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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Docusign, Inc. (XNAS:DOCU) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
DOCU
Name:
DOCUSIGN, INC. (XNAS:DOCU)
Sector:
123.00M
Industry:
Software�Application
CEO:
Mr. Daniel Springer
Total Employees:
7,461
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -102.02% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF DOCUSIGN, INC.(DOCU) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND SOFTWARE�APPLICATION INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
54.45
One Month Price Target:
$54.83
Six Month Price Target :
$56.7
Likely Price in One Year's Time:
Ticker:
$58.95
Likely Trading Range Today Under (Normal Volatility)
$54.09
Price Upper limit ($) :
$54.87
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$49.73
This week:
$43.89
This month :
$33.33
Other Primary facts
Market Cap:
10.76B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
199.94M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
20.54%
-42.22%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$76.36
$66.34
$32.54
$42.56
Medium risk (<10%) entry points
Buy Call
Sell Call
$63.07
Buy Put:
Sell Put:
$60.93
$45.80
$47.97
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
DOCU
Sharpe Ratio:
1.07%
Comparison:
DOCU, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is 11.47% higher than the industry
& is -52.86% lower than the market/S&P 500 average
Average Returns/Yield of
DOCU
Daily returns:
0.05%
Weekly returns:
0.27%
Monthly returns:
1.09%
Yearly returns:
9.94%
Comparison of returns:
Average annual returns/yield (last 3 years) is 31.63% above industry average
Classification:
DOCU, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.96
Statistical test of Returns:
DOCU has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
4.25%
Weekly Volatility:
9.50%
Monthly Volatility:
19.00%
Yearly Volatility:
65.82%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
2.27%
Volatility in last five trading days has been -46.46% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-8.67%
Weekly VaR:
-19.39%
Monthly VaR:
-38.78%
How Much Can the price of
DOCU
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-34%
Worst case (decline):
>85%
This translates to price declining to:
$36.12
This translates to price declining to:
$8.17
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
DOCU is a 173.71% riskier investment compared to the market/S&P 500 & is 134.48% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 18.20% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
DOCU
Beta in relation to market/S&P 500--1.23
Expected beta in 1 year's time:
1.181
Expected beta in 3 year's time:
1.671
Unlevered (debt free) Beta:
0.255
Beta in relation to Nasdaq (XNAS):
1.315
Beta in relation to all global stocks::
0.353
Beta Comparison & Analysis
Beta of competitors/peers::
1.302
Beta is -5.53% lower than peers
Average Industry Beta:
1.335
Beta is -7.88% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
-
-
Alpha provided | Alpha Analysis
Alpha provided:
0.015
Alpha is -163.66% below industry average alpha yield
Alpha is 96% compared to market & is healthy
Analysis of Cost of Capital of
DOCU
Equity cost of capital:
0.116
Equity cost of capital is -5.86% below industry mean WACC
Unlevered (without debt) cost of capital:
2.40%
Before-tax cost of debt:
0.78%
After-tax cost of debt:
0.61%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
0.61%
WACC is -22.01% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$11.14
Revenue growth rate per share of (3Y):
44.76
Annual revenue growth rate is -7.89% below industry average
EPS:
-$0.45
Expected Annual growth rate of EPS (3Y):
-51.52%
Expected future EPS growth rate is -288.35% lower than the Software�Application industry
Free cash flow (FCF) per share:
$2.33
-
-
Debt per share
$4.49
EBITDA per share
$0.02
Valuation Analysis Today of
DOCU
P/E Ratio:
-
P/E Ratio of Competitors/Peers:
157.9
-
-
DOCU is -168.13% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
4.89
Price to sales ratio is -57.38% below the industry mean
P/B (Price to book value ratio):
44.76
Price to free cash flow: 23.36
Price to free cash flow ratio is -45.06% lower than the industry
