DOCU
DocuSign, Inc.$44.48
Hold
Target $57.45
Report: Feb 23, 2026Technology • Software - Application • Mature CompounderSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$44.48+29.2%
Rec: HoldConviction: Medium
Entry Target
$44.19
(1% below current)
Fair Value
$57.45
(29% above current)
Stop Loss
$38.11
(14% below current)
Position Size
Starter
Time Horizon
Strategic
Key Metrics
Live Snapshot
Market Data
52 Week High$94.67
52 Week Low$40.16
Avg. 3 Month Volume4.91M
Efficiency
LTM Gross Margin79.4%
LTM EBITDA Margin15.1%
LTM EBIT Margin10.9%
LTM Operating Margin9.3%
LTM ROA7.7%
LTM ROE15.6%
LTM ROIC28.9%
LTM ROCE16.0%
Capital Structure
Market Cap (MM)$9.2B
Enterprise Value (MM)$8.8B
Shares Outstanding200.46M
Total Debt (MM)$185.12M
Cash & Equivalents (MM)$602.44M
LTM Net Debt (MM)$-417.32M
LTM Net Debt/EBITDA-0.9x
Growth
TTM Rev. Growth8.2%
Last 3-Yr Rev. CAGR8.6%
Last 3-Yr EBITDA CAGR152.1%
Last 3-Yr EPS CAGRN/A
Valuation
Street Target Price$68.67
LTM EV/Revenue2.7x
LTM EV/Gross Profit3.4x
LTM EV/EBIT25.2x
LTM EV/EBITDA18.2x
LTM P/E29.8x
LTM EV/FCF8.3x
LTM P/FCF8.7x
LTM P/TB2.5x
LTM P/B4.8x
Dividend Yield0.0%
Payout Ratio0.0%
Executive SummarySituation: Current price is $44.48 versus fair value $57.45 (29.2% expected return), and valuation confidence is stable. Debate: Bull case depends on Transition from billings to ARR reporting starting in FY2027. Bear case centers on Moat erosion through commoditization. Conclusion: Recommendation is Hold with Starter sizing and Strategic horizon.
Bull Case
The IAM platform achieves double-digit revenue contribution ahead of schedule, driven by 25,000 early adopters and superior retention rates; aggressive buybacks significantly reduce share count at attractive FCF yields.
Bear Case
E-signature commoditization by Adobe and Microsoft forces pricing concessions, leading to margin erosion; negative incremental ROIC of -146% indicates that IAM investments are not yet generating value above the cost of capital.
Key Catalysts
Mid-Term (6-18 months)Impact: High
Transition from billings to ARR reporting starting in FY2027. This shift will eliminate the volatility associated with renewal timing and pr...
Mid-Term (6-18 months)Impact: Critical
IAM subscription revenue reaching low double-digit percentage of total recurring revenue. Achieving this threshold would validate the moneti...
Long-Term (18+ months)Impact: Moderate
DocuSign is at a pivotal moment as it lapped the strategic go-to-market changes of 2024 and is now entering the first major renewal cycle fo...
Primary Risks
Concern: Medium
Moat erosion through commoditization. The primary threat is that e-signatures become a free 'add-on' feature in larger enterprise suites (e....
Concern: High
Negative incremental ROIC. The company is reinvesting heavily in IAM and R&D, but current incremental ROIC stands at -146%, suggesting these...
Concern: Medium
The stewardship verdict is positive but requires vigilance. The board is robust, featuring financial experts like James Beer (former CFO of...
Recent Activity
2026-01-13Press Release
-5.56%Docusign'S New Ai Translates Legalese And Does Your Contract Busywork
2025-12-05SEC Filing (8-K)
-7.64%DocuSign reported Q3 FY2026 financial results with strong growth and profitability.
2025-06-06SEC Filing (8-K)
-18.97%Docusign reports Q1 FY2026 results with 8% revenue growth and announces $1B share repurchase increase
2025-03-14SEC Filing (8-K)
+14.81%Docusign reported Q4 and FY2025 financial results with strong revenue growth and profitability.
2024-12-06SEC Filing (8-K)
+27.86%Docusign reports Q3 FY2025 results with 8% revenue growth and IAM platform momentum
Valuation Table
9.8/10Decision Grade
Scenario Range
$47
Bear
$70
Base
$99
Bull
$44