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DocuSign (DOCU) Outpaces Stock Market Gains: What You Should Know

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In the latest trading session, DocuSign (DOCU) closed at $243.47, marking a +0.34% move from the previous day. This move outpaced the S&P 500's daily gain of 0.23%. Meanwhile, the Dow lost 0.03%, and the Nasdaq, a tech-heavy index, added 0.09%.

Heading into today, shares of the provider of electronic signature technology had lost 13.52% over the past month, lagging the Business Services sector's loss of 5.29% and the S&P 500's gain of 3.34% in that time.

Wall Street will be looking for positivity from DocuSign as it approaches its next earnings report date. This is expected to be December 2, 2021. The company is expected to report EPS of $0.46, up 109.09% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $529.33 million, up 38.23% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $1.72 per share and revenue of $2.08 billion. These totals would mark changes of +91.11% and +43.37%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for DocuSign. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. DocuSign is currently sporting a Zacks Rank of #3 (Hold).

In terms of valuation, DocuSign is currently trading at a Forward P/E ratio of 141.08. For comparison, its industry has an average Forward P/E of 30.13, which means DocuSign is trading at a premium to the group.

Meanwhile, DOCU's PEG ratio is currently 3.01. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. DOCU's industry had an average PEG ratio of 1.94 as of yesterday's close.

The Technology Services industry is part of the Business Services sector. This industry currently has a Zacks Industry Rank of 166, which puts it in the bottom 35% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.

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