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DocuSign: A New Reality Fortune Maker

Jun. 08, 2020 8:21 AM ETDocuSign, Inc. (DOCU) Stock11 Comments


  • DocuSign was born for the current climate, where a growing portion of workflows are sure to become digital.
  • This article reviews the business, the market opportunity, COVID-19 tailwinds, competition, valuation and risks.
  • We conclude with our opinion on why DocuSign is a fortune maker stock with shares that can reasonably increase 10x over the next 10 years.

DocuSign (NASDAQ:DOCU) is a firm that was born for the current climate, where a growing portion of workflows are sure to become digital. The e-signature business has been growing rapidly, and the company is exploring adjacent opportunities (e.g., contract analytics and agreement cloud) in order to become a one-stop solution for agreement management. This article reviews the business, the market opportunity, COVID-19 tailwinds, competition, valuation and risks. We conclude with our opinion on why DocuSign is a fortune maker stock with shares that can reasonably increase 10x over the next 10 years.


Incorporated in 2003, DocuSign was first listed on the Nasdaq in 2018. It started its journey as an e-signature solution provider and became the largest player in the business. Last year, the company announced the launch of DocuSign Agreement Cloud platform, an umbrella of service offerings, that helps customers manage the entire agreement workflow (i.e., preparing, signing, acting-on as well as agreement life cycle management). More recently, in order to further bolster its suite of products, DocuSign acquired Seal Software, an agreement analytics and AI technology service provider.

The company follows a subscription-based business model and essentially has 2 sources of revenue:

Subscription Revenue - This segment is driven by fees charged by DocuSign for use of its software platforms, as well as access for customer support. The company receives customer payments in advance for the entire subscription period and then amortizes the revenue over the term of contract. This is the primary source of revenue generation for the DocuSign. Subscriptions accounts for 94% of revenue, and the segment has a gross profit margin of 84%.

Professional Services - This segment includes deployment and integration fees charged by DocuSign for onboarding of new customers as well as revenue from the sale of on-premise solutions. Professional services account for only

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Left Brain Investment Research has no positions in any of the aforementioned securities. However, affiliate companies Left Brain Capital Management and/or Left Brain Wealth Management are long DocuSign (DOCU).

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Comments (11)

EzekielMX profile picture
Thank you for another great article. Do you believe there’s a chance that Adobe might acquire DocuSign? If so, how do you see that playing out for investors of DocuSign?
Left Brain Wealth Management profile picture
I think it plays out well for $DOCU either way. $ADBE is a powerful fast grower in its own right.
RobertPredicts profile picture
For investors it's a win win.
beyond growth profile picture
I already have ADBE so I hope this never happens.
However, this question gets asked in every single DOCU article on SA. very tiring.
Left Brain Wealth Management profile picture
$DOCU is not a dividend stock, and it's not a value stock. You buy DocuSign for the long-term growth potential. This one could reasonable increase 10x in the next 10 years, and a lot of that could come sooner than later. Rather than trying to market time, just buy and hang on for the ride. Your future self (or whoever inherits your nest egg) might be extremely glad you did.
Daggone, another "TAM"-based article on SA? On DOCU no less (like 5th or 6th one in past few weeks). Is TAM all the rage now, to justify everything, at any level, and every reason for buying? Anyway: DOCU's TAM. You hearing us Adobe? Our TAM is gonna kick your TAM in the teeth! Go get your own TAM!! Imho, DOCU (as someone recently pointed out in an article about DOCU) is more than a little ahead of itself here, but that can be said about darn near everything in the markets right now. So into DOCU I go......weeeeeeeeee. Good luck to us all. I'm buying only an amount I can double or triple down on if the stock, sector and/or markets decide to screw with us all and head back down below 20K. Deflation is beast will we all learn to hate.
Tack profile picture
A wonderful buy on March 1, but now it's obvious from its chart that that its gotten way ahead of itself with an unsustainable slope of its curve. The share price needs to decline significantly to again become consistent with its actual growth rate.
RobertPredicts profile picture
It's an illusion. Covid 19 has accelerated docusign 10 fold. The company is up on it's billings big time. At minimum docu is worth and easy $170.
beyond growth profile picture
CEO said they are naturally moving into ID and online Notary sigs too which generates more revenue.
RobertPredicts profile picture
People are foolish for not buying Docu @139.00 It'll be over 200 by year end.
Left Brain Wealth Management profile picture
DocuSign is on our Fortune Makers List. Stocks that have the potential to increase 10x over the next 10 years, and a lot of that could come sooner than later. You can see a couple more names on the Fortune Maker List, here...
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