Docusign, Inc. DOCU has witnessed a remarkable surge of 27.9% in its stock price over the last three months, outpacing the technology services industry growth of 7.3%. As of the recent trading session, DOCU’s stock closed at $71.78, nearing its 52-week high of $73.8. The stock is currently trading above its 50-day moving average, indicating a positive investor sentiment.
Given the upward trajectory of DOCU shares, investors may be considering whether it’s an opportune time to invest in the company. Let’s delve deeper to evaluate this possibility.
Docusign’s Growth Driven by Unprecedented Demand
Docusign’s robust financial performance is attributed to the sustained demand for eSignature services in a market with vast potential. The company’s customer base has steadily increased over the years, with figures reaching 1.1 million in fiscal 2022, 1.3 million in fiscal 2023, and 1.5 million in fiscal 2024. This growth trend indicates a promising outlook for the company in the foreseeable future. Despite the escalating demand, the eSignature market remains largely untapped, offering Docusign ample opportunities to broaden its services globally and enhance its revenue streams.
A significant portion of Docusign’s revenue, around 97%, is derived from subscription fees. This model ensures a steady income flow for the company and enhances revenue predictability while making its software solutions more accessible to businesses with limited resources. Additionally, DOCU’s strategic go-to-market initiatives have fueled growth among commercial and enterprise clients, with subscription revenues surging by 10% in fiscal 2024.
Noteworthy is Docusign’s success in expanding its international market presence, with international revenues accounting for a growing share of its total revenues in recent years. The company’s strategic efforts in countries like Canada, the U.K., and Australia have reaped rewards, with rising demand in various regions prompting intensified marketing campaigns.