On Friday, Citi analyst Tyler Radke increased the price target for Docusign Inc. (NASDAQ: DOCU) stock, adjusting it to $115 from the previous $113, while reiterating a Buy rating on the shares. According to InvestingPro data, DocuSign maintains impressive gross profit margins of 80.16% and has achieved revenue growth of 7.52% over the last twelve months. Radke highlighted Docusign’s continued growth trajectory, noting a significant beat in billings and positive trends in subscription revenue and total revenue. The company’s net revenue retention (NRR) is ramping up, along with an uptick in customers with contracts over $300,000 and improved contract utilization.
Radke acknowledged that early renewals played a role in the billing outperformance, accounting for half of the excess. However, Docusign also benefited from increased IAM billings contributions and stronger annual billing terms, which are anticipated to bolster the billing outlook for fiscal year 2026 (FY26). Despite softer gross and operating margin outlooks for FY26 due to reinvestment in the business to support IAM, the management expects to see leverage in the coming years. InvestingPro analysis indicates the company maintains a strong financial health score of 3.19, rated as "GREAT," suggesting solid fundamentals supporting these growth initiatives.
The Citi analyst remains optimistic about Docusign’s future, citing potential for continued international expansion, IAM optionality in FY26, and operating leverage in future years. These factors contributed to Radke’s decision to raise the top-line estimates for FY27 and beyond, culminating in the higher price target of $115 for Docusign stock while maintaining a Buy rating with a High Risk classification. Based on InvestingPro’s Fair Value analysis, the stock currently appears undervalued. Subscribers can access 15 additional ProTips and a comprehensive Pro Research Report for deeper insights into DocuSign’s investment potential.
In other recent news, DocuSign Inc (NASDAQ:DOCU). reported impressive financial results for the fourth quarter of fiscal year 2025, surpassing analysts’ expectations. The company achieved an earnings per share (EPS) of $0.86, exceeding the forecasted $0.84, and reported revenue of $776 million, which also surpassed predictions. This marked a 9% year-over-year revenue growth for the quarter. For the full fiscal year 2025, DocuSign’s revenue reached $3 billion, an 8% increase from the previous year. DocuSign also introduced its Intelligent Agreement Management platform, aimed at enhancing its product offerings and contributing to future subscription revenue.
In other developments, JMP Securities maintained a Market Outperform rating on DocuSign, with a price target of $124. The firm highlighted DocuSign’s leading position in the e-signature market and significant growth potential in its agreement automation business. The company’s Net Revenue Retention rate improved to 101% in the fourth fiscal quarter, indicating strong customer retention. Additionally, DocuSign’s leadership was praised for their strategic guidance, contributing to the company’s positive outlook. These developments reflect a robust trajectory for DocuSign as it continues to innovate and expand its market presence.
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