Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Position Status | Return(%)* |
|---|---|---|---|---|---|---|---|---|
| 5 Sep, 25 | DOCU | Buy | USD 78.47 | USD 82.4 | USD 86.0 | 5 days | Closed |
5.01%
|
*Return(%) represent the percentage change between the entry price and exit price of the recommendation.
Data Powered by EOD Historical Data (“EODHD”).
DocuSign, Inc. provides electronic signature solution in the United States and internationally. The company provides e-signature solution that enables sending and signing of agreements on various devices; Contract Lifecycle Management (CLM), which automates workflows across the entire agreement process; Document Generation streamlines the process of generating new, custom agreements; and Gen for Salesforce, which allows sales representatives to automatically generate agreements with a few clicks from within Salesforce. It also provides Identify, a signer-identification option for checking government-issued IDs; Standards-Based Signatures, which support signatures that involve digital certificates; Monitor that uses advanced analytics to track DocuSign eSignature web, mobile, and API account; Notary which enables notaries public to conduct remote online notarization transactions; and Web Forms, a web forms that quickly draft agreements using pre-populated data from completed forms or external systems via APIs. In addition, the company offers Rooms for Real Estate that provides a way for brokers and agents to manage the entire real estate transaction digitally. Signature and CLM are FedRAMP, an authorized version of DocuSign eSignature for U.S. federal government agencies; and life sciences modules that support compliance with the electronic signature practices. The company sells its products through direct and partner-assisted sales, and digital self-service purchasing. DocuSign, Inc. was incorporated in 2003 and is headquartered in San Francisco, California.
Modest Decline in Non-GAAP Profitability: Non-GAAP net income per diluted share decreased to USD 0.92 in Q2 FY26, compared to USD 0.97 in Q2 FY25, highlighting slight margin pressures
Sharp Decline in GAAP Earnings: GAAP net income per diluted share fell significantly to USD 0.30 in Q2 FY26, down from USD 4.26 in Q2 FY25, reflecting the absence of one-time prior year benefits
Double-Digit Billings Expansion: Billings rose 13% year-over-year to USD 818.0 million in Q2 FY26, compared to USD 724.0 million in Q2 FY25, supported by stronger customer adoption and favorable currency impact
Strong Revenue Growth: Revenue increased 9% year-over-year to USD 800.6 million in Q2 FY26, compared to USD 734.5 million in Q2 FY25, reflecting continued momentum in subscription services
Docusign’s heavy reliance on subscription growth and AI-driven product adoption poses a risk if customer demand slows or competitors accelerate innovation in digital agreement management
| Entry Price | Support* | Target 1** | Target 2** |
|---|---|---|---|
| 78.47 | 70.5 | 82.4 | 86.0 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
**Target prices may vary by ±0.5% depending on market volatility.
Strong Quarterly Performance: Docusign delivered an outstanding second quarter, marked by strong growth across its eSignature, CLM, and Intelligent Agreement Management (IAM) businesses. CEO Allan Thygesen highlighted that recent AI-driven product innovations and go-to-market changes contributed to one of the company’s best quarters in terms of growth and profitability in recent years.
Financial Results: The company reported revenue of USD 800.6 million, representing a 9% year-over-year (YoY) increase. Subscription revenue rose 9% to USD 784.4 million, while professional services and other revenue declined 13% to USD 16.2 million. Billings reached USD 818.0 million, up 13% YoY, including a 1% positive impact from currency exchange. Free cash flow was USD 217.6 million, compared to USD 197.9 million in the same period last year, with total cash, cash equivalents, and investments standing at USD 1.1 billion.
Profitability Metrics: GAAP gross margin improved slightly to 79.3% from 78.9% in the prior year, while non-GAAP gross margin remained stable at 82.0%. GAAP net income per diluted share decreased to USD 0.30 from USD 4.26 a year earlier, largely due to one-time effects in the prior period, while non-GAAP net income per diluted share was USD 0.92, down from USD 0.97 last year. Operating cash flow strengthened to USD 246.1 million, up from USD 220.2 million YoY.
Product Innovation and AI Capabilities: Docusign advanced its IAM platform with new AI-powered features across the agreement lifecycle. Key launches included Agreement Prep for efficient document creation, integration with CLEAR for biometric ID verification, and Custom Extractions in Docusign Navigator to streamline contract data management. Additionally, Maestro Workflow Templates and SCIM integration enhanced workflow automation and enterprise user management.
CLM Leadership and Market Recognition: The company reinforced its leadership position in contract lifecycle management, being named a leader in IDC’s 2025 MarketScape for AI-enabled Buy-Side CLM Applications. Docusign introduced Unified Task Management, which consolidates all agreement-related tasks into a single view, helping organizations prioritize contract workflows based on AI-extracted insights such as due dates and contract values.
Governance Updates: On the governance front, Docusign welcomed Mike Rosenbaum, CEO of Guidewire and former Salesforce executive, to its Board of Directors, adding valuable SaaS growth and product expertise. Additionally, James Beer was appointed as the next Board Chair, succeeding Maggie Wilderotter at the end of the fiscal year. Beer’s extensive financial and strategic experience is expected to strengthen board leadership as Docusign continues its IAM-driven transformation.
Forward Guidance: For Q3 FY26, Docusign projects revenue between USD 804 million and USD 808 million, representing a 7% YoY increase, with subscription revenue expected between USD 786 million and USD 790 million. Billings are forecast at USD 785 million to USD 795 million, reflecting 5% growth. For the full year FY26, total revenue is anticipated to be in the range of USD 3.19 billion to USD 3.20 billion, up 7% YoY, with billings growth of 7% and non-GAAP operating margins in the range of 28.6% to 29.6%.
Considering recent key business, financial updates, current trading levels, and key business risks, a ‘Buy’ recommendation has been given on Docusign, Inc. (NASDAQ: DOCU) at the current market price of USD 78.47, as on Sep 05, 2025 at 6:45 am PDT.
Data Powered by EOD Historical Data (“EODHD”).
Sector: Technology Industry: Software - Application
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| DOCU DocuSign Inc |
0.99 1.47% | 68.78 | 160.31 | 18.25 | 4.38 | 10.71 | 4.05 | 57.24 |
| CRM Salesforce.com Inc |
-1.18 0.46% | 256.96 | 100.89 | 27.47 | 7.42 | 4.34 | 7.44 | 26.81 |
| SAPGF SAP SE |
3.16 1.31% | 244.47 | 76.28 | 22.88 | 5.61 | 3.84 | 5.59 | 26.18 |
| SAP SAP SE ADR |
3.42 1.42% | 244.84 | 75.80 | 22.37 | 5.62 | 3.75 | 5.51 | 25.79 |
| INTU Intuit Inc |
9.21 1.39% | 669.99 | 55.56 | 32.68 | 11.28 | 10.07 | 11.62 | 40.11 |
Data Powered by EOD Historical Data (“EODHD”).
Related Risks: This report may be looked at from high-risk perspective and recommendations are provided are for a short duration. Recommendations provided in this report are solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is September 05,2025. The reference data in this report has been partly sourced from REFINITIV.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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