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

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In the latest trading session, DocuSign (DOCU - Free Report) closed at $221.69, marking a +1.06% move from the previous day. The stock outpaced the S&P 500's daily loss of 0.92%.

Heading into today, shares of the provider of electronic signature technology had gained 5.52% over the past month, outpacing the Business Services sector's gain of 0.97% and lagging the S&P 500's gain of 6.83% 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 $0.27 per share. This would mark year-over-year growth of 125%. Our most recent consensus estimate is calling for quarterly revenue of $434.87 million, up 46.41% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $1.32 per share and revenue of $1.97 billion, which would represent changes of +46.67% and +35.62%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for DOCU. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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 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. The Zacks Consensus EPS estimate has moved 10.35% higher within the past month. DOCU is currently sporting a Zacks Rank of #3 (Hold).

Digging into valuation, DOCU currently has a Forward P/E ratio of 166.08. For comparison, its industry has an average Forward P/E of 30.69, which means DOCU is trading at a premium to the group.

Also, we should mention that DOCU has a PEG ratio of 4.3. 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. DOCU's industry had an average PEG ratio of 2.79 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 160, which puts it in the bottom 38% 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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