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Reporter Name | Relationship | Type | Amount | SEC Filing |
---|---|---|---|---|
Grayson Blake Jeffrey | Chief Financial Officer | Sell | $778,576 | Form 4 |
Shaughnessy James P | Chief Legal Officer | Sell | $202,212 | Form 4 |
Chatwani Robert | President General Mgr, Growth | Sell | $820,752 | Form 4 |
DocuSign's Chief Financial Officer, Grayson Blake Jeffrey, sold 14,036 shares of common stock on September 18, 2024, at a weighted average price ranging from $55.20 to $55.66, totaling $778,576. Following the sale, Jeffrey directly owns 87,611 shares of DocuSign. This transaction was executed under a Rule 10b5-1 trading plan.
DocuSign's Chief Legal Officer, Shaughnessy James P, sold 3,600 shares on September 17 and 18, 2024, for a total of $202,212, at prices of $56.98 and $55.36 per share, respectively. Post-transaction, Shaughnessy directly owns 50,801 shares. These sales were also conducted under a Rule 10b5-1 plan.
DocuSign's President General Mgr, Growth, Chatwani Robert, sold 14,799 shares on September 18, 2024, at a weighted average price ranging from $55.20 to $55.66, with the total sale amounting to $820,752. Following this sale, Robert directly owns 70,748 shares of the company. This sale was conducted under a Rule 10b5-1 plan.
Reporter Name | Briggs Teresa |
Relationship | Director |
Type | Sell |
Amount | $30,203 |
SEC Filing | Form 4 |
Teresa Briggs, serving as a Director at DocuSign, sold 534 shares of Common Stock on September 16, 2024, at a price of $56.56 per share, totaling $30,203. Following this transaction, Briggs directly owns 7,202 shares of DocuSign. The sale was conducted under a Rule 10b5-1 trading plan.
SEC Filing: DOCUSIGN, INC. [ DOCU ] - Form 4 - Sep. 17, 2024
It’s no secret that technology-driven companies can benefit immensely from a lower inflationary environment.
With the Federal Reserve expected to cut the national interest rate average by 25-50 basis points this week, it's noteworthy that the Zacks Technology Services Industry is in the top 28% of over 250 Zacks industries.
Providing popular services to consumers, this vibrant business industry has several stocks that boast a Zacks Rank #1 (Strong Buy).
Notably, the innovation and creativity of these businesses should be enhanced by a more favorable operating environment. Attesting to this scenario is the industry’s strong price performance with the Zacks Technology Services Market rising +20% year to date and up more than +50% over the last year.
That said, here are three highly-ranked technology services stocks that should have more upside after receiving a strong buy rating.
AppLovin APP
Investor sentiment has been sky-high for AppLovin which provides an application technology platform that helps developers create apps for businesses. To that point, AppLovin’s stock has skyrocketed over +160% this year to roughly match the stellar performance of AI chip giant Nvidia NVDA.
After going public in 2021, AppLovin’s rapid stride to profitability has justified the hype in its stock with high double-digit EPS growth expected in fiscal 2024 and FY25. The company’s top line expansion is very compelling as well with total sales now expected to climb 35% this year and projected to rise another 13% in FY25 to $5.04 billion.
Duolingo DUOL
Like AppLovin, Duolingo went public in 2021 and is one the fastest-growing technology services companies as a provider of a mobile language learning platform. Duolingo’s improved financial metrics have been fueled by its subscription growth with services extending to math and music courses along with language certifications that appeal to business professionals.
Expecting high percentage top and bottom line growth in FY24 and FY25, Duolingo’s stock is up +20% year to date and has soared over +150% in the last year. Headquartered in Pittsburgh, many analysts have remained bullish on Duolingo’s market position as language learning companies such as Germany-based Babble have put off their bids to launch IPOs in the US among other markets.
Docusign DOCU
The agreement cloud services of Docusign have become a mainstay for sending and receiving business documents and this commonality should continue. Simplifying this process away from scanning or faxing, Docusign’s business remains a disrupter and shouldn't be overlooked despite DOCU dipping -4% year to date.
