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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

SHARPE ratio explained.png

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)?

VaR explained figure

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%