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DocuSign (DOCU) Gains But Lags Market: What You Should Know

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DocuSign (DOCU - Free Report) closed at $100.68 in the latest trading session, marking a +0.15% move from the prior day. This change lagged the S&P 500's 0.58% gain on the day. Meanwhile, the Dow gained 0.14%, and the Nasdaq, a tech-heavy index, added 1.66%.

Prior to today's trading, shares of the provider of electronic signature technology had gained 31.22% over the past month. This has outpaced the Business Services sector's loss of 5.42% and the S&P 500's gain of 3.15% in that time.

Investors will be hoping for strength from DOCU as it approaches its next earnings release. On that day, DOCU is projected to report earnings of $0.11 per share, which would represent year-over-year growth of 57.14%. Meanwhile, our latest consensus estimate is calling for revenue of $284 million, up 32.74% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $0.53 per share and revenue of $1.31 billion. These totals would mark changes of +70.97% and +34.43%, respectively, from last year.

Any recent changes to analyst estimates for DOCU should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. 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. 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 remained stagnant. DOCU is currently a Zacks Rank #3 (Hold).

Digging into valuation, DOCU currently has a Forward P/E ratio of 188.66. This valuation marks a premium compared to its industry's average Forward P/E of 21.47.

We can also see that DOCU currently has a PEG ratio of 4.03. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Technology Services stocks are, on average, holding a PEG ratio of 1.96 based on yesterday's closing prices.

The Technology Services industry is part of the Business Services sector. This group has a Zacks Industry Rank of 58, putting it in the top 23% 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.

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


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