DocuSign (DOCU) AI Stock Analysis

• Market Cap: $14.57B
• Dividend Yield: N/A
• Average Volume (3M): 2.99M
• Price to Earnings (P/E): 13.8
• Beta (1Y): 1.38
• Revenue Growth: 7.78%
• EPS Growth: 1345.45%
• Country: US
• Employees: 6,838
• Sector: Technology
• Sector Strength: 40
• Industry: Software - Application
• EPS (TTM): 5.11
• Shares Outstanding: 202,489,720
• 10 Day Avg. Volume: 2,328,611
• 30 Day Avg. Volume: 2,990,642
• PEG Ratio: 0.01
• Price to Book (P/B): N/A
• Price to Sales (P/S): 5.99
• Price to Cash Flow (P/CF): 14.50
• P/FCF Ratio: 14.50
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $96.62
• Price Target Upside: 22.94% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 16

DocuSign is positioned well with strong financial performance and a positive earnings outlook. Its valuation appears reasonable, though the lack of a dividend yield might not appeal to all investors. The technical analysis presents a mixed picture, with potential overbought conditions. The overall score reflects these strengths, offset by some caution due to technical signals.

Positive Factors

Customer Growth

Customer growth solid, with DOCU adding 30,000 total customers and 4,000 enterprise and commercial customers.

Financial Performance

DOCU reported strong FQ4 results, including upside to revenue, margins and billings.

Product Development

The company remains encouraged with early IAM traction and expects additional product improvements to enhance the growth opportunity of its underlying platform.

Negative Factors

Margin Guidance

Margins mixed, guided to adjusted operating margins below consensus' 29.6% expectation.

Market Valuation

The price objective is being lowered to $98 from $112 due to multiple compression across the group, suggesting near-term upside is largely priced into the shares.

Revenue Guidance

FY26 revenue and operating margins were both guided below consensus.

DocuSign Business Overview & Revenue Model

Company Description

DocuSign, Inc. provides electronic signature software in the United States and internationally. The company provides e-signature solution that enables businesses to digitally prepare, sign, act on, and manage agreements. It also offers CLM, which automates workflows across the entire agreement process; Insights that use artificial intelligence (AI) to search and analyze agreements by legal concepts and clauses; Gen for Salesforce, which allows sales representatives to automatically generate agreements with a few clicks from within Salesforce; Negotiate for Salesforce that supports for approvals, document comparisons, and version control; Analyzer, which helps customers understand what they're signing before they sign it; and CLM+ that provide AI-driven contract lifecycle management. The company provides Guided Forms, which enable complex forms to be filled via an interactive and step-by-step process; Click that supports no-signature-required agreements for standard terms and consents; Identify, a signer-identification option for checking government-issued IDs; Standards-Based Signatures, which support signatures that involve digital certificates; Payments that enables customers to collect signatures and payment; Remote Online Notary is a solution using audio-visual and identify verification technologies to enable notarization; and Monitor using advanced analytics to track DocuSign eSignature web, mobile, and API account. It offers industry-specific cloud offerings, including Rooms for Real Estate that provides a way for brokers and agents to manage the entire real estate transaction digitally; Rooms for Mortgage, which offers digital workspace to create and close mortgages; FedRAMP, an authorized version of DocuSign eSignature for U.S. federal government agencies; and life sciences modules that support compliance with the electronic signature practices. The company sells its products through direct, partner-assisted, and Web-based sales. It serves enterprise, commercial, and small businesses. The company was incorporated in 2003 and is headquartered in San Francisco, California.

How the Company Makes Money

DocuSign generates revenue primarily through a subscription-based model. The company's key revenue streams include subscriptions for its eSignature services and the broader DocuSign Agreement Cloud. Customers, ranging from individual professionals to large enterprises, pay recurring fees for access to these digital transaction management solutions. DocuSign also earns revenue from professional services, which include training and support tailored to help customers implement and optimize their use of DocuSign products. Additionally, strategic partnerships with major technology companies and integrations with popular business applications contribute to its market presence and financial performance, although these are not direct revenue streams.

DocuSign Financial Statement Overview

Summary

DocuSign demonstrates impressive financial health across all major financial statements. Revenue growth and profitability improvements underline strong business performance. A stable balance sheet with low leverage and high ROE complements this growth, while robust cash flow generation further strengthens the financial foundation, positioning DocuSign well for future growth and stability.

