DocuSign, once a pandemic darling, has seen its stock plummet by 80% as life returns to normal. However, the company is not giving up on growth and is focusing on contract lifecycle management to regain its competitive edge.
Despite facing stiff competition from high-profile software companies like Adobe and Dropbox, DocuSign recently announced its intent to acquire Lexion, a move that could integrate contract management technology powered by artificial intelligence into its ecosystem.
While the global document management system industry is projected to grow at a CAGR of 17% through 2032, it remains to be seen how much of this market DocuSign can capture in the face of increasing competition.
In fiscal 2024, DocuSign reported revenue of nearly $2.8 billion, a 10% increase from the previous year. The company also managed to turn a profit, with a net income of $74 million, a significant improvement from the previous year’s loss of $97 million.
Despite the stock price being far below its record high, investors have responded positively, with the stock growing by nearly 25% over the last year. With a forward P/E ratio of just 19, DocuSign may be more appealing to value investors than growth investors.
While growth stock investors may continue to shy away from DocuSign due to slowing revenue growth, the company’s profitability and potential for market-beating returns could make it a solid buy for value investors.
Overall, DocuSign’s focus on contract lifecycle management and its profitability make it an intriguing investment opportunity for those willing to look beyond its recent stock price decline.
