Docusign Stock Rises 20% in a Month: Should You Hold or Fold?

Stock Performance - DOCU stock price increased by 20.3% over the past month, outperforming the broader industry's 6.7% growth [1] - DOCU shares closed at $83, nearing the 52-week high of$83.68 and trading above the 50-day moving average, indicating strong bullish sentiment [1] Growth Drivers - DOCU's customer base grew from 1.1 million in fiscal 2022 to 1.5 million in fiscal 2024, driven by demand for eSignature solutions [4] - Subscription fees account for 97% of total revenues, providing stable cash flow and market expansion opportunities [5][6] - Subscription revenues increased by 10% in fiscal 2024, driven by existing customer expansion and new customer additions [7] - International revenues grew consistently, representing 23%, 25%, and 26% of total revenues in fiscal 2022, 2023, and 2024, respectively [8] Strategic Partnerships - DOCU deepened relationships with Salesforce and Microsoft, expanding global strategic partnerships and integrating eSignature with Microsoft Teams [9] - These partnerships enable DOCU to access a larger customer base and enhance collaboration solutions [9] Financial Performance - DOCU's trailing 12-month ROE is 53.7%, significantly higher than the industry average of 31.8% [10] - Fiscal 2025 earnings are expected to grow by 15.8%, with sales projected to increase by 6.5% year over year [12] - Fiscal 2026 earnings are expected to grow by 6%, with sales projected to increase by 6% year over year [12] Market Potential - The eSignature market remains largely untapped, providing DOCU with significant growth opportunities globally [4] - DOCU's international expansion efforts focus on Canada, the U.K., and Australia, leveraging similar e-signature approaches to the U.S. [8]