Track market-moving stories before they get noisy

It doesn't matter your age or experience: taking full advantage of the stock market and investing with confidence are common goals for all investors. Luckily, Zacks Premium offers several different ways to do both.

The popular research service can help you become a smarter, more self-assured investor, giving you access to daily updates of the Zacks Rank and Zacks Industry Rank, the Zacks #1 Rank List, Equity Research reports, and Premium stock screens.

It also includes access to the Zacks Style Scores.

What are the Zacks Style Scores? The Zacks Style Scores, developed alongside the Zacks Rank, are complementary indicators that rate stocks based on three widely-followed investing methodologies; they also help investors pick stocks with the best chances of beating the market over the next 30 days.

Each stock is given an alphabetic rating of A, B, C, D or F based on their value, growth, and momentum qualities. With this system, an A is better than a B, a B is better than a C, and so on, meaning the better the score, the better chance the stock will outperform.

The Style Scores are broken down into four categories:

Value ScoreFinding good stocks at good prices, and discovering which companies are trading under their true value, are what value investors like to focus on. So, the Value Style Score takes into account ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to highlight the most attractive and discounted stocks.

Growth ScoreGrowth investors are more concerned with a stock's future prospects, and the overall financial health and strength of a company. Thus, the Growth Style Score analyzes characteristics like projected and historic earnings, sales, and cash flow to find stocks that will see sustainable growth over time.

Momentum ScoreMomentum investors, who live by the saying "the trend is your friend," are most interested in taking advantage of upward or downward trends in a stock's price or earnings outlook. Utilizing one-week price change and the monthly percentage change in earnings estimates, among other factors, the Momentum Style Score can help determine favorable times to buy high-momentum stocks.

VGM ScoreIf you like to use all three kinds of investing, then the VGM Score is for you. It's a combination of all Style Scores, and is an important indicator to use with the Zacks Rank. The VGM Score rates each stock on their shared weighted styles, narrowing down the companies with the most attractive value, best growth forecast, and most promising momentum.

How Style Scores Work with the Zacks Rank A proprietary stock-rating model, the Zacks Rank utilizes the power of earnings estimate revisions, or changes to a company's earnings outlook, to help investors create a successful portfolio.

#1 (Strong Buy) stocks have produced an unmatched +23.94% average annual return since 1988, which is more than double the S&P 500's performance over the same time frame. However, the Zacks Rank examines a ton of stocks, and there can be more than 200 companies with a Strong Buy rank, and another 600 with a #2 (Buy) rank, on any given day.

This totals more than 800 top-rated stocks, and it can be overwhelming to try and pick the best stocks for you and your portfolio.

That's where the Style Scores come in.

To maximize your returns, you want to buy stocks with the highest probability of success. This means picking stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you find yourself looking at stocks with a #3 (Hold) rank, make sure they have Scores of A or B as well to ensure as much upside potential as possible.

The direction of a stock's earnings estimate revisions should always be a key factor when choosing which stocks to buy, since the Scores were created to work together with the Zacks Rank.

A stock with a #4 (Sell) or #5 (Strong Sell) rating, for instance, even one with Scores of A and B, will still have a declining earnings forecast, and a greater chance its share price will fall too.

Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.

Stock to Watch: DocuSign (DOCU - Free Report) Founded in 2003 and headquartered in San Francisco, Docusign is a global provider of cloud-based software. The company’s Docusign Agreement Cloud is a cloud software suite that automates and connects the entire agreement process.

DOCU is a #3 (Hold) on the Zacks Rank, with a VGM Score of A.

Additionally, the company could be a top pick for growth investors. DOCU has a Growth Style Score of A, forecasting year-over-year earnings growth of 18.2% for the current fiscal year.

Seven analysts revised their earnings estimate upwards in the last 60 days for fiscal 2027. The Zacks Consensus Estimate has increased $0.11 to $4.54 per share. DOCU boasts an average earnings surprise of +8.7%.

With a solid Zacks Rank and top-tier Growth and VGM Style Scores, DOCU should be on investors' short list.

It doesn't matter your age or experience: taking full advantage of the stock market and investing with confidence are common goals for all investors. Luckily, Zacks Premium offers several different ways to do both.

The research service features daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, all of which will help you become a smarter, more confident investor.

It also includes access to the Zacks Style Scores.

What are the Zacks Style Scores? The Zacks Style Scores is a unique set of guidelines that rates stocks based on three popular investing types, and were developed as complementary indicators for the Zacks Rank. This combination helps investors choose securities with the highest chances of beating the market over the next 30 days.

Each stock is given an alphabetic rating of A, B, C, D or F based on their value, growth, and momentum qualities. With this system, an A is better than a B, a B is better than a C, and so on, meaning the better the score, the better chance the stock will outperform.

The Style Scores are broken down into four categories:

Value ScoreFinding good stocks at good prices, and discovering which companies are trading under their true value, are what value investors like to focus on. So, the Value Style Score takes into account ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to highlight the most attractive and discounted stocks.

Growth ScoreGrowth investors are more concerned with a stock's future prospects, and the overall financial health and strength of a company. Thus, the Growth Style Score analyzes characteristics like projected and historic earnings, sales, and cash flow to find stocks that will see sustainable growth over time.

Momentum ScoreMomentum traders and investors live by the saying "the trend is your friend." This investing style is all about taking advantage of upward or downward trends in a stock's price or earnings outlook. Employing factors like one-week price change and the monthly percentage change in earnings estimates, the Momentum Style Score can indicate favorable times to build a position in high-momentum stocks.

VGM ScoreIf you want a combination of all three Style Scores, then the VGM Score will be your friend. It rates each stock on their combined weighted styles, helping you find the companies with the most attractive value, best growth forecast, and most promising momentum. It's also one of the best indicators to use with the Zacks Rank.

How Style Scores Work with the Zacks Rank The Zacks Rank, which is a proprietary stock-rating model, employs earnings estimate revisions, or changes to a company's earnings expectations, to make building a winning portfolio easier.

#1 (Strong Buy) stocks have produced an unmatched +23.94% average annual return since 1988, which is more than double the S&P 500's performance over the same time frame. However, the Zacks Rank examines a ton of stocks, and there can be more than 200 companies with a Strong Buy rank, and another 600 with a #2 (Buy) rank, on any given day.

But it can feel overwhelming to pick the right stocks for you and your investing goals with over 800 top-rated stocks to choose from.

That's where the Style Scores come in.

To maximize your returns, you want to buy stocks with the highest probability of success. This means picking stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you find yourself looking at stocks with a #3 (Hold) rank, make sure they have Scores of A or B as well to ensure as much upside potential as possible.

The direction of a stock's earnings estimate revisions should always be a key factor when choosing which stocks to buy, since the Scores were created to work together with the Zacks Rank.

For instance, a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one that boasts Scores of A and B, still has a downward-trending earnings forecast, and a much greater likelihood its share price will decline as well.

Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.

Stock to Watch: DocuSign (DOCU - Free Report) Founded in 2003 and headquartered in San Francisco, Docusign is a global provider of cloud-based software. The company’s Docusign Agreement Cloud is a cloud software suite that automates and connects the entire agreement process.

DOCU is a #3 (Hold) on the Zacks Rank, with a VGM Score of A.

It also boasts a Value Style Score of B thanks to attractive valuation metrics like a forward P/E ratio of 10.55; value investors should take notice.

Seven analysts revised their earnings estimate higher in the last 60 days for fiscal 2027, while the Zacks Consensus Estimate has increased $0.11 to $4.54 per share. DOCU also boasts an average earnings surprise of +8.7%.

With a solid Zacks Rank and top-tier Value and VGM Style Scores, DOCU should be on investors' short list.

In the latest close session, DocuSign (DOCU - Free Report) was down 1.2% at $52.74. This change lagged the S&P 500's 1.01% loss on the day. Meanwhile, the Dow experienced a drop of 0.77%, and the technology-dominated Nasdaq saw a decrease of 1.4%.

The stock of provider of electronic signature technology has risen by 22.8% in the past month, leading the Computer and Technology sector's loss of 3.73% and the S&P 500's gain of 0.32%.

Investors will be eagerly watching for the performance of DocuSign in its upcoming earnings disclosure. In that report, analysts expect DocuSign to post earnings of $1.08 per share. This would mark year-over-year growth of 17.39%. Alongside, our most recent consensus estimate is anticipating revenue of $868.04 million, indicating a 8.42% upward movement from the same quarter last year.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $4.54 per share and revenue of $3.49 billion. These totals would mark changes of +18.23% and +8.53%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for DocuSign. These latest adjustments often mirror the shifting dynamics of short-term business patterns. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.

Based on our research, we believe these estimate revisions are directly related to near-term 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 varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the past month, there's been a 1% rise in the Zacks Consensus EPS estimate. As of now, DocuSign holds a Zacks Rank of #3 (Hold).

Investors should also note DocuSign's current valuation metrics, including its Forward P/E ratio of 11.76. This denotes a discount relative to the industry average Forward P/E of 20.37.

We can additionally observe that DOCU currently boasts a PEG ratio of 0.7. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. As of the close of trade yesterday, the Internet - Software industry held an average PEG ratio of 1.11.

The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 86, putting it in the top 35% of all 250+ industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. 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.

