- Piper Sandler analyst James Fish initiated coverage of DigitalOcean Holdings Inc (NYSE:DOCN) with an Overweight rating and a $72 price target (21% upside).
- Fish expects DigitalOcean to benefit from the shift of the 18% public cloud workload annual growth in which cloud spending is only 23% of broader infrastructure spending today.
- The analyst notes DigitalOcean is a price leader and provides best-in-class support.
- However, Fish expects hyperscaler competitive concerns to persist and likely cap the multiple, with the company needing not to invest in more geo-availability but also more into the edge.
- DigitalOcean's Q4 FY21 revenue of $119.7 million, up 37% Y/Y, beat the consensus of $119.1 million. Non-GAAP EPS of $0.10 beat the consensus of $0.09.
- DigitalOcean forecasts Q1 revenue of $126 million -$126.5 million compared to the consensus of $126.19 million and Non-GAAP EPS of $0.10-$0.12 versus the consensus of $0.11.
- DigitalOcean sees FY22 revenue of $564 million - $568 million, above the consensus of $563.17 million, and Non-GAAP EPS of $0.70-$0.71, above the consensus of $0.58.
- Price Action: DOCN shares traded higher by 0.91% at $60.11 on Monday's last check.
