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DocuSign (DOCU) Gains As Market Dips: What You Should Know

Zacks Equity Research
·3 min read

DocuSign (DOCU) closed at $198.31 in the latest trading session, marking a +0.36% move from the prior day. The stock outpaced the S&P 500's daily loss of 0.14%. At the same time, the Dow added 0.9%, and the tech-heavy Nasdaq lost 1.37%.

Heading into today, shares of the provider of electronic signature technology had lost 14.78% over the past month, lagging the Business Services sector's gain of 2.19% and the S&P 500's gain of 2.25% in that time.

Investors will be hoping for strength from DOCU as it approaches its next earnings release. On that day, DOCU is projected to report earnings of $0.12 per share, which would represent year-over-year growth of 9.09%. Our most recent consensus estimate is calling for quarterly revenue of $360.38 million, up 44.44% from the year-ago period.

DOCU's full-year Zacks Consensus Estimates are calling for earnings of $0.53 per share and revenue of $1.39 billion. These results would represent year-over-year changes of +70.97% and +42.37%, respectively.

Investors might also notice recent changes to analyst estimates for DOCU. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 2.71% higher within the past month. DOCU is holding a Zacks Rank of #3 (Hold) right now.

Investors should also note DOCU's current valuation metrics, including its Forward P/E ratio of 370.5. For comparison, its industry has an average Forward P/E of 31.29, which means DOCU is trading at a premium to the group.

The Technology Services industry is part of the Business Services sector. This group has a Zacks Industry Rank of 185, putting it in the bottom 28% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow DOCU in the coming trading sessions, be sure to utilize Zacks.com.


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Zacks Investment Research