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DocuSign (DOCU) Gains But Lags Market: What You Should Know

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DocuSign (DOCU - Free Report) closed at $302.81 in the latest trading session, marking a +0.51% move from the prior day. The stock lagged the S&P 500's daily gain of 0.82%.

Heading into today, shares of the provider of electronic signature technology had gained 8.66% over the past month, outpacing the Business Services sector's loss of 14.63% and the S&P 500's gain of 3.89% 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 $0.39, up 129.41% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $482.48 million, up 40.99% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $1.68 per share and revenue of $2.03 billion, which would represent changes of +86.67% and +39.39%, respectively, from the prior year.

Investors should also note any 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.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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.

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. 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 179.79. For comparison, its industry has an average Forward P/E of 31.46, which means DOCU is trading at a premium to the group.

It is also worth noting that DOCU currently has a PEG ratio of 3.21. 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 was holding an average PEG ratio of 2.5 at yesterday's closing price.

The Technology Services industry is part of the Business Services sector. This industry currently has a Zacks Industry Rank of 185, which puts it in the bottom 28% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

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


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