Net income growth rate (3Y):
250.86%
Net income growth rate is 2.74% higher than the average industry net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
369.42%
Net debt to equity ratio:
175.85%
Debt to assets ratio:
39.12%
Net debt to assets ratio:
18.62%
Debt-to-asset ratio is -28.70% below industry average
Ability to repay debt:
Interest coverage ratio:
0.61
Interest coverage ratio is -98.86% less than industry average
Looking forward:
Debt growth rate:
88.41%
Annual debt growth is -91% lower than industry average debt growth rate
Debt repayment rate in last quarter: 3.92%
Analysis of Key Statistics
Correlation of price movement with the market:
0.411
Statistical significance of correlation:
DOCU has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.503
Stock price is -18.32% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.503
Correlation of price movement with Nasdaq (^IXIC):
-0.078
Covariance of price movement with the market:
-0.194
Kurtosis
17.389
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
-1.483
Returns are left (negative) skewed; mean returns are lower than median and mode returns
Fundamental Analysis & Dupont Analysis of
DOCU
Gross Profit Margin Ratio:
311%
Operating Profit Margin Ratio:
-3.16%
Operating profit margin is -83.51% lower than the industry
Net Profit Margin Ratio:
311%
Effective Tax Rate:
-3.40%
Effective tax rate is -112.90% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
-36.59%
Return on equity (ROE) is 179.75% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
-3.87%
Return on assets (ROA) is 0.87% higher than the industry
Financial Leverage:
1.6x
Current Ratio:
1.01
Current ratio is -66.21% below industry average
Cash Conversion Cycle (days):
19.8
Cash conversion cycle is -79.07% below industry average
The remaining useful life of property plant & equipment is: 22.4 years
Stock based compensation to net income ratio:
-91.73%
In-depth Efficiency Analysis
Revenue generated per employee:
298.5K
Each employee generates -14% less revenue than industry average revenue per employee
EBITDA generated per employee:
0.6K
Each employee generates -94% less EBITDA than industry average revenue per employee
Profit generated per employee:
- 11.9K
Each employee generates -32% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
16.5K
Each employee generates -312% less free cash flow than industry average revenue per employee
Assets/Capital per employee
158.9K
Each employee generates -312% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 46.33%
Growth rate in R&D investment/expenditure is 2930.45% higher than the industry
Competitors/Peer firms of
DOCU
SYNOPSYS, INC. (XNAS:SNPS)
COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION (XNAS:CTSH)
OKTA, INC. (XNAS:OKTA)
MICROCHIP TECHNOLOGY INCORPORATED (XNAS:MCHP)
FORTINET, INC. (XNAS:FTNT)
CROWDSTRIKE HOLDINGS, INC. (XNAS:CRWD)
Mediobanca Banca di Credito Finanziario SpA (XMIL:MB)
THE TRADE DESK, INC. (XNAS:TTD)
MARVELL TECHNOLOGY, INC (XNAS:MRVL)
Current Analyst Ratings
Strong buy�8%
Buy�13%
Hold�13%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
4/30/22
Revenue:
2.23B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
493.63M
1.73B
420.17M
245.30M
1.38B
1.14B
-
1.80B
- 1427.00K
7.36M
83.18M
4.47M
- 70373.00K
- 88995.00K
- 86067.00K
2.93M
- 88995.00K
Statement of Cash Flow
Date:
Period:
20.04M
Differed Income Tax :
264.00K
Stock Based Compensation :
81.64M
Change in Working Capital :
9.18M
Accounts Receivables:
73.21M
Other Working Capital:
- 28554.00K
Other Non-Cash Items:
32.84M
Net Cash Provided by Operating Activities:
135.60M
Investments in PP&E:
- 12596.00K
Net Acquisitions:
-
Purchases of Investments:
- 97425.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
4/30/21
2022
Q1
518.97M
261.66M
780.63M
265.63M
-
65.17M
1.11B
316.31M
351.51M
115.01M
94.93M
-
307.92M
1.19B
-
2.30B
14.87M
48.12M
-
829.84M
205.08M
1.10B
898.58M
32.97M
955.97M
-
2.05B
19.00K
- 1376567.00K
5.4M
1.61B
April 30, 2021 at 6:00:00 AM
2.30B
243.24M
2.30B
356.59M
946.70M
427.7M
39.52M
-
- 70506.00K
- 36684.00K
-
-
-
- 76270.00K
- 112954.00K
779.00K
- 47084.00K
519.25M
566.34M
135.60M
- 12596.00K
123.00M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
DOCU
2023
2024
2025
2026
2027
$46.65
$50.51
$54.69
$59.21
$64.10