In a strategic move, Docusign (DOCU, Financial) has announced an expansion of its stock repurchase initiative, authorizing an additional $1 billion for the repurchase of its common shares. This enhancement reflects the company's confidence in its financial stability and growth prospects. Importantly, the program does not impose a minimum purchasing requirement, nor does it have a specified termination date, offering flexibility in execution.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 16 analysts, the average target price for Docusign Inc (DOCU, Financial) is $92.77 with a high estimate of $124.00 and a low estimate of $65.00. The average target implies an downside of 0.14% from the current price of $92.90. More detailed estimate data can be found on the Docusign Inc (DOCU) Forecast page.
Based on the consensus recommendation from 23 brokerage firms, Docusign Inc's (DOCU, Financial) average brokerage recommendation is currently 2.7, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Docusign Inc (DOCU, Financial) in one year is $68.52, suggesting a downside of 26.24% from the current price of $92.9. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Docusign Inc (DOCU) Summary page.
DOCU Key Business Developments
Release Date: March 13, 2025
- Q4 Revenue: $776 million, up 9% year-over-year.
- Fiscal 2025 Revenue: $3 billion, up 8% year-over-year.
- Non-GAAP Operating Margin Q4: 28.8%.
- Non-GAAP Operating Margin Fiscal 2025: 29.8%.
- Q4 Billings: $923 million, up 11% year-over-year.
- Fiscal 2025 Billings: Up 7% year-over-year.
- Dollar Net Retention Rate Q4: 101%.
- Total Customers: Nearly 1.7 million, 10% growth year-over-year.
- Free Cash Flow Q4: $280 million, 36% margin.
- Free Cash Flow Fiscal 2025: $920 million, 31% margin.
- Non-GAAP Gross Margin Q4: 82.3%.
- Non-GAAP Gross Margin Fiscal 2025: 82.2%.
- Non-GAAP Diluted EPS Q4: $0.86.
- GAAP Diluted EPS Q4: $0.39.
- Non-GAAP Diluted EPS Fiscal 2025: $3.55.
- GAAP Diluted EPS Fiscal 2025: $5.08.
- Cash, Cash Equivalents, and Investments: $1.1 billion.
- Share Repurchases Fiscal 2025: $684 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- DocuSign Inc (DOCU, Financial) reported Q4 revenue of $776 million, up 9% year-over-year, and fiscal 2025 revenue of $3 billion, up 8% year-over-year.
- The introduction of Intelligent Agreement Management (IAM) has been transformative, with IAM quickly becoming the fastest-growing new product in DocuSign Inc (DOCU)'s history.
- DocuSign Inc (DOCU) achieved strong profitability with 29% non-GAAP operating margins in Q4 and 30% for fiscal 2025, reflecting significant efficiency improvements.
- The dollar net retention rate improved to 101% in Q4, the highest level in six quarters, indicating strong customer retention and usage trends.
- DocuSign Inc (DOCU) continues to see growth in international and digital segments, with international revenue growing 12% year-over-year in Q4.
Negative Points
- Despite growth, the fiscal 2026 revenue guidance indicates a slower 5% year-over-year increase, reflecting ongoing challenges in accelerating revenue growth.
- The ongoing cloud infrastructure migration is expected to impact gross margins in fiscal 2026, with a larger impact anticipated before easing in fiscal 2027.
- DocuSign Inc (DOCU) faces headwinds from foreign currency rates, impacting both revenue and billings growth projections for fiscal 2026.
- The transition to IAM in enterprise segments is expected to be more complex, requiring significant investment in sales and go-to-market strategies.
- DocuSign Inc (DOCU) anticipates a billing-specific headwind due to reduced early renewal volume as a result of go-to-market design changes.
