DocuSign, Inc.
DOCU
is benefiting from continued customer demand for eSignature as well as solid liquidity.
DOCU’s revenues are anticipated to grow 17.5% in fiscal 2023.
Factors That Augur Well
eSignature, DocuSign’s anchor product, enables virtual but secure signing and sending of agreements on a variety of devices, from anywhere in the world. The company’s top line is significantly benefiting from continued customer demand for eSignature. Despite rising demand, the market for eSignature remains largely untapped. This keeps DocuSign in a position to expand eSignature across businesses around the world.
DocuSign’s current ratio (a measure of liquidity) stood at 1.02 at the end of second-quarter fiscal 2023, higher than the current ratio of 0.98 recorded at the end of the prior year quarter. The gradually increasing current ratio bodes well for DocuSign as it implies that the risk of default is less.
Some Risks
DocuSign is seeing an increase in expenses as it continues to invest in sales, marketing and technical expertise. Total operating expenses of $1.3 billion increased 34.8% year over year in fiscal 2022. Hence, the company’s bottom line is likely to remain under pressure going forward.
Shares of DOCU have plunged 72.8% in the past year, compared with 60.3% fall of the
industry
it belongs to.
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Zacks Rank and Stocks to Consider
DocuSign currently carries a Zacks Rank #3 (Hold). You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks in the broader Zacks
Business Services
sector are
Booz Allen Hamilton Holding Corporation
BAH
and
Cross Country Healthcare, Inc.
CCRN
.
Booz Allen
carries a Zacks Rank #2 (Buy) at present. BAH has a long-term earnings growth expectation of 8.9%.
Booz Allen delivered a trailing four-quarter earnings surprise of 8.8%, on average.
Cross Country Healthcare
is currently Zacks #2 Ranked. CCRN has a long-term earnings growth expectation of 6%.
CCRN delivered a trailing four-quarter earnings surprise of 10.1%, on average.
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