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Reasons to Hold DocuSign (DOCU) Stock in Your Portfolio

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DocuSign, Inc. (DOCU - Free Report) has an impressive Growth Score of A. This style score condenses all the essential metrics from a company’s financial statements to get a true sense of quality and sustainability of its growth. The company’s earnings for fiscal 2022 and 2023 are expected to improve 86.7% and 28.5% respectively, year over year.

The stock has gained 42.5% in the past year against 27.4% decline of the industry it belongs to.

DocuSign Inc. Price

DocuSign Inc. Price

DocuSign Inc. price | DocuSign Inc. Quote

What’s Supporting the Rally?

DocuSign remains focused on continuously acquiring eSignature customers, expanding eSignature use cases within existing customers, improving its offerings and popularizing other Agreement Cloud products to new and existing customers, and expanding internationally. The company continues to invest in sales, marketing and technical expertise across a number of industry verticals.

DocuSign’s top line is significantly benefiting from continued customer demand for eSignature, the company’s anchor product. Despite this rising demand, the market for eSignature remains largely untapped, and this keeps DocuSign in a position to expand the same across businesses around the world.

The acquisitions of Seal Software and Liveoak Technologies in 2020 are expected to add functionality to DocuSign Agreement Cloud and significantly expand the company’s eNotary offerings. These buyouts are anticipated to aid the company in continuous development of new features internally, while also aptly utilizing investments to tap a large addressable market.

Headwinds

DocuSign is seeing increase in expenses as it continues to invest in sales, marketing and technical expertise. Total operating expenses of $1.3 billion increased 36.6% year over year in fiscal 2021. Hence, the company's bottom line is likely to remain under pressure going forward.

DocuSign has neither ever declared, nor does it currently have any plan to pay cash dividends on its common stock. So, the only way to achieve return on investment on the company’s stock is share price appreciation, which is not guaranteed. Investors seeking cash dividends should avoid buying DocuSign’s shares.

Zacks Rank and Stocks to Consider

DocuSign currently carries a Zacks Rank #3 (Hold).

Some top-ranked stocks in the broader Zacks Business Services sector are Accenture (ACN - Free Report) , Cross Country Healthcare (CCRN - Free Report) and Paychex (PAYX - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

The long-term expected earnings per share (three to five years) growth rate for Accenture, Cross Country Healthcare and Paychexis pegged at 10%, 9.9% and 8%, respectively.


In-Depth Zacks Research for the Tickers Above


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Accenture PLC (ACN) - free report >>

Paychex, Inc. (PAYX) - free report >>

Cross Country Healthcare, Inc. (CCRN) - free report >>

DocuSign (DOCU) - free report >>