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Here's Why DocuSign Stock is a Great Pick for Investors

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DocuSign (DOCU - Free Report) is an eSignature solution provider that has performed well in the past three months and has the potential to sustain momentum in the near term. The stock has gained 12% in the said time frame compared with the 10% growth of the industry.

What Makes DOCU an Attractive Pick?

Solid Rank: DOCU currently sports a Zacks Rank #1 (Strong Buy). Our research shows that stocks with a Zacks Rank #1 or 2 (Buy) offer attractive investment opportunities for investors.

Earnings Surprise History: DOCU has an impressive earnings surprise history. The company outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average earnings surprise of 18.3%.

Northward Estimate Revisions: Six estimates for fiscal 2025 moved north in the past 60 days versus one southward revision, reflecting analysts’ confidence in the company. The Zacks Consensus Estimate for fiscal 2024 earnings has moved up 6.2% in the same time.

Strong Growth Prospects: The Zacks Consensus Estimate for DOCU’s fiscal 2025 earnings is pegged at $3.43 per share, indicating 15% year-over-year growth. The company has a long-term expected earnings growth rate of 9.3%.

Growth Factors: eSignature, DocuSign’s anchor product, enables the virtual but secure signing and sending of agreements on a variety of devices from anywhere in the world. The company’s top line is significantly benefiting from continued customer demand for eSignature. Despite this rising demand, the market for eSignature remains largely untapped and this keeps DocuSign in a position to expand eSignature across businesses around the world.

The company registered growth in earnings and revenues in the second quarter of fiscal 2025. Non-GAAP earnings of 97 cents per share increased 34.7% year over year and total revenues of $736 million were up 7% year over year.

The recent acquisition of Lexion fortifies DocuSign's position in Intelligent Agreement Management (IAM) by adding more AI-assisted capabilities to its IAM platform. The integration will provide customers with richer insights and analysis, speeding up contract reviews and negotiations and simplifying information retrieval within documents.

Other Stocks to Consider

Some other top-ranked stocks in the broader Zacks Business Services sector are Evertec (EVTC - Free Report) and Charles River Associates (CRAI - Free Report) , each sporting a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

EVTC has a long-term earnings growth expectation of 8%. It delivered a trailing four-quarter earnings surprise of 11.1%, on average.

CRAI has a long-term earnings growth expectation of 16%. It delivered a trailing four-quarter earnings surprise of 23.5%, on average.


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