DocuSign (DOCU - Free Report) ended the recent trading session at $49.87, demonstrating a +1.4% change from the preceding day's closing price. The stock outpaced the S&P 500's daily loss of 0.79%. Meanwhile, the Dow lost 0.26%, and the Nasdaq, a tech-heavy index, lost 1.55%.

The provider of electronic signature technology's shares have seen an increase of 9.22% over the last month, surpassing the Computer and Technology sector's gain of 3.44% and the S&P 500's gain of 4.28%.

The investment community will be paying close attention to the earnings performance of DocuSign in its upcoming release. The company is forecasted to report an EPS of $1.08, showcasing a 17.39% upward movement from the corresponding quarter of the prior year. Meanwhile, our latest consensus estimate is calling for revenue of $868.04 million, up 8.42% from the prior-year quarter.

For the full year, the Zacks Consensus Estimates project earnings of $4.54 per share and a revenue of $3.49 billion, demonstrating changes of +18.23% and +8.53%, respectively, from the preceding year.

Any recent changes to analyst estimates for DocuSign should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. 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, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the past month, there's been a 1% rise in the Zacks Consensus EPS estimate. Currently, DocuSign is carrying a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that DocuSign has a Forward P/E ratio of 10.83 right now. This expresses a discount compared to the average Forward P/E of 19.66 of its industry.

Meanwhile, DOCU's PEG ratio is currently 0.65. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. As of the close of trade yesterday, the Internet - Software industry held an average PEG ratio of 1.07.

The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 104, which puts it in the top 43% of all 250+ industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.

DocuSign (DOCU - Free Report) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.

Shares of this provider of electronic signature technology have returned +4.6% over the past month versus the Zacks S&P 500 composite's +1.1% change. The Zacks Internet - Software industry, to which DocuSign belongs, has gained 3.2% over this period. Now the key question is: Where could the stock be headed in the near term?

Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.

Revisions to Earnings EstimatesRather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.

Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.

DocuSign is expected to post earnings of $1.08 per share for the current quarter, representing a year-over-year change of +17.4%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.

The consensus earnings estimate of $4.54 for the current fiscal year indicates a year-over-year change of +18.2%. This estimate has changed +1% over the last 30 days.

For the next fiscal year, the consensus earnings estimate of $5.13 indicates a change of +12.9% from what DocuSign is expected to report a year ago. Over the past month, the estimate has changed +0.2%.

Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, DocuSign is rated Zacks Rank #3 (Hold).

The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:

12 Month EPS

Projected Revenue GrowthEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.

For DocuSign, the consensus sales estimate for the current quarter of $868.04 million indicates a year-over-year change of +8.4%. For the current and next fiscal years, $3.49 billion and $3.77 billion estimates indicate +8.5% and +7.9% changes, respectively.

Last Reported Results and Surprise HistoryDocuSign reported revenues of $830.23 million in the last reported quarter, representing a year-over-year change of +8.7%. EPS of $1.09 for the same period compares with $0.9 a year ago.

Compared to the Zacks Consensus Estimate of $824.75 million, the reported revenues represent a surprise of +0.67%. The EPS surprise was +9%.

The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates each time over this period.

ValuationWithout considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.

Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.

As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.

DocuSign is graded B on this front, indicating that it is trading at a discount to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.

Bottom LineThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about DocuSign. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.

For new and old investors, taking full advantage of the stock market and investing with confidence are common goals. Zacks Premium provides lots of different ways to do both.

The popular research service can help you become a smarter, more self-assured investor, giving you access to daily updates of the Zacks Rank and Zacks Industry Rank, the Zacks #1 Rank List, Equity Research reports, and Premium stock screens.

It also includes access to the Zacks Style Scores.

What are the Zacks Style Scores? The Zacks Style Scores is a unique set of guidelines that rates stocks based on three popular investing types, and were developed as complementary indicators for the Zacks Rank. This combination helps investors choose securities with the highest chances of beating the market over the next 30 days.

Each stock is given an alphabetic rating of A, B, C, D or F based on their value, growth, and momentum qualities. With this system, an A is better than a B, a B is better than a C, and so on, meaning the better the score, the better chance the stock will outperform.

The Style Scores are broken down into four categories:

Value ScoreFor value investors, it's all about finding good stocks at good prices, and discovering which companies are trading under their true value before the broader market catches on. The Value Style Score utilizes ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to help pick out the most attractive and discounted stocks.

Growth ScoreGrowth investors, on the other hand, are more concerned with a company's financial strength and health, and its future outlook. The Growth Style Score examines things like projected and historic earnings, sales, and cash flow to find stocks that will experience sustainable growth over time.

Momentum ScoreMomentum trading is all about taking advantage of upward or downward trends in a stock's price or earnings outlook, and these investors live by the saying "the trend is your friend." The Momentum Style Score can pinpoint good times to build a position in a stock, using factors like one-week price change and the monthly percentage change in earnings estimates.

VGM ScoreIf you want a combination of all three Style Scores, then the VGM Score will be your friend. It rates each stock on their combined weighted styles, helping you find the companies with the most attractive value, best growth forecast, and most promising momentum. It's also one of the best indicators to use with the Zacks Rank.

How Style Scores Work with the Zacks Rank The Zacks Rank is a proprietary stock-rating model that harnesses the power of earnings estimate revisions, or changes to a company's earnings expectations, to help investors build a successful portfolio.

#1 (Strong Buy) stocks have produced an unmatched +23.94% average annual return since 1988, which is more than double the S&P 500's performance over the same time frame. However, the Zacks Rank examines a ton of stocks, and there can be more than 200 companies with a Strong Buy rank, and another 600 with a #2 (Buy) rank, on any given day.

This totals more than 800 top-rated stocks, and it can be overwhelming to try and pick the best stocks for you and your portfolio.

That's where the Style Scores come in.

You want to make sure you're buying stocks with the highest likelihood of success, and to do that, you'll need to pick stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you like a stock that only has a #3 (Hold) rank, it should also have Scores of A or B to guarantee as much upside potential as possible.

The direction of a stock's earnings estimate revisions should always be a key factor when choosing which stocks to buy, since the Scores were created to work together with the Zacks Rank.

A stock with a #4 (Sell) or #5 (Strong Sell) rating, for instance, even one with Scores of A and B, will still have a declining earnings forecast, and a greater chance its share price will fall too.

Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.

Stock to Watch: DocuSign (DOCU - Free Report) Founded in 2003 and headquartered in San Francisco, Docusign is a global provider of cloud-based software. The company’s Docusign Agreement Cloud is a cloud software suite that automates and connects the entire agreement process.

DOCU is a #3 (Hold) on the Zacks Rank, with a VGM Score of A.

Additionally, the company could be a top pick for growth investors. DOCU has a Growth Style Score of A, forecasting year-over-year earnings growth of 18.2% for the current fiscal year.

For fiscal 2027, seven analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.11 to $4.54 per share. DOCU boasts an average earnings surprise of +8.7%.

With a solid Zacks Rank and top-tier Growth and VGM Style Scores, DOCU should be on investors' short list.

It doesn't matter your age or experience: taking full advantage of the stock market and investing with confidence are common goals for all investors. Luckily, Zacks Premium offers several different ways to do both.

Featuring daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, the research service can help you become a smarter, more self-assured investor.

Zacks Premium includes access to the Zacks Style Scores as well.

What are the Zacks Style Scores? The Zacks Style Scores is a unique set of guidelines that rates stocks based on three popular investing types, and were developed as complementary indicators for the Zacks Rank. This combination helps investors choose securities with the highest chances of beating the market over the next 30 days.

Each stock is given an alphabetic rating of A, B, C, D or F based on their value, growth, and momentum qualities. With this system, an A is better than a B, a B is better than a C, and so on, meaning the better the score, the better chance the stock will outperform.

The Style Scores are broken down into four categories:

Value ScoreFinding good stocks at good prices, and discovering which companies are trading under their true value, are what value investors like to focus on. So, the Value Style Score takes into account ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to highlight the most attractive and discounted stocks.

Growth ScoreGrowth investors are more concerned with a stock's future prospects, and the overall financial health and strength of a company. Thus, the Growth Style Score analyzes characteristics like projected and historic earnings, sales, and cash flow to find stocks that will see sustainable growth over time.

Momentum ScoreMomentum trading is all about taking advantage of upward or downward trends in a stock's price or earnings outlook, and these investors live by the saying "the trend is your friend." The Momentum Style Score can pinpoint good times to build a position in a stock, using factors like one-week price change and the monthly percentage change in earnings estimates.

VGM ScoreIf you want a combination of all three Style Scores, then the VGM Score will be your friend. It rates each stock on their combined weighted styles, helping you find the companies with the most attractive value, best growth forecast, and most promising momentum. It's also one of the best indicators to use with the Zacks Rank.

How Style Scores Work with the Zacks Rank The Zacks Rank is a proprietary stock-rating model that harnesses the power of earnings estimate revisions, or changes to a company's earnings expectations, to help investors build a successful portfolio.

It's highly successful, with #1 (Strong Buy) stocks producing an unmatched +23.94% average annual return since 1988. That's more than double the S&P 500. But because of the large number of stocks we rate, there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.

But it can feel overwhelming to pick the right stocks for you and your investing goals with over 800 top-rated stocks to choose from.

That's where the Style Scores come in.

To have the best chance of big returns, you'll want to always consider stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B, which will give you the highest probability of success. If you're looking at stocks with a #3 (Hold) rank, it's important they have Scores of A or B as well to ensure as much upside potential as possible.

