Medical marijuana real estate investment trust ( REIT) Innovative Industrial Properties (NYSE: IIPR) is the next unstoppable Russell 2000 stock to consider. However, at 12 times earnings estimates and 16 times free cash flow, DigitalOcean is attractively valued for long-term wealth generation. Even so, DigitalOcean’s stock is down 61% from recent highs. They had to rein in spending, although they are still spending more. That’s due to SMBs feeling the pinch of high interest rates more acutely than larger companies do. Net dollar retention rate, or the amount of new money existing customers spend with it each year, was growing rapidly but shrunk from 112% last year to 104% this year. Coupled with DigitalOcean’s own 616,000 clients, the opportunity to offer enhanced services just multiplied exponentially. DigitalOcean recently acquired PaperSpace, an artificial intelligence ( AI) cloud provider, that brought 500,000 customers with it. Revenue is up 28% year to date, but expect that to grow significantly greater in the future. More tools can be added to their toolkit as more services are needed. Yet DigitalOcean’s services can grow as the customer scales up in size. They just want to get it done and have it work. It makes the cloud accessible for companies that haven’t attained the size to afford the services of Amazon (NASDAQ: AMZN) or Microsoft (NASDAQ: MSFT).ĭigitalOcean says its platform lets a business go “from inquiry to deployment within minutes, without any specialized training or heavy implementation.” That’s perfect for companies who don’t have large IT departments or any IT department at all. What better way to benefit from the long-term growth potential of small-cap stocks than to invest in a small-cap business catering to small- and medium-sized businesses (SMBs)? DigitalOcean (NASDAQ: DOCN) simplifies the move to cloud computing for startups and SMBs.
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