Docusign Inc. (DOCU) Is a Trending Stock: Facts to Know Before Betting on It

Core Viewpoint - DocuSign's stock has underperformed compared to the S&P 500 and the Zacks Technology Services industry, raising questions about its near-term performance [2] Earnings Estimates Revisions - For the current quarter, DocuSign is expected to post earnings of $0.85 per share, reflecting a year-over-year increase of +7.6% and a +27.2% change in the Zacks Consensus Estimate over the last 30 days [5] - The consensus earnings estimate for the current fiscal year is $3.43, indicating a +15.1% year-over-year change, with a +19.5% revision in the last 30 days [5] - For the next fiscal year, the consensus estimate is $3.65, showing a +6.4% change from the previous year, with a +5.4% revision over the past month [6] Revenue Growth Projections - The consensus sales estimate for the current quarter is $743.44 million, indicating a +6.1% year-over-year change [9] - For the current and next fiscal years, sales estimates are $2.94 billion and $3.12 billion, reflecting +6.4% and +6.1% changes, respectively [9] Recent Performance and Surprises - In the last reported quarter, DocuSign achieved revenues of $736.03 million, a +7% year-over-year increase, and an EPS of $0.97 compared to $0.72 a year ago [10] - The reported revenues exceeded the Zacks Consensus Estimate of $726.15 million by +1.36%, and the EPS surprise was +21.25% [10] - The company has consistently beaten consensus EPS and revenue estimates over the past four quarters [10] Valuation Metrics - DocuSign is graded D in the Zacks Value Style Score, indicating it is trading at a premium compared to its peers [14] - Valuation multiples such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF) are essential for assessing whether the stock is overvalued or undervalued [12][13] Conclusion - The Zacks Rank 1 suggests that DocuSign may outperform the broader market in the near term, despite its current valuation concerns [15]