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S&P 500   5,069.76 (-0.17%)
DOW   38,949.02 (-0.06%)
QQQ   435.27 (-0.53%)
AAPL   181.42 (-0.66%)
MSFT   407.72 (+0.06%)
META   484.02 (-0.62%)
GOOGL   136.38 (-1.80%)
AMZN   173.16 (-0.22%)
TSLA   202.04 (+1.16%)
NVDA   776.63 (-1.32%)
NIO   5.44 (-6.05%)
AMD   176.54 (-0.82%)
BABA   74.60 (-3.96%)
T   16.96 (+0.77%)
F   12.30 (+2.50%)
MU   89.71 (-2.33%)
CGC   3.36 (-4.82%)
GE   155.62 (+1.06%)
DIS   110.81 (+1.27%)
AMC   5.00 (+3.95%)
PFE   27.06 (+0.59%)
PYPL   60.25 (+0.15%)
XOM   104.37 (+0.33%)
S&P 500   5,069.76 (-0.17%)
DOW   38,949.02 (-0.06%)
QQQ   435.27 (-0.53%)
AAPL   181.42 (-0.66%)
MSFT   407.72 (+0.06%)
META   484.02 (-0.62%)
GOOGL   136.38 (-1.80%)
AMZN   173.16 (-0.22%)
TSLA   202.04 (+1.16%)
NVDA   776.63 (-1.32%)
NIO   5.44 (-6.05%)
AMD   176.54 (-0.82%)
BABA   74.60 (-3.96%)
T   16.96 (+0.77%)
F   12.30 (+2.50%)
MU   89.71 (-2.33%)
CGC   3.36 (-4.82%)
GE   155.62 (+1.06%)
DIS   110.81 (+1.27%)
AMC   5.00 (+3.95%)
PFE   27.06 (+0.59%)
PYPL   60.25 (+0.15%)
XOM   104.37 (+0.33%)
S&P 500   5,069.76 (-0.17%)
DOW   38,949.02 (-0.06%)
QQQ   435.27 (-0.53%)
AAPL   181.42 (-0.66%)
MSFT   407.72 (+0.06%)
META   484.02 (-0.62%)
GOOGL   136.38 (-1.80%)
AMZN   173.16 (-0.22%)
TSLA   202.04 (+1.16%)
NVDA   776.63 (-1.32%)
NIO   5.44 (-6.05%)
AMD   176.54 (-0.82%)
BABA   74.60 (-3.96%)
T   16.96 (+0.77%)
F   12.30 (+2.50%)
MU   89.71 (-2.33%)
CGC   3.36 (-4.82%)
GE   155.62 (+1.06%)
DIS   110.81 (+1.27%)
AMC   5.00 (+3.95%)
PFE   27.06 (+0.59%)
PYPL   60.25 (+0.15%)
XOM   104.37 (+0.33%)

The truth about DocuSign's relevancy in today's world: Surprise

DocuSign stock price

Key Points

  • DocuSign may be a disregarded stock today, followed by the market focus on other more 'popular names.'
  • The business is as relevant as ever, and its financials don't lie; there is plenty of fuel left in the tank for this firm to continue growing.
  • Analysts and other major investors like the story, and the 'buy' button is itching to be pressed.
  • 5 stocks we like better than HubSpot

With the year-end right around the corner, it is more important than ever to ensure that your portfolio is in the best position, with the right balance of upside and value or momentum, whatever your diet and appetite prescribe. A VIX below 15.0% (lowest since 2019) is making that harder today than all of 2023.

Judging by the price action in the technology stocks sector, namely the Technology Select Sector SPDR Fund NYSEARCA: XLK, which has beaten the S&P 500 by as much as 28.7% on a year-to-date basis, it seems that all the bullish sentiment is concentrated in this space.

DocuSign NASDAQ: DOCU became an investor favorite during the peak years of the COVID-19 pandemic, where almost all business activity had to be done online. Signing documents depended on DocuSign's services, just like most 'data rooms' have come to rely on HubSpot NYSE: HUBS to function. However, the appreciation has been sort of one-sided lately.

