DocuSign Inc. is an American agreement company that allows organizations to manage their electronic agreements. They offer electronic signatures (eSignatures), which allow one to sign documents and agreements online. The company offers its services by subscriptions or for free to those using the mobile device app.
In recent times, DocuSign Inc. released some new happenings in the company, one of which was the release of the financial report for their first quarter fiscal for 2024. The press release explained their projected first-quarter financial highlights and their operational highlights. They projected their total revenue to be $661.4 million, with subscription revenue of $639.3 million.
You may be wondering why you should invest in DocuSign Inc. Over the last six to eight months, DocuSign Inc. has performed well in that their stocks are a strong buy for the following reasons:
●They have a rich earnings surprise history; they deliver an average earning surprise of 12.3%
● Their financial projections for the fiscal year 2024 show strong revenue growth
● They remained very focused on their set business growth strategies, which has worked well for them over time.
DocuSign Inc’s Overview
Court Lorenzini, Tom Gonser, and Eric Ranft founded DocuSign Inc. in 2003. The company, whose headquarter is in San Francisco, California has over one million customers with several millions of users in over 180 countries all over the world.
Source: Unsplash
DocuSign Inc. began its sales in 2005 when Ziplogix signed them in their virtual real estate forms. In 2007, they changed their CEO and Chairman for the board for the first time as Court Lorenzini stepped down for Matthew Schiltz, and then in 2010, Stephen King took over. Between 2010 and 2012, they signed PayPal, Google Drive and Salesforce.com.
In 2012, it got reported that about 90 % of companies that were under Fortune 500, had already signed up to use DocuSign. As of 2018, more than 20 billion pieces of paper and 608,000 barrels of oil had been saved by the company. In July 2018 and February 2020, they acquired SpringCM for $220 million and Seal Software for $188 million respectively.
The company is segmented in various departments like the administrative department, legal, customer success, IT operations, experience, security, product management, and marketing, having 7,461 employees. The current CEO of DocuSign Inc. is Allan Thygesen, he used to work at Google as their president, Americas. He also went to Stanford University Graduate School of Business.
DocuSign Inc's Business Model and Products/Services
Source: Unsplash
DocuSign Inc. is a SaaS company that offers contract management to businesses. They provide eSignature and digital transaction management services, enabling businesses to sign, send and manage agreements in the cloud. Now: DocuSign Inc. makes its money by using either monthly or annual subscriptions. The structure they use allows companies and organizations to register for whichever plan suits them depending on how large they are or how much they have budgeted.
Also, DocuSign Inc. also has some other products like contract lifecycle management, contract analytics, payments, admin tools, document generation, clickwrap agreements, guided forms, and electronic notarization. These products are often used in various industries like tech, healthcare, construction, insurance, accounting and tax, manufacturing, legal science and real estate.
DocuSign Inc. Financials, Growth, and Valuation Metrics
Source: Unsplash
DocuSign Inc., in March 2023, announced its fourth quarter and fiscal year financial results. They declared that for their fourth quarter, they had total revenue of $659.6 million, which was a 17 % year-over-year increase. They also had a subscription revenue of $643.7 million, and professional services and other revenue had a 5% year-over-year decrease of $15.9 million.
In their fiscal year 2023, their total revenue was $2.5 billion, giving them a 19 % year-on-year increase, subscription revenue of $2.4 billion, with professional services and other revenue bringing them a 5% year-over-year increase of $73.7 million.
As of June 2023, DocuSign Inc. registered a market capitalization of $10.13 billion. By market cap, DocuSign ranks no. 1479 in the world. Between 2018 and 2022, DocuSign Inc.'s market cap grew from $6.62 billion to $11.14 billion. The quarter which ended in April 2023, registered DocuSign Inc.'s net income as $0.001 billion, which was a 101.97 % decline from the last year. They also had a profit margin of -2.69%.
