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

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In the latest trading session, DocuSign (DOCU - Free Report) closed at $259.31, marking a +1.81% move from the previous day. This change outpaced the S&P 500's 0.3% gain on the day.

Heading into today, shares of the provider of electronic signature technology had lost 4.96% over the past month, outpacing the Business Services sector's loss of 6.77% and lagging the S&P 500's loss of 2.37% in that time.

DOCU will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $0.46, up 109.09% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $529.33 million, up 38.23% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $1.72 per share and revenue of $2.08 billion, which would represent changes of +91.11% and +43.37%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for DOCU. These recent revisions tend to reflect the evolving nature of short-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 remained stagnant within the past month. DOCU currently has a Zacks Rank of #4 (Sell).

In terms of valuation, DOCU is currently trading at a Forward P/E ratio of 148.08. This valuation marks a premium compared to its industry's average Forward P/E of 28.8.

Investors should also note that DOCU has a PEG ratio of 3.16 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 was holding an average PEG ratio of 1.77 at yesterday's closing price.

The Technology Services industry is part of the Business Services sector. This group has a Zacks Industry Rank of 170, putting it in the bottom 34% 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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