Docusign, Inc. (NASDAQ: DOCU)

Sector: Technology Industry: Software - Application CIK: 0001261333
Market Cap 13.96 Bn
P/B 7.04
P/E 46.18
P/S 4.42
ROIC (Qtr) 11.20
Div Yield % 0.00
Rev 1y % (Qtr) 8.42
Total Debt (Qtr) 150.37 Mn
Debt/Equity (Qtr) 0.08

About

DocuSign, Inc., often referred to as DOCU, operates in the agreement management industry, which involves the creation, execution, and management of agreements such as contracts and other documents. The company offers a suite of products and services that enable electronic signature and agreement management, with the aim of streamlining agreement workflows, reducing costs, and improving efficiency for businesses. At the heart of DocuSign's offerings is its flagship product, eSignature, which allows users to send and sign agreements electronically....

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Price action

Investment thesis

Bull case

  • Strong operating cash flow of 1.10B provides robust 7.29x coverage of total debt 150.37M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 583.29M provide 36.82x coverage of short-term debt 15.84M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 3.46B provides 23.04x coverage of total debt 150.37M, indicating robust asset backing and low credit risk.
  • Operating cash flow of 1.10B provides exceptional 464.28x coverage of interest expenses 2.36M, showing strong debt service capability.
  • Robust free cash flow of 987.93M exceeds capital expenditure of 107.77M by 9.17x, indicating strong organic growth funding capability.

Bear case

  • Operating cash flow of 1.10B barely covers its investment activities of (125.42M), with a coverage ratio of -8.74, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (125.42M) provide weak support for R&D spending of 652.17M, which is -0.19x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • The company's operating cash flow of 1.10B shows concerning coverage of stock compensation expenses of 616.72M, with a 1.78 ratio indicating potential earnings quality issues.
  • Operating earnings of 316.03M show weak coverage of depreciation charges of 137.12M, with a 2.30 ratio indicating high capital intensity and potential reinvestment needs.
  • High financing cash flow of (998.83M) relative to working capital of (476.59M), which is 2.10x suggests concerning dependence on external funding for operational needs.

Product and Service Breakdown of Revenue (2025)

Geographical Breakdown of Revenue (2025)

Peer comparison

Companies in the Software - Application
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 SAP Sap Se 288.31 Bn 34.60 6.72 10.73 Bn
2 CRM Salesforce, Inc. 248.32 Bn 34.38 6.16 11.14 Bn
3 SHOP Shopify Inc. 212.27 Bn 119.19 19.85 1.12 Bn
4 INTU Intuit Inc. 180.73 Bn 43.89 9.30 6.78 Bn
5 UBER Uber Technologies, Inc 178.38 Bn 10.72 3.60 12.19 Bn
6 NOW ServiceNow, Inc. 146.98 Bn 84.91 11.60 2.40 Bn
7 ADBE Adobe Inc. 144.48 Bn 20.77 6.23 6.64 Bn
8 ADP Automatic Data Processing Inc 108.20 Bn 26.16 5.18 9.77 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 3.39 2.65
EV to Cash from Ops. EV/CFO 12.31 13.37
EV to Debt EV to Debt 89.69 57.69
EV to EBIT EV/EBIT 42.67 19.12
EV to EBITDA EV/EBITDA 33.02 15.00
EV to Free Cash Flow [EV/FCF] EV/FCF 13.65 14.69
EV to Market Cap EV to Market Cap 0.97 -92.28
EV to Revenue EV/Rev 4.27 4.60
Price to Book Value [P/B] P/B 7.04 4.26
Price to Earnings [P/E] P/E 46.18 -136.90
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -3.95
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 4.25
Dividend per Basic Share Div per Share (Qtr) 0.00 0.15
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 2.52
Interest Coverage Int. cover (Qtr) 133.91 -52.32
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -18.74 -259.78
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -4.51 9,763.58
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 1.61
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -70.30 -263.15
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 50.49 56.46
EBIT Growth (1y) % EBIT 1y % (Qtr) 48.61 -225.15
EBT Growth (1y) % EBT 1y % (Qtr) 49.51 -86.10
EPS Growth (1y) % EPS 1y % (Qtr) -69.84 123.84
FCF Growth (1y) % FCF 1y % (Qtr) 11.09 -36.82
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 8.76 95.08
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.79 0.58
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.02
Cash Ratio Cash Ratio (Qtr) 0.33 3.75
Current Ratio Curr Ratio (Qtr) 0.73 8.16
Debt to Equity Ratio Debt/Equity (Qtr) 0.08 0.17
Interest Cover Ratio Int Coverage (Qtr) 133.91 -52.32
Times Interest Earned Times Interest Earned (Qtr) 133.91 -52.32
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 14.30 -100.06
EBIT Margin % EBIT Margin % (Qtr) 10.00 -164.24
EBT Margin % EBT Margin % (Qtr) 9.93 -116.94
Gross Margin % Gross Margin % (Qtr) 79.30 58.20
Net Profit Margin % Net Margin % (Qtr) 9.60 -121.65