Since the Scores were created to work together with the Zacks Rank, the direction of a stock's earnings estimate revisions should be a key factor when choosing which stocks to buy.

A stock with a #4 (Sell) or #5 (Strong Sell) rating, for instance, even one with Scores of A and B, will still have a declining earnings forecast, and a greater chance its share price will fall too.

Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.

Stock to Watch: DocuSign (DOCU - Free Report) Founded in 2003 and headquartered in San Francisco, Docusign is a global provider of cloud-based software. The company’s Docusign Agreement Cloud is a cloud software suite that automates and connects the entire agreement process.

DOCU is a #3 (Hold) on the Zacks Rank, with a VGM Score of A.

It also boasts a Value Style Score of B thanks to attractive valuation metrics like a forward P/E ratio of 10.14; value investors should take notice.

For fiscal 2027, seven analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.11 to $4.54 per share. DOCU boasts an average earnings surprise of +8.7%.

With a solid Zacks Rank and top-tier Value and VGM Style Scores, DOCU should be on investors' short list.

On June 25, 2026, Docusign Inc (DOCU) shares fell 4.0% to a current price of $42.46. This decline comes amid a challenging year for the company, with its stock

Docusign for Perplexity Computer helps in-house legal teams draft, review, sign, and manage contracts across the entire business

, /PRNewswire/ -- Docusign (NASDAQ: DOCU) today announced that its Intelligent Agreement Management (IAM) platform is now available for Perplexity Computer and Computer for Counsel, enabling legal teams and businesses to automate contract workflows with AI. The Docusign integration helps in-house legal teams spend less time on manual contract tasks and more time on strategic work by making it easier to collaborate with sales, procurement, HR, and other teams on contracting work.

Docusign for Perplexity "Contracts are at the heart of how every company operates, and legal teams sit right in the middle of this work," said Allan Thygesen, CEO of Docusign. "Too often, critical contract information gets stuck in disconnected systems, forcing legal teams to juggle multiple tools. We want to bring Docusign's agreement intelligence and workflows directly into the AI tools legal teams already use — so they can spend less time managing documents and more time helping the business move faster."

"As Perplexity's General Counsel, I've felt the pain of contract work scattered across tools firsthand — and I've also seen what Perplexity Computer can do when it's pointed at a real workflow," said Nathan Barksdale, General Counsel at Perplexity. "Connecting Docusign to Computer means legal teams don't just get faster contract execution — they can automate agreement workflows from end-to-end and spend more time on strategic legal work."

Using Docusign in Perplexity for AI-Powered Contracting Work

Powered by the Docusign Model Context Protocol (MCP) server, legal teams can set an objective using plain language in Perplexity and Docusign can automate contract work from start to finish. Examples include:

Streamlined Vendor & Compliance Reviews: Legal and procurement teams can identify clauses that don't align with company playbooks and review suggested edits – no manual comparisons required. Faster Deal Negotiations: During negotiations, legal and sales teams can quickly find historical contract language, draft updated terms based on this information, route approvals, and send the agreement for signature without switching tools. HR & Employment Agreements: Legal can operationalize agreements for HR teams across the entire hire-to-retire journey, from routing employment agreements for review and signature to identifying missing employee documents and flagging compliance issues – without having to open a spreadsheet. The Docusign for Perplexity integration is available today in English globally.

About Docusign
Docusign brings agreements to life. Nearly 1.9 million customers and more than a billion people in over 180 countries use Docusign solutions to accelerate the process of doing business and simplify people's lives. With intelligent agreement management, Docusign unleashes business-critical data that is trapped inside of documents. Until now, these were disconnected from business systems of record, costing businesses time, money, and opportunity. Using the Docusign AI-native IAM platform, companies can create, commit, and manage agreements with solutions created by the #1 company in e-signature and CLM. Learn more at www.docusign.com.

Media Contact:
Docusign Corporate Communications
[email protected]

SOURCE Docusign, Inc.

On June 17, 2026, Docusign Inc DOCU shares fell 4.2% today, closing at $42.58. This decline adds to a challenging year for the company, with its stock down 37.8% year-to-date and a staggering 43.1% over the past year. The shares have traded between $40.16 and $86.65 over the past 52 weeks.

GF Value™ verdict: The current price of $42.58 is significantly below the GF Value™ estimate of $72.44, indicating a 41.2% upside potential.GF Score™: The stock has a GF Score™ of 67/100, suggesting it is rated as above average compared to its peers.Notable signal: Insider activity shows that insiders sold $3.1 million worth of stock in the last 3 months, with no insider buying reported. Is DOCU Overvalued or Undervalued? Based on the current price of $42.58 and the GF Value™ estimate of $72.44, Docusign appears to be significantly undervalued at this moment. This 41.2% margin of safety presents a potential investment opportunity for those considering the stock. However, potential investors should be cautious, as the GF Valuation label indicates that while the stock is undervalued, there might be risks associated with its recent price performance.

GF Value™ is GuruFocus' proprietary measure of intrinsic value, calculated from historical trading multiples, past business growth, and future performance estimates. The disparity between the current price and GF Value™ suggests that the market may not fully reflect the company's potential, but investors should remain aware of the specific challenges that might be contributing to the stock's current price trajectory.

How Does DOCU's Valuation Compare to Its History? Metric Current Historical P/E (TTM) 27.6x 32.4x Forward P/E 9.4x N/A The current P/E (TTM) of 27.6x is 15% below its 5-year median of 32.4x, indicating that Docusign is trading below its historical valuation levels. This analysis aligns with the GF Value™ verdict, reinforcing the notion that the stock is undervalued compared to its past performance.

What Does DOCU's GF Score™ Tell Us? Metric Rating GF Score™ 67 Financial Strength 8/10 Profitability 4/10 Growth 7/10 Valuation 4/10 Momentum 2/10 The GF Score™ of 67/100 indicates a solid position for Docusign, with particularly strong financial strength rated at 8/10 and a respectable growth rank of 7/10. However, the valuation and momentum ranks are weaker at 4/10 and 2/10, respectively, suggesting that while the company has a sound financial footing and growth potential, momentum in the stock price has been poor, and its valuation may not currently reflect its intrinsic value.

What Are Insiders Doing with DOCU Stock? In recent months, insider activity has shown that insiders sold approximately $3.1 million in Docusign stock, without any reported purchases. This pattern of selling could suggest a lack of confidence in the short-term performance of the stock or a strategy to realize gains. The absence of insider buying could also indicate that insiders do not see current prices as attractive for investment, which is often a cautionary signal for potential investors.

What This Means for Investors Based on the analysis of GF Value™, Docusign Inc DOCU is currently undervalued. The significant difference between the current price and the GF Value™ estimate presents a potential opportunity, albeit with caveats regarding insider selling and current momentum issues.

For the complete analysis, visit the Docusign Inc DOCU stock page. You can also explore the GF Value™ page for detailed valuation methodology, or use the GuruFocus Stock Screener to find similar opportunities.

Frequently Asked Questions What is DOCU's GF Score™?

DOCU has a GF Score™ of 67/100, indicating that it is above average relative to its peers, suggesting potential for better long-term returns.

Is DOCU overvalued or undervalued?

According to the GF Value™, DOCU is currently undervalued, with a significant margin of safety compared to its intrinsic value estimate.

What is DOCU's P/E ratio?

DOCU's P/E (TTM) is 27.6x, which is 15% below its 5-year median of 32.4x, indicating that the stock is trading below historical valuation levels.

This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].

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Stock to Watch: DocuSign (DOCU - Free Report) Founded in 2003 and headquartered in San Francisco, Docusign is a global provider of cloud-based software. The company’s Docusign Agreement Cloud is a cloud software suite that automates and connects the entire agreement process.

DOCU is a #3 (Hold) on the Zacks Rank, with a VGM Score of A.

Additionally, the company could be a top pick for growth investors. DOCU has a Growth Style Score of A, forecasting year-over-year earnings growth of 18% for the current fiscal year.

Six analysts revised their earnings estimate upwards in the last 60 days for fiscal 2027. The Zacks Consensus Estimate has increased $0.10 to $4.53 per share. DOCU boasts an average earnings surprise of +8.7%.

With a solid Zacks Rank and top-tier Growth and VGM Style Scores, DOCU should be on investors' short list.

, /PRNewswire/ -- Docusign, Inc. (NASDAQ: DOCU) today announced results for its fiscal quarter ended April 30, 2026. Prepared remarks and the news release with the financial results will be accessible on Docusign's website at investor.docusign.com prior to its webcast.

"In Q1, we saw continued growing demand for Docusign's AI-native IAM platform with 40,000 customers investing in our rapidly expanding roadmap," said Allan Thygesen, CEO of Docusign. "We delivered significant innovation this quarter while driving strong financial results through durable revenue growth, substantial free cash flow, and record share buybacks."

