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DocuSign (DOCU) Gains But Lags Market: What You Should Know

In the latest trading session, DocuSign (DOCU) closed at $64.39, marking a +0.19% move from the previous day. This change lagged the S&P 500's 1.21% gain on the day. At the same time, the Dow added 1.03%, and the tech-heavy Nasdaq gained 0.16%.

Prior to today's trading, shares of the provider of electronic signature technology had gained 5.29% over the past month. This has outpaced the Business Services sector's gain of 3.7% and the S&P 500's gain of 3.2% in that time.

Investors will be hoping for strength from DocuSign as it approaches its next earnings release. On that day, DocuSign is projected to report earnings of $0.43 per share, which would represent a year-over-year decline of 8.51%. Meanwhile, our latest consensus estimate is calling for revenue of $602.06 million, up 17.63% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $1.75 per share and revenue of $2.47 billion. These totals would mark changes of -11.62% and +17.43%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for DocuSign. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. DocuSign is holding a Zacks Rank of #4 (Sell) right now.

In terms of valuation, DocuSign is currently trading at a Forward P/E ratio of 36.69. Its industry sports an average Forward P/E of 25.51, so we one might conclude that DocuSign is trading at a premium comparatively.

Meanwhile, DOCU's PEG ratio is currently 2.23. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Technology Services was holding an average PEG ratio of 2.11 at yesterday's closing price.

The Technology Services industry is part of the Business Services sector. This group has a Zacks Industry Rank of 126, putting it in the top 50% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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