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DigitalOcean Holdings, Inc. (DOCN) Outpaces Stock Market Gains: What You Should Know

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DigitalOcean Holdings, Inc. (DOCN - Free Report) closed the most recent trading day at $25.07, moving +0.89% from the previous trading session. The stock outpaced the S&P 500's daily gain of 0.12%. Meanwhile, the Dow lost 0.2%, and the Nasdaq, a tech-heavy index, added 0.29%.

Prior to today's trading, shares of the company had lost 28.43% over the past month. This has lagged the Computer and Technology sector's gain of 2.32% and the S&P 500's gain of 0.09% in that time.

Investors will be hoping for strength from DigitalOcean Holdings, Inc. as it approaches its next earnings release. On that day, DigitalOcean Holdings, Inc. is projected to report earnings of $0.41 per share, which would represent year-over-year growth of 7.89%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $173.51 million, up 14.06% from the year-ago period.

DOCN's full-year Zacks Consensus Estimates are calling for earnings of $1.63 per share and revenue of $684.55 million. These results would represent year-over-year changes of +73.4% and +18.78%, respectively.

Investors should also note any recent changes to analyst estimates for DigitalOcean Holdings, Inc.These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. DigitalOcean Holdings, Inc. is currently a Zacks Rank #3 (Hold).

Looking at its valuation, DigitalOcean Holdings, Inc. is holding a Forward P/E ratio of 15.27. This represents a discount compared to its industry's average Forward P/E of 38.77.

We can also see that DOCN currently has a PEG ratio of 0.54. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Internet - Software was holding an average PEG ratio of 1.66 at yesterday's closing price.

The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 93, putting it in the top 37% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow DOCN in the coming trading sessions, be sure to utilize Zacks.com.


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