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Investors should take note of NASDAQ:DOCU, a growth stock that remains attractively priced.

By Mill Chart

Last update: Mar 12, 2024

Our stock screening tool has pinpointed DOCUSIGN INC (NASDAQ:DOCU) as a growth stock that isn't overvalued. NASDAQ:DOCU is excelling in various growth indicators while maintaining a solid financial footing. Furthermore, it remains attractively priced. Let's delve into the specifics below.

ChartMill's Evaluation of Growth

A key component of ChartMill's stock assessment is the Growth Rating, which spans from 0 to 10. This rating evaluates diverse growth factors, such as EPS and revenue growth, considering both past performance and future projections. NASDAQ:DOCU has received a 7 out of 10:

  • The Earnings Per Share has grown by an impressive 46.57% over the past year.
  • Measured over the past years, DOCU shows a very strong growth in Earnings Per Share. The EPS has been growing by 97.30% on average per year.
  • DOCU shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 9.77%.
  • DOCU shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 31.55% yearly.
  • DOCU is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 8.51% yearly.

Valuation Analysis for NASDAQ:DOCU

ChartMill assigns a proprietary Valuation Rating to each stock. The score is computed by evaluating various valuation aspects, like price to earnings and free cash flow, both absolutely as relative to the market and industry. NASDAQ:DOCU was assigned a score of 5 for valuation:

  • DOCU's Price/Earnings ratio is rather cheap when compared to the industry. DOCU is cheaper than 87.10% of the companies in the same industry.
  • When comparing the Price/Earnings ratio of DOCU to the average of the S&P500 Index (25.97), we can say DOCU is valued slightly cheaper.
  • Compared to the rest of the industry, the Price/Forward Earnings ratio of DOCU indicates a rather cheap valuation: DOCU is cheaper than 84.59% of the companies listed in the same industry.
  • Based on the Enterprise Value to EBITDA ratio, DOCU is valued a bit cheaper than 67.03% of the companies in the same industry.
  • Based on the Price/Free Cash Flow ratio, DOCU is valued cheaper than 93.91% of the companies in the same industry.

How do we evaluate the Health for NASDAQ:DOCU?

A critical element of ChartMill's stock evaluation is the Health Rating, which spans from 0 to 10. This rating considers multiple health factors, including liquidity and solvency, both in absolute terms and relative to industry peers. NASDAQ:DOCU has received a 5 out of 10:

  • DOCU has an Altman-Z score of 4.03. This indicates that DOCU is financially healthy and has little risk of bankruptcy at the moment.
  • The Altman-Z score of DOCU (4.03) is better than 63.80% of its industry peers.
  • There is no outstanding debt for DOCU. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.

Looking at the Profitability

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of NASDAQ:DOCU, the assigned 5 is noteworthy for profitability:

  • DOCU has a Return On Assets of 2.49%. This is in the better half of the industry: DOCU outperforms 74.91% of its industry peers.
  • The Return On Equity of DOCU (6.55%) is better than 78.85% of its industry peers.
  • DOCU has a Return On Invested Capital of 3.73%. This is in the better half of the industry: DOCU outperforms 75.63% of its industry peers.
  • With a decent Profit Margin value of 2.68%, DOCU is doing good in the industry, outperforming 73.48% of the companies in the same industry.
  • DOCU has a better Operating Margin (2.24%) than 70.25% of its industry peers.
  • The Gross Margin of DOCU (79.27%) is better than 80.65% of its industry peers.
  • DOCU's Gross Margin has improved in the last couple of years.

Every day, new Affordable Growth stocks can be found on ChartMill in our Affordable Growth screener.

Our latest full fundamental report of DOCU contains the most current fundamental analsysis.

Keep in mind

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.

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DOCUSIGN INC

NASDAQ:DOCU (5/29/2024, 7:00:02 PM)

Premarket: 58.15 -0.35 (-0.6%)

58.5

+0.79 (+1.37%)

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