BofA cuts Docusign price target to $98 from $112

On Friday, BofA Securities adjusted its outlook on Docusign Inc. (NASDAQ: DOCU) shares, reducing the price target from $112.00 to $98.00 while maintaining a Neutral rating. Currently trading at $74.70, the stock sits between analyst targets ranging from $70 to $124. According to InvestingPro data, Docusign has demonstrated impressive gross profit margins of 80.16% and maintains a strong financial health score. The revision follows Docusign’s fourth-quarter results, which indicated strong performance in growth initiatives, potentially signaling a reacceleration in the company’s business.

The analyst at BofA Securities noted the positive aspects of Docusign’s recent performance, highlighting the company’s execution on growth initiatives. With revenue growth of 7.52% in the last twelve months and net income expected to grow this year, the firm’s Identity Access Management (IAM) is seen as a multi-year cycle opportunity that complements Docusign’s core eSignature business by expanding into larger Contract Lifecycle Management (CLM), analytics, and workflow automation applications.

Despite the optimism around operational execution, the analyst expressed a cautious stance on the stock’s valuation. Docusign’s shares are trading at 16.4 times the calendar year 2026 free cash flow (C26 FCF) or 1.8 times adjusted for a 10% growth rate. This is compared to the larger cap group trading at 1.2 times but adjusted for a higher 21% growth rate. According to the analyst, this suggests that the near-term upside potential might already be reflected in the current stock price.

The decision to lower the price target to $98 is attributed to multiple compression across the sector. The new price objective is set at 19.4 times the estimated C26 FCF, which is a reduction from the previous 22 times. This valuation also represents a discount compared to the large cap group’s 24.2 times, justified by Docusign’s lower FCF growth expectations.

Investors and market watchers will continue to monitor Docusign’s stock performance as the company navigates its growth initiatives and the evolving market landscape. For deeper insights into Docusign’s valuation and growth prospects, InvestingPro subscribers can access 15+ additional ProTips and a comprehensive Pro Research Report, which provides detailed analysis of the company’s financial health, valuation metrics, and growth potential.

In other recent news, DocuSign Inc (NASDAQ:DOCU). reported its fourth-quarter fiscal year 2025 financial results, surpassing analysts’ expectations with an earnings per share (EPS) of $0.86, compared to the forecasted $0.84. Revenue also exceeded predictions, reaching $776 million against the anticipated $760.99 million, marking a 9% year-over-year increase. Citi analyst Tyler Radke raised the company’s stock price target to $115, maintaining a Buy rating, highlighting DocuSign’s strong billings growth and positive trends in subscription revenue. Despite a deceleration in international growth, DocuSign’s Identity and Access Management (IAM) platform has become a significant part of its recurring revenue, with expectations to grow into double digits by the end of fiscal year 2026.

Needham analyst Scott Berg maintained a Hold rating, noting impressive IAM bookings and potential growth catalysts, while expressing the need for further evidence of sustained adoption. Wolfe Research also maintained its Peerperform rating, acknowledging the strong quarter but expressing caution regarding fiscal year 2026 guidance. JMP Securities, on the other hand, maintained a Market Outperform rating with a price target of $124, citing DocuSign’s leading position in the e-signature market and potential for significant growth in its agreement automation business.

DocuSign’s management remains optimistic about the company’s growth trajectory, particularly through its IAM product, and anticipates continued improvement in its net revenue retention rate. The company’s fiscal year 2026 guidance projects revenue between $3.129 billion and $3.141 billion, indicating a growth rate of approximately 5%.

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