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DocuSign (DOCU) to Report Q3 Earnings: What's in the Offing?

Zacks Equity Research

DocuSign, Inc. DOCU is scheduled to report third-quarter fiscal 2020 results on Dec 5, after the bell. The stock has rallied 74.5% year to date, significantly outperforming the 13.4% growth of the industry it belongs to.

The company has an impressive earnings surprise history, having surpassed the Zacks Consensus Estimate in three of the trailing four quarters, with an average positive surprise of 150%.

Expectations This Time Around

The Zacks Consensus Estimate for revenues in the to-be-reported quarter is pegged at $241.3 million, indicating 35.3% year-over-year growth. Higher subscription sales to new and existing customers, increased engagement of professional services to support the growing customer base and addition of offerings related to SpringCM are expected to have driven the top line. In the second quarter of fiscal 2020, the company’s revenues of $235.6 million increased 41% year over year.

The consensus mark for non-GAAP earnings is pegged at 3 cents, indicating an increase from break-even earnings incurred in the year-ago quarter. In the second quarter of fiscal 2020, non-GAAP earnings of a penny declined 66.7% year over year.

What Our Model Says

Our proven model predicts an earnings beat for DocuSign this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

DocuSign has an Earnings ESP of +47.37% and a Zacks Rank #3.

Other Stocks to Consider

Here are a few other stocks that investors may consider as our model shows that these too have the right combination of elements to beat on third-quarter fiscal 2020 earnings:

Dollar General Corporation DG has an Earnings ESP of +1.23% and a Zacks Rank #2. The company is slated to report results on Dec 5. You can see the complete list of today’s Zacks #1 Rank stocks here.

Big Lots, Inc. BIG has an Earnings ESP of +3.85% and a Zacks Rank #3. The company is slated to report results on Dec 6.

Signet Jewelers Limited SIG has an Earnings ESP of +3.74% and a Zacks Rank #3. The company is slated to release results on Dec 5.

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