A new way to do things 

While some may not like it, you must admit that the savings on legalities, the time taken, and the physical materials make DocuSign all the more essential in today's globalized economy. The timely delivery of agreements and their confidentiality are key for corporate profits.

Think about it: when you need to organize customer information and ensure that a team of sales specialists can get the job done on a reliable basis, very few names other than Salesforce NYSE: CRM come to mind.


This stock drove its market capitalization from roughly $130 billion at the beginning of 2023 to a high of $242.6 billion; this behavior can only come from deeply entrenched brand penetration, something Buffett would call a moat.

Run this exercise again, but think of sending someone a document that needs to be urgently signed and returned to you. Would you trust anyone other than DocuSign to get the job done? Yeah, it's the same with millions of businesses and contractors out there today.

It may be hard to accept, but the days of faxing signed documents back and forth are over; it can now be done from the comfort of your palm (given you are holding a phone), which also makes record-keeping easier. But anyway, surely you know the benefits of DocuSign by now, but does the market?

Bargain offer

Investing in technology names typically brings a certain level of added risk via a higher beta. Beta is a fancy way of comparing how a stock moves next to the S&P 500.

A beta of 1.0 means an equal expected move, more than 1.0 indicates a more aggressive move and a less volatile behavior if below 1.0.

DocuSign can be part of those low-beta stocks that bring low volatility into your portfolio, matching today's market sentiment as judged by the lowest VIX in almost 5 years. So, the stock is safe, and its price has plummeted from its all-time high of over $300.0 back in 2021.

But is it cheap for a reason? Only the mood swings that overcame a hysteria seen back in the peak years of lockdowns and work-from-home trends, when every investor thought this stock could go nowhere but up. The truth is, the fundamentals are still intact.

COVID-19 was only the beginning; millions of businesses adopted and have kept DocuSign as their main provider for these signing services. Yet the stock price is acting like the party is over.

Analysts will come to bring a reality check in this situation. By assigning a consensus price target of $61.7 a share, there is an implied upside of 34.5% from today's prices. Does that sound like a dying business now?

In fact, the second quarter of 2023 saw an 11% annual revenue increase for the business, which was driven mainly by subscription revenue jumps. More than that, Free cash flow nearly doubled to $183.6 million compared to $105.5 million a year prior.

So, look, subscriptions are on the rise (which proves the still strong adoption rate for services). On a fundamental business level, free cash flow (the lifeblood of business) is also on the rise. 

There has to be a reason why Morgan Stanley NYSE: MS, the company's second-largest shareholder, has upped its stake by 1.7% in the past quarter, just in time for a potential earnings beat and a jump in the stock price.

Let everyone else focus on today's popular stocks, but do yourself a favor and keep an eye on this one; it may surprise you soon.

→ This is the #1 Stock to Buy for the AI Tidal Wave (From Chaikin Analytics) (Ad)

Should you invest $1,000 in HubSpot right now?

Before you consider HubSpot, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and HubSpot wasn't on the list.

While HubSpot currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys.

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Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Morgan Stanley (MS)
4.754 of 5 stars
$86.05+0.7%3.95%16.64Hold$94.56
DocuSign (DOCU)
4.4085 of 5 stars
$52.77+1.3%N/A211.09Hold$60.00
Salesforce (CRM)
4.6661 of 5 stars
$299.98+0.2%N/A114.06Moderate Buy$272.09
Technology Select Sector SPDR Fund (XLK)N/A$204.70-0.5%0.63%20.04HoldN/A
HubSpot (HUBS)
4.025 of 5 stars
$612.69-0.5%N/A-172.59Moderate Buy$631.54
Compare These Stocks  Add These Stocks to My Watchlist 

Gabriel Osorio-Mazilli

About Gabriel Osorio-Mazilli

  • gosoriomazzilli@gmail.com

Contributing Author

Value Stocks, Asian Markets, Macro Economics

Experience

Gabriel Osorio-Mazilli has been a contributing writer for MarketBeat since 2023.

Areas of Expertise

Value investing, long/short trading, options, emerging markets

Education

CFA Level I candidate; Goldman Sachs corporate training; independent courses

Past Experience

Analyst at Goldman Sachs, associate at Citigroup, senior financial analyst in real estate


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