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While growth is established for NASDAQ:DOCU, the stock's valuation remains reasonable.

By Mill Chart

Last update: Apr 3, 2024

Our stock screener has singled out DOCUSIGN INC (NASDAQ:DOCU) as an attractive growth opportunity. NASDAQ:DOCU is demonstrating remarkable growth potential while maintaining strong financial indicators, making it a reasonably priced option. We'll explore this further.

Understanding NASDAQ:DOCU's 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.
  • Based on estimates for the next years, DOCU will show a quite strong growth in Revenue. The Revenue will grow by 8.51% on average per year.

Understanding NASDAQ:DOCU's Valuation Score

ChartMill provides a Valuation Rating to every stock, ranging from 0 to 10. This rating assesses various valuation aspects, comparing price to earnings and cash flows, while considering factors like profitability and growth. NASDAQ:DOCU boasts a 5 out of 10:

  • DOCU's Price/Earnings ratio is rather cheap when compared to the industry. DOCU is cheaper than 86.33% of the companies in the same industry.
  • DOCU is valuated rather cheaply when we compare the Price/Earnings ratio to 26.04, which is the current average of the S&P500 Index.
  • Compared to the rest of the industry, the Price/Forward Earnings ratio of DOCU indicates a rather cheap valuation: DOCU is cheaper than 84.17% of the companies listed in the same industry.
  • Based on the Enterprise Value to EBITDA ratio, DOCU is valued a bit cheaper than the industry average as 66.19% of the companies are valued more expensively.
  • Based on the Price/Free Cash Flow ratio, DOCU is valued cheaper than 93.53% of the companies in the same industry.

Assessing Health Metrics 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 4.10. This indicates that DOCU is financially healthy and has little risk of bankruptcy at the moment.
  • With a decent Altman-Z score value of 4.10, DOCU is doing good in the industry, outperforming 62.23% of the companies in the same industry.
  • DOCU has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.

How do we evaluate the Profitability for NASDAQ:DOCU?

ChartMill utilizes a Profitability Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of profitability ratios and margins, both in absolute terms and in comparison to industry peers. NASDAQ:DOCU has earned a 5 out of 10:

  • DOCU has a Return On Assets of 2.49%. This is in the better half of the industry: DOCU outperforms 74.82% of its industry peers.
  • DOCU has a better Return On Equity (6.55%) than 79.14% of its industry peers.
  • DOCU has a better Return On Invested Capital (3.73%) than 75.90% of its industry peers.
  • Looking at the Profit Margin, with a value of 2.68%, DOCU is in the better half of the industry, outperforming 74.10% of the companies in the same industry.
  • With a decent Operating Margin value of 2.24%, DOCU is doing good in the industry, outperforming 70.14% of the companies in the same industry.
  • DOCU has a Gross Margin of 79.27%. This is amongst the best in the industry. DOCU outperforms 81.30% 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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