First Quarter Financial Highlights

Revenue was $830.2 million, a 9% year-over-year increase including approximately 1.6% positive impact from foreign exchange rates. Intelligent Agreement Management ("IAM") represented 12.6% of our total Annual Recurring Revenue ("ARR") as of April 30, 2026, compared to 10.8% of our total ARR as of January 31, 2026. GAAP gross margin was 79.4% for both periods. Non-GAAP gross margin was 81.5% compared to 82.3% in the same period last year. GAAP net income per basic share was $0.40 on 195 million shares outstanding compared to $0.35 on 203 million shares outstanding in the same period last year. GAAP net income per diluted share was $0.40 on 196 million shares outstanding compared to $0.34 on 213 million shares outstanding in the same period last year. Non-GAAP net income per diluted share was $1.09 on 196 million shares outstanding compared to $0.90 on 213 million shares outstanding in the same period last year. Net cash provided by operating activities was $321.7 million compared to $251.4 million in the same period last year. Free cash flow was $289.4 million compared to $227.8 million in the same period last year. Cash, cash equivalents, and investments were $1.0 billion at the end of the quarter. Repurchases of common stock were $317.5 million compared to $183.4 million in the same period last year. A reconciliation of GAAP to non-GAAP financial measures has been provided in the tables included in this press release. An explanation of these measures is also included below under the heading "Non-GAAP Financial Measures and Other Key Metrics."

Key Business Highlights

AI-Powered Intelligent Agreement Management ("IAM") announcements: In May at our annual Momentum conference, Docusign announced new IAM capabilities powered by Iris, our agreement AI engine:

Iris assistant and agents: Iris is Docusign's AI engine for agreements, which helps teams work smarter, faster, and trigger actions using natural language. Customers can now:

Move faster through reviews: Agents can check agreements against company standards, suggest edits, and automatically request the right approvals in minutes. Keep work moving automatically: Agents can monitor contracts in the background and flag risks, track obligations, and trigger next steps without manual follow-up. Build agents for specific workflows: With Docusign Agent Studio, teams can create and deploy custom agents tailored to how they manage deals, renewals, approvals, and more. Docusign IAM platform ecosystem: Docusign connects agreement work across the systems and teams that run the business. Instead of contracts living in silos, Docusign brings them into the tools people already use:

AI where teams work: Through our open platform and Model Context Protocol (MCP) server, Docusign connects with leading frontier models like Anthropic Claude, Gemini, and OpenAI ChatGPT – so teams can create, review, and manage agreements using natural language within the tools they already use. Deep integrations across business systems: Docusign integrates with core applications like Coupa, Microsoft Copilot, Salesforce, SAP, and Slack – so agreement workflows happen seamlessly across systems teams use every day, from triggering actions to surfacing completed agreements and the insights they contain. A connected legal AI ecosystem: Docusign is also partnering with leading legal AI platforms, including Harvey, Legora, and CoCounsel by Thomson Reuters. These integrations will bring legal research, document analysis, and contract review directly into agreement workflows across sales, procurement, HR, and finance. Docusign IAM platform end-to-end workflows:

IAM for HR: Employee agreements span the entire lifecycle, from hiring to role changes, but the work behind them is often fragmented and manual. IAM for HR spans the often manual HR lifecycle from hiring to role changes. Mobile I-9 verification simplifies compliance, while integrations with HCM platforms help HR teams move faster and improve the employee experience from day one onward. IAM for Sales: IAM for Sales brings the full agreement lifecycle directly into CRMs like HubSpot, Microsoft Dynamics 365, and Salesforce. New CRM-embedded experiences for Agreement Desk, Agreement Prep, and Agreement Manager keep workflows, collaboration, and signed agreements connected in one place. Instant Form Creation for Customer Experience:  AI-powered Web Forms transform static documents into interactive, shareable forms in seconds, so people can complete them quickly without manual re-entry. Executive Appointment: Docusign announced Graham Sheldon as its incoming Chief Product Officer. Most recently, Sheldon served as Chief Product Officer at UiPath Inc., a leading enterprise-grade agentic automation platform. Before that, Sheldon spent more than 20 years at Microsoft Corp., including as Corporate Vice President of Product for Microsoft Teams.

Guidance

The company currently expects the following guidance:

(in millions, except percentages)

Three Months Ended
July 31, 2026

YoY
Midpoint
Change

Revenue [1]

$865

to

$869

8 %

Non-GAAP gross margin

81.5 %

to

81.7 %

NA

Non-GAAP operating margin

29.7 %

to

30.2 %

NA

Non-GAAP diluted weighted-average shares outstanding

191

to

196

NA

(in millions, except percentages)

Year Ended January 31,
2027

YoY
Midpoint
Change

Revenue [1]

$3,490

to

$3,502

9 %

Annual recurring revenue year-over-year growth rate

8.25 %

to

8.75 %

8.50 %

Non-GAAP gross margin

81.5 %

to

82.0 %

NA

Non-GAAP operating margin

30.5 %

to

31.0 %

NA

Non-GAAP diluted weighted-average shares outstanding     

190

to

195

NA

[1] Excluding the impact of foreign currency exchange rates on year-over-year guided revenue growth, revenue guidance range would be approximately 1.4% points lower for the quarter ending July 31, 2026 and 1.3% points lower for the fiscal year ending January 31, 2027.

A reconciliation of non-GAAP guidance measures to corresponding GAAP guidance measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty regarding, and the potential variability of, expenses that may be incurred in the future. Stock-based compensation-related charges, including employer payroll tax-related items on employee stock transactions, are impacted by many factors, including the timing of employee stock transactions, the future fair market value of our common stock, and our future hiring and retention needs, all of which are difficult to predict and subject to constant change. We have provided a reconciliation of GAAP to non-GAAP financial measures in the financial statement tables for our historical non-GAAP financial results included in this release.

Webcast Conference Call Information

The company will host a conference call on June 4, 2026 at 2:00 p.m. PDT (5:00 p.m. EDT) to discuss its financial results. A live webcast of the event will be available on the Docusign Investor Relations website at investor.docusign.com. Prepared remarks and the news release with the financial results will also be accessible on Docusign's website prior to the webcast. A live dial-in will be available domestically at 877-407-0784 or internationally at 201-689-8560. A replay will be available domestically at 844-512-2921 or internationally at 412-317-6671 until midnight (EDT) June 18, 2026 using the passcode 13760337.

About Docusign

Docusign brings agreements to life. Nearly 1.9 million customers and more than a billion people in over 180 countries use Docusign solutions to accelerate the process of doing business and simplify people's lives. With intelligent agreement management, Docusign unleashes business critical data that is trapped inside of documents. Until now, these were disconnected from business systems of record, costing businesses time, money, and opportunity. Using Docusign's AI-native IAM platform, companies can create, commit, and manage agreements with solutions created by the #1 company in e-signature and CLM. Learn more at www.docusign.com.

Copyright 2026. Docusign, Inc. is the owner of DOCUSIGN® and all its other marks (www.docusign.com/IP).

Investor Relations:
Docusign Investor Relations
[email protected] 

Media Relations:
Docusign Corporate Communications
[email protected] 

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that are based on our management's beliefs and assumptions and on information currently available to management, and which statements involve substantial risk and uncertainties. All statements contained in this press release other than statements of historical fact, including statements regarding our future operating results and financial position, our business strategy and plans, market growth and trends, our objectives for future operations, and the impact of such assumptions on our financial condition and results of operations are forward-looking statements. Forward-looking statements in this press release also include, among other things, statements under "Guidance" above and any other statements about expected financial metrics, such as revenue, annual recurring revenue, free cash flow, non-GAAP gross margin, non-GAAP operating margin, non-GAAP diluted weighted-average shares outstanding, and non-financial metrics, as well as statements related to our expectations regarding: the impact of foreign exchange rates; the timing and extent of customer renewals; the effectiveness of changes to our sales force and go-to-market strategy; the effects of seasonality; the timing and impact of our cloud migration transition; the benefits, the timing or rollout of future products and capabilities; the evolution, customer demand, and adoption of the Docusign IAM platform; and our utilization of our stock repurchase program, including the expected timing, duration, volume and nature of share repurchase under such program. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as "may," "will," "should," "expects," "plans," "anticipates," "could," "intends," "target," "projects," "contemplates," "believes," "estimates," "predicts," "potential," or "continue" or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions.

Forward-looking statements contained in this press release include, but are not limited to, statements about: our expectations regarding global macro-economic conditions, including the effects of inflation, volatile interest rates or foreign exchange rates, and market volatility on the global economy; our inability to accurately estimate our market opportunity; our ability to compete effectively in an evolving and competitive market; the impact of any interruptions or delays in performance of our technical infrastructure, or data breaches, cyberattacks or other fraudulent or malicious activity attempting to exploit our technology systems, platform or brand name; our ability to effectively sustain and manage our growth and future expenses and maintain or increase profitability; our ability to attract new customers and retain and expand our existing customer base, including our ability to attract large organizations as users; our ability to scale and update our platform to respond to customers' needs and rapid technological change, including our ability to successfully incorporate artificial intelligence into our existing and future products and to successfully deploy them; our ability to successfully develop, launch, and sell IAM solutions; our ability to expand use cases within existing customers and vertical solutions; our ability to expand our operations and increase adoption of our platform internationally; our ability to strengthen and foster our relationships with developers; our ability to retain our direct sales force, customer success team and strategic partnerships around the world; our ability to identify targets for and execute potential acquisitions and to successfully integrate and realize the anticipated benefits of such acquisitions; our ability to maintain, protect and enhance our brand; the sufficiency of our cash, cash equivalents and capital resources to satisfy our liquidity needs; limitations on us due to obligations we have under our credit facility; our ability to realize the anticipated benefits of our stock repurchase program; our failure or the failure of our software to comply with applicable industry standards, laws and regulations; our ability to maintain, protect and enhance our intellectual property; our ability to successfully defend litigation against us; our ability to maintain our corporate culture; our ability to offer high-quality customer support; our ability to hire, retain and motivate qualified personnel, including executive level management; our ability to successfully manage and integrate executive management transitions; uncertainties regarding the impact of general economic and market conditions, including as a result of geopolitical conflict or changes in trade policies and practices; and our ability to maintain proper and effective internal controls.

