Is DocuSign At $68 A Potential Opportunity After Recent Strategy And Product Updates?

• Wondering if DocuSign at around $68 is a bargain or a value trap? You are not alone, and that is exactly what we are going to unpack here.
• The stock is down about 24.5% year to date and roughly 30.5% over the last year, even though it is still up about 26.0% over three years. That combination often signals shifting market expectations rather than a simple growth or decline story.
• Recent headlines have focused on DocuSign sharpening its product lineup and partnerships, as e-signatures and agreement workflows stay central to how businesses operate in a more digital, remote friendly world. That mix of persistent demand and competitive pressure helps explain why the market has been rethinking the right price to pay for its future growth.
• On our valuation checks, DocuSign scores a 3/6, suggesting it looks undervalued on some metrics but not convincingly cheap across the board. Next we will walk through different valuation approaches, and finish with a way to pull all those signals into one clear view of what the stock might really be worth.

Find out why DocuSign's -30.5% return over the last year is lagging behind its peers.

Approach 1: DocuSign Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model estimates what a business is worth today by projecting the cash it can generate in the future and then discounting those cash flows back to their value in today’s dollars.

For DocuSign, the model uses its latest twelve month free cash flow of about $990 million as a starting point. Analysts provide detailed forecasts for the next few years. Beyond that, Simply Wall St extrapolates the trend to build a longer term view, with projected free cash flow reaching roughly $1.19 billion by 2030. Each of those annual cash flows is then discounted back using an appropriate rate to reflect risk and the time value of money.

Putting those cash flows together, the 2 Stage Free Cash Flow to Equity model arrives at an estimated intrinsic value of about $99.85 per share. Compared with the recent share price around $68, the DCF implies DocuSign is roughly 31.7% undervalued, suggesting the market may be pricing in a more cautious future than the cash flow projections assume.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests DocuSign is undervalued by 31.7%. Track this in your watchlist or portfolio, or discover 913 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for DocuSign.

Approach 2: DocuSign Price vs Earnings

For profitable companies like DocuSign, the price to earnings (PE) ratio is often the go to valuation gauge because it directly ties what investors pay for each share to the earnings that business is generating today.

What counts as a normal or fair PE depends on how fast earnings are expected to grow and how risky those earnings are. Higher growth and stronger competitive positioning can justify a higher multiple, while slower growth or more uncertainty usually means investors will only pay a lower PE.

DocuSign currently trades on a PE of about 45.2x, which is above both the broader software industry average of roughly 32.4x and the peer group average of around 77.9x. Simply Wall St’s own Fair Ratio for DocuSign is about 33.3x, a proprietary estimate of what a reasonable PE should be based on its earnings growth, profitability, industry, market cap and risk profile.

This Fair Ratio framework is more tailored than a simple peer or industry comparison because it adjusts for DocuSign’s specific growth and risk mix rather than assuming all software stocks deserve the same multiple. With the actual PE sitting well above the 33.3x Fair Ratio, the shares look somewhat expensive on this lens.

Result: OVERVALUED

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Upgrade Your Decision Making: Choose your DocuSign Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, a simple framework where you describe your view of DocuSign’s future in plain language and then tie that story to concrete numbers like revenue growth, margins, and a personal estimate of fair value.

A Narrative connects three things: what you think is really happening in the business, how that should flow through a financial forecast, and what that implies DocuSign shares are actually worth today.

On Simply Wall St’s Community page, millions of investors use Narratives as an accessible tool that turns their ideas into structured forecasts. The platform then compares each Narrative’s Fair Value to the current price so you can quickly see whether your story suggests you should buy, hold, or sell.

Those Narratives are kept live and relevant, with fair values automatically refreshed when new information lands, such as earnings results, major product updates, or changes in analyst expectations.

For example, one bullish DocuSign Narrative might lean toward the higher end of analyst targets, assuming stronger AI driven adoption and a fair value closer to $124. A more cautious Narrative might anchor to the lower end near $77, highlighting slower agreement platform uptake and tougher competition.

Do you think there's more to the story for DocuSign? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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