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DocuSign (DOCU) Stock Sinks As Market Gains: What You Should Know

DocuSign (DOCU) closed at $130.44 in the latest trading session, marking a -0.11% move from the prior day. This change lagged the S&P 500's 0.08% gain on the day. Elsewhere, the Dow lost 0.56%, while the tech-heavy Nasdaq lost 0.42%.

Prior to today's trading, shares of the provider of electronic signature technology had lost 12.95% over the past month. This has was narrower than the Business Services sector's loss of 16.48% and lagged the S&P 500's gain of 0.22% in that time.

Investors will be hoping for strength from DocuSign as it approaches its next earnings release. The company is expected to report EPS of $0.48, up 29.73% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $560.8 million, up 30.15% from the year-ago period.

DOCU's full-year Zacks Consensus Estimates are calling for earnings of $1.97 per share and revenue of $2.09 billion. These results would represent year-over-year changes of +118.89% and +43.65%, respectively.

Any recent changes to analyst estimates for DocuSign should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-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 currently a Zacks Rank #3 (Hold).

In terms of valuation, DocuSign is currently trading at a Forward P/E ratio of 66.14. For comparison, its industry has an average Forward P/E of 22.83, which means DocuSign is trading at a premium to the group.

We can also see that DOCU currently has a PEG ratio of 1.39. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Technology Services industry currently had an average PEG ratio of 1.55 as of yesterday's close.

The Technology Services industry is part of the Business Services sector. This industry currently has a Zacks Industry Rank of 193, which puts it in the bottom 25% 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.

To follow DOCU in the coming trading sessions, be sure to utilize Zacks.com.


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