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Stockchase Insights Docusign DOCU-Q BUY ON WEAKNESS Jul 14, 2025

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research

We have long thought someone should take over DOCU. While there is competition and not really a 'moat' anymore, it still has a solid 'brand'. Growth is slowing, but cash flow is solid and growing. It is 21X earnings right now, down 15% for the year but of course well off its pandemic highs. Its low is just below $50. We would likely get more interested in the $65 range.
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BUY ON WEAKNESS

Are spectacular buys in the tech space, even pandemic tech winners like Docusign. It just reported a surprise beat and shares are soaring. Post-Covid, it sold off hard and fast, but they still had a business going. Buy during sell-offs.

BUY ON WEAKNESS

Allan Tong’s Discover Picks Taking a step back, DOCU revenues have climbed from $250 million in 2016 to $2.1 billion in its last fiscal year. Meanwhile, cash levels are rising. Flashforward to last week's report in which EPS clocked in at $0.44. That was actually down 6% from a year ago, but higher than the expected $0.42. Also impressing the street were revenues of $622.2 million beating $602 million (a 22% increase YOY). The company issued a rosy forecast of $626 million in revenues vs. the street's $625 million. Read 2 Big Technology Stocks That Are Back for our full analysis.

DON'T BUY

Likes and uses its software, but it's still too close to its post-Covid hangover to buy. There are too many competitors, too.

BUY

Has a new CEO since last year and he's aggressively cut costs. Last month, they reported one of their best quarters in years, but shares didn't get any traction.

DON'T BUY

Dominates this business, but ADBE has entered the space. Stock's gone sideways. Software is not unique, and competition will show up. Perhaps a bigger player like MSFT would buy it and incorporate the technology.

HOLD

It has maxed out to a large degree on the growth side. It is still dominant in the space and could be an acquisition target.

STRONG BUY

Their Q2 earnings beat. A pandemic darling that then crashed. But now it trades at a fair valuation and strong free cash flow. She bought it last September is up 35%. Trades at 16x PE and has a 8% free cash flow yield. Great managers who underpromise, so they will beat their quarter. Has real secular growth.

BUY

Decent earnings lie ahead. Has a 5.5% free cash flow yield.

SELL

Their last quarter was good but nobody liked it. Innovations were good. That said, go with the flow and sell.

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