Assessing DocuSign (DOCU) Valuation As Goldman Sachs Flags Rising AI Automation Risk

AI concerns put DocuSign in focus

Goldman Sachs’ new AI themed pair trade has put DocuSign (DOCU) under the microscope, after the firm tagged the e-signature provider as potentially exposed to automation risk on the short side.

For investors, that classification raises fresh questions about how DocuSign’s US$3.2b revenue business, built around electronic signatures and broader agreement management tools, might be valued if markets increasingly separate perceived AI beneficiaries from potential AI casualties.

See our latest analysis for DocuSign.

DocuSign’s latest share price of US$44.82 sits against a year to date share price return decline of 30.89% and a 1 year total shareholder return decline of 48.32%. This suggests momentum has been fading as investors reassess automation and AI risk, even as the company prepares to present at the WEST Conference 2026.

If this AI debate has you rethinking where software risk and opportunity might lie, it could be a good moment to scan our list of 26 AI small caps as potential alternatives.

With revenue of about US$3.2b, net income of roughly US$302m, and the shares sitting well below both analyst targets and some intrinsic value estimates, you have to ask: is DocuSign mispriced or already reflecting its future growth?

Most Popular Narrative: 47.3% Undervalued

With DocuSign’s fair value estimate sitting around $85.11 against a last close of $44.82, the most widely followed narrative sees a large valuation gap that rests heavily on how recurring revenue and agreement software adoption hold up over time.

Rollout and ramp up of the IAM platform, with AI native features and deep enterprise system integrations, is unlocking significant upsell opportunities as customers migrate from core eSignature to broader agreement management, driving improved ARPU and supporting double digit future topline growth.

Read the complete narrative. Read the complete narrative.

Want to see the engine behind that valuation gap? Revenue growth, margin expectations, and future earnings multiples all sit at the heart of this story. The narrative leans on recurring software economics, assumes ongoing product mix shifts beyond e-signatures, and prices in a richer earnings profile than today.

Result: Fair Value of $85.11 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, the story can change quickly if competition erodes pricing power or if AI native IAM adoption disappoints, leaving growth and margin assumptions looking too optimistic.

Find out about the key risks to this DocuSign narrative.

Next Steps

With sentiment clearly split between AI risk and long term upside, it makes sense to look at the evidence yourself and act sooner rather than later. You can weigh up our view of 2 key rewards and 1 important warning sign to see how those risks and rewards stack up side by side.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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