📊 DOCU Key Takeaways
Is Docusign, Inc.. (DOCU) a Good Investment?
DocuSign faces a profitability crisis with net income collapsing 71% YoY despite modest 8.2% revenue growth, indicating severe operational deleverage and expense control issues. While the company generates strong free cash flow and maintains a debt-free balance sheet, its deteriorating liquidity metrics (current ratio 0.66x), anaemic returns on capital (ROE 4.3%, ROA 2.0%), and 79.4% gap between gross and net margins signal fundamental business model stress that cannot be overlooked.
DocuSign shows solid fundamental quality with high gross margins, strong free cash flow generation, and a debt-free balance sheet, indicating a resilient software business model. Revenue growth remains positive, but the modest top-line pace, flat net income, and sharp diluted EPS decline suggest profitability expansion is not yet fully translating into per-share growth. Overall, the company appears fundamentally strong, but sustained operating margin improvement and healthier earnings quality are important to confirm further upside in business performance.
Docusign, Inc.. Key Strengths (DOCU)
- Strong free cash flow generation of $289.4M (34.9% FCF margin) exceeds net income, indicating quality earnings
- Exceptional gross margin of 79.4% demonstrates pricing power and core product efficiency
- Zero long-term debt provides financial flexibility and eliminates refinancing risk
- High gross margin and strong free cash flow margin indicate an efficient, scalable software model
- Debt-free capital structure and substantial cash balance support financial flexibility
- Positive revenue growth with solid operating profitability and very high interest coverage
DOCU Stock Risks: Docusign, Inc.. Investment Risks
- Net income collapsed 71% YoY while revenue grew only 8.2%, exposing severe operational expense bloat and lack of leverage
- Current ratio of 0.66x indicates potential liquidity stress and working capital deterioration relative to liabilities
- Abysmal capital efficiency with ROE of 4.3% and ROA of 2.0% suggests shareholder value destruction and inefficient asset deployment
- Revenue growth is relatively modest for a software company, raising questions about long-term expansion potential
- Net income was flat year over year and diluted EPS fell sharply, signaling weaker per-share earnings quality
- Current ratio below 1.0 may reflect balance sheet working-capital pressure even if common in subscription models
Key Metrics to Watch
- Operating margin trend reversal and operating expense ratio as percentage of revenue
- Current ratio trajectory and working capital management efficiency
- Return on equity and return on assets recovery toward software industry benchmarks (15%+ ROE target)
- Revenue growth acceleration and billings/deferred revenue trends
- Operating margin and diluted EPS trend
Docusign, Inc.. (DOCU) Financial Metrics & Key Ratios
💡 AI Analyst Insight
The 34.9% free cash flow margin provides substantial flexibility for dividends, buybacks, and strategic investments. The current ratio below 1.0x warrants monitoring of short-term liquidity.
DOCU Profit Margin, ROE & Profitability Analysis
DOCU vs Technology Sector: How Docusign, Inc.. Compares
How Docusign, Inc.. compares to Technology sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Docusign, Inc.. Stock Overvalued? DOCU Valuation Analysis 2026
Based on fundamental analysis, Docusign, Inc.. has mixed fundamental signals relative to the Technology sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Docusign, Inc.. Balance Sheet: DOCU Debt, Cash & Liquidity
DOCU Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Docusign, Inc..'s revenue has grown significantly by 53% over the 5-year period, indicating strong business expansion. The most recent EPS of $0.36 reflects profitable operations.
DOCU Revenue Growth, EPS Growth & YoY Performance
DOCU Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q1 2027 | $763.7M | $72.1M | $0.34 |
| Q3 2026 | $754.8M | $62.4M | $0.30 |
| Q2 2026 | $736.0M | $63.0M | $0.30 |
| Q1 2026 | $709.6M | $33.8M | $0.16 |
| Q3 2025 | $700.4M | $38.8M | $0.19 |
| Q2 2025 | $687.7M | $7.4M | $0.04 |
| Q1 2025 | $661.4M | $539.0K | $0.00 |
| Q3 2024 | $645.5M | -$29.9M | $-0.15 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Docusign, Inc.. Dividends, Buybacks & Capital Allocation
DOCU SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Docusign, Inc.. (CIK: 0001261333)
📋 Recent SEC Filings
❓ Frequently Asked Questions about DOCU
What is the AI rating for DOCU?
Docusign, Inc.. (DOCU) has a Combined AI Grade of B from Claude (C) and ChatGPT (A) with 76% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are DOCU's key strengths?
Claude: Strong free cash flow generation of $289.4M (34.9% FCF margin) exceeds net income, indicating quality earnings. Exceptional gross margin of 79.4% demonstrates pricing power and core product efficiency. ChatGPT: High gross margin and strong free cash flow margin indicate an efficient, scalable software model. Debt-free capital structure and substantial cash balance support financial flexibility.
What are the risks of investing in DOCU?
Claude: Net income collapsed 71% YoY while revenue grew only 8.2%, exposing severe operational expense bloat and lack of leverage. Current ratio of 0.66x indicates potential liquidity stress and working capital deterioration relative to liabilities. ChatGPT: Revenue growth is relatively modest for a software company, raising questions about long-term expansion potential. Net income was flat year over year and diluted EPS fell sharply, signaling weaker per-share earnings quality.
What is DOCU's revenue and growth?
Docusign, Inc.. reported revenue of $830.2M.
Does DOCU pay dividends?
Docusign, Inc.. does not currently pay dividends.
Where can I find DOCU SEC filings?
Official SEC filings for Docusign, Inc.. (CIK: 0001261333) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is DOCU's EPS?
Docusign, Inc.. has a diluted EPS of $0.40.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined grade reflects both perspectives for balanced insights.
What is DOCU's fundamental grade?
Based on our AI fundamental analysis in June 2026, Docusign, Inc.. has a B grade with 76% confidence. Review the strengths and risks sections above for full context. This is not investment advice.
Is DOCU stock overvalued or undervalued?
Valuation metrics for DOCU: ROE of 4.3% (sector avg: 22%), net margin of 9.4% (sector avg: 18%). Compare these metrics with sector averages to assess valuation.
What is DOCU's AI grade for 2026?
Our dual AI analysis gives Docusign, Inc.. a combined B grade for 2026. Revenue is data pending, with profitability at or below sector average. Always conduct your own research.
What is DOCU's free cash flow?
Docusign, Inc..'s operating cash flow is $321.7M, with capital expenditures of $32.3M. FCF margin is 34.9%.
How does DOCU compare to other Technology stocks?
Vs Technology sector averages: Net margin 9.4% (avg: 18%), ROE 4.3% (avg: 22%), current ratio 0.66 (avg: 2.5).