Docusign, Inc. DOCU has had an impressive run over the past year. Its shares have rallied 41.6%, outperforming the 9.3% rise of the internet software industry and the 10.2% growth of the Zacks S&P 500 composite.

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DOCU has an impressive Growth Score of B. This style score condenses all the essential metrics from the company’s financial statements to get the true sense of the quality and sustainability of its growth.

The company’s earnings for fiscal 2026 and 2027 are expected to improve by 18.5% and 3.7%, respectively, year over year. DOCU has a long-term (three to five years) expected earnings growth rate of 9.4%.

Factors That Augur Well for DOCU

DocuSign's Notary On-Demand solution reflects a revolutionary shift in how notarization is handled, offering 24/7 remote access to notaries across all 50 U.S. states. This service addresses the delays and inefficiencies of traditional in-person notarizations, helping businesses streamline critical processes like real estate deals and loan closings.

Integrating advanced identity verification tools and secure video technology also helps mitigate fraud risks. The solution’s seamless integration with DocuSign’s eSignature platform and its support for various document types further enhance its utility. Overall, it offers a modern, efficient and secure approach to notarization, which could greatly impact industries that rely on these services.

DocuSign's tech-savvy initiatives are commendable, particularly with the launch of Docusign for Developers, which enhances its Intelligent Agreement Management platform. This suite of tools empowers developers to integrate, automate and scale solutions across the agreement lifecycle, offering features like the Maestro and Navigator APIs for custom workflows and data insights.

Moreover, AI-Assisted Review simplifies contract reviews by flagging discrepancies and suggesting changes in real time within Microsoft Word. Integrations with Workday, SAP and Salesforce automate data entry and improve accuracy across industries like finance, healthcare and legal services.

The company’s shareholder-friendly initiatives are also encouraging as it has a brief history of repurchasing common stock. In fiscal 2023, 2024 and 2025, the company had repurchased common stock worth $63.04 million, $145.5 million and $683.5 million, respectively. In June 2024, DOCU’s decision to increase its stock repurchase program by $1.0 billion reflects confidence in its financial strength and offers value to shareholders. The program’s flexibility, with no set minimum or end date, allows Docusign to adapt to market conditions and investment opportunities.

DOCU: Key Risks to Watch

DocuSign is facing challenges with high operating expenses, largely due to significant sales and marketing costs. While expenses slightly decreased in fiscal 2024, they remain elevated. In the fourth quarter of fiscal 2024, operating expenses increased by 6.2% year over year, highlighting ongoing pressure in controlling costs despite efforts to reduce them.

DOCU's Zacks Rank

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

Stocks to Consider

Some better-ranked stocks from the broader Zacks Business Services sector are Maximus MMS and Charles River Associates CRAI.

Maximus sports a Zacks Rank of 1 (Strong Buy) at present.

MMS has an encouraging earnings surprise history, having outpaced the Zacks Consensus estimate in three of the trailing four quarters and missed once. The average beat being 13.3%.

Charles River Associates currently carries a Zacks Rank #2 (Buy).

CRAI has an encouraging earnings surprise history, having outpaced the Zacks Consensus estimate in each of the trailing four quarters. The average beat being 25.9%.

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Charles River Associates (CRAI) : Free Stock Analysis Report

Maximus, Inc. (MMS) : Free Stock Analysis Report

Docusign Inc. (DOCU) : Free Stock Analysis Report

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

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