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DocuSign (DOCU) Stock Sinks As Market Gains: Here's Why

In the latest market close, DocuSign (DOCU) reached $59.73, with a -0.05% movement compared to the previous day. The stock trailed the S&P 500, which registered a daily gain of 0.48%. Meanwhile, the Dow gained 0.32%, and the Nasdaq, a tech-heavy index, added 0.75%.

The provider of electronic signature technology's stock has climbed by 5.45% in the past month, exceeding the Business Services sector's gain of 0.64% and the S&P 500's gain of 2%.

Analysts and investors alike will be keeping a close eye on the performance of DocuSign in its upcoming earnings disclosure. The company's upcoming EPS is projected at $0.79, signifying a 9.72% increase compared to the same quarter of the previous year. Our most recent consensus estimate is calling for quarterly revenue of $706.07 million, up 6.76% from the year-ago period.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $3.24 per share and revenue of $2.92 billion, indicating changes of +8.72% and +5.77%, respectively, compared to the previous year.

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Investors should also pay attention to any latest changes in analyst estimates for DocuSign. These revisions help to show the ever-changing nature of near-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. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 1.16% higher. DocuSign presently features a Zacks Rank of #1 (Strong Buy).

Investors should also note DocuSign's current valuation metrics, including its Forward P/E ratio of 18.43. For comparison, its industry has an average Forward P/E of 24.42, which means DocuSign is trading at a discount to the group.

Also, we should mention that DOCU has a PEG ratio of 1.39. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. By the end of yesterday's trading, the Technology Services industry had an average PEG ratio of 1.59.

The Technology Services industry is part of the Business Services sector. This industry, currently bearing a Zacks Industry Rank of 61, finds itself in the top 25% echelons of all 250+ industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in 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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DocuSign (DOCU) : Free Stock Analysis Report

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