Trading at a very reasonable 16.5X forward earnings multiple, Docusign shares are still up nearly +30% over the last year with EPS expected to increase 15% in FY24 and projected to rise another 6% in FY25 to $3.65. Plus, Docusign's sales are forecasted to increase by 6% in FY24 and FY25 with projections edging toward $3 billion.
More reassuring is that Docusign has strengthened its balance sheet with it noteworthy that the company’s cash and equivalents are near $1 billion compared to pre-pandemic levels of $656 million in 2019.
Takeaway
Considering rate cuts will likely benefit the Zacks Technology Services Industry, earnings estimate revisions have remained higher for AppLovin, Duolingo, and Docusign. This makes their attractive growth trajectories more compelling and suggests short-term upside in addition to being viable long-term investments.
Zacks Investment Research
For Immediate Releases
Chicago, IL – September 16, 2024 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Ubiquiti Inc. UI, Spotify Technology S.A. SPOT, DocuSign Inc. DOCU, Vertiv Holdings Co. VRT and Universal Health Services Inc. UHS.
Here are highlights from Monday’s Analyst Blog:
Buy 5 Large-Cap Growth Stocks on Rate-Cut Expectations
Wall Street is currently riding on high expectations of the beginning of the interest rate cut regime by the Fed in the September FOMC meeting scheduled next week. The existing range of 5.25-5.5% marks a 23-year high level. If the Fed initiates a rate cut, it will be the first one since March 2020, at the onset of COVID-19.
The CME FedWatch tool currently shows a 100% probability of a 25-basis point interest rate cut in September. For November, market participants estimate a 100% probability that the total (year-to-date) rate cut will be 50 basis points and a 94.4% probability that the total rate cut will be 75 basis points. Likewise for December, market participants estimate a 100% probability that the total rate cut will be 75 basis points and a 79.7% probability that the total rate cut will be 1% in 2024.
At this stage, investment in growth stocks should be fruitful. Five such stocks are — Ubiquiti Inc. Spotify Technology S.A., DocuSign Inc., Vertiv Holdings Co. and Universal Health Services Inc.
These stocks have strong growth potential for the rest of 2024. These stocks have seen positive earnings estimate revisions in the past 60 days. Each of our picks sports a Zacks Rank #1 (Strong Buy) and has a Growth Score of A or B. You can see the complete list of today’s Zacks #1 Rank stocks here.
Growth investors are primarily focused on stocks with aggressive earnings or revenue growth, which should propel their stock prices higher in the future. A rate cut will be beneficial for corporates as it will reduce the cost of production. Moreover, businesses will get access to cheap credits.
5 Large-Cap Growth Stocks to Buy
Ubiquiti Inc.
Ubiquiti’s excellent global business model, which is flexible and adaptable to evolving changes in markets, helps it to beat challenges and maximize growth. UI’s operating model is backed by a rapidly growing and highly engaged community of service providers, distributors, value-added resellers, systems integrators and corporate IT professionals (referred to as the Ubiquiti Community).
Ubiquiti boasts a proprietary network communication platform that is well-equipped to meet end-market customer needs. In addition, UI is committed to reducing its operational costs by using a self-sustaining mechanism for rapid product support and dissemination of information by leveraging the strength of the Ubiquiti Community.
Earnings Estimate Revisions for UI Stock on the Rise
Ubiquiti has an expected revenue and earnings growth rate of 11.9% and 22.2%, respectively, for the current year (ending June 2025). The Zacks Consensus Estimate for current-quarter, current-year and next-year earnings has improved over the past seven days.
Spotify Technology S.A.
Spotify Technology provides audio streaming services worldwide. SPOT operates through two segments - Premium and Ad-Supported. The Premium segment offers unlimited online and offline streaming access to its catalog of music and podcasts without commercial breaks to its subscribers.
The Ad-Supported segment provides on-demand online access to its catalog of music and unlimited online access to the catalog of podcasts to its subscribers on their computers, tablets, and compatible mobile devices. SPOT also offers sales, distribution and marketing, contract research and development, and customer support services.
