U.S. Markets open in 5 hrs 41 mins

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

Zacks Equity Research

DocuSign (DOCU) closed the most recent trading day at $102.79, moving -1.11% from the previous trading session. This change lagged the S&P 500's daily gain of 2.66%. Elsewhere, the Dow gained 2.21%, while the tech-heavy Nasdaq added 3.57%.

Prior to today's trading, shares of the provider of electronic signature technology had gained 12.49% over the past month. This has outpaced the Business Services sector's gain of 8.71% and lagged the S&P 500's gain of 12.74% in that time.

Wall Street will be looking for positivity from DOCU as it approaches its next earnings report date. In that report, analysts expect DOCU to post earnings of $0.11 per share. This would mark year-over-year growth of 57.14%. Our most recent consensus estimate is calling for quarterly revenue of $284 million, up 32.74% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $0.53 per share and revenue of $1.31 billion, which would represent changes of +70.97% and +34.43%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for DOCU. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. DOCU is currently a Zacks Rank #3 (Hold).

Looking at its valuation, DOCU is holding a Forward P/E ratio of 195.06. Its industry sports an average Forward P/E of 25.95, so we one might conclude that DOCU is trading at a premium comparatively.

Also, we should mention that DOCU has a PEG ratio of 4.17. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. DOCU's industry had an average PEG ratio of 3.04 as of yesterday's close.

The Technology Services industry is part of the Business Services sector. This group has a Zacks Industry Rank of 58, putting it in the top 23% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
DocuSign Inc. (DOCU) : Free Stock Analysis Report
To read this article on Zacks.com click here.