Baird has adjusted its price target for DocuSign (DOCU, Financial), lowering it from $93 to $85 while maintaining a Neutral rating on the stock. This revision follows the company's latest quarterly earnings report, prompting the firm to update its valuation model.
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 $91.90 with a high estimate of $124.00 and a low estimate of $67.00. The average target implies an downside of 1.18% from the current price of $93.00. 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 26.32% from the current price of $93. 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: June 05, 2025
- Revenue: $764 million, up 8% year over year.
- Subscription Revenue: $746 million, up 8% year over year.
- Gross Margin: Non-GAAP gross margin at 82.3%.
- Operating Margin: Non-GAAP operating margin at 29.5%, a 100-basis point improvement year over year.
- Free Cash Flow: $228 million, representing a 30% margin.
- Billings: $740 million, up 4% year over year.
- Net Retention Rate: Increased to 101% from 99% in Q1 2025.
- Customers: Over 1.7 million total customers, with 10% year-over-year growth.
- Large Customers: 1,123 customers spending over $300,000 annually, a 6% increase year over year.
- International Revenue: 28% of total revenue, grew 10% year over year.
- Non-GAAP EPS: $0.90, up from $0.82 last year.
- GAAP EPS: $0.34, up from $0.16 last year.
- Share Buybacks: $183 million repurchased in Q1, with $1.4 billion in repurchase authorization available.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Docusign Inc (DOCU, Financial) reported strong Q1 financial performance with revenue of $764 million, an 8% growth year-over-year, surpassing expectations.
- The company achieved a 30% free cash flow margin, supporting continued share repurchases and authorizing an additional $1 billion in buybacks.
- Docusign Inc (DOCU) introduced new AI-powered capabilities across the agreement lifecycle, enhancing its Intelligent Agreement Management (IAM) platform.
- The IAM platform has become the fastest-growing offering in Docusign Inc (DOCU)'s history, with over 10,000 customers and significant international growth.
- Gross retention and dollar net retention improved year-over-year, indicating strong customer retention and engagement.
Negative Points
- Billings growth ended slightly below guidance due to lower-than-expected early renewals, attributed to timing rather than demand.
- The company experienced a reduction in early renewals sooner than anticipated, impacting Q1 billings.
- Docusign Inc (DOCU) faces challenges in expanding its enterprise business, with a focus on replicating its commercial success.
- International revenue growth was impacted by lower-than-expected expansion rates, particularly in EMEA.
- The company is undergoing foundational go-to-market changes, which have introduced some short-term disruption.