DocuSign Inc.'s annual revenue for the 2019 year was $701 M, and that of 2020 was $974 M. In 2021, their revenue was $1.453B, which is a whopping 49.19 % increase from 2020. In 2022, it was $2.107B, a 45.02 % increase from 2021. As for the twelve months that ended on April 30, 2023, the revenue totaled $2.589B, which was a 16.25 % increase year-over-year. DocuSign Inc.'s revenue for the quarter that ended on April 30, 2023, was $0.661B, a 12.35 % increase year-over-year.
In 2021, the operating cash flow for DocuSign Inc. was $0.298 billion, a 157.67 % increase from the previous year. As for the twelve months ending April 30, 2023, their cash from operations had reached $1.427B, a 0.52% decline year-over-year. DocuSign Inc.'s key financial ratio and metrics as of April 30, 2023, are:
●Current ratio: 0.82
●Debt/equity ratio: 0.0
● Price to earnings rate: -102.21
● PS ratio: 4.2
Forecast shows that DocuSign should grow in earnings and revenue by 47.6 % and 7.4 % per annum, respectively. Currently, DocuSign stock, in comparison with its most prominent peers, is relatively overvalued.
DOCU Stock Performance
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On April 27, 2018, DocuSign Inc. began trading on the NASDAQ exchange as DOCU in the American Stock Exchange in New York City. As of June 26th, 2023, DOCU stock is worth $50.08, a 1.51 % decrease from the previous trading day. The DocuSign Inc. stock trades in U.S. dollars and follows the trading hours from 9:30 am to 4:00 pm. The stock also has pre-market and after-market trading sessions that extend from 4:00 to 9:30 a.m. and from 4:00 to 8:00 p.m., respectively.
In the history of DocuSign Inc., stock split only occurred once, in 1988. It was a one-for-four reverse split, which meant that the shareholders who owned four shares before the pre-split now owned one share. As of June 2023, NASDAQ: DOCU has not started paying its shareholders dividends.
DocuSign stock is currently a strong buy with 68 % buy, 32 % hold, and 0 % sell, which means that this is a good time for investors to either buy or hold onto their DOCU stock.
DocuSign stock's price changes often, and this is a result of various factors such as:
● Balance of Power or Price Action
This is very important when deciding whether to buy, hold or sell DocuSign stock. It is usually used to explain the percentage change in the price of DOCU every trading day. It is usually the major metric that traders and investors use to check how volatile the DocuSign Inc. stock is.
● Company News and Performance
News released by the company about its performances in new quarters of the year can influence the price of its stock. An increase in their performance rating can lead to an increase in their stock price, while a decrease in performance rating can lead to a drop in the stock price.
● Industry Performance and Economic Factors
How well the industry does can affect the change in the price of DOCU stock. If there is a current drop in the industry, it will have an effect on all the stock in that industry. The state of the economy could also affect the pricing of things leading to an effect on the prices of the stock of such companies.
Looking at the 12-month price targets for DocuSign in the last three months, the average price target for DocuSign Inc. is $65.73 (high: $84.00 and low $48.00). This puts the average price target at a 29.24 % change from the last price of $50.86. Analysts predict that by the end of 2023, DocuSign stock will be worth $49.85, which will be a 1.86 % decrease, and by 2027, it will decrease further by 26.47 % and be worth $37.84. They further predict that by 2033, the stock will have further decreased by 33.05 %, and by then it will be worth $33.54.
Risks/Challenges and Opportunities
While DocuSign Inc. is a big company and leader in its industry, it has major competitors that relatively do better in terms of market cap, revenue, total assets, and even stock prices. Some of DocuSign Inc.'s major competitors in the signature industry include; Adobe Acrobat Sign, Airslate SignNow, Panda Doc, and HelloSign.
DocuSign Inc.'s competitive terrain has a solid mix of companies that are larger than them. In today's digitalized world, several companies are rising, giving the global growing demand for eSignatures. For instance, let's observe another world-leading eSignature company Adobe Acrobat Sign, that competes with DocuSign on features like prices and integrations.
Because of their parent body Adobe, they are a bit higher on the scale of rating in regards to recognition than DocuSign; they also outspend more than DocuSign in terms of research and development. However, DocuSign Inc. still stands out, thanks to its larger customer base and more comprehensive features, giving them a better chance to capitalize on the now-growing world of eSignatures.
