Critical Review: Docusign (DOCU) versus The Competition

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Docusign (NASDAQ: DOCU) is one of 197 public companies in the “Prepackaged software” industry, but how does it compare to its rivals? We will compare Docusign to related businesses based on the strength of its institutional ownership, risk, earnings, analyst recommendations, valuation, profitability and dividends.

Analyst Ratings

This is a breakdown of current ratings and target prices for Docusign and its rivals, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Docusign 0 4 8 0 2.67
Docusign Competitors 1691 7916 14565 726 2.58

Docusign presently has a consensus price target of $61.55, suggesting a potential upside of 11.39%. As a group, “Prepackaged software” companies have a potential upside of 2.72%. Given Docusign’s stronger consensus rating and higher possible upside, research analysts clearly believe Docusign is more favorable than its rivals.

Institutional and Insider Ownership

53.1% of Docusign shares are held by institutional investors. Comparatively, 60.5% of shares of all “Prepackaged software” companies are held by institutional investors. 21.6% of shares of all “Prepackaged software” companies are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Docusign and its rivals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Docusign -60.84% -86.06% -30.84%
Docusign Competitors -38.92% -24.45% -3.63%

Earnings and Valuation

This table compares Docusign and its rivals revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Docusign $700.97 million -$426.46 million -19.05
Docusign Competitors $1.91 billion $226.93 million 37.49

Docusign’s rivals have higher revenue and earnings than Docusign. Docusign is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.

Summary

Docusign rivals beat Docusign on 9 of the 12 factors compared.

About Docusign

DocuSign, Inc. provides cloud based transaction products and services in the United States. The company offers e-signature solution that enables businesses to digitally prepare, execute, and act on agreements. It serves large enterprises, sole proprietorships, small- to medium-sized businesses, professionals, and individuals. The company was 2003 and is headquartered in San Francisco, California.

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