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Here's Why DocuSign (DOCU) Deserves a Place in Your Portfolio
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DocuSign, Inc. (DOCU - Free Report) banks on its partnerships and acquisitions. The company aims to expand its global footprint and enter newer markets, thereby increasing its revenues.
DOCU’s shares have increased 9.3% in the past month compared with its industry’s 6.6% growth in the same time frame.
Reasons Why DOCU is an Attractive Pick Now
Solid Rank and VGM Score: DOCU currently carries a Zacks Rank #2 (Buy) and a VGM Score of B. Our research shows that stocks with a Zacks Rank #1 (Strong Buy) or 2, combined with a VGM Score of A or B, offer the best investment opportunities. Thus, the company appears to be a compelling investment proposition at the moment. You can see the complete list of today’s Zacks #1 Rank stocks here.
Revenue and Earnings Expectations: The Zacks Consensus Estimate of the company’s revenues for fiscal 2024 is pegged at $2.73 billion, up 8.6% from the year-ago reported quarter. The company reported revenues of $2.52 billion in fiscal 2023, 15.9% higher than revenues of fiscal 2022.
Earnings growth and stock price gains often indicate a company’s prospects. For the full year 2023, the consensus estimate of earnings is pegged at $2.62 per share, which indicates growth of 29.1% from the year-ago reported figure. The company reported earnings of $2.03 per share in fiscal 2023, indicating 2.5% year-over-year growth.
Northward Estimate Revisions: For the full year 2023, the earnings estimates have been revised slightly upward in the past 60 days. The favorable estimate revision reflects the confidence of brokers in the stock.
Positive Earnings Surprise History: DOCU has an impressive earnings surprise history. The company outpaced the Zacks Consensus Estimate in all trailing four quarters, delivering an earnings surprise of 27.1%, on average.
Bullish Industry Rank: The industry to which DocuSign belongs currently has a Zacks Industry Rank of 81 (of 251 groups). Such a solid rank places the industry in the top 32% of the Zacks industries. Studies show that 50% of a stock price movement is directly tied to the performance of the industry group that it hails from.
In fact, a mediocre stock in a healthy group is likely to outperform a robust stock in a poor industry. Therefore, taking the industry’s performance into account becomes necessary.
Growth Factors: DocuSign is gaining from the continued demand for its anchor product, eSignature. A huge market for eSignatures is still left unexploited, which increases the scope of the expansion of the product. The company currently has 1.44 billion customers, which is expected to reach 1.56 billion by 2024, courtesy of the stable demand situation of its products.
DocuSign aims at tapping the global markets through acquisitions and partnerships. It has strengthened ties with key partners like Salesforce and Microsoft. Its global strategic alliance with Salesforce now focuses on automating contracts and enhancing collaboration through Salesforce's Slack. Additionally, DocuSign seamlessly integrated eSignatures into Microsoft Teams, thus officially serving in the Teams' Approvals app.
DocuSign's worldwide success is evident, as international earnings constituted about 25%, 23% and 20% of total revenues for the fiscal years concluding on Jan 31, 2023, 2022 and 2021. The company’s initial market was the English-speaking common law countries such as Canada, the UK and Australia, leveraging shared e-signature practices with the U.S. Later, significant investments were made to broaden product offerings in selected civil law nations.
Other Stocks to Consider
The following stocks from the broader Business Services sector are worth consideration:
Fiserv (FI - Free Report) : The Zacks Consensus Estimate of Fiserv’s 2023 revenues indicates 8.1% growth from the year-ago figure while earnings are expected to grow 15.4%. The company has beaten the consensus estimate in two of the past four quarters while matching in the other two instances, the average surprise being 0.6%.
The company holds a Zacks Rank #2 and has a VGM Score of B.
Broadridge Financial Solutions (BR - Free Report) : The Zacks Consensus Estimate of Broadridge’s 2023 revenues indicates 7.5% growth from the year-ago figure, while earnings are expected to grow 9.8%. The company has beaten the consensus estimate in three of the past four quarters and matched on one instance, the average surprise being 5.4%.
BR holds a Zacks Rank of 2.
