Update shared on 06 Dec 2025
Fair value Decreased 5.67%Analysts have modestly reduced their price target on DocuSign, trimming fair value estimates by about $5 to reflect slightly softer revenue growth assumptions and a higher discount rate, which are partially offset by improved long term profitability expectations and a lower projected earnings multiple.
Analyst Commentary
Analysts describe the latest price target adjustment for DocuSign as more of a recalibration than a fundamental shift in thesis, with the stock still viewed as a solid, albeit more mature, growth story.
Recent commentary emphasizes that execution on product roadmap and customer retention remains the key swing factor for whether the shares can justify even the modestly trimmed valuation.
Bullish Takeaways
- Bullish analysts highlight that margin expansion and disciplined cost control are tracking ahead of prior expectations, supporting a thesis that DocuSign can deliver stronger free cash flow even on slower top line growth.
- They point to the company’s entrenched position in e-signature and contract workflow as a durable competitive advantage that underpins a premium relative valuation compared with many software peers.
- Several note that the current share price already discounts a more muted growth profile, arguing that any upside surprise in enterprise adoption or cross sell of adjacent agreement cloud solutions could drive multiple expansion.
- Improving profitability metrics and clearer capital allocation priorities are seen as catalysts that could help re-rate the stock if management continues to execute steadily over the next few quarters.
Bearish Takeaways
- Bearish analysts remain cautious on DocuSign’s ability to re-accelerate revenue growth in a more constrained IT spending environment, which they view as a key risk to sustaining even the adjusted fair value range.
- They flag intensifying competition across digital document and workflow tools, suggesting this could pressure pricing power and limit upside to long-term growth assumptions embedded in current models.
- Some also underscore that higher discount rates and a less favorable macro backdrop leave little room for execution missteps, with any slowdown in large deal activity likely to weigh disproportionately on the stock’s valuation.
- Concerns persist that the market may continue to rerate remote work beneficiaries toward lower growth, utility-like multiples, potentially capping DocuSign’s near-term multiple even if profitability continues to improve.
What's in the News
- Rumors of a potential DocuSign buyout resurfaced after a takeover-focused Betaville blog alert flagged market chatter around the company, drawing investor attention to strategic alternatives and deal speculation (Betaville via The Fly).
- DocuSign updated investors on capital returns, disclosing that from August 1 to October 31, 2025 it repurchased about 2.9 million shares for $215.1 million, completing an 11.31 percent buyback program totaling $1.49 billion.
- The company issued new guidance for the fiscal year ending January 31, 2026, targeting quarterly revenue of $825 million to $829 million and full year revenue of $3.208 billion to $3.212 billion.
- DocuSign announced that its Intelligent Agreement Management platform will be available directly inside ChatGPT via the Model Context Protocol, enabling users and AI agents to create, analyze, and manage contracts without leaving the ChatGPT interface.
- DocuSign reported that its Intelligent Agreement Management platform achieved FedRAMP Moderate authorization, clearing the way for broader adoption across U.S. federal agencies seeking secure, compliant digital agreement workflows.
Valuation Changes
- Fair Value: reduced modestly from $93.16 to $87.88, reflecting a slightly more conservative outlook.
- Discount Rate: risen slightly from 8.41 percent to about 8.49 percent, modestly increasing the hurdle rate applied to future cash flows.
- Revenue Growth: trimmed from approximately 7.29 percent to about 7.02 percent, indicating a small downgrade to long term growth assumptions.
- Net Profit Margin: increased meaningfully from roughly 9.41 percent to about 10.91 percent, signaling stronger expected long term profitability.
- Future P/E: lowered from about 64.3x to roughly 53.4x, implying a more moderate valuation multiple on projected earnings.
Disclaimer
AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.