DocuSign (DOCU) Stock Forecast & Price Target

DocuSign's total revenue experienced a year-over-year increase of 9.0%, with subscription revenue growing by 8.9%, suggesting strong demand for its Agreement Cloud software suite. The company's operating cash flows reached $307.9 million, reflecting a robust 39.7% margin, which is an improvement of 170 basis points compared to the previous year. Although guidance for future revenue shows a slight deviation from consensus estimates, the projections indicate sustained growth, with a year-over-year revenue increase anticipated at approximately 5%, reinforcing the company’s overall positive financial trajectory.

The financial analysis indicates a negative outlook for DocuSign's stock primarily due to stagnant customer additions, which remained at 30,000 for the quarter, reflecting a decline from 40,000 in the prior year. Weaker guidance for fiscal year 2026 includes gross margins estimated between 80.5% and 81.5%, below Wall Street estimates, driven by elevated cloud migration costs and a significant deceleration in direct customer growth to 7.4% year-over-year. Furthermore, a reliance on e-signature revenue amidst a competitive market raises concerns about the company's ability to attract new customers and sustain revenue growth, exacerbated by potential data security issues and foreign currency headwinds impacting overall performance.