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DocuSign DOCU is an eSignature solution provider that has performed well in the past three months and has the potential to sustain momentum in the near term. The stock has gained 27% in the said time frame, compared with the 14% growth of the industry.
What Makes DOCU an Attractive Pick?
Solid Rank: DOCU currently carries a Zacks Rank #2 (Buy). Our research shows that stocks with a Zacks Rank #1 (Strong Buy) or 2 offer attractive investment opportunities for investors.
Docusign Inc. Price
Docusign Inc. price | Docusign Inc. Quote
Earnings Surprise History: DOCU has an impressive earnings surprise history. The company outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average earnings surprise of 12.1%.
Northward Estimate Revisions: Eight estimates for fiscal 2025 moved north in the past 60 days versus no southward revision, reflecting analysts’ confidence in the company. The Zacks Consensus Estimate for fiscal 2024 earnings has moved up 2.3% in the same time.
Strong Growth Prospects: The Zacks Consensus Estimate for DOCU’s fiscal 2025 earnings is pegged at $3.53 per share, reflecting 18.5% year-over-year growth. The company has a long-term expected earnings growth rate of 9.4%.
Growth Factors: Docusign’s revenue growth has been significantly driven by sustained customer demand for its eSignature solution within a vast addressable market. The company’s customer base has expanded consistently, reaching 1.1 million in 2022, 1.3 million in 2023, and 1.5 million in 2024. This upward trajectory suggests continued growth in the years ahead. Despite the increasing demand, the eSignature market remains largely underpenetrated, offering Docusign substantial opportunities to extend its eSignature services globally, thereby enhancing revenue potential.
The company’s strategic direct and indirect go-to-market efforts have contributed to growth among both commercial and enterprise customers. Enhanced customer programs, innovative initiatives and diversified use cases have consistently driven subscription revenue growth. In fiscal 2024, subscription revenues increased 10%, driven by expanded revenues from existing customers and the addition of new clients.
The recent acquisition of Lexion fortifies DocuSign's position in Intelligent Agreement Management (IAM) by adding more AI-assisted capabilities to its IAM platform. The integration will provide customers with richer insights and analysis, speeding up contract reviews and negotiations and simplifying information retrieval within documents.