Reasons Why You Should Hold Docusign Stock in Your Portfolio

Docusign, Inc. DOCU has delivered an impressive performance over the past 30 days. Its shares have gained 11.3%, outperforming the 0.1% decline of the internet software industry and the 0.6% fall of the Zacks S&P 500 composite.

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DOCU’s revenues are anticipated to increase 7.86% and 6.6% year over year in 2026 and 2027, respectively. Earnings are estimated to rise 6.76% in 2026 and 9.7% in 2027. The company has an estimated long-term (three to five years) earnings per share growth rate of 14.3%.

Factors That Augur Well for DOCU

Docusign partnered with Anthropic to integrate its Intelligent Agreement Management (“IAM”) platform into Cowork, advancing AI-driven contract automation. The integration lets users draft, review, route and manage agreements through natural language prompts, enabling end-to-end contract workflows rather than simple document summaries. This capability streamlines processes across legal, sales, procurement and HR functions while reducing manual work. The platform maintains enterprise-grade security and permission-based access to protect sensitive agreement data.

DOCU's recognition as a winner of the Inc. Power Partner Awards highlights the company’s role in helping businesses streamline contract workflows with AI-driven agreement solutions. Through its IAM platform and AI engine, Iris, the company enables organizations to automate processes, reduce risk and accelerate decision-making, reinforcing its growing influence in AI-powered contract management.

The uptick in demand for the company’s offerings drove solid revenue growth during the third quarter of fiscal 2026. Total revenues increased 8% year over year to $818.4 million, including a modest 0.5% favorable impact from foreign exchange rates. Subscription revenues, the key growth driver, rose 9% year over year to $801 million, reflecting strong demand for the company’s core services. Billings increased 10% year over year to $829.5 million, supported by a 0.5% positive foreign currency impact, indicating healthy customer demand and providing a positive signal for future revenue growth.

Docusign strengthens its technology capabilities through developer-focused and AI-driven initiatives. The launch of Docusign for Developers enhances its IAM platform by enabling developers to integrate and automate workflows using tools like Maestro and Navigator APIs. AI-Assisted Review streamlines contract analysis by flagging discrepancies and suggesting edits in Microsoft Word, while integrations with Workday, SAP and Salesforce improve data accuracy and workflow efficiency.

The company’s shareholder-friendly initiatives are encouraging, as it has a brief history of repurchasing its common stock. In fiscal 2023, 2024 and 2025, the company repurchased common stock worth $63.04 million, $145.5 million and $683.5 million, respectively. In the third quarter of fiscal 2026, DOCU repurchased stock worth $215.1 million compared to $172.7 million in the year-ago period. This reflects confidence in its financial strength and offers value to shareholders.

DOCU: Key Risks to Watch

DocuSign is facing challenges with high operating expenses, largely driven by significant sales and marketing costs. While expenses slightly decreased in fiscal 2024, they remain elevated. In the third-quarter of fiscal 2026, operating expenses increased 4.3% year over year, highlighting ongoing pressure on cost control despite efforts to reduce them. In the nine-month period of fiscal 2026, costs surged 4.9% year over year.

DocuSign’s Zacks Rank & Stocks to Consider

DOCU currently carries a Zacks Rank of #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some better-ranked stocks for investors’ consideration are Dave Inc. DAVE and Maximus MMS.

Dave currently carries a Zacks Rank of 2 (Buy). The company has an expected earnings growth rate of 9.9% and 20.8% for 2026 and 2027, respectively.

DAVE has an encouraging earnings surprise history as it has surpassed the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average beat of 54.2%.

Maximus carries a Zacks Rank of 2. MMS has an expected earnings growth rate of 15% and 5.04% for fiscal 2026 and 2027, respectively.

The company has an encouraging earnings surprise history as it has topped the Zacks Consensus Estimate in three of the trailing four quarters, missing in the remaining one, delivering an average earnings surprise of 25.5%.

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Docusign Inc. (DOCU): Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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