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

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In the latest trading session, DocuSign (DOCU - Free Report) closed at $231.93, marking a -0.54% move from the previous day. This change lagged the S&P 500's daily gain of 0.36%.

Prior to today's trading, shares of the provider of electronic signature technology had gained 5.63% over the past month. This has outpaced the Business Services sector's loss of 3.02% and the S&P 500's gain of 5.21% in that time.

Investors will be hoping for strength from DOCU as it approaches its next earnings release. The company is expected to report EPS of $0.27, up 125% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $434.87 million, up 46.41% from the prior-year quarter.

DOCU's full-year Zacks Consensus Estimates are calling for earnings of $1.32 per share and revenue of $1.97 billion. These results would represent year-over-year changes of +46.67% and +35.62%, respectively.

Any recent changes to analyst estimates for DOCU should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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. The Zacks Consensus EPS estimate has moved 10.35% higher 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 170.57. This represents a premium compared to its industry's average Forward P/E of 30.92.

Meanwhile, DOCU's PEG ratio is currently 4.41. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Technology Services stocks are, on average, holding a PEG ratio of 2.85 based on yesterday's closing prices.

The Technology Services industry is part of the Business Services sector. This industry currently has a Zacks Industry Rank of 159, which puts it in the bottom 38% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

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