Yahoo Finance Reasons to Hold DocuSign (DOCU) Stock in Your Portfolio Now
DocuSign, Inc. DOCU has an impressive Growth Score of A. This style score condenses all the essential metrics from the company’s financial statements to get the true sense of the quality and sustainability of its growth.
The company’s earnings for fiscal 2025 and 2026 are expected to improve 9.4% and 8%, respectively, year over year. DOCU has a long-term (three to five years) expected earnings growth rate of 13.7%.
Factors That Augur Well
DocuSign has progressed significantlyacross the three pillars of the company’s strategic vision: accelerating product innovation, enhancing the reach and effectiveness of omnichannel go-to-market initiatives, and strengthening operational and financial efficiency.
The company registered growth in both earnings and revenues in the first quarter of fiscal 2025. Non-GAAP earnings of 82 cents per share increased 14% year over year and total revenues of $710 million were up 7% year over year.
DocuSign Revenue (TTM)
DocuSign revenue-ttm | DocuSign Quote
DocuSign is experiencing improved performance with customers managed by the direct sales force. The company has significantly increased its business with customers signing and renewing multiyear, multimillion-dollar contracts, including Fortune 500 global leaders in energy, insurance, industrials, consumer goods, and several federal and state government agencies.
In terms of product innovation, identity verification products like AI-enabled IDV Premier and the recently launched QES-compliant Identity Wallet are now in use by more than 1,000 customers in the U.K. The recently launched DocuSign monitor had 1,500 new accounts created in the fiscal fourth quarter.
Regarding operational and financial efficiency, ongoing cost management initiatives are helping DocuSign streamline its operations and channel investments on initiatives that promise long-term growth.
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.
A Negative
DocuSign has never declared dividends and currently does not have any payout plan. So, the only way to achieve a return on investment on the company’s stock is share price appreciation, which is not guaranteed. Investors seeking cash dividends should avoid buying DocuSign’s shares.
Zacks Rank and Stocks to Consider
DocuSign currently carries a Zacks Rank #3 (Hold).
A couple of better-ranked stocks from the broader Zacks Business Services sector are Kelly Services KELYA and Fiserv FI.
Kelly Services presently sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
KELYA has a long-term earnings growth expectation of 13%. It delivered a trailing four-quarter earnings surprise of 45.8%, on average.
Fiserv currently carries a Zacks Rank of 2 (Buy). It has a long-term earnings growth expectation of 14.3%. FI delivered a trailing four-quarter earnings surprise of 2.3%, on average.
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DocuSign (DOCU) : Free Stock Analysis Report
