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Why DocuSign (DOCU) Dipped More Than Broader Market Today

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DocuSign (DOCU - Free Report) closed the most recent trading day at $68.98, moving -1.67% from the previous trading session. The stock fell short of the S&P 500, which registered a loss of 0.33% for the day. Meanwhile, the Dow lost 0.22%, and the Nasdaq, a tech-heavy index, lost 0.56%.

The provider of electronic signature technology's stock has climbed by 14.21% in the past month, exceeding the Computer and Technology sector's gain of 2.83% and the S&P 500's gain of 1.83%.

Analysts and investors alike will be keeping a close eye on the performance of DocuSign in its upcoming earnings disclosure. The company is forecasted to report an EPS of $0.86, showcasing an 8.86% upward movement from the corresponding quarter of the prior year. At the same time, our most recent consensus estimate is projecting a revenue of $743.38 million, reflecting a 6.13% rise from the equivalent quarter last year.

DOCU's full-year Zacks Consensus Estimates are calling for earnings of $3.45 per share and revenue of $2.94 billion. These results would represent year-over-year changes of +15.77% and +6.46%, respectively.

Any recent changes to analyst estimates for DocuSign should also be noted by investors. Such recent modifications usually signify the changing landscape of near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has remained steady. DocuSign is currently sporting a Zacks Rank of #1 (Strong Buy).

In the context of valuation, DocuSign is at present trading with a Forward P/E ratio of 20.32. This signifies a discount in comparison to the average Forward P/E of 31.33 for its industry.

Meanwhile, DOCU's PEG ratio is currently 2.18. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The Internet - Software industry currently had an average PEG ratio of 2.17 as of yesterday's close.

The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 83, putting it in the top 33% of all 250+ industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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