NASDAQ:DOCU is showing decent growth, but is still valued reasonably.

Take a closer look at DOCUSIGN INC (NASDAQ:DOCU), an affordable growth stock uncovered by our stock screener. NASDAQ:DOCU boasts strong growth prospects and excels in financial health indicators, all while maintaining a reasonable valuation. Let's break it down further.

Growth Assessment of NASDAQ:DOCU

A key component of ChartMill's stock assessment is the Growth Rating, which spans from 0 to 10. This rating evaluates diverse growth factors, such as EPS and revenue growth, considering both past performance and future projections. NASDAQ:DOCU has received a 8 out of 10:

• The Earnings Per Share has grown by an impressive 54.01% over the past year.
• The Earnings Per Share has been growing by 87.39% on average over the past years. This is a very strong growth
• The Revenue has grown by 11.16% in the past year. This is quite good.
• Measured over the past years, DOCU shows a very strong growth in Revenue. The Revenue has been growing by 37.15% on average per year.
• Based on estimates for the next years, DOCU will show a quite strong growth in Earnings Per Share. The EPS will grow by 14.23% on average per year.
• Based on estimates for the next years, DOCU will show a quite strong growth in Revenue. The Revenue will grow by 8.83% on average per year.

How We Gauge Valuation for NASDAQ:DOCU

ChartMill employs its own Valuation Rating system for all stocks. This score, ranging from 0 to 10, is determined by evaluating different valuation factors, including price to earnings and free cash flow, both in absolute terms and relative to the market and industry. NASDAQ:DOCU has earned a 6 for valuation:

• Based on the Price/Earnings ratio, DOCU is valued cheaper than 85.00% of the companies in the same industry.
• 80.36% of the companies in the same industry are more expensive than DOCU, based on the Price/Forward Earnings ratio.
• Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of DOCU indicates a somewhat cheap valuation: DOCU is cheaper than 68.93% of the companies listed in the same industry.
• Based on the Price/Free Cash Flow ratio, DOCU is valued cheaper than 87.86% of the companies in the same industry.
• The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
• A more expensive valuation may be justified as DOCU's earnings are expected to grow with 14.41% in the coming years.

Deciphering NASDAQ:DOCU's Health Rating

A critical element of ChartMill's stock evaluation is the Health Rating, which spans from 0 to 10. This rating considers multiple health factors, including liquidity and solvency, both in absolute terms and relative to industry peers. NASDAQ:DOCU has received a 5 out of 10:

• DOCU has an Altman-Z score of 3.34. This indicates that DOCU is financially healthy and has little risk of bankruptcy at the moment.
• Looking at the Altman-Z score, with a value of 3.34, DOCU is in the better half of the industry, outperforming 61.07% of the companies in the same industry.
• There is no outstanding debt for DOCU. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.

Evaluating Profitability: NASDAQ:DOCU

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of NASDAQ:DOCU, the assigned 5 is noteworthy for profitability:

• With a decent Return On Assets value of 1.55%, DOCU is doing good in the industry, outperforming 73.93% of the companies in the same industry.
• Looking at the Return On Equity, with a value of 5.35%, DOCU is in the better half of the industry, outperforming 79.29% of the companies in the same industry.
• Looking at the Return On Invested Capital, with a value of 3.57%, DOCU is in the better half of the industry, outperforming 76.79% of the companies in the same industry.
• With a decent Profit Margin value of 1.90%, DOCU is doing good in the industry, outperforming 73.93% of the companies in the same industry.
• DOCU has a Operating Margin of 1.92%. This is in the better half of the industry: DOCU outperforms 71.07% of its industry peers.
• DOCU's Gross Margin of 79.25% is amongst the best of the industry. DOCU outperforms 81.07% of its industry peers.

Our Affordable Growth screener lists more Affordable Growth stocks and is updated daily.

Our latest full fundamental report of DOCU contains the most current fundamental analsysis.

Keep in mind

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.