In the latest trading session, DocuSign (DOCU) closed at $66.65, marking a +1.77% move from the previous day. This change outpaced the S&P 500's 1.38% loss on the day. At the same time, the Dow lost 1.26%, and the tech-heavy Nasdaq lost 5.67%.
Prior to today's trading, shares of the provider of electronic signature technology had gained 13.9% over the past month. This has outpaced the Business Services sector's gain of 3.88% and the S&P 500's gain of 3.87% in that time.
DocuSign will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $0.53, up 10.42% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $639.39 million, up 10.08% from the prior-year quarter.
It is also important to note the recent changes to analyst estimates for DocuSign. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about 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.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. DocuSign is currently sporting a Zacks Rank of #3 (Hold).
Digging into valuation, DocuSign currently has a Forward P/E ratio of 30.43. Its industry sports an average Forward P/E of 22.82, so we one might conclude that DocuSign is trading at a premium comparatively.
We can also see that DOCU currently has a PEG ratio of 2.22. 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 Technology Services industry currently had an average PEG ratio of 2.42 as of yesterday's close.
The Technology Services industry is part of the Business Services sector. This group has a Zacks Industry Rank of 106, putting it in the top 43% 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.
You can find more information on all of these metrics, and much more, on Zacks.com.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