Additional risks and uncertainties that could affect our financial results are included in the sections titled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our annual report on Form 10-K for the fiscal year ended January 31, 2026, filed on March 18, 2026, our quarterly report on Form 10-Q for the quarter ended April 30, 2026, which we expect to file on June 5, 2026 with the Securities and Exchange Commission (the "SEC"), and other filings that we make from time to time with the SEC. The forward-looking statements made in this press release relate only to events as of the date on which such statements are made. We undertake no obligation to update any forward-looking statements after the date of this press release or to conform such statements to actual results or revised expectations, except as required by law.

Non-GAAP Financial Measures and Other Key Metrics

To supplement our consolidated financial statements, which are prepared and presented in accordance with U.S. GAAP, we use certain non-GAAP financial measures, as described below, to understand and evaluate our core operating performance. These non-GAAP financial measures, which may be different than similarly titled measures used by other companies, are presented to enhance investors' overall understanding of our financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

We believe that these non-GAAP financial measures provide useful information about our financial performance, enhance the overall understanding of our past performance and future prospects, and allow for greater transparency with respect to important metrics used by our management for financial and operational decision-making. We present these non-GAAP measures to assist investors in seeing our financial performance using a management view, and because we believe that these measures provide an additional tool for investors to use in comparing our core financial performance over multiple periods with other companies in our industry. However, these non-GAAP measures are not intended to be considered in isolation from, a substitute for, or superior to our GAAP results.

Non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP income from operations, non-GAAP operating margin, non-GAAP net income and non-GAAP net income per share: We define these non-GAAP financial measures as the respective GAAP measures, excluding expenses related to stock-based compensation, employer payroll tax on employee stock transactions, amortization of acquisition-related intangibles, and, as applicable, other special items. The amount of employer payroll tax-related items on employee stock transactions is dependent on our stock price and other factors that are beyond our control and do not correlate to the operation of the business. When evaluating the performance of our business and making operating plans, we do not consider these items (for example, when considering the impact of equity award grants, we place a greater emphasis on overall stockholder dilution rather than the accounting charges associated with such grants). We believe it is useful to exclude these expenses in order to better understand the long-term performance of our core business and to facilitate comparison of our results to those of peer companies and over multiple periods. In addition to these exclusions, we subtract an assumed provision for income taxes to calculate non-GAAP net income. We utilize a fixed long-term projected tax rate in our computation of the non-GAAP income tax provision to provide better consistency across the reporting periods. For the three months ended April 30, 2026 and 2025, we have determined the projected non-GAAP tax rate to be 21% and 20%, respectively.

Free cash flow: We define free cash flow as net cash provided by operating activities less purchases of property and equipment. We believe free cash flow is an important liquidity measure of the cash that is available (if any), after purchases of property and equipment, for operational expenses, investment in our business and to make acquisitions. Free cash flow is useful to investors as a liquidity measure because it measures our ability to generate or use cash in excess of our capital investments in property and equipment. Once our business needs and obligations are met, cash can be used to maintain a strong balance sheet and invest in future growth.

Annual Recurring Revenue: We calculate ARR as the annualized value of active customer contracts as of the measurement date. This calculation assumes that any contract expiring within the next 12 months renews on its existing terms, and excludes non-recurring revenue streams recognized at a point in time. When evaluating ARR on a product basis for contracts spanning multiple product lines, we allocate the support contract value to each product offering based on its proportional share of the total contract value. To annualize contracts, we divide the total committed contract value by the number of months in the subscription term and multiply by twelve. For international contracts denominated in foreign currencies, ARR is translated into U.S. dollars using a fixed exchange rate set at the beginning of each fiscal year. We adjust previously reported ARR annually to reflect these exchange rate changes for comparative purposes. We believe ARR measures our business performance and serves as a leading indicator of future revenue growth. We report total ARR annually at the end of the fiscal year. Because quarterly net new ARR represents only a fraction of our overall book of business, it is subject to timing volatility and can be highly volatile on a year-over-year basis. Because the objective of ARR is to evaluate the long-term growth of our business, these quarterly timing fluctuations can detract from the insight and usefulness of ARR. ARR is an operating metric and should be viewed independently of revenue, deferred revenue, and remaining performance obligations; it does not represent revenue under U.S. GAAP on an annual basis.

For a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measure, please see "Reconciliation of GAAP to Non-GAAP Financial Measures" below.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

Three Months Ended
April 30,

(in thousands, except per share data)

2026

2025

Revenue

$   830,235

$   763,654

Cost of revenue

171,270

157,269

Gross profit

658,965

606,385

Operating expenses:

Sales and marketing

296,175

296,413

Research and development

159,586

159,447

General and administrative

91,895

90,270

Total operating expenses

547,656

546,130

Income from operations

111,309

60,255

Interest expense

(551)

(478)

Interest income and other income, net

6,998

14,013

Income before provision for income taxes                                                                                                    

117,756

73,790

Provision for income taxes

39,559

1,703

Net income

$     78,197

$     72,087

Net income per share attributable to common stockholders:

Basic

$         0.40

$         0.35

Diluted

$         0.40

$         0.34

Weighted-average shares used in computing net income per share:

Basic

195,489

203,280

Diluted

196,480

212,812

Stock-based compensation expense included in costs and expenses:

Cost of revenue

15,309

16,904

Sales and marketing

43,026

46,085

Research and development

54,476

54,431

General and administrative

28,566

28,176

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(in thousands)

April 30, 2026

January 31, 2026

Assets

Current assets

Cash and cash equivalents

$            548,027

$            602,442

Investments—current

266,152

264,084

Accounts receivable, net

300,684

516,429

Contract assets—current

8,024

10,782

Prepaid expenses and other current assets

132,729

97,101

Total current assets

1,255,616

1,490,838

Investments—noncurrent

209,897

208,393

Property and equipment, net

387,946

361,808

Operating lease right-of-use assets

160,090

165,578

Goodwill

459,148

458,446

Intangible assets, net

56,659

61,394

Deferred contract acquisition costs—noncurrent

468,452

474,628

Deferred tax assets—noncurrent

805,136

835,245

Other assets—noncurrent

181,061

173,220

Total assets

$         3,984,005

$         4,229,550

Liabilities and Equity

Current liabilities

Accounts payable

$              23,970

$              17,419

Accrued expenses and other current liabilities                                                                                        

108,002

113,358

Accrued compensation

175,575

260,840

Contract liabilities—current

1,564,942

1,631,168

Operating lease liabilities—current

16,055

16,623

Total current liabilities

1,888,544

2,039,408

Contract liabilities—noncurrent

29,735

29,956

Operating lease liabilities—noncurrent

167,278

168,496

Deferred tax liability—noncurrent

24,205

21,507

Other liabilities—noncurrent

54,495

52,363

Total liabilities

2,164,257

2,311,730

Stockholders' equity

Common stock

19

20

Additional paid-in capital

3,920,519

3,777,995

Accumulated other comprehensive loss

(3,960)

(3,712)

Accumulated deficit

(2,096,830)

(1,856,483)

Total stockholders' equity

1,819,748

1,917,820

Total liabilities and equity

$         3,984,005

$         4,229,550

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

Three Months Ended
April 30,

(in thousands)

2026

2025

Cash flows from operating activities:

Net income

$   78,197

$   72,087

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

32,208

30,369

Amortization of deferred contract acquisition and fulfillment costs

67,358

66,482

Non-cash operating lease costs

4,864

4,660

Stock-based compensation expense

141,377

145,596

Deferred income taxes

33,032

(3,465)

Other

1,920

1,861

Changes in operating assets and liabilities:

Accounts receivable

214,448

121,003

Prepaid expenses and other current assets

(31,832)

(28,551)

Deferred contract acquisition and fulfillment costs

(65,491)

(56,648)

Other assets

2,320

844

Accounts payable

3,222

(6,764)

Accrued expenses and other liabilities

(5,460)

4,625

Accrued compensation

(88,415)

(61,451)

Contract liabilities

(65,553)

(34,240)

Operating lease liabilities

(507)

(4,969)

Net cash provided by operating activities

321,688

251,439

Cash flows from investing activities:

Purchases of marketable securities

(97,408)

(92,563)

Maturities of marketable securities

93,024

91,262

Purchases of strategic and other investments

(2,610)

—

Purchases of property and equipment

(32,253)

(23,624)

Net cash used in investing activities

(39,247)

(24,925)

Cash flows from financing activities:

Repurchases of common stock

(317,510)

(183,431)

Payment of tax withholding obligation on net RSU settlement and ESPP purchase                                                        

(39,536)

(62,793)

Proceeds from exercise of stock options

53

699

Proceeds from employee stock purchase plan

22,799

22,010

Other

(220)

—

Net cash used in financing activities

(334,414)

(223,515)

Effect of foreign exchange on cash, cash equivalents and restricted cash

(481)

9,923

Net increase (decrease) in cash, cash equivalents and restricted cash

(52,454)

12,922

Cash, cash equivalents and restricted cash at beginning of period (1)

