In the world of growth stocks, NASDAQ:DOCU shines as a value proposition.

Last update: Feb 5, 2024

Our stock screening tool has pinpointed DOCUSIGN INC (NASDAQ:DOCU) as a growth stock that isn't overvalued. NASDAQ:DOCU is excelling in various growth indicators while maintaining a solid financial footing. Furthermore, it remains attractively priced. Let's delve into the specifics below.

Assessing Growth Metrics for NASDAQ:DOCU

ChartMill assigns a Growth Rating to every stock. This score ranges from 0 to 10 and evaluates the different growth aspects like EPS and Revenue, both in the past as in the future. NASDAQ:DOCU scores 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.
Measured over the past years, DOCU shows a very strong growth in Earnings Per Share. The EPS has been growing by 87.39% on average per year.
The Revenue has grown by 11.16% in the past year. This is quite good.
DOCU shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 37.15% yearly.
DOCU is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 14.23% yearly.
Based on estimates for the next years, DOCU will show a quite strong growth in Revenue. The Revenue will grow by 9.09% on average per year.

Looking at the Valuation

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 cheaply inside the industry as 87.73% of the companies are valued more expensively.
DOCU is valuated rather cheaply when we compare the Price/Earnings ratio to 26.19, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio, DOCU is valued cheaply inside the industry as 85.92% of the companies are valued more expensively.
DOCU's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. DOCU is cheaper than 68.23% of the companies in the same industry.
89.89% of the companies in the same industry are more expensive than DOCU, based on the Price/Free Cash Flow ratio.
DOCU's 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 15.68% in the coming years.

Evaluating Health: NASDAQ:DOCU

ChartMill employs its own Health Rating for stock assessment. This rating, ranging from 0 to 10, is calculated by examining various liquidity and solvency ratios. In the case of NASDAQ:DOCU, the assigned 5 reflects its health status:

DOCU has an Altman-Z score of 3.10. This indicates that DOCU is financially healthy and has little risk of bankruptcy at the moment.
DOCU has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.

How do we evaluate the Profitability for NASDAQ:DOCU?

Discover ChartMill's exclusive Profitability Rating, a proprietary metric that assesses stocks on a scale of 0 to 10. It takes into consideration various profitability ratios and margins, both in absolute terms and relative to industry peers. Notably, NASDAQ:DOCU has achieved a 5:

DOCU's Return On Assets of 1.55% is fine compared to the rest of the industry. DOCU outperforms 74.73% of its industry peers.
With a decent Return On Equity value of 5.35%, DOCU is doing good in the industry, outperforming 79.42% of the companies in the same industry.
DOCU's Return On Invested Capital of 3.57% is fine compared to the rest of the industry. DOCU outperforms 76.90% of its industry peers.
DOCU has a Profit Margin of 1.90%. This is in the better half of the industry: DOCU outperforms 74.37% of its industry peers.
Looking at the Operating Margin, with a value of 1.92%, DOCU is in the better half of the industry, outperforming 71.48% of the companies in the same industry.
DOCU has a Gross Margin of 79.25%. This is amongst the best in the industry. DOCU outperforms 80.87% of its industry peers.

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

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

Keep in mind

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.