Income Statement

DocuSign showcases strong financial performance with a consistent upward trend in revenue, increasing from $973.97M in 2020 to $2.98B in TTM (Trailing-Twelve-Months). Gross profit margin remains robust at 79.0% for TTM, reflecting effective cost management. The net profit margin has significantly improved to 35.9% in TTM, driven by a rise in net income to $1.07B, highlighting profitability enhancement. The EBIT and EBITDA margins reflect positive operational efficiency, with EBIT margin at 7.7% and EBITDA margin at 11.3% in TTM.

Balance Sheet

The balance sheet is solid with a favorable equity position; the equity ratio is 49.9% in TTM, indicating a balanced capital structure. The debt-to-equity ratio is low at 0.06, suggesting minimal leverage risk. ROE has surged notably to 53.3% in TTM, demonstrating strong returns to shareholders. The steady increase in stockholders' equity to $2.00B in TTM reflects financial strength and growth potential.

Cash Flow

Cash flow statements reveal strong free cash flow generation, with TTM free cash flow at $920.28M, a growth from $887.14M in 2024. The operating cash flow to net income ratio is 0.95, showing efficient cash generation relative to net income. Free cash flow to net income ratio stands at 0.86, indicating effective conversion of net income to cash.

Breakdown
Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement		Total Revenue
2.98B	2.76B	2.52B	2.11B	1.45B
	Gross Profit
2.36B	2.19B	1.98B	1.64B	1.09B
	EBIT
199.93M	31.63M	-55.16M	-60.47M	-173.85M
	EBITDA
357.30M	195.59M	2.76M	21.44M	-127.60M
	Net Income Common Stockholders
1.07B	73.98M	-97.45M	-69.98M	-243.27M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
963.55M	1.05B	1.03B	802.82M	773.50M
	Total Assets
4.01B	2.97B	3.01B	2.54B	2.34B
	Total Debt
124.43M	143.05M	888.29M	882.23M	915.75M
	Net Debt
-524.20M	-654.01M	166.40M	373.17M	349.70M
	Total Liabilities
2.01B	1.84B	2.40B	2.27B	2.01B
	Stockholders Equity
2.00B	1.13B	617.29M	275.50M	325.74M
Cash Flow		Free Cash Flow
920.28M	887.13M	429.11M	445.07M	214.56M
	Operating Cash Flow
1.02B	979.53M	506.76M	506.47M	296.95M
	Investing Cash Flow
-312.88M	44.61M	-191.20M	-162.91M	81.23M
	Financing Cash Flow
-838.79M	-946.04M	-98.26M	-394.62M	-58.98M

DocuSign Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 78.59
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DOCU, the sentiment is Negative. The current price of 78.59 is below the 20-day moving average (MA) of 81.99, below the 50-day MA of 84.89, and above the 200-day MA of 73.75, indicating a neutral trend. The MACD of -0.28 indicates Negative momentum. The RSI at 45.86 is Neutral, neither overbought nor oversold. The STOCH value of 17.02 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DOCU.

DocuSign Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BSY	78 Outperform	$12.78B	58.23	24.39%	0.65%	10.15%	-28.62%
DOCU	77 Outperform	$14.57B	13.76	68.18%	―	7.78%	1345.45%
ZM	77 Outperform	$20.77B	20.83	11.92%	―	3.05%	55.96%
MNDY	72 Outperform	$11.22B	360.92	3.51%	―	33.21%	―
GRAB	61 Neutral	$14.18B	―	-1.62%	―	18.52%	76.16%
Sector *	57 Neutral	$20.31B	10.03	-14.49%	2.79%	5.15%	-23.76%
U	53 Neutral	$7.07B	―	-20.84%	―	-17.10%	21.82%

DocuSign Corporate Events

DocuSign Amends Executive Severance Agreements

On January 15, 2025, DocuSign’s Board of Directors approved amendments to the Executive Severance and Change in Control Agreements for key executives, including the CFO, President, and Chief Legal Officer. These restated agreements make permanent certain enhancements for qualifying terminations outside and during a change in control period, impacting severance benefits including salary, bonus, COBRA coverage, and equity award vesting.