618,150

659,554

Cash, cash equivalents and restricted cash at end of period (1)

$ 565,696

$ 672,476

(1) Cash, cash equivalents and restricted cash included restricted cash of $17.7 million and $15.7 million at April 30, 2026 and January 31, 2026.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(Unaudited)

Reconciliation of gross profit and gross margin:

Three Months Ended
April 30,

(in thousands)

2026

2025

GAAP gross profit

$    658,965

$     606,385

Add: Stock-based compensation

15,309

16,904

Add: Employer payroll tax on employee stock transactions

1,126

1,873

Add: Amortization of acquisition-related intangibles

1,495

3,565

Non-GAAP gross profit

$    676,895

$     628,727

GAAP gross margin

79.4 %

79.4 %

Non-GAAP adjustments

2.1 %

2.9 %

Non-GAAP gross margin

81.5 %

82.3 %

Reconciliation of operating expenses:

Three Months Ended
April 30,

(in thousands)

2026

2025

GAAP sales and marketing

$    296,175

$     296,413

Less: Stock-based compensation

(43,026)

(46,085)

Less: Employer payroll tax on employee stock transactions

(2,470)

(3,940)

Less: Amortization of acquisition-related intangibles

(3,240)

(3,354)

Non-GAAP sales and marketing

$    247,439

$     243,034

GAAP sales and marketing as a percentage of revenue

35.7 %

38.8 %

Non-GAAP sales and marketing as a percentage of revenue

29.8 %

31.8 %

GAAP research and development

$    159,586

$     159,447

Less: Stock-based compensation

(54,476)

(54,431)

Less: Employer payroll tax on employee stock transactions

(3,687)

(5,081)

Non-GAAP research and development

$    101,423

$       99,935

GAAP research and development as a percentage of revenue

19.2 %

20.9 %

Non-GAAP research and development as a percentage of revenue                                                             

12.2 %

13.1 %

GAAP general and administrative

$      91,895

$       90,270

Less: Stock-based compensation

(28,566)

(28,176)

Less: Employer payroll tax on employee stock transactions

(902)

(1,365)

Non-GAAP general and administrative

$      62,427

$       60,729

GAAP general and administrative as a percentage of revenue

11.1 %

11.8 %

Non-GAAP general and administrative as a percentage of revenue

7.5 %

7.9 %

Reconciliation of income from operations and operating margin:

Three Months Ended
April 30,

(in thousands)

2026

2025

GAAP income from operations

$    111,309

$      60,255

Add: Stock-based compensation

141,377

145,596

Add: Employer payroll tax on employee stock transactions

8,185

12,259

Add: Amortization of acquisition-related intangibles

4,735

6,919

Non-GAAP income from operations

$    265,606

$    225,029

GAAP operating margin

13.4 %

7.9 %

Non-GAAP adjustments

18.6 %

21.6 %

Non-GAAP operating margin

32.0 %

29.5 %

Reconciliation of net income and net income per share, basic and diluted:

Three Months Ended
April 30,

(in thousands, except per share data)

2026

2025

GAAP net income

$      78,197

$      72,087

Add: Stock-based compensation

141,377

145,596

Add: Employer payroll tax on employee stock transactions

8,185

12,259

Add: Amortization of acquisition-related intangibles

4,735

6,919

Add: Income tax and other tax adjustments

(17,572)

(46,010)

Non-GAAP net income attributable to common stockholders

$    214,922

$     190,851

Numerator:

Non-GAAP net income attributable to common stockholders

$    214,922

$     190,851

Denominator:

Weighted-average common shares outstanding, basic

195,489

203,280

Effect of dilutive securities

991

9,532

Non-GAAP weighted-average common shares outstanding, diluted

196,480

212,812

GAAP net income per share, basic

$          0.40

$          0.35

GAAP net income per share, diluted

$          0.40

$          0.34

Non-GAAP net income per share, basic

$          1.10

$          0.94

Non-GAAP net income per share, diluted

$          1.09

$          0.90

Computation of free cash flow:

Three Months Ended
April 30,

(in thousands)

2026

2025

Net cash provided by operating activities

$    321,688

$    251,439

Less: Purchases of property and equipment

(32,253)

(23,624)

Non-GAAP free cash flow

$    289,435

$    227,815

Net cash used in investing activities

$     (39,247)

$     (24,925)

Net cash used in financing activities

$   (334,414)

$   (223,515)

SOURCE Docusign, Inc.

Docusign shares are seeing increased attention. Why is DOCU stock trending? DocuSign Q1 HighlightsDocusign posted first-quarter revenue of $830.2 million, beating the consensus estimate of $824.77 million, according to Benzinga Pro. The agreement management company reported adjusted earnings of $1.09 per share for the quarter, beating analyst estimates of 99 cents per share.

Total revenue was up 9% year-over-year. Net cash from operations totaled $321.7 million, and free cash flow came in at $289.4 million in the quarter.

Docusign said it repurchased $317.5 million of its common stock during the quarter. The company ended the period with approximately $1 billion in cash, cash equivalents and investments.

“In Q1, we saw continued growing demand for Docusign’s AI-native IAM platform with 40,000 customers investing in our rapidly expanding roadmap,” said Allan Thygesen, CEO of Docusign. “We delivered significant innovation this quarter while driving strong financial results through durable revenue growth, substantial free cash flow, and record share buybacks.”

Docusign expects second-quarter revenue to be in the range of $865 million to $869 million, versus estimates of $866.08 million. The company also raised its full-year revenue guidance from a range of $3.484 billion to $3.496 billion to a new range of $3.49 billion to $3.502 billion, versus estimates of $3.49 billion.

Docusign executives will discuss the quarter on an earnings call with investors and analysts at 5 p.m. ET.

DOCU Shares Stumble After HoursDOCU Price Action: Docusign shares were down 4.02% in after-hours, trading at $48.85 at the time of publication on Thursday, according to Benzinga Pro.

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These 3 Beaten-Down Stocks Just Announced Massive Share BuybacksDocusign NASDAQ: DOCU reported 9% year-over-year revenue growth in the first quarter of fiscal 2027 and said adoption of its AI-native Intelligent Agreement Management platform, or IAM, continued to expand across its customer base.

CEO Allan Thygesen said on the company’s earnings call that Docusign began the fiscal year with “continued strong demand” for IAM, which he described as the company’s AI-native platform for managing agreements across enterprises. Thygesen said 40,000 companies have invested in IAM, and the platform generated 12.6% of total company annual recurring revenue, up from 10.8% in the prior quarter.

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AI Is Separating Software Winners From Losers, 2 Experts ExplainFor the quarter, revenue was $830 million, up 9% from a year earlier. CFO Blake Grayson said foreign exchange rates provided an approximately 1.6 percentage point benefit. International revenue represented 31% of total revenue.

Non-GAAP operating income was $266 million, up 18% year-over-year, while non-GAAP operating margin reached 32.0%, compared with 29.5% in the year-ago quarter. Free cash flow was $289 million, representing a 35% margin. Docusign repurchased $318 million of stock during the quarter, which Grayson said was the largest quarterly repurchase in the company’s history.

IAM becomes larger share of recurring revenue The Cloud Computing ETF Every Growth Investor Should ConsiderThygesen said Docusign’s strategy for fiscal 2027 centers on two priorities: delivering end-to-end agreement workflows for customers and expanding the company’s AI, data and orchestration advantages. He said customers are increasingly recognizing the value of a unified AI agreement platform rather than “isolated department-level point products.”

Grayson said IAM slightly outperformed the company’s expectations in the quarter and that bookings grew faster year-over-year in North America Enterprise than in any other segment. The company remains on track for IAM to represent approximately 18% of total ARR at the end of fiscal 2027, which would put IAM at more than $600 million in ARR, according to Grayson.

Docusign also reiterated its expectation for total ARR growth of 8.25% to 8.75% in fiscal 2027, or 8.5% at the midpoint, reaching more than $3.5 billion by the end of the fiscal fourth quarter. Grayson said growth is expected to come from gross new bookings, primarily from new and expanding IAM customers, as well as improvements in gross retention.

AI products and partnerships highlighted Thygesen pointed to a series of product announcements and partnerships introduced at Docusign’s Momentum customer event. The company launched legal-specific contract assistants and agents designed to triage, review and move documents toward closing, using knowledge of a company’s past negotiations and internal policies.

Docusign also expanded integrations with several AI and legal technology providers. Thygesen cited a deeper partnership with Anthropic that integrates IAM with Claude’s legal tools, as well as integrations with Harvey, Legora and CoCounsel Legal by Thomson Reuters. In procurement, Docusign partnered with Coupa, while its IAM for HR product connects Workday and Greenhouse to the platform. The company also announced Slack integration through its Salesforce partnership and payments integration through Stripe.

Thygesen said Docusign’s AI engine, Iris, combines frontier large language model capabilities with Docusign’s agreement data and workflow expertise. He said hundreds of millions of consented private agreements have been ingested into IAM, with millions more added each week. He also said Docusign believes it can achieve up to a 15 percentage point improvement in precision and recall compared with models trained on public contract data, while reducing AI processing costs by more than 50 times compared with direct prompts on large language models.

The company introduced pre-built agents in Iris, custom agents through Docusign Agent Studio and third-party agent connections through its MCP server to Anthropic Claude, Google Gemini and OpenAI ChatGPT. Thygesen said there had been “unprecedented” inbound interest in the MCP connector beta, with thousands of people signing up.

