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

DocuSign (DOCU) closed at $292.66 in the latest trading session, marking a -0.83% move from the prior day. This change lagged the S&P 500's daily gain of 0.82%.

Prior to today's trading, shares of the provider of electronic signature technology had gained 5.84% over the past month. This has outpaced the Business Services sector's loss of 2.2% and the S&P 500's gain of 0.89% in that time.

Investors will be hoping for strength from DOCU as it approaches its next earnings release. In that report, analysts expect DOCU to post earnings of $0.39 per share. This would mark year-over-year growth of 129.41%. Meanwhile, our latest consensus estimate is calling for revenue of $482.48 million, up 40.99% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $1.68 per share and revenue of $2.03 billion. These totals would mark changes of +86.67% and +40.05%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for DOCU. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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. DOCU is currently a Zacks Rank #2 (Buy).

In terms of valuation, DOCU is currently trading at a Forward P/E ratio of 176.1. For comparison, its industry has an average Forward P/E of 32.64, which means DOCU is trading at a premium to the group.

It is also worth noting that DOCU currently has a PEG ratio of 3.15. 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. DOCU's industry had an average PEG ratio of 2.32 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 188, which puts it in the bottom 26% 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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