but the Wheel Score tapers the Premium points (9 of 20) because volatility this high usually comes with a reason. The option chain is deep: 68,948 contracts of open interest across all expiries, which means tight fills at most strikes.
Volume runs at 6.4M shares a day on a market cap of $12.9B, with a beta of 1.70 - a high beta, so the stock tends to move more than the market and a strike can be gapped through; the Stability part of the Wheel Score gives that 18 of 20.
| Part | Points | From | |
|---|---|---|---|
| Value | 0 / 25 | -108% margin of safety | |
| Health | 11 / 20 | Piotroski 5/9 | |
| Moat | 10 / 15 | moat 6.7/10 | |
| Premium | 9 / 20 | implied volatility 106% | |
| Stability | 18 / 20 | 6.4M shares/day, $12.9B cap, beta 1.70 |
The Wheel Score ranks ~7,400 US stocks for selling cash-secured puts and covered calls; it is updated nightly and is not a recommendation. The walkthrough lesson shows how the score fits into a trade, start to finish.
Upcoming events
The next earnings report is due on 4 Nov 2026 (before the open), 19 days away; a 30-45-day put sold today would expire after it, which is worth weighing against the premium.
Earnings, dividend, IPO, split and economic calendars for the whole market, filterable to your watchlists.
Similar stocks in Software - Infrastructure
The 12 companies below are the closest to DigitalOcean Holdings, Inc. by market cap within the Software - Infrastructure industry, each with its own fact sheet; the Compare page puts up to eight of them side by side.
| Stock | Close | Fair value | MoS | Wheel | Mkt cap |
|---|---|---|---|---|---|
| AKAM Akamai Technologies, Inc. | 92.32 | 80.13 | -15% | 62Fair | $13.3B |
| GDDY GoDaddy Inc. | 107.29 | 243.71 | +56% | 94Prime | $13.6B |
| CHKP Check Point Software Technologies Ltd. | 138.10 | 186.70 | +26% | 87Prime | $14.1B |
| GEN Gen Digital Inc. | 24.82 | 43.44 | +43% | 88Prime | $14.9B |
| SAIL SailPoint, Inc. | 19.30 | 5.91 | -227% | 45Weak | $10.9B |
| TOST Toast, Inc. | 29.85 | 29.40 | -2% | 71Good | $15.4B |
| PAYP PayPay Corporation | 14.87 | 877.42 | +98% | 83Prime | $10.1B |
| KSPI Joint Stock Company Kaspi.kz | 94.84 | 21,073.44 | +100% | 89Prime | $18.0B |
| NTNX Nutanix, Inc. | 69.98 | 140.22 | +50% | 45Weak | $18.9B |
| NTSK Netskope, Inc. Class A Common Stock | 20.45 | - | - | 45Weak | $8.4B |
| DBX Dropbox, Inc. | 36.54 | 71.80 | +49% | 88Prime | $7.9B |
| S SentinelOne, Inc. | 22.82 | 17.05 | -34% | 45Weak | $7.8B |
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Start free See the Sunday ScanQuestions about DOCN
Is DOCN undervalued right now?
No: at 109.47 the stock trades 108% above the GLS average fair value of 52.60 (data as of 16 Oct 2026), well beyond what trailing earnings, cash flow and book value support.
What is the Wheel Score of DOCN and what does it mean?
DOCN scores 48 out of 100 (Weak). The Wheel Score blends the margin of safety (25 points), Piotroski health (20), the GLS moat (15), the option premium on offer (20) and trading stability (20) into one number that ranks stocks for the wheel strategy - selling cash-secured puts, then covered calls if assigned. 80 and above is Prime, 65-79 Good, 50-64 Fair, under 50 Weak.
What is the GLS fair value for DOCN?
52.60 per share as of 16 Oct 2026 - the simple average of the 8 valuation models (out of nine: DCF, Graham Number, Graham Growth, Lynch, GLS Growth, 10 Cap, Payback Time, DDM and EPV) that produced a positive value. The models run every night on the latest filings; the Quote page lets you switch any of them off and add a margin of safety of your own.
When does DigitalOcean Holdings, Inc. report earnings next?
The next earnings report is due on 4 Nov 2026 (before the open), 19 days from the data date of 16 Oct 2026. The Calendars page lists every upcoming report with its time of day.
Does DOCN have listed options, and how liquid are they?
Yes. The nightly snapshot found 1,000 listed contracts with 68,948 open interest across all expiries and implied volatility of 106% on the near-the-money contracts. The Options scanner lists the cash-secured put and covered call set-ups with premium and annualised yield worked out.