Customer and operating metrics improve Grayson said dollar net retention for direct customers was above 102%, improving by more than one percentage point from the first quarter of fiscal 2026. He said the metric has improved sequentially for seven consecutive quarters, supported by retention gains and IAM adoption.

Total customer growth remained at 9% year-over-year, with Docusign approaching 1.9 million total customers. Grayson said envelope sends continued to grow year-over-year, while consumption rose to multiyear highs across most tracked customer segments and verticals.

The number of customers spending more than $300,000 in annual contract value rose to 1,258, up 12% year-over-year. Grayson said it was the first time in three years that this metric delivered double-digit growth, and he cited early positive IAM adoption trends among larger customers.

Thygesen also highlighted customer examples. Experian partnered with Docusign to improve seller productivity and speed client contract cycles, while HSBC introduced IAM to digitize and simplify its credit lending process. Crete United reduced contract negotiation times by 80% and improved deal execution speed by 90% using AI-assisted review, according to Thygesen. Milky Moo, a milkshake franchisor with more than 800 stores in Brazil, used Docusign AI to track renewals and saved more than 1,000 hours of manual work last year.

Guidance and capital allocation For the second quarter, Docusign expects revenue of $865 million to $869 million, representing 8% year-over-year growth at the midpoint. For fiscal 2027, the company expects revenue of $3.490 billion to $3.502 billion, or 9% growth at the midpoint.

Docusign guided for non-GAAP gross margin of 81.5% to 81.7% in the second quarter and 81.5% to 82.0% for the full fiscal year. Non-GAAP operating margin is expected to be 29.7% to 30.2% in the second quarter and 30.5% to 31.0% for fiscal 2027, an increase of 0.5 percentage points at the midpoint compared with prior guidance.

Grayson said the company ended the quarter with approximately $1 billion of cash, equivalents and investments, and no debt. After the first-quarter repurchases, Docusign had $2.4 billion remaining under its buyback authorization. Diluted weighted average shares outstanding fell 8% year-over-year to 196.5 million.

Non-GAAP diluted earnings per share were $1.09, up from $0.90 a year earlier. GAAP diluted EPS was $0.40, compared with $0.34 in the year-ago quarter.

Docusign also announced that Graham Sheldon joined as chief product officer after serving as chief product officer at UiPath and previously spending more than 20 years at Microsoft. Thygesen thanked outgoing Chief Product Officer Dmitri Krakovsky for his role in building IAM’s foundation.

About Docusign NASDAQ: DOCUDocuSign, Inc NASDAQ: DOCU is a leading provider of electronic signature and digital transaction management solutions. The company's flagship offering, DocuSign eSignature, enables organizations to send, sign and manage legally binding electronic agreements securely in the cloud. Beyond eSignature, DocuSign's Agreement Cloud combines contract lifecycle management, document generation, and workflow automation to streamline agreement processes from initiation through execution and storage.

DocuSign's platform serves a diverse customer base spanning industries such as finance, real estate, healthcare, technology, and government.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].

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DocuSign Inc (NASDAQ:DOCU) shares fell nearly 5% on Friday after the electronic signature company reported first-quarter results that topped analyst estimates but offered full-year guidance that failed to impress investors.

The San Francisco-based company posted Q1 fiscal 2027 revenue of $830.2 million, above the $823.23 million consensus estimate and up 9% from a year earlier. Adjusted earnings per share came in at $1.09, beating the $1 estimate.

Despite the earnings beat, shares declined 4.9% in Friday morning trading.

For the full fiscal year, DocuSign guided revenue of $3.49 billion to $3.502 billion, roughly in line with the $3.49 billion analyst consensus, representing 9% annual growth. The company projected non-GAAP operating margin of 30.5% to 31% and non-GAAP gross margin of 81.5% to 82%.

Second-quarter revenue guidance of $865 million to $869 million, against a consensus estimate of $866 million, implied 8% year-over-year growth.

DocuSign reported free cash flow of $289.4 million for the quarter, with operating cash flow of $321.7 million. The company returned $317.5 million to shareholders through buybacks and held $1.0 billion in cash, equivalents and investments at quarter-end.

The company's Intelligent Agreement Management platform continued to gain traction, with IAM now representing 12.6% of annual recurring revenue, up from 10.8% the prior quarter. Some 40,000 customers are now investing in the IAM roadmap.

DocuSign also named Graham Sheldon as incoming chief product officer.

DocuSign Inc (NASDAQ:DOCU) shares fell nearly 5% on Friday after the electronic signature company reported first-quarter results that topped analyst estimates but offered full-year guidance that failed to impress investors.

The San Francisco-based company posted Q1 fiscal 2027 revenue of $830.2 million, above the $823.23 million consensus estimate and up 9% from a year earlier. Adjusted earnings per share came in at $1.09, beating the $1 estimate.

Despite the earnings beat, shares declined 4.9% in Friday morning trading.

For the full fiscal year, DocuSign guided revenue of $3.49 billion to $3.502 billion, roughly in line with the $3.49 billion analyst consensus, representing 9% annual growth. The company projected non-GAAP operating margin of 30.5% to 31% and non-GAAP gross margin of 81.5% to 82%.

Second-quarter revenue guidance of $865 million to $869 million, against a consensus estimate of $866 million, implied 8% year-over-year growth.

DocuSign reported free cash flow of $289.4 million for the quarter, with operating cash flow of $321.7 million. The company returned $317.5 million to shareholders through buybacks and held $1.0 billion in cash, equivalents and investments at quarter-end.

The company's Intelligent Agreement Management platform continued to gain traction, with IAM now representing 12.6% of annual recurring revenue, up from 10.8% the prior quarter. Some 40,000 customers are now investing in the IAM roadmap.

DocuSign also named Graham Sheldon as incoming chief product officer.

Shares of DocuSign Inc. DOCU moved lower on Friday after the electronic signature and agreement management software provider offered guidance that left investors looking for stronger signs of accelerating growth.

DocuSign stock fell 6% in trading, extending a three-session losing streak and putting the shares down more than 12% for the week.

The decline came despite better-than-expected revenue and earnings, as analysts focused on a forward outlook that largely matched existing market expectations.

Earnings beat but guidance remains measuredFor the fiscal first quarter, DocuSign reported revenue of $830.2 million, up 9% from a year earlier and above analyst estimates of roughly $824 million.

Adjusted earnings came in at $1.09 per share, beating consensus expectations of approximately $0.99 to $1.00 per share.

The company also delivered strong profitability metrics. Operating margin reached 32%, while free cash flow margin stood at 35%. Net cash provided by operating activities totaled $321.7 million, and free cash flow came in at $289.4 million.

DocuSign repurchased approximately $318 million of its common stock during the quarter, marking the largest quarterly share buyback in the company's history.

Looking ahead, management forecast second-quarter revenue between $865 million and $869 million, broadly in line with analyst expectations of about $866 million.

The company also raised its fiscal 2027 revenue guidance to a range of $3.49 billion to $3.502 billion from its previous outlook of $3.484 billion to $3.496 billion. Analysts had been expecting revenue of roughly $3.49 billion.

Despite the increase, several analysts suggested the revised guidance did not meaningfully change the company's long-term growth outlook.

A key focus for investors remains DocuSign's Intelligent Agreement Management (IAM) platform, which integrates artificial intelligence into agreement workflows.

The company said IAM is now used by around 40,000 customers and represents 12.6% of annual recurring revenue, up from 10.8% at the end of January.

DocuSign has expanded the platform through partnerships with AI companies, including Anthropic and OpenAI, while management highlighted growing enterprise adoption from customers such as Experian and HSBC. 

The company expects IAM to account for about 18% of annual recurring revenue by the end of fiscal 2027 and believes broader AI adoption, expanding platform usage, and improved customer retention will help accelerate recurring revenue growth during the year.

Chief Executive Officer Allan Thygesen said, "In Q1, we saw continued growing demand for DocuSign’s AI-native IAM platform with 40,000 customers investing in our rapidly expanding roadmap." 

"We delivered significant innovation this quarter while driving strong financial results through durable revenue growth, substantial free cash flow, and record share buybacks."

Analysts remain cautious on long-term growthAlthough analysts generally viewed the quarter as operationally solid, many maintained a cautious stance on the pace at which IAM can drive a broader growth reacceleration.

Morgan Stanley wrote that "DOCU showed solid Q1 execution, strong margins/FCF and steady IAM progress, but the debate is unchanged: IAM traction is improving, yet financial inflection is limited and economics remain too opaque to prove a durable path back to double-digit growth."

Wolfe Research echoed similar concerns, stating: "While IAM outperformed expectations and enterprise traction improved, Dollar Net Retention (DNR) remained flat at 102%, and leaves us waiting for clearer evidence IAM can drive a sustained growth recovery."

The mixed analyst reaction reflected the broader market view that while DocuSign continues to execute well operationally and build momentum around its AI strategy, investors are still waiting for clearer evidence that those investments can translate into sustained double-digit growth.

Docusign (DOCU +1.05%) used to be known for its e-signature and digital contract management software that allowed thousands of businesses to continue making deals at the height of the pandemic, when lockdowns and social restrictions prevented travel. As a result, its stock soared to an all-time high of $310 in late 2021, a tenfold increase from its 2018 initial public offering (IPO) price of $29.

