DocuSign (DOCU) AI Stock Analysis

• Market Cap: $12.39B
• Dividend Yield: N/A
• Average Volume (3M): 3.09M
• Price to Earnings (P/E): 43.3
• Beta (1Y): 1.16
• Revenue Growth: 8.45%
• EPS Growth: -69.85%
• Country: US
• Employees: 6,838
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 1.01
• Shares Outstanding: 200,272,740
• 10 Day Avg. Volume: 2,539,225
• 30 Day Avg. Volume: 3,092,301
• PEG Ratio: 0.01
• Price to Book (P/B): 9.87
• Price to Sales (P/S): 6.64
• P/FCF Ratio: 21.48
• Enterprise Value/Market Cap: 1.17
• Enterprise Value/Revenue: 4.59
• Enterprise Value/Gross Profit: 5.79
• Enterprise Value/Ebitda: 25.40
• 1Y Price Target: $80.23
• Price Target Upside: 29.68% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 16
• EPS Forecast (FY): 3.77
• Revenue Forecast (FY): $3.21B

• Rating: 71 Outperform
• Price Target: $73.00 ▲(17.99% Upside)

DocuSign's overall stock score reflects strong financial performance and positive earnings call sentiment, offset by technical analysis indicating bearish momentum and a high P/E ratio suggesting overvaluation. The company's strategic focus on innovation and international expansion supports its growth prospects, despite challenges in revenue growth and cloud migration costs.

Positive Factors

Strong Cash Generation

The robust free cash flow growth and high margin indicate strong cash generation, providing financial flexibility for reinvestment and strategic initiatives.

IAM Platform Adoption

The rapid adoption of the IAM platform suggests a strong demand for innovative solutions, enhancing DocuSign's competitive position and recurring revenue potential.

International Revenue Growth

Sustained international revenue growth reflects successful global expansion efforts, diversifying revenue streams and reducing reliance on the domestic market.

Negative Factors

Cloud Migration Costs

Cloud migration costs impacting margins may pressure profitability in the short term, requiring careful management to ensure long-term operational efficiency.

Deceleration in Revenue Growth

Slowing revenue growth suggests market saturation or competitive pressures, potentially limiting future expansion and necessitating strategic adjustments.

Maturing Growth Phase

A maturing growth phase may signal a shift from high growth to stabilization, impacting long-term growth prospects and necessitating innovation to drive future gains.

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 subscription-based licensing of its software solutions. The company offers several pricing tiers for its eSignature and Agreement Cloud products, targeting individual users, small businesses, and large enterprises. Key revenue streams include annual and monthly subscriptions, with additional revenue from professional services and integrations. Partnerships with other technology providers and integrations into popular platforms like Salesforce, Microsoft, and Google Drive enhance its market reach and drive additional sales. Furthermore, the growing demand for digital solutions and remote work has significantly contributed to the company's earnings, as organizations increasingly seek efficient and secure ways to manage their agreements.

DocuSign Financial Statement Overview

Summary

DocuSign demonstrates strong financial performance with a solid gross profit margin and improved net profit margin. The balance sheet shows low leverage and strong equity, while cash flow analysis indicates robust cash generation. However, revenue growth has slowed, suggesting a maturing growth phase.

Income Statement

DocuSign's income statement shows a strong gross profit margin of approximately 79% in TTM, indicating efficient cost management. The net profit margin improved significantly from negative values in previous years to about 9.6% in TTM, reflecting enhanced profitability. Revenue growth has slowed to 2.05% in TTM, down from higher growth rates in earlier periods, suggesting a maturing growth phase. EBIT and EBITDA margins have improved, but remain moderate at 6.96% and 10.79% respectively, indicating room for operational efficiency improvements.

Balance Sheet

The balance sheet reflects a solid financial position with a low debt-to-equity ratio of 0.076 in TTM, highlighting low leverage and financial stability. Return on equity has improved to 14.06% in TTM, showcasing effective use of equity to generate profits. The equity ratio stands at approximately 49.8%, indicating a strong equity base relative to total assets, which enhances financial resilience.

Cash Flow

Cash flow analysis reveals a healthy operating cash flow to net income ratio of 0.61 in TTM, indicating strong cash generation relative to net income. Free cash flow growth is positive at 5.58% in TTM, although it has decelerated from previous periods. The free cash flow to net income ratio is robust at 0.90, suggesting effective conversion of earnings into cash.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 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
EBITDA	357.30M	195.59M	2.76M	21.44M	-127.60M
Net Income	1.07B	73.98M	-97.45M	-69.98M	-243.27M
Balance Sheet
Total Assets	4.01B	2.97B	3.01B	2.54B	2.34B
Cash, Cash Equivalents and Short-Term Investments	963.55M	1.05B	1.03B	802.82M	773.50M
Total Debt	124.43M	143.05M	888.29M	882.23M	915.75M
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: 61.87
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

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 61.87 is below the 20-day moving average (MA) of 67.90, below the 50-day MA of 68.20, and below the 200-day MA of 75.26, indicating a bearish trend. The MACD of -0.90 indicates Positive momentum. The RSI at 34.88 is Neutral, neither overbought nor oversold. The STOCH value of 23.01 is Neutral, 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
ZM	81 Outperform	$24.51B	16.08	17.74%	―	3.85%	72.42%
DOCU	71 Outperform	$12.39B	43.30	15.22%	―	8.45%	-69.85%
MNDY	66 Neutral	$6.62B	106.30	5.81%	―	28.62%	186.67%
GTLB	64 Neutral	$6.09B	―	-5.17%	―	27.35%	18.18%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
ASAN	57 Neutral	$2.71B	-12.25	-102.48%	―	9.47%	16.97%
KC	50 Neutral	$3.94B	-24.79	-15.88%	―	24.26%	55.58%