Why NASDAQ:DOCU Is a Promising High-Growth Stock in the Midst of Consolidation.

Last update: Jan 24, 2024

In this article, we'll take a closer look at DOCUSIGN INC (NASDAQ:DOCU) as a potential candidate for growth investing. While it's important for investors to conduct their own research, DOCUSIGN INC has piqued our interest by appearing on our strong growth and breakout radar. Let's explore further.

Growth Analysis for NASDAQ:DOCU

Every stock receives a Growth Rating from ChartMill, ranging from 0 to 10. This rating assesses various growth aspects, including historical and projected EPS and revenue growth. NASDAQ:DOCU boasts a 8 out of 10:

DOCU shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 54.01%, which is quite impressive.
DOCU shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 87.39% yearly.
The Revenue has grown by 11.16% in the past year. This is quite good.
The Revenue has been growing by 37.15% on average over the past years. This is a very strong growth!
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.
DOCU is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 8.83% yearly.

Assessing Health Metrics for NASDAQ:DOCU

ChartMill employs a unique Health Rating system for all stocks. This rating, ranging from 0 to 10, is determined by analyzing various liquidity and solvency ratios. For NASDAQ:DOCU, the assigned 5 for health provides valuable insights:

DOCU has an Altman-Z score of 3.31. This indicates that DOCU is financially healthy and has little risk of bankruptcy at the moment.
DOCU's Altman-Z score of 3.31 is fine compared to the rest of the industry. DOCU outperforms 60.43% of its industry peers.
DOCU has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.

What does the Profitability looks like for 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:

DOCU has a Return On Assets of 1.55%. This is in the better half of the industry: DOCU outperforms 74.46% of its industry peers.
The Return On Equity of DOCU (5.35%) is better than 79.50% of its industry peers.
DOCU has a Return On Invested Capital of 3.57%. This is in the better half of the industry: DOCU outperforms 76.98% of its industry peers.
The Profit Margin of DOCU (1.90%) is better than 74.10% of its industry peers.
DOCU has a Operating Margin of 1.92%. This is in the better half of the industry: DOCU outperforms 71.22% of its industry peers.
DOCU has a better Gross Margin (79.25%) than 80.94% of its industry peers.

Looking at the Setup

ChartMill also assign a Setup Rating to every stock. With this score it is determined to what extend the stock has been trading in a range in the recent days and weeks. This score also ranges from 0 to 10 and is updated daily. The setup score evaluates various short term technical indicators. NASDAQ:DOCU scores a 7 out of 10:

Besides having an excellent technical rating, DOCU also presents a decent setup pattern. We see reduced volatility while prices have been consolidating in the most recent period. A pullback is taking place, which may present a nice opportunity for an entry. There is a resistance zone just above the current price starting at 63.11. Right above this resistance zone may be a good entry point. We notice that large players showed an interest for DOCU in the last couple of days, which is a good sign.

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

For an up to date full fundamental analysis you can check the fundamental report of DOCU

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

Disclaimer

This article should in no way be interpreted as advice in any way. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.