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Data Storage Stocks Q1 Teardown: DigitalOcean (NYSE:DOCN) Vs The Rest


Max Juang /
2024/06/03 4:35 am EDT

As the Q1 earnings season comes to a close, it’s time to take stock of this quarter's best and worst performers in the data storage industry, including DigitalOcean (NYSE:DOCN) and its peers.

Data is the lifeblood of the internet and software in general, and the amount of data created is accelerating. As a result, the importance of storing the data in scalable and efficient formats continues to rise, especially as its diversity and associated use cases expand from analyzing simple, structured datasets to high-scale processing of unstructured data such as images, audio, and video.

The 4 data storage stocks we track reported a mixed Q1; on average, revenues beat analyst consensus estimates by 3.5%. while next quarter's revenue guidance was in line with consensus. Inflation progressed towards the Fed's 2% goal at the end of 2023, leading to strong stock market performance. The start of 2024 has been a bumpier ride, as the market switches between optimism and pessimism around rate cuts due to mixed inflation data, and while some of the data storage stocks have fared somewhat better than others, they collectively declined, with share prices falling 3.5% on average since the previous earnings results.

DigitalOcean (NYSE:DOCN)

Started by brothers Ben and Moisey Uretsky, DigitalOcean (NYSE: DOCN) provides a simple, low-cost platform that allows developers and small and medium-sized businesses to host applications and data in the cloud.

DigitalOcean reported revenues of $184.7 million, up 11.9% year on year, topping analysts' expectations by 1.2%. It was a decent quarter for the company, with a significant improvement in its gross margin.

“The first quarter was a strong start to the year as we position the company to be the leading cloud and AI platform for growing technology businesses,” said Paddy Srinivasan, CEO of DigitalOcean.

DigitalOcean Total Revenue

DigitalOcean delivered the weakest performance against analyst estimates of the whole group. The stock is up 11.5% since the results and currently trades at $36.32.

Is now the time to buy DigitalOcean? Access our full analysis of the earnings results here, it's free.

Best Q1: Commvault Systems (NASDAQ:CVLT)

Originally formed in 1988 as part of Bell Labs, Commvault (NASDAQ: CVLT) provides enterprise software used for data backup and recovery, cloud and infrastructure management, retention, and compliance.

Commvault Systems reported revenues of $223.3 million, up 9.7% year on year, outperforming analysts' expectations by 5.1%. It was a very strong quarter for the company, with management forecasting accelerating growth and a solid beat of analysts' billings estimates.

Commvault Systems Total Revenue

Commvault Systems delivered the highest full-year guidance raise but had the slowest revenue growth among its peers. The stock is up 11.6% since the results and currently trades at $111.

Is now the time to buy Commvault Systems? Access our full analysis of the earnings results here, it's free.

Weakest Q1: Snowflake (NYSE:SNOW)

Founded in 2013 by three French engineers who spent decades working for Oracle, Snowflake (NYSE:SNOW) provides a data warehouse-as-a-service in the cloud that allows companies to store large amounts of data and analyze it in real time.

Snowflake reported revenues of $828.7 million, up 32.9% year on year, exceeding analysts' expectations by 5.4%. It was a decent quarter for the company, with revenue, net revenue retention, and RPO exceeding expectations.

Snowflake delivered the biggest analyst estimates beat and fastest revenue growth in the group. The company added 24 enterprise customers paying more than $1m annually to reach a total of 485. The stock is down 4.2% since the results and currently trades at $156.41.

Read our full analysis of Snowflake's results here.

MongoDB (NASDAQ:MDB)

Started in 2007 by the team behind Google’s ad platform, DoubleClick, MongoDB offers database-as-a-service that helps companies store large volumes of semi-structured data.

MongoDB reported revenues of $450.6 million, up 22.3% year on year, surpassing analysts' expectations by 2.4%. It was a weak quarter for the company, with full-year revenue guidance missing analysts' expectations and underwhelming revenue guidance for the next quarter.

MongoDB had the weakest full-year guidance update among its peers. The company added 85 enterprise customers paying more than $100,000 annually to reach a total of 2,137. The stock is down 24.8% since the results and currently trades at $233.

Read our full, actionable report on MongoDB here, it's free.

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