Docusign Shares Jump on Strong Outlook: Is It Too Late to Buy the Stock?

Core Insights - Docusign is leveraging AI to drive growth after experiencing a decline post-pandemic, with a focus on its Intelligent Agreement Management (IAM) platform [1][4][11] Financial Performance - In fiscal Q2 2026, Docusign reported a 9% increase in revenue to $800.6 million and a 9% rise in subscription revenue to $784.4 million, while professional service revenue grew by 13% to $16.2 million [5] - Adjusted earnings per share (EPS) decreased by 5% to $0.92, surpassing analysts' expectations of $0.85 [6] - Billings increased by 13% to $818 million, exceeding prior guidance [7] Customer Metrics - The total number of customers grew by 9% year over year to over 1.7 million, with large customers spending over $300,000 annually increasing by 7% to 1,137 [8] - Dollar revenue retention improved to 102%, indicating existing customers are spending slightly more than the previous year [8] Cash Flow and Guidance - Docusign generated $246.1 million in operating cash flow and $217.6 million in free cash flow, ending the period with $1.1 billion in cash and investments and no debt [9] - The company raised its full-year guidance for revenue, subscription revenue, and billings, projecting revenue for fiscal Q3 between $804 million and $808 million [10] Market Position and Valuation - Docusign's stock trades at a forward P/E ratio of just over 20 and a P/S ratio of under 5, with nearly 7% of its market cap in cash [12] - The company is seen as slightly undervalued given its growth potential, but needs to accelerate growth to attract more investor interest [12]