DigitalOcean HoldingsXSWX:DOCN 68 Forward Rate of Return (Yacktman) % is 20.77% as of Mar. 2026, which is 2% above its 10-year median of 20.45. GuruFocus rates XSWX:DOCN with a GF Score™ of 68/100 and a GF Value™ of CHF41.87. The stock has 6 warning signs investors should review. Among 1,367 Software companies, DigitalOcean Holdings ranks better than 71.47% on this metric.
Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation. DigitalOcean Holdings's forward rate of return for was 20.77%.
The historical rank and industry rank for DigitalOcean Holdings's Forward Rate of Return (Yacktman) % or its related term are showing as below:
XSWX:DOCN'
s Forward Rate of Return (Yacktman) % Range Over the Past 10 Years
Min: 20 Med: 20.45 Max: 22.06
Current: 20.5
During the past 8 years, DigitalOcean Holdings's highest Forward Rate of Return was 22.06. The lowest was 20.00. And the median was 20.45.
XSWX:DOCN's Forward Rate of Return (Yacktman) % is ranked better than 71.47% of 1367
companies
in the Software industry
Industry Median: 13.64
vs XSWX:DOCN: 20.50
Unlike the Earnings Yield %, the Forward Rate of Return uses the normalized Free Cash Flow of the past five years, and considers growth. The forward rate of return can be thought of as the return that investors buying the stock today can expect from it in the future.
DigitalOcean Holdings (XSWX:DOCN) Forward Rate of Return (Yacktman) % Explanation
Unlike the Earnings Yield, the Forward Rate of Return uses the normalized Free Cash Flow of the past five years, and considers growth. The forward rate of return can be thought of as the return that investors buying the stock today can expect from it in the future.
For the growth part of the Forward Rate of Return calculation, GuruFocus uses the 5-year average growth rate of EBITDA per share as the growth rate, and the growth rate is always capped at 20%. For the Free Cash Flow we use per share data averaged over five years. The reason we use five years is to make it comparable to the growth rate.
Be Aware
In the Forward Rate of Return calculation, the growth rate is added directly to today's free cash flow yield. Therefore the calculation is reliable only if the company can grow at the same rate in the future as it did in the past. Investors should pay close attention to this when researching growth stocks. A more accurate measurement for return is Return on Capital.
DigitalOcean Holdings Forward Rate of Return (Yacktman) % Related Terms
DigitalOcean Holdings Forward Rate of Return (Yacktman) % Historical Data
* Premium members only.
The historical data trend for DigitalOcean Holdings's Forward Rate of Return (Yacktman) % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
DigitalOcean Holdings Forward Rate of Return (Yacktman) % Chart
XSWX:DOCN vs : Forward Rate of Return (Yacktman) % Comparison
For the Software - Infrastructure subindustry, DigitalOcean Holdings's Forward Rate of Return (Yacktman) %, along with its competitors' market caps and Forward Rate of Return (Yacktman) % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
DigitalOcean Holdings Forward Rate of Return (Yacktman) % vs Software Industry
For the Software industry and Technology sector, DigitalOcean Holdings's Forward Rate of Return (Yacktman) % distribution charts can be found below:
* The bar in red indicates where DigitalOcean Holdings's Forward Rate of Return (Yacktman) % falls into.
DigitalOcean Holdings Forward Rate of Return (Yacktman) % Calculation
Forward Rate of Return is a concept that Don Yacktman uses in his investment approach. Yacktman explained the forward rate of return concept in detail in his interview with GuruFocus. Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation. He said in the interview (March 2012, when the S&P 500 was at about 1400):
If the business is stable, this calculation is fairly straightforward. For instance, on the S&P 500 we would normalize earnings. We would then calculate what percentage of those earnings are not reinvested in the underlying businesses and are therefore free. Historically, for the S&P 500, this has been just under 50% of earnings. Currently, we expect the S&P to earn about 70 on a normalized basis, a number which is far below reported earnings due to our adjusting for record high profit margins. $70 X ½ / 1400 gives you a normalized free cash flow yield of approximately 2.5%.
The historical real growth rate of the S&P 500 (companies) is about 1.5%. Assuming an inflation rate of 2.5%, the forward rate of return on an investment in the S&P 500 is about 6.5% today (2.5% free cash flow yield plus 1.5% real growth plus 2.5% inflation).
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
What does a Forward Rate of Return (Yacktman) % of 20.77% mean?
