Taking everything into account, DOCU scores 5 out of 10 in our fundamental rating. DOCU was compared to 278 industry peers in the Software industry. Both the profitability and the financial health of DOCU get a neutral evaluation. Nothing too spectacular is happening here. DOCU has a correct valuation and a medium growth rate.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

DOCU had positive earnings in the past year.
In the past year DOCU had a positive cash flow from operations.
In multiple years DOCU reported negative net income over the last 5 years.
Each year in the past 5 years DOCU had a positive operating cash flow.

1.2 Ratios

DOCU's Return On Assets of 7.59% is fine compared to the rest of the industry. DOCU outperforms 78.78% of its industry peers.
With an excellent Return On Equity value of 15.25%, DOCU belongs to the best of the industry, outperforming 82.37% of the companies in the same industry.
DOCU has a better Return On Invested Capital (9.75%) than 84.53% of its industry peers.

		Industry Rank	Sector Rank
ROA	7.59%
ROE	15.25%
ROIC	9.75%

ROA(3y)8.62%

ROA(5y)2.54%

ROE(3y)14.69%

ROE(5y)-11.2%

ROIC(3y)N/A

ROIC(5y)N/A

1.3 Margins

Looking at the Profit Margin, with a value of 9.57%, DOCU is in the better half of the industry, outperforming 69.42% of the companies in the same industry.
DOCU has a Operating Margin of 8.59%. This is in the better half of the industry: DOCU outperforms 73.74% of its industry peers.
DOCU's Gross Margin of 79.31% is fine compared to the rest of the industry. DOCU outperforms 78.78% of its industry peers.
DOCU's Gross Margin has been stable in the last couple of years.

		Industry Rank	Sector Rank
OM	8.59%
PM (TTM)	9.57%
GM	79.31%

OM growth 3YN/A

OM growth 5YN/A

PM growth 3YN/A

PM growth 5YN/A

GM growth 3Y0.53%

GM growth 5Y1.07%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

DOCU has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
DOCU has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, DOCU has more shares outstanding
DOCU has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.

2.2 Solvency

DOCU has an Altman-Z score of 3.53. This indicates that DOCU is financially healthy and has little risk of bankruptcy at the moment.
With a decent Altman-Z score value of 3.53, DOCU is doing good in the industry, outperforming 66.55% of the companies in the same industry.
DOCU has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.

		Industry Rank	Sector Rank
Debt/Equity	0
Debt/FCF	0
Altman-Z	3.53

ROIC/WACC0.88

WACC11.12%

2.3 Liquidity

DOCU has a Current Ratio of 0.73. This is a bad value and indicates that DOCU is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 0.73, DOCU is doing worse than 86.69% of the companies in the same industry.
A Quick Ratio of 0.73 indicates that DOCU may have some problems paying its short term obligations.
DOCU's Quick ratio of 0.73 is on the low side compared to the rest of the industry. DOCU is outperformed by 86.69% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	0.73
Quick Ratio	0.73

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

DOCU shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 6.96%.
The Earnings Per Share has been growing by 62.84% on average over the past years. This is a very strong growth
Looking at the last year, DOCU shows a quite strong growth in Revenue. The Revenue has grown by 8.45% in the last year.
Measured over the past years, DOCU shows a very strong growth in Revenue. The Revenue has been growing by 25.04% on average per year.

EPS 1Y (TTM)6.96%

EPS 3Y21.69%

EPS 5Y62.84%

EPS Q2Q%12.22%

Revenue 1Y (TTM)8.45%

Revenue growth 3Y12.2%

Revenue growth 5Y25.04%

Sales Q2Q%8.42%

3.2 Future

Based on estimates for the next years, DOCU will show a quite strong growth in Earnings Per Share. The EPS will grow by 8.69% on average per year.
The Revenue is expected to grow by 6.97% on average over the next years.

EPS Next Y8.79%

EPS Next 2Y8.77%

EPS Next 3Y9.1%

EPS Next 5Y8.69%

Revenue Next Year8.37%

Revenue Next 2Y7.59%

Revenue Next 3Y7.63%

Revenue Next 5Y6.97%

3.3 Evolution

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.

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4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 14.57, which indicates a correct valuation of DOCU.
DOCU's Price/Earnings ratio is rather cheap when compared to the industry. DOCU is cheaper than 80.58% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 28.39, DOCU is valued a bit cheaper.
The Price/Forward Earnings ratio is 12.80, which indicates a correct valuation of DOCU.
82.37% of the companies in the same industry are more expensive than DOCU, based on the Price/Forward Earnings ratio.
DOCU is valuated cheaply when we compare the Price/Forward Earnings ratio to 25.72, which is the current average of the S&P500 Index.

		Industry Rank	Sector Rank
PE	14.57
Fwd PE	12.8

4.2 Price Multiples

DOCU's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. DOCU is cheaper than 71.94% of the companies in the same industry.
90.29% of the companies in the same industry are more expensive than DOCU, based on the Price/Free Cash Flow ratio.

		Industry Rank	Sector Rank
P/FCF	10.95
EV/EBITDA	24.94

4.3 Compensation for Growth

The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
DOCU has a very decent profitability rating, which may justify a higher PE ratio.