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

Zacks Equity Research
·3 min read

DocuSign (DOCU) closed the most recent trading day at $201.56, moving -0.34% from the previous trading session. This move lagged the S&P 500's daily gain of 1.23%. Meanwhile, the Dow gained 1.6%, and the Nasdaq, a tech-heavy index, added 0.42%.

Prior to today's trading, shares of the provider of electronic signature technology had lost 9% over the past month. This has lagged the Business Services sector's loss of 6.4% and the S&P 500's loss of 2.51% in that time.

DOCU will be looking to display strength as it nears 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%. Meanwhile, our latest consensus estimate is calling for revenue of $360.38 million, up 44.44% from the prior-year quarter.

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. 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.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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 has moved 3.29% lower. DOCU is holding a Zacks Rank of #4 (Sell) right now.

In terms of valuation, DOCU is currently trading at a Forward P/E ratio of 379.22. Its industry sports an average Forward P/E of 30.72, so we one might conclude that DOCU is trading at a premium comparatively.

The Technology Services industry is part of the Business Services sector. This group has a Zacks Industry Rank of 193, putting it in the bottom 24% 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.

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


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Zacks Investment Research