DocuSign Inc (DOCU, Financial) has experienced a remarkable surge in its stock price, with an 11.61% gain over the past week and an impressive 45.28% increase over the past three months. Currently, the company boasts a market capitalization of $12.51 billion and a share price of $61.35. When compared to the GF Value of $84.93, DocuSign's stock is considered modestly undervalued, a shift from its previous status as significantly undervalued when the GF Value was at $127.5. This change in valuation reflects a positive market sentiment towards the company's future prospects.
Introduction to DocuSign Inc
DocuSign Inc, a prominent player in the software industry, provides a comprehensive cloud-based software suite known as the Agreement Cloud. This suite facilitates the automation of the agreement process and enables users to execute legally binding e-signatures from virtually any device. Since its inception in 2003 and subsequent IPO in May 2018, DocuSign has been at the forefront of digital transformation, streamlining how agreements are prepared, signed, acted upon, and managed.
Assessing DocuSign's Profitability
Despite a Profitability Rank of 3/10, DocuSign's financial metrics suggest a competitive edge within its industry. The company's operating margin stands at 1.92%, outperforming 48% of its peers. Additionally, DocuSign's return on equity (ROE) is 7.07%, surpassing 60.85% of competitors, while its return on assets (ROA) at 1.67% and return on invested capital (ROIC) at 1.19% are better than 54.25% and 49.22% of industry counterparts, respectively. These figures indicate a solid foundation for profitability relative to many other companies in the software sector.
Growth Trajectory of DocuSign
DocuSign's growth metrics are equally noteworthy. The company's Growth Rank is 4/10, reflecting a strong expansion trajectory. The 3-year revenue growth rate per share is an impressive 31.50%, which is higher than 85.35% of its peers. Over a 5-year period, the revenue growth rate per share is 3.70%, outpacing 40.56% of competitors. Looking ahead, the estimated total revenue growth rate for the next 3 to 5 years is 7.74%, better than 35.48% of industry players. The 3-year and 5-year EPS without NRI growth rates are 31.50% and 33.10%, respectively, both of which are significantly higher than the majority of their peers. The future EPS growth rate estimate for the next 3 to 5 years is 16.76%, surpassing 46.77% of competitors. These growth indicators suggest that DocuSign is well-positioned for continued expansion and profitability.
Notable Shareholders in DocuSign
DocuSign's shareholder base includes some notable names in the investment world. Jim Simons (Trades, Portfolio) leads the pack with 2,577,900 shares, representing a 1.27% share percentage. Caxton Associates (Trades, Portfolio) holds 200,000 shares, accounting for 0.1% of the company's shares, while Ray Dalio (Trades, Portfolio) has a stake of 60,143 shares, equating to 0.03%. The confidence of these significant holders may influence other investors' perceptions and contribute to the stock's performance.
Competitive Landscape
When compared to its closest competitors, DocuSign maintains a competitive edge. Elastic NV (ESTC, Financial) has a market cap of $11.19 billion, Procore Technologies Inc (PCOR, Financial) is valued at $9.88 billion, and Guidewire Software Inc (GWRE, Financial) stands at $9.11 billion. DocuSign's higher market cap suggests a stronger market position relative to these companies, potentially reflecting investor confidence in its business model and growth prospects.
Conclusion
In summary, DocuSign Inc's recent stock performance and current valuation indicate a positive outlook from the market. The company's profitability and growth metrics demonstrate a robust business model capable of sustaining and expanding its market share. The positions held by significant investors further bolster the company's standing. When juxtaposed with its key competitors, DocuSign appears to be in a strong position to continue its upward trajectory. Investors and market watchers will undoubtedly keep a close eye on DocuSign as it navigates the dynamic software industry landscape.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
