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

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DocuSign (DOCU - Free Report) closed at $308 in the latest trading session, marking a +1.71% move from the prior day. This change outpaced the S&P 500's 0.2% gain on the day.

Heading into today, shares of the provider of electronic signature technology had gained 10.19% over the past month, outpacing the Business Services sector's loss of 14.43% and the S&P 500's gain of 3.28% 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 $0.39 per share, which would represent year-over-year growth of 129.41%. Our most recent consensus estimate is calling for quarterly revenue of $482.48 million, up 40.99% from the year-ago period.

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.

It is also important to note the recent changes to analyst estimates for DOCU. These revisions typically reflect the latest short-term business trends, which can change frequently. 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.

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 holding a Zacks Rank of #3 (Hold) right now.

Investors should also note DOCU's current valuation metrics, including its Forward P/E ratio of 180.71. For comparison, its industry has an average Forward P/E of 31.43, which means DOCU is trading at a premium to the group.

Also, we should mention that DOCU has a PEG ratio of 3.23. 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. The Technology Services industry currently had an average PEG ratio of 2.51 as of yesterday's close.

The Technology Services industry is part of the Business Services sector. This industry currently has a Zacks Industry Rank of 184, which puts it in the bottom 28% 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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