But demand cooled for Docusign's platform after 2022 as social conditions mostly returned to normal, causing a sharp slowdown in the company's revenue growth. Its stock now trades at just $48 as I write this, which is 84% below its 2021 peak.

However, that might present an opportunity for long-term investors: In 2024 Docusign launched a new platform, powered by artificial intelligence (AI), called Intelligent Agreement Management (IAM), which completely transforms contract management processes for businesses. It's already experiencing strong demand, and it could be the bullish catalyst Docusign needs for a long-term turnaround.

Image source: Getty Images.

IAM is a powerful enterprise platform In 2024, global consulting network Deloitte conducted a study that found businesses waste over 55 billion hours each year due to inefficient agreement management processes, resulting in $2 trillion in lost economic value. IAM was built to solve that very problem.

One of IAM's most powerful resources is called Navigator, a digital repository where businesses have already collectively stored millions of agreements. It uses AI to extract important information from every document and then makes that discoverable via a search function, so employees no longer have to spend hours digging through contracts manually. It also uses AI to track expiration dates, so management can stop auto-renewals for contracts they no longer need, or get ahead of sales agreements that are about to lapse.

Then there is AI-Assisted Review, which uses an organization's preset standards to autonomously identify risks and opportunities in every agreement. Docusign says one of its customers, Crete United, used this tool to reduce contract negotiation times by 80% and improve deal execution speed by 90%.

As of April 30, the end of Docusign's fiscal 2027 first quarter, IAM accounted for just 12.6% of the company's total annual recurring revenue (ARR). That was up from 10.8% in the fourth quarter of fiscal 2026, just three months earlier, but it's clear there's still a long runway for growth.

Steady growth on the top and bottom lines Docusign generated $830.2 million in revenue during the fiscal 2027 first quarter, which topped management's forecast range of $822 million to $826 million. That was a modest growth rate of 9%, so the company certainly isn't shooting the lights out right now -- especially compared to five years ago, when quarterly sales growth was regularly above 40%.

However, management is sacrificing some top-line growth to focus more on profitability so it can build a more sustainable business for the long term. Total operating expenses were flat during the first quarter, with a small reduction in marketing spending, typically a growth-oriented cost.

Today's Change

(

1.05

%) $

0.47

Current Price

$

45.02

As a result, Docusign managed to generate a profit based on generally accepted accounting principles (GAAP) of $78.2 million for the period, which was a year-over-year increase of 8%. After excluding one-off and noncash expenses like stock-based compensation, the company delivered a much bigger adjusted (non-GAAP) profit of $214.9 million.

Docusign could give up some of its profits by investing more heavily in areas like research and development (R&D) and marketing, which would likely lead to faster revenue growth. This is a useful lever that management could pull in the future.

Docusign stock is attractively valued right now Docusign is currently trading at a price-to-sales (P/S) ratio of 3.1, which is a steep discount to its long-term average of 12.1 dating back to its IPO. The stock looks quite attractive from that perspective.

DOCU PS Ratio data by YCharts.

Based on trailing-12-month GAAP earnings of $1.57 per share, Docusign's price-to-earnings (P/E) ratio is 30.9. That's a discount to the Nasdaq-100 index, which is trading at a P/E of 35.2, so Docusign is slightly cheaper than the broader technology market right now.

Therefore, as IAM becomes a larger part of the company's revenue, I think Docusign's current stock price offers investors an attractive long-term entry point.

Key Takeaways DOCU beat Q1 fiscal 2027 earnings and revenue estimates, driven by IAM adoption and demand growth.DOCU stated that IAM reached 12.6% of total ARR, up from 10.8% in the prior quarter.DOCU raised its full-year fiscal 2027 operating margin outlook and expects IAM to reach about 18% of ARR. Docusign (DOCU - Free Report) reported impressive first-quarter fiscal 2027 results, with both earnings and revenues beating the Zacks Consensus Estimate, driven by continued adoption of its Intelligent Agreement Management (IAM) platform and solid profitability.

The company’s first-quarter fiscal 2027 adjusted earnings of $1.09 per share beat the Zacks Consensus Estimate by 9% and increased 21.1% year over year. Revenues of $830.2 million surpassed the consensus estimate by 0.7% and rose 8.7% year over year.

However, the better-than-expected results failed to impress the market, as the stock has declined 7.2% since the earnings release on June 4, due to skepticism among shareholders.

DOCU Sees Broad-Based Revenue GrowthFirst-quarter revenues reached $830.2 million, driven by steady customer demand and approximately 1.6 percentage points of favorable foreign-exchange impact. International markets remained an important growth driver, with overseas operations accounting for 31% of total revenues.

Management noted that customer activity remained healthy across the business. Total customer count approached 1.9 million, while envelope volume continued to grow year over year. Consumption trends improved across most customer segments and vertical markets, supporting management’s confidence in accelerating annual recurring revenue (ARR) growth during fiscal 2027.

Docusign Gains Traction With IAM PlatformIAM continued emerging as Docusign’s primary growth initiative. The company reported that 40,000 customers invested in the platform and IAM bookings in North American enterprise accounts grew faster than in any other customer segment during this quarter.

The company expanded the platform’s capabilities through new artificial intelligence (AI)-powered offerings under its Iris agreement AI engine. New contract review agents, workflow automation tools and integrations with platforms such as Anthropic Claude, OpenAI ChatGPT, Salesforce, Coupa and Thomson Reuters are intended to deepen customer engagement and strengthen Docusign’s competitive position in agreement management.

A notable highlight was IAM’s growing contribution to the business in this quarter. The platform represented 12.6% of total ARR, up from 10.8% at the end of the prior quarter, reflecting rising customer adoption.

DOCU Delivers Strong ProfitabilityProfitability remained a key strength. Non-GAAP operating income rose 18% year over year to $266 million, while operating margin expanded 250 basis points to 32%. Results benefited from higher revenues, disciplined spending, increased capitalization of development costs and an insurance-related legal reimbursement.

Non-GAAP gross margin was 81.5% compared with 82.3% in the year-earlier period. Although cloud migration investments continued to pressure margins modestly, results came in ahead of management’s expectations.

Docusign Generates Robust Cash FlowThe company continued to generate strong cash flow. Net cash provided by operating activities totaled $321.7 million compared with $251.4 million in the prior-year quarter. Free cash flow increased to $289.4 million from $227.8 million a year earlier.

Docusign ended the quarter with approximately $1 billion in cash, cash equivalents and investments with no debt. The company repurchased $317.5 million of stock during the quarter, marking the largest quarterly buyback in its history. Management indicated that capital returns remain a priority, with $2.4 billion remaining under its share repurchase authorization at quarter-end.

DOCU Raises Confidence With Fiscal 2027 OutlookFor the second quarter of fiscal 2027, Docusign expects revenues to be between $865 million and $869 million, with the midpoint of $867 million being above the Zacks Consensus Estimate of $866.4 million. The company projects non-GAAP gross margin of 81.5% to 81.7% and non-GAAP operating margin of 29.7% to 30.2%.

For fiscal 2027, management reaffirmed revenue guidance of $3.49-$3.502 billion. The Zacks Consensus Estimate for the same is pegged at $3.49 billion. DOCU expects ARR growth to be in the range of 8.25% to 8.75%. IAM is projected to represent approximately 18% of total ARR by year-end, implying more than $600 million in ARR from the platform. The company also raised its full-year non-GAAP operating margin outlook to 30.5-31.0%, underscoring confidence in growth and operating efficiency.

Currently, Docusign carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Earnings SnapshotsAccenture plc (ACN - Free Report) reported impressive second-quarter fiscal 2026 results.

ACN’s earnings were $2.93 per share, which beat the Zacks Consensus Estimate by 2.5%. The metric increased 3.9% from the year-ago quarter. Total revenues of $18 billion topped the consensus estimate by 1.2% and rose 8.3% on a year-over-year basis.

Automatic Data Processing, Inc. (ADP - Free Report) reported impressive third-quarter fiscal 2026 results, with earnings and revenues outpacing the Zacks Consensus Estimate.

ADP’s earnings per share of $3.37 beat the consensus estimate by 2.7% and increased 10.1% from the year-ago quarter. Total revenues of $5.94 billion surpassed the consensus estimate by 1.4% and grew 7% on a year-over-year basis.

Docusign, Inc. delivered strong Q1 '27 results, beating both revenue and earnings estimates despite a subsequent 7% share price decline. Revenues and annual recurring revenue continue to grow, supported by expanding enterprise IAM adoption and a robust margin profile. Non-GAAP operating income and free cash flow margins improved year-over-year, highlighting DOCU's profitability and operational efficiency in the document lifecycle market.

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Stock to Watch: DocuSign (DOCU - Free Report) Founded in 2003 and headquartered in San Francisco, Docusign is a global provider of cloud-based software. The company’s Docusign Agreement Cloud is a cloud software suite that automates and connects the entire agreement process.

DOCU is a #3 (Hold) on the Zacks Rank, with a VGM Score of A.

Momentum investors should take note of this Computer and Technology stock. DOCU has a Momentum Style Score of A, and shares are up 0.1% over the past four weeks.

Six analysts revised their earnings estimate higher in the last 60 days for fiscal 2027, while the Zacks Consensus Estimate has increased $0.10 to $4.53 per share. DOCU also boasts an average earnings surprise of +8.7%.

With a solid Zacks Rank and top-tier Momentum and VGM Style Scores, DOCU should be on investors' short list.