Impressive Earnings Estimate Revisions for SPOT Shares
Spotify Technology has an expected revenue and earnings growth rate of 19.4% and more than 100%, respectively, for the current year. The Zacks Consensus Estimate for current-quarter, next-quarter, current-year and next-year earnings has improved over the past 60 days.
DocuSign Inc.
DocuSign’s top line has been significantly benefiting from continued customer demand for eSignature, its anchor product. Despite this rising demand, the market for eSignature remains largely untapped. This keeps DOCU in a position to expand eSignature around the world. DOCU remains focused on continuously acquiring customers, improving its offerings and expanding internationally.
Robust Earnings Estimate Revisions of DOCU Stock
DocuSign has an expected revenue and earnings growth rate of 6.6% and 15.1%, respectively, for the current year (ending January 2025). The Zacks Consensus Estimate for current-quarter, next-quarter, current-year and next-year earnings has improved over the past seven days.
Vertiv Holdings Co.
Veritiv designs, manufactures, and services critical digital infrastructure technologies and life cycle services for data centers, communication networks, and commercial and industrial environments in the Americas, the Asia Pacific, Europe, the Middle East, and Africa. VRT offers hardware, software, analytics and ongoing services.
VRT Shares See Strong Earnings Estimate Revisions
VRT has an expected revenue and earnings growth rate of 12.8% and 45.8%, respectively, for the current year. The Zacks Consensus Estimate for current-quarter, current-year and next-year earnings has improved over the past 60 days.
Universal Health Services Inc.
Universal Health’s Acute Care and Behavioral Health segments have been pivotal in driving top-line growth, fueled by expansions in licensed bed capacity. UHS anticipates positive impacts on its Acute Care unit from Medicaid supplemental programs.
Strategic buyouts have played a significant role in augmenting its growth trajectory by broadening its portfolio of facilities. UHS maintains a robust liquidity position, enabling it to pursue growth initiatives and distribute capital through buybacks and dividends.
UHS Shares Witness Solid Earnings Estimate Revisions
Universal Health Services has an expected revenue and earnings growth rate of 9.8% and 51%, respectively, for the current year. The Zacks Consensus Estimate for current-quarter, next-quarter, current-year and next-year earnings has improved over the past 60 days.
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Zacks Investment Research
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Zacks Investment Research
Wall Street is currently riding on high expectations of the beginning of the interest rate cut regime by the Fed in the September FOMC meeting scheduled next week. The existing range of 5.25-5.5% marks a 23-year high level. If the Fed initiates a rate cut, it will be the first one since March 2020, at the onset of COVID-19.
The CME FedWatch tool currently shows a 100% probability of a 25-basis point interest rate cut in September. For November, market participants estimate a 100% probability that the total (year-to-date) rate cut will be 50 basis points and a 94.4% probability that the total rate cut will be 75 basis points. Likewise for December, market participants estimate a 100% probability that the total rate cut will be 75 basis points and a 79.7% probability that the total rate cut will be 1% in 2024.
At this stage, investment in growth stocks should be fruitful. Five such stocks are — Ubiquiti Inc. UI, Spotify Technology S.A. SPOT, DocuSign Inc. DOCU, Vertiv Holdings Co. VRT and Universal Health Services Inc. UHS.
These stocks have strong growth potential for the rest of 2024. These stocks have seen positive earnings estimate revisions in the past 60 days. Each of our picks sports a Zacks Rank #1 (Strong Buy) and has a Growth Score of A or B. You can see the complete list of today’s Zacks #1 Rank stocks here.
Growth investors are primarily focused on stocks with aggressive earnings or revenue growth, which should propel their stock prices higher in the future. A rate cut will be beneficial for corporates as it will reduce the cost of production. Moreover, businesses will get access to cheap credits.
5 Large-Cap Growth Stocks to Buy
Ubiquiti Inc.
Ubiquiti’s excellent global business model, which is flexible and adaptable to evolving changes in markets, helps it to beat challenges and maximize growth. UI’s operating model is backed by a rapidly growing and highly engaged community of service providers, distributors, value-added resellers, systems integrators and corporate IT professionals (referred to as the Ubiquiti Community).