Some other risks or challenges of DocuSign include; data privacy regulation, security issues, dependence on commercial real estate rebound, risks if small/midsize customer churn rises, margin pressures from R&D, and expansion spending. DocuSign Inc.'s risk distribution is as follows:
● 37 % Finance and Corporate
● 18 % Legal and Regulatory
● 16 % Tech and Innovation
● 16 % Ability to Sell
● 8 % Macro and Political
● 6 % Production
Although after the pandemic, DocuSign Inc.'s growth rate reduced pace, nevertheless, it continues to grow with upside potential with numerous growth expansions in the future.
Trading Strategies for DOCU Stock
Interested in trading DOCU stock? Here are some strategies you can employ while trading DOCU stock in order to ensure you remain profitable:
Fundamental Analysis: This strategy involves analyzing the fundamental factors that impact DocuSign as a company. Traders using this approach would consider factors such as earnings reports, revenue growth, market share, and industry trends. This will help you make informed trading decisions based on their evaluation of the stock's intrinsic value.
Volatility Breakout: With this strategy, traders look for periods of high volatility in Docu stock. They identify price levels of support and resistance and wait for a breakout above resistance or below support with increased trading volume. This breakout indicates a potentially significant price movement, and traders can enter positions in the direction of the breakout.
Moving Average Crossover: This strategy involves using different moving averages, such as the 50-day and 200-day moving averages, to generate buy and sell signals. For instance, when the shorter-term moving average (e.g., 50-day) crosses above the longer-term moving average (e.g., 200-day), it may indicate a bullish signal and vice versa.
Source: TradingView
Key Support and Resistance Levels to Pay Attention to for DOCU Stock
DOCU stock has been in a massive downtrend for some time however based on current indications, it would seem that DOCU stock price is now primed for an upward movement. Recently, price has failed to break below the 39.80 low, opting instead to go into a consolidation that’ll likely be the trigger for the buy movement. DOCU stock’s most recent high is the 57.02 level.
Source: TradingView
If price is able to smash that, then we can expect an upward move targeting other highs like the 72.34 and 91.67 levels. Of course if tha does happen, we’ll be expecting the 57.02 level to transition from a resistance to a support.
Trade DOCU Stock CFD at VSTAR
Trading DocuSign stock CFDs with VSTAR comes with advantages that help investors overcome some of the challenges they might face in trading. VSTAR is a globally regulated and secure trading platform with a user-friendly app for both experienced and beginner traders. VSTAR helps investors trade DOCU stock CFD with very minimal risk compared to trading on their own.
As soon as you start trading with VSTAR, you will enjoy the following:
Easy-to-use interface: VSTAR has a very easy-to-use interface that can get used by anybody, even beginners in trading. This means that with VSTAR, you can trade DOCU stocks even if you have not traded before. You can also trade DOCU stock with your phone when using the app.
Minimum deposit of only $50: With VSTAR, you only need a minimum value of $50 to begin a trade. Once your account gets funded with the amount, you can start a trade.
Lowest trading cost: VSTAR provides you with very low trading costs alongside low fees for DocuSign Inc. stock.
To trade DocuSign Inc. stocks CFDs with VSTAR:
● Visit www.vstar.com or download the VSTAR app on your device
● Register for an account by providing your details
● Verify your identity by uploading your proof of identity and address
● Deposit funds into your account by choosing your preferred payment method and amount.
● Trade by selecting your stock from the list of available instruments, entering your trade size, direction (buy or sell), stop loss, take profit, etc., and click on "Open Trade”.
Conclusion
This article gives investors an in-depth study and a detailed dive into the DocuSign Inc. brand and their stock. It discusses the overview, financial growth, and valuation metrics. Also, it contains the stock performances and risks, and challenges that investors and traders should know before buying the stock.
The article also contains the advantages of trading a CFD and how to trade using VSTAR, a global trading platform. To learn more about CFD trading or start trading DocuSign Inc. CFDs with VSTAR, visit www.vstar.com or download the VSTAR app today!
