Head to Head Survey: DigitalOcean (NASDAQ:DOCN) & Wix.com (NASDAQ:WIX)

DigitalOcean (NASDAQ:DOCN) and Wix.com (NASDAQ:WIX) are both mid-cap computer and technology companies, but which is the superior stock? We will compare the two businesses based on the strength of their risk, dividends, institutional ownership, valuation, analyst recommendations, profitability and earnings.

Profitability

This table compares DigitalOcean and Wix.com’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
DigitalOcean	9.30%	-31.71%	6.51%
Wix.com	4.44%	-49.05%	4.78%

Volatility and Risk

DigitalOcean has a beta of 1.83, suggesting that its stock price is 83% more volatile than the S&P 500. Comparatively, Wix.com has a beta of 1.47, suggesting that its stock price is 47% more volatile than the S&P 500.

Valuation & Earnings

This table compares DigitalOcean and Wix.com’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
DigitalOcean	$735.14 million	4.51	$19.41 million	$0.53	68.74
Wix.com	$1.56 billion	5.48	$33.14 million	$1.14	136.91

Wix.com has higher revenue and earnings than DigitalOcean. DigitalOcean is trading at a lower price-to-earnings ratio than Wix.com, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent recommendations and price targets for DigitalOcean and Wix.com, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
DigitalOcean	1	5	5	0	2.36
Wix.com	0	4	13	1	2.83

DigitalOcean currently has a consensus target price of $36.40, suggesting a potential downside of 0.08%. Wix.com has a consensus target price of $189.19, suggesting a potential upside of 21.21%. Given Wix.com’s stronger consensus rating and higher possible upside, analysts plainly believe Wix.com is more favorable than DigitalOcean.

Insider & Institutional Ownership

49.8% of DigitalOcean shares are held by institutional investors. Comparatively, 81.5% of Wix.com shares are held by institutional investors. 0.7% of DigitalOcean shares are held by company insiders. Comparatively, 6.2% of Wix.com shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

Wix.com beats DigitalOcean on 11 of the 15 factors compared between the two stocks.

About DigitalOcean

DigitalOcean Holdings, Inc., through its subsidiaries, operates a cloud computing platform in North America, Europe, Asia, and internationally. The company's platform provides on-demand infrastructure and platform tools for developers, start-ups, and small and growing digital businesses. It also offers infrastructure-as-a-service (IaaS) solutions comprising compute and storage services, as well as networking projects, including Cloud Firewalls software, Managed Load Balancers software, and Virtual Private Cloud (VPC). The company also provides platform-as-a-service (PaaS) solutions, such as managed databases; managed Kubernetes and container registry; application platform to build, deploy, and scale applications; Functions, a serverless compute solution; and Uptime for real-time uptime and latency alerts, as well as software-as-a-service (SaaS), including managed hosting and DigitalOcean Marketplace, a platform where developers can find pre-configured applications and solutions. In addition, it offers artificial intelligence (AI)/machine learning (ML) applications comprising GPU virtual machines for scaling AI applications; Notebooks, a simple cloud workspace that runs on GPUs that provides a managed interactive development environment for exploring data, and training and building machine learning models; and Deployments for deploying their machine learning model as an API endpoint. The company's customers include software engineers, researchers, data scientists, system administrators, students, and hobbyists. Its customers use its platform in various industry verticals and for a range of use cases, such as web and mobile applications, website hosting, e-commerce, media and gaming, personal web projects, managed services, and AI/ML applications. DigitalOcean Holdings, Inc. was incorporated in 2012 and is headquartered in New York, New York.

About Wix.com

Wix.com Ltd., together with its subsidiaries, operates as a cloud-based web development platform for registered users and creators worldwide. The company offers Wix Editor, a drag-and-drop visual development and website editing environment platform; and Wix ADI that enables users to have the freedom of customization that the classic editor offers. It also provides Wix Logo Maker that generates a logo, including through the use of artificial intelligence; Wix Answers to support users; and Payments by Wix, a payment platform, which helps its users receive payments from their customers through their Wix Website. In addition, the company offers various vertical-specific applications that business owners use to operate various aspects of their business online. Further, it provides a range of complementary services, including Wix App Market, a marketplace that offers its registered users various free and paid web applications for building, growing, and managing their businesses; Wix marketplace that brings users seeking help in creating and managing a website together with Web experts; and Wix owner App, a native mobile application, which enables users to manage their Websites and Wix operating systems. The company was formerly known as Wixpress Ltd. The company was incorporated in 2006 and is headquartered in Tel Aviv, Israel.