DigitalOcean Holdings (XSWX:DOCN) has a Forward Rate of Return (Yacktman) % of 20.77% as of Mar. 2026. Yacktman's forward rate of return equals the sum of normalized free-cash-flow yield plus earnings growth. View historical data on DigitalOcean Holdings and its competitors. This is near median its historical median of 20.45. Over the past decade, DigitalOcean Holdings' Forward Rate of Return (Yacktman) % has ranged from 20.00 to 22.06. According to the industry distribution chart, DigitalOcean Holdings ranks #390 out of 1367 companies in the Software industry, placing it in the top 28.5%.
Is DigitalOcean Holdings' Forward Rate of Return (Yacktman) % too high?
DigitalOcean Holdings' current Forward Rate of Return (Yacktman) % of 20.77% is near median its 10-year median of 20.45. Over the past 10 years, this metric has ranged from a low of 20.00 to a high of 22.06. The Software industry median Forward Rate of Return (Yacktman) % is 13.64. DigitalOcean Holdings' value of 20.77% is 52.3% above this industry median. Based on the distribution chart, DigitalOcean Holdings ranks #390 out of 1367 companies in the Software industry, which is above the industry midpoint. Overall, DigitalOcean Holdings has a GF Score™ of 68/100, reflecting its overall financial health beyond just this single metric.
How does DigitalOcean Holdings' Forward Rate of Return (Yacktman) % compare to ?
According to the Software industry distribution chart, DigitalOcean Holdings ranks #390 out of 1367 companies for Forward Rate of Return (Yacktman) %. This puts DigitalOcean Holdings in the upper half of its industry. The industry median Forward Rate of Return (Yacktman) % is 13.64. DigitalOcean Holdings' value of 20.77% is 52.3% above this benchmark. Historically, DigitalOcean Holdings' own Forward Rate of Return (Yacktman) % has ranged from 20.00 to 22.06 over the past decade. While the company's 10-year median is 20.45 vs. the industry median of 13.64, DigitalOcean Holdings has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Forward Rate of Return (Yacktman) % for a Software company?
The median Forward Rate of Return (Yacktman) % among Software companies is 13.64, based on 1,367 companies in the industry. Companies in the top quartile (top 25%) have a Forward Rate of Return (Yacktman) % significantly above this median, while those in the bottom quartile fall well below. However, Forward Rate of Return (Yacktman) % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. DigitalOcean Holdings's current Forward Rate of Return (Yacktman) % of 20.77% is 52.3% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Forward Rate of Return (Yacktman) % mean?
A high Forward Rate of Return (Yacktman) % can signal that a stock is expensive relative to its fundamentals. Yacktman's forward rate of return equals the sum of normalized free-cash-flow yield plus earnings growth. View historical data on DigitalOcean Holdings and its competitors. For the Software industry, the median Forward Rate of Return (Yacktman) % is 13.64 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. DigitalOcean Holdings's current Forward Rate of Return (Yacktman) % is 20.77%, which is near median its own 10-year median of 20.45. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is DigitalOcean Holdings stock overvalued right now?
DigitalOcean Holdings (XSWX:DOCN) has a current Forward Rate of Return (Yacktman) % of 20.77%. The stock's GF Value™ is CHF41.87, compared to a current price of CHF118.84 — trading 183.8% above its estimated fair value. The current Forward Rate of Return (Yacktman) % is 20.77%, which is near median its 10-year median of 20.45 and 52.3% above the Software industry median of 13.64. DigitalOcean Holdings' overall GF Score™ is 68/100 with 6 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Forward Rate of Return (Yacktman) % calculated?
Forward Rate of Return (Yacktman) % is calculated from a company's financial statements. For DigitalOcean Holdings (XSWX:DOCN), the current Forward Rate of Return (Yacktman) % is 20.77% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is DigitalOcean Holdings (XSWX:DOCN) Overvalued in 2026?
Based on GuruFocus' analysis, DigitalOcean Holdings stock appears to be overvalued.
The current stock price of CHF118.84 is trading 183.8% above its estimated GF Value™ of CHF41.87.
Key valuation signals for XSWX:DOCN:
Forward Rate of Return (Yacktman) %: 20.77% (near median its 10-year median of 20.45)
GF Value™: CHF41.87 vs. price of CHF118.84 (183.8% above fair value)
Industry Position: 52.3% above the Software median (#390 of 1367)
No single metric tells the full story. See the XSWX:DOCN stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
DigitalOcean Holdings Inc is a cloud computing platform offering on-demand infrastructure and platform tools for developers, start-ups, and small and medium-sized businesses. The customers use the platform for a wide range of cases, such as web and mobile applications, website hosting, e-commerce, media and gaming, personal web projects, and managed services, among many others. Geographically, the company generates maximum revenue from North America and also has a presence in Europe, Asia, and the Rest of the world.
68GF Score
Get the complete analysis for XSWX:DOCN
Forward Rate of Return (Yacktman) % is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.
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