DocuSign Stock: Is It a Good Buy Right Now?
In 2018, the e-signature provider DocuSign went public at a per-share price of $29. On its first Nasdaq trading day, the stock’s shares went up by over 30%, opening at $38 per share the following day.
At the time, the company said it sold 21.7 million shares and had 152.1 million outstanding shares, CNBC reported. With that, DocuSign’s valuation went well above $3 billion, as reported in 2015, to $4.41 billion.
Due to its revenue growth, the stock has skyrocketed, as noted by The Motley Fool in May of this year, when it was hovering around $200. Indeed, many experts believe DocuSign is a pandemic-proof stock.
But now, a few years down the line, is DocuSign stock still a good investment? Here’s what you need to consider.
What Is DocuSign?
DocuSign is the largest e-signature provider in the world, allowing individuals and companies to send and sign e-signatures.
Among other products, the company also offers DocuSign CLM, which allows contract life cycle management, under which companies can automate workflows and agreements.
Now, some investors might be confused about the high worth of DocuSign. If it’s primarily a document signing service, how does it earn so much? Simple: DocuSign is the most popular e-signature service, with a share of the e-signature market that comes out to about 68%, according to Datanyze.
The company serves over 1 million customers worldwide. According to its website, some of those customers are Fortune 500 companies, including:
- 15 of the top 15 financial companies
- 14 of the top 15 healthcare companies
- 13 of the top 15 tech companies
Over 1 billion people use the DocuSign Agreement Cloud, which includes DocuSign eSignature as a way for users to sign their daily contracts and agreements.
How Much Is DocuSign Worth?
On Sept. 9, DocuSign stock opened at $292.75 and closed at $281.31, giving the company a market capitalization of about $55.34 billion.
Is It a Safe Investment?
DocuSign has been growing significantly in the past few years. In 2019, the company’s year-over-year revenue growth was at 35%, which increased to 39% in 2020, and soared to 49% in 2021, according to The Motley Fool.
The sharp increase in the company’s revenue can be attributed to the pandemic, as most businesses resorted to remote signatures when physical workplaces closed down.
“We don’t believe our new or expanded customers will be going back to paper even after the pandemic recedes,” Dan Springer, DocuSign’s CEO, said at the company’s earnings call in March of this year.
Therefore, it’s safe to invest in DocuSign as its usage is forecast to continue increasing in the future.
How and Where To Buy DocuSign Stock
You can buy DocuSign stock from any major trading platform or brokerage. The company’s shares are under the ticker symbol DOCU. Once you’ve created your account on a trading platform, simply research the stock and purchase the number of shares you want.
Is DocuSign Stock a Good Investment?
According to Zacks, as of Sept. 9, DocuSign stock is a hold. In mid-August, however, Zacks also made note of two things to consider:
- DocuSign invests in technical expertise, sales and marketing to increase its revenue and global reach.
- The e-signature market is largely untapped, giving DocuSign a monopoly and flexibility to expand its services and business around the world.
Yahoo Finance notes that of eight analysts, two consider the stock a strong buy, three consider it a buy, and three consider it a hold. This gives the stock an overall recommendation rating that falls between “buy” and “strong buy,” which suggests that DocuSign stock is probably a good investment for the future.
Data is accurate as of Sept. 9, 2021, unless otherwise noted, and subject to change.
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- Datanyze. "Electronic Signatures Software Market Share."
- Zacks. 2021. "Reasons to Hold DocuSign (DOCU) Stock in Your Portfolio."
- Reuters. 2021. "Edited Transcript of DOCU.OQ earnings conference call or presentation 11-Mar-21 9:30pm GMT."
- The Motley Fool. 2021. "Is DocuSign Stock a Buy?"
- CNBC. 2018. "DocuSign starts trading on Nasdaq after raising $629 million in IPO."
- DocuSign. 2018. "DocuSign Announces Pricing of Initial Public Offering."