DocuSign (DOCU) Declines More Than Market: Some Information for Investors

DocuSign (DOCU) closed at $74.04 in the latest trading session, marking a -1.03% move from the prior day. The stock trailed the S&P 500, which registered a daily loss of 0.43%. Meanwhile, the Dow lost 0.77%, and the Nasdaq, a tech-heavy index, lost 0.22%.

Heading into today, shares of the provider of electronic signature technology had lost 6.34% over the past month, lagging the Computer and Technology sector's gain of 2.56% and the S&P 500's gain of 2.65%.

Market participants will be closely following the financial results of DocuSign in its upcoming release. The company plans to announce its earnings on September 4, 2025. In that report, analysts expect DocuSign to post earnings of $0.84 per share. This would mark a year-over-year decline of 13.4%. At the same time, our most recent consensus estimate is projecting a revenue of $778.96 million, reflecting a 5.83% rise from the equivalent quarter last year.

DOCU's full-year Zacks Consensus Estimates are calling for earnings of $3.54 per share and revenue of $3.16 billion. These results would represent year-over-year changes of -0.28% and +6.05%, respectively.

It is also important to note the recent changes to analyst estimates for DocuSign. These latest adjustments often mirror the shifting dynamics of short-term business patterns. As such, positive estimate revisions reflect analyst optimism about the business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the past month, there's been no change in the Zacks Consensus EPS estimate. DocuSign is currently sporting a Zacks Rank of #3 (Hold).

Digging into valuation, DocuSign currently has a Forward P/E ratio of 21.16. Its industry sports an average Forward P/E of 30.83, so one might conclude that DocuSign is trading at a discount comparatively.

It is also worth noting that DOCU currently has a PEG ratio of 9.24. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The average PEG ratio for the Internet - Software industry stood at 2.34 at the close of the market yesterday.

Story ContinuesThe Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 71, putting it in the top 29% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

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This article originally published on Zacks Investment Research (zacks.com).

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