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

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DocuSign (DOCU - Free Report) closed at $277.01 in the latest trading session, marking a +0.57% move from the prior day. The stock outpaced the S&P 500's daily loss of 0.33%.

Heading into today, shares of the provider of electronic signature technology had gained 8.84% over the past month, outpacing the Business Services sector's loss of 15.1% and the S&P 500's gain of 2.89% 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 $0.39 per share. This would mark year-over-year growth of 129.41%. Meanwhile, our latest consensus estimate is calling for revenue of $482.48 million, up 40.99% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $1.68 per share and revenue of $2.03 billion. These totals would mark changes of +86.67% and +39.39%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for DOCU. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about 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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. DOCU is currently sporting a Zacks Rank of #3 (Hold).

Digging into valuation, DOCU currently has a Forward P/E ratio of 164.37. Its industry sports an average Forward P/E of 32.53, so we one might conclude that DOCU is trading at a premium comparatively.

Investors should also note that DOCU has a PEG ratio of 2.94 right now. 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. The Technology Services industry currently had an average PEG ratio of 2.69 as of yesterday's close.

The Technology Services industry is part of the Business Services sector. This group has a Zacks Industry Rank of 178, putting it in the bottom 30% 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.

To follow DOCU in the coming trading sessions, be sure to utilize Zacks.com.


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