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1 Growth Stock Down 72% to Buy Hand Over Fist During the Nasdaq Correction
NDAQNasdaq(NDAQ) The Motley Fool·2025-03-19 08:37

Group 1: Market Overview - The Nasdaq-100 has entered correction territory with losses exceeding 10% from its record high, but historical trends suggest that the U.S. stock market tends to reach new highs over time, indicating potential buying opportunities for long-term investors [1] Group 2: Company Profile - Docusign - Docusign is a leader in digital document technologies, focusing on contract lifecycle management, and has integrated AI into its product offerings [3][4] - The company has seen its stock rise by 51% over the past year, yet it remains 72% below its all-time high from 2021, suggesting significant room for recovery [2][13] Group 3: Product Innovation - Docusign launched the Intelligent Agreement Management (IAM) platform, which aims to address the 2trillioneconomiclossbusinessesfaceduetopoorcontractmanagement[5]TheIAMplatformincludesAIpoweredtoolslikeNavigator,whichhelpsorganizationsmanageagreementsmoreefficiently,andMaestro,anocodetoolthatstreamlinesagreementworkflows[6][7]Group4:FinancialPerformanceDocusigngeneratedarecord2 trillion economic loss businesses face due to poor contract management [5] - The IAM platform includes AI-powered tools like Navigator, which helps organizations manage agreements more efficiently, and Maestro, a no-code tool that streamlines agreement workflows [6][7] Group 4: Financial Performance - Docusign generated a record 2.98 billion in revenue for fiscal 2025, reflecting an 8% growth compared to the previous year, slightly above management's guidance [9] - The company achieved a net income of 1.06billion,markinga1,3431.06 billion, marking a 1,343% year-over-year increase, aided by a one-off tax benefit of 819 million [11] - On a non-GAAP basis, Docusign's net income was 747.2million,representinga19.8747.2 million, representing a 19.8% growth compared to fiscal 2024, indicating positive trends in profitability [12] Group 5: Valuation Metrics - Docusign's stock currently trades at a price-to-sales (P/S) ratio of 6.1, which is a 52% discount to its long-term average of 12.7 since going public in 2018 [14] - The company's price-to-earnings (P/E) ratio stands at 16.9, making it cheaper than the Nasdaq-100 technology index, which has a P/E ratio of 28.5 [16] - Docusign's addressable market is valued at 50 billion, indicating substantial growth potential despite current valuation metrics [15]