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

DocuSign (DOCU) closed at $210.11 in the latest trading session, marking a -1.09% move from the prior day. This change lagged the S&P 500's 1.05% gain on the day. At the same time, the Dow added 1.44%, and the tech-heavy Nasdaq gained 0.66%.

Coming into today, shares of the provider of electronic signature technology had gained 42.66% in the past month. In that same time, the Business Services sector lost 1.55%, while the S&P 500 lost 1.56%.

Investors will be hoping for strength from DOCU as it approaches its next earnings release. On that day, DOCU is projected to report earnings of $0.07 per share, which would represent year-over-year growth of 600%. Meanwhile, our latest consensus estimate is calling for revenue of $318.37 million, up 35.13% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $0.46 per share and revenue of $1.32 billion, which would represent changes of +48.39% and +35.04%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for DOCU. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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. The Zacks Consensus EPS estimate has moved 0.27% higher within the past month. DOCU is currently a Zacks Rank #2 (Buy).

Valuation is also important, so investors should note that DOCU has a Forward P/E ratio of 464.31 right now. Its industry sports an average Forward P/E of 30.41, so we one might conclude that DOCU is trading at a premium comparatively.

Also, we should mention that DOCU has a PEG ratio of 14.89. 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 3.99 as of yesterday's close.

The Technology Services industry is part of the Business Services sector. This group has a Zacks Industry Rank of 158, putting it in the bottom 38% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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