DocuSign (DOCU) Gains But Lags Market: What You Should Know

In the latest trading session, DocuSign (DOCU) closed at $193.30, marking a +0.77% move from the previous day. This move lagged the S&P 500's daily gain of 1.4%. At the same time, the Dow added 1.05%, and the tech-heavy Nasdaq gained 2.13%.

Heading into today, shares of the provider of electronic signature technology had lost 2.35% over the past month, lagging the Business Services sector's gain of 4.49% and the S&P 500's gain of 4.78% in that time.

DOCU will be looking to display strength as it nears its next earnings release. In that report, analysts expect DOCU to post earnings of $0.07 per share. This would mark year-over-year growth of 600%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $318.37 million, up 35.13% from the year-ago period.

DOCU's full-year Zacks Consensus Estimates are calling for earnings of $0.46 per share and revenue of $1.32 billion. These results would represent year-over-year changes of +48.39% and +35.04%, respectively.

Investors might also notice recent changes to analyst estimates for DOCU. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. DOCU is holding a Zacks Rank of #3 (Hold) right now.

Digging into valuation, DOCU currently has a Forward P/E ratio of 419.28. Its industry sports an average Forward P/E of 35.76, so we one might conclude that DOCU is trading at a premium comparatively.

It is also worth noting that DOCU currently has a PEG ratio of 13.44. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Technology Services industry currently had an average PEG ratio of 4.41 as of yesterday's close.

The Technology Services industry is part of the Business Services sector. This group has a Zacks Industry Rank of 175, putting it in the bottom 32% of all 250+ industries.

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

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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