Ubiquiti boasts a proprietary network communication platform that is well-equipped to meet end-market customer needs. In addition, UI is committed to reducing its operational costs by using a self-sustaining mechanism for rapid product support and dissemination of information by leveraging the strength of the Ubiquiti Community.
Earnings Estimate Revisions for UI Stock on the Rise
Ubiquiti has an expected revenue and earnings growth rate of 11.9% and 22.2%, respectively, for the current year (ending June 2025). The Zacks Consensus Estimate for current-quarter, current-year and next-year earnings has improved over the past seven days.
Spotify Technology S.A.
Spotify Technology provides audio streaming services worldwide. SPOT operates through two segments - Premium and Ad-Supported. The Premium segment offers unlimited online and offline streaming access to its catalog of music and podcasts without commercial breaks to its subscribers.
The Ad-Supported segment provides on-demand online access to its catalog of music and unlimited online access to the catalog of podcasts to its subscribers on their computers, tablets, and compatible mobile devices. SPOT also offers sales, distribution and marketing, contract research and development, and customer support services.
Impressive Earnings Estimate Revisions for SPOT Shares
Spotify Technology has an expected revenue and earnings growth rate of 19.4% and more than 100%, respectively, for the current year. The Zacks Consensus Estimate for current-quarter, next-quarter, current-year and next-year earnings has improved over the past 60 days.
DocuSign Inc.
DocuSign’s top line has been significantly benefiting from continued customer demand for eSignature, its anchor product. Despite this rising demand, the market for eSignature remains largely untapped. This keeps DOCU in a position to expand eSignature around the world. DOCU remains focused on continuously acquiring customers, improving its offerings and expanding internationally.
Robust Earnings Estimate Revisions of DOCU Stock
DocuSign has an expected revenue and earnings growth rate of 6.6% and 15.1%, respectively, for the current year (ending January 2025). The Zacks Consensus Estimate for current-quarter, next-quarter, current-year and next-year earnings has improved over the past seven days.
Vertiv Holdings Co.
Veritiv designs, manufactures, and services critical digital infrastructure technologies and life cycle services for data centers, communication networks, and commercial and industrial environments in the Americas, the Asia Pacific, Europe, the Middle East, and Africa. VRT offers hardware, software, analytics and ongoing services.
VRT Shares See Strong Earnings Estimate Revisions
VRT has an expected revenue and earnings growth rate of 12.8% and 45.8%, respectively, for the current year. The Zacks Consensus Estimate for current-quarter, current-year and next-year earnings has improved over the past 60 days.
Universal Health Services Inc.
Universal Health’s Acute Care and Behavioral Health segments have been pivotal in driving top-line growth, fueled by expansions in licensed bed capacity. UHS anticipates positive impacts on its Acute Care unit from Medicaid supplemental programs.
Strategic buyouts have played a significant role in augmenting its growth trajectory by broadening its portfolio of facilities. UHS maintains a robust liquidity position, enabling it to pursue growth initiatives and distribute capital through buybacks and dividends.
UHS Shares Witness Solid Earnings Estimate Revisions
Universal Health Services has an expected revenue and earnings growth rate of 9.8% and 51%, respectively, for the current year. The Zacks Consensus Estimate for current-quarter, next-quarter, current-year and next-year earnings has improved over the past 60 days.
Zacks Investment Research
DocuSign (DOCU) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.
Shares of this provider of electronic signature technology have returned -0.5% over the past month versus the Zacks S&P 500 composite's +4% change. The Zacks Technology Services industry, to which DocuSign belongs, has gained 8.3% over this period. Now the key question is: Where could the stock be headed in the near term?
Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.
Revisions to Earnings Estimates
Here at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.
We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For the current quarter, DocuSign is expected to post earnings of $0.85 per share, indicating a change of +7.6% from the year-ago quarter. The Zacks Consensus Estimate has changed +27.2% over the last 30 days.
The consensus earnings estimate of $3.43 for the current fiscal year indicates a year-over-year change of +15.1%. This estimate has changed +19.5% over the last 30 days.
For the next fiscal year, the consensus earnings estimate of $3.65 indicates a change of +6.4% from what DocuSign is expected to report a year ago. Over the past month, the estimate has changed +5.4%.
Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, DocuSign is rated Zacks Rank #1 (Strong Buy).
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Projected Revenue Growth
While earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth.
For DocuSign, the consensus sales estimate for the current quarter of $743.44 million indicates a year-over-year change of +6.1%. For the current and next fiscal years, $2.94 billion and $3.12 billion estimates indicate +6.4% and +6.1% changes, respectively.
Last Reported Results and Surprise History
DocuSign reported revenues of $736.03 million in the last reported quarter, representing a year-over-year change of +7%. EPS of $0.97 for the same period compares with $0.72 a year ago.
Compared to the Zacks Consensus Estimate of $726.15 million, the reported revenues represent a surprise of +1.36%. The EPS surprise was +21.25%.
The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates each time over this period.
Valuation
Without considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.
Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.
As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
DocuSign is graded D on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
Conclusion
The facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about DocuSign. However, its Zacks Rank #1 does suggest that it may outperform the broader market in the near term.
Zacks Investment Research
WEX Inc. WEX stock has had an impressive run over the past three months. Shares of the company have gained 11.1% compared with the 6.1% growth of the industry it belongs to and the marginal rise of the Zacks S&P 500 composite.
The company’s revenues for 2024 are expected to improve 6% year over year, and for 2025, it is anticipated to increase 6.4% year over year. Earnings are anticipated to increase 9.2% in 2024 and 12.9% in 2025. The company has an expected long-term (three to five years) earnings per share growth rate of 12.2%.
Factors That Auger Well for WEX’s Future Success
WEX’s top line experiences organic growth, driven by its extensive network of fuel and service providers, transaction volume growth, product quality, marketing effort and sales force productivity. Strong demand for its payment processing, account servicing and transaction processing services, coupled with operational efficiency, has assisted the company in generating solid revenues and earnings growth.
WEX Inc. Revenue (TTM)
WEX Inc. revenue-ttm | WEX Inc. Quote
The company has signed several expansions and new agreements with fintech companies, including Upgrades, Jack Henry and Allied Payment Network during the second quarter of 2024. This positions WEX’s corporate payments business well with the competitive offerings of the industry for the long run, underpinned by a top-notch virtual card solution and strong long-term client relationships.
Strategic acquisitions made by WEX support its organic growth by contributing to revenues, adding products and service differentiation, and improving scalability. The company is positive about its organic growth opportunities across each of its segments.
WEX’s buyouts serve as a key growth catalyst. In 2024, the company acquired Sawatch Labs, a fleet electrification analytics software startup. WEX finds the acquired company to have the potential to advance WEX’s ability to support the customers via its EV evaluation processes.
In 2023, the company acquired Payzer, a high-growth, cloud-based and field service management software provider. The acquisition boosted WEX’s growth strategy of expanding its products and creating opportunities for additional cross-selling by providing a new, scalable SaaS solution for 150,000 small business customers who are field service providers.
Risks Faced by WEX
Seasonality affects WEX’s businesses. Fuel prices are higher during the summer, which benefits the mobility segment. The corporate payments segment gains from higher online travel sales during the third quarter. The benefits segment experiences seasonality in terms of consumer spending, which is correlated with insurance deductibles that are higher at the beginning of the year.
WEX's current ratio (a measure of liquidity) at the end of the second quarter of 2024 was pegged at 1.04, lower than the preceding quarter's 1.06. A decreasing current ratio does not bode well.
Zacks Rank & Stocks to Consider
WEX carries a Zacks Rank #3 (Hold) at present.
Some better-ranked stocks from the broader Zacks Business Services sector are Docusign DOCU and Maplebear Inc. CART.
Docusign sports a Zacks Rank of 1 (Strong Buy) at present. It has a long-term earnings growth expectation of 9.3%. You can see the complete list of today’s Zacks #1 Rank stocks here.
DOCU delivered a trailing four-quarter earnings surprise of 18.3%, on average.
Maplebear flaunts a Zacks Rank of 1 at present. It has a long-term earnings growth expectation of 27.5%.
CART delivered a trailing four-quarter earnings surprise of 414.6%, on average.
Zacks Investment Research
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