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Here's Why DocuSign (DOCU) Deserves a Place in Your Portfolio
DocuSign, Inc. (DOCU - Free Report) banks on its partnerships and acquisitions. The company aims to expand its global footprint and enter newer markets, thereby increasing its revenues.
DOCU’s shares have increased 9.3% in the past month compared with its industry’s 6.6% growth in the same time frame.
Reasons Why DOCU is an Attractive Pick Now
Solid Rank and VGM Score: DOCU currently carries a Zacks Rank #2 (Buy) and a VGM Score of B. Our research shows that stocks with a Zacks Rank #1 (Strong Buy) or 2, combined with a VGM Score of A or B, offer the best investment opportunities. Thus, the company appears to be a compelling investment proposition at the moment. You can see the complete list of today’s Zacks #1 Rank stocks here.
Revenue and Earnings Expectations: The Zacks Consensus Estimate of the company’s revenues for fiscal 2024 is pegged at $2.73 billion, up 8.6% from the year-ago reported quarter. The company reported revenues of $2.52 billion in fiscal 2023, 15.9% higher than revenues of fiscal 2022.
Earnings growth and stock price gains often indicate a company’s prospects. For the full year 2023, the consensus estimate of earnings is pegged at $2.62 per share, which indicates growth of 29.1% from the year-ago reported figure. The company reported earnings of $2.03 per share in fiscal 2023, indicating 2.5% year-over-year growth.
Northward Estimate Revisions: For the full year 2023, the earnings estimates have been revised slightly upward in the past 60 days. The favorable estimate revision reflects the confidence of brokers in the stock.
Positive Earnings Surprise History: DOCU has an impressive earnings surprise history. The company outpaced the Zacks Consensus Estimate in all trailing four quarters, delivering an earnings surprise of 27.1%, on average.
DocuSign Price and EPS Surprise
DocuSign price-eps-surprise | DocuSign Quote
Bullish Industry Rank: The industry to which DocuSign belongs currently has a Zacks Industry Rank of 81 (of 251 groups). Such a solid rank places the industry in the top 32% of the Zacks industries. Studies show that 50% of a stock price movement is directly tied to the performance of the industry group that it hails from.
In fact, a mediocre stock in a healthy group is likely to outperform a robust stock in a poor industry. Therefore, taking the industry’s performance into account becomes necessary.
Growth Factors: DocuSign is gaining from the continued demand for its anchor product, eSignature. A huge market for eSignatures is still left unexploited, which increases the scope of the expansion of the product. The company currently has 1.44 billion customers, which is expected to reach 1.56 billion by 2024, courtesy of the stable demand situation of its products.
DocuSign aims at tapping the global markets through acquisitions and partnerships. It has strengthened ties with key partners like Salesforce and Microsoft. Its global strategic alliance with Salesforce now focuses on automating contracts and enhancing collaboration through Salesforce's Slack. Additionally, DocuSign seamlessly integrated eSignatures into Microsoft Teams, thus officially serving in the Teams' Approvals app.
DocuSign's worldwide success is evident, as international earnings constituted about 25%, 23% and 20% of total revenues for the fiscal years concluding on Jan 31, 2023, 2022 and 2021. The company’s initial market was the English-speaking common law countries such as Canada, the UK and Australia, leveraging shared e-signature practices with the U.S. Later, significant investments were made to broaden product offerings in selected civil law nations.
Other Stocks to Consider
The following stocks from the broader Business Services sector are worth consideration:
Fiserv (FI - Free Report) : The Zacks Consensus Estimate of Fiserv’s 2023 revenues indicates 8.1% growth from the year-ago figure while earnings are expected to grow 15.4%. The company has beaten the consensus estimate in two of the past four quarters while matching in the other two instances, the average surprise being 0.6%.
The company holds a Zacks Rank #2 and has a VGM Score of B.
Broadridge Financial Solutions (BR - Free Report) : The Zacks Consensus Estimate of Broadridge’s 2023 revenues indicates 7.5% growth from the year-ago figure, while earnings are expected to grow 9.8%. The company has beaten the consensus estimate in three of the past four quarters and matched on one instance, the average surprise being 5.4%.
BR holds a Zacks Rank of 2.