Back to top

Image: Bigstock

DocuSign (DOCU) Exceeds Market Returns: Some Facts to Consider

Read MoreHide Full Article

DocuSign (DOCU - Free Report) closed at $43.80 in the latest trading session, marking a +1.98% move from the prior day. This change outpaced the S&P 500's 0.74% gain on the day. On the other hand, the Dow registered a gain of 0.58%, and the technology-centric Nasdaq increased by 1.13%.

The upcoming earnings release of DocuSign will be of great interest to investors. The company's earnings report is expected on December 7, 2023. The company is predicted to post an EPS of $0.61, indicating a 7.02% growth compared to the equivalent quarter last year. In the meantime, our current consensus estimate forecasts the revenue to be $689.17 million, indicating a 6.77% growth compared to the corresponding quarter of the prior year.

For the full year, the Zacks Consensus Estimates are projecting earnings of $2.62 per share and revenue of $2.73 billion, which would represent changes of +29.06% and +8.55%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for DocuSign. These latest adjustments often mirror the shifting dynamics of short-term business patterns. 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. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, there's been no change in the Zacks Consensus EPS estimate. DocuSign presently features a Zacks Rank of #2 (Buy).

Digging into valuation, DocuSign currently has a Forward P/E ratio of 16.38. This indicates a discount in contrast to its industry's Forward P/E of 24.89.

It's also important to note that DOCU currently trades at a PEG ratio of 1.18. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The average PEG ratio for the Technology Services industry stood at 1.52 at the close of the market yesterday.

The Technology Services industry is part of the Business Services sector. This industry currently has a Zacks Industry Rank of 81, which puts it in the top 33% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

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

See More Zacks Research for These Tickers

Normally $25 each - click below to receive one report FREE:

DocuSign (DOCU) - free report >>

Published in