Perhaps timely catching DocuSign Inc. (DOCU) would be a good idea

DocuSign Inc. (NASDAQ: DOCU) stock fell -1.26% on Tuesday to $57.95 against a previous-day closing price of $58.69. With 3.79 million shares changed hands, the volume of the stock remained lighter than its average volume of 5.76 million shares. During the session, the Software – Application company that operates in wider Technology sector, reached to the highest price of $58.96 whereas the lowest price it dropped to was $56.49. The 52-week range on DOCU shows that it touched its highest point at $131.91 and its lowest point at $39.57 during that stretch. It currently has a 1-year price target of $62.78. Beta for the stock currently stands at 0.99.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of DOCU was down-trending over the past week, with a drop of -2.96%, but this was up by 2.42% over a month. Three-month performance surged to 21.21% while six-month performance fell -8.60%. The stock lost -50.10% in the past year, while it has gained 4.57% so far this year. A look at the trailing 12-month EPS for DOCU yields -0.66 with Next year EPS estimates of 2.16. For the next quarter, that number is 0.52. This implies an EPS growth rate of 72.80% for this year and 12.47% for next year. EPS is expected to grow by 20.00% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 16.20%.

Float and Shares Shorts:

At present, 201.39 million DOCU shares are outstanding with a float of 197.79 million shares on hand for trading. On Oct 13, 2022, short shares totaled 18.14 million, which was 9.04% higher than short shares on Sep 14, 2022. In addition to Ms. Mary Agnes Wilderotter as the firm’s Interim Pres & Chairman, Ms. Cynthia Gaylor serves as its Chief Financial Officer.


Institutional Ownership:

Through their ownership of 79.32% of DOCU’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 46.29% of DOCU, in contrast to 32.73% held by mutual funds. Shares owned by individuals account for 21.56%. As the largest shareholder in DOCU with 8.98% of the stake, The Vanguard Group, Inc. holds 18,050,846 shares worth 18,050,846. A second-largest stockholder of DOCU, Polen Capital Management LLC, holds 8,647,060 shares, controlling over 4.30% of the firm’s shares. BlackRock Fund Advisors is the third largest shareholder in DOCU, holding 8,369,873 shares or 4.16% stake. With a 3.03% stake in DOCU, the Vanguard Total Stock Market Index is the largest stakeholder. A total of 6,099,472 shares are owned by the mutual fund manager. The Vanguard Mid Cap Index Fund, which owns about 2.30% of DOCU stock, is the second-largest Mutual Fund holder. It holds 4,614,723 shares valued at 255.75 million. American Funds Growth Fund of Ame holds 1.99% of the stake in DOCU, owning 3,993,955 shares worth 221.34 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for DOCU since 24 analysts follow the stock currently. There are 6 analysts who recommend BUY ratings, while 3 suggest SELL ratings. Of the remaining analysts, 14 believe that the stock is worth HOLDING, 1 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With DOCU analysts setting a high price target of $90.00 and a low target of $38.00, the average target price over the next 12 months is $61.35. Based on these targets, DOCU could surge 55.31% to reach the target high and fall by -34.43% to reach the target low. Reaching the average price target will result in a growth of 5.87% from current levels.


EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. DOCU will report FY 2023 earnings on 03/10/2023. Analysts have provided yearly estimates in a range of $2.16 being high and $1.88 being low. For DOCU, this leads to a yearly average estimate of $1.93. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. DocuSign Inc. surprised analysts by $0.15 when it reported $0.57 EPS against a consensus estimate of $0.42. The surprise factor in the prior quarter was $0.02. Based on analyst estimates, the high estimate for the next quarter is $0.58 and the low estimate is $0.49. The average estimate for the next quarter is thus $0.52.

Summary of Insider Activity:

Insiders traded DOCU stock several times over the past three months with 13 Buys and 4 Sells. In these transactions, 52,761 shares were bought while 18,496 shares were sold. The number of buy transactions has increased to 58 while that of sell transactions has risen to 36 over the past year. The total number of shares bought during that period was 338,725 while 133,443 shares were sold.

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