Reasons Why You Should Hold Docusign Stock in Your Portfolio

Core Viewpoint - Docusign, Inc. (DOCU) has demonstrated significant stock performance, with a 67% increase over the past six months, outperforming the internet software industry and the S&P 500 composite [1] Financial Performance - Earnings for fiscal years 2025 and 2026 are projected to grow by 18.5% and 4.3% year over year, respectively, with a long-term expected earnings growth rate of 9.4% over three to five years [2] Revenue Growth Drivers - Docusign's revenue growth is primarily driven by strong customer demand for its eSignature solution, with a growing customer base from 1.1 million in 2022 to a projected 1.5 million in 2024, indicating substantial future growth potential [3] - Approximately 97% of Docusign's total revenue comes from subscription fees, which provide stable revenue streams and enhance cash flow visibility [4] - Subscription revenues increased by 10% in fiscal 2024, fueled by revenue expansion from existing customers and the acquisition of new clients [5] Strategic Partnerships - Docusign has strengthened partnerships with technology leaders such as Salesforce and Microsoft, enhancing its market reach and customer base through integrated solutions [6] Concerns - Docusign has never declared dividends and lacks a payout plan, meaning returns for investors rely solely on share price appreciation [7] - The company's current ratio is 0.84, indicating potential challenges in meeting short-term obligations and raising concerns about financial flexibility [8] Market Position - Docusign currently holds a Zacks Rank of 3 (Hold), reflecting its market position [9]