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Investing.com - BofA Securities raised its price target on Docusign Inc. (NASDAQ:DOCU) to $102 from $85 while maintaining a Neutral rating on the stock. The company, currently trading at $76.24, demonstrates impressive gross profit margins of 79.47% and maintains a "GREAT" financial health score according to InvestingPro analysis.
The research firm cited improved execution in Docusign’s core eSignature business and regaining momentum in its emerging Identity and Access Management (IAM) business as key factors for the price target increase.
BofA Securities expressed bullishness on the long-term opportunity for IAM, noting that the solution brings Docusign into more strategic workflow and larger deal sizes, though it characterized the cycle as early with go-to-market efforts still a work in progress.
The new price target is based on 20x calendar year 2026 estimated free cash flow, up from the previous multiple of 17x, reflecting better billings growth for the document management company.
Despite the higher price target, BofA Securities maintained its Neutral rating, stating that much of the near-term upside is already priced into the shares, with the stock trading at 15.8x calendar year 2026 estimated free cash flow.
In other recent news, DocuSign Inc . reported robust second-quarter results that exceeded expectations across several key metrics. The company announced revenue of $801 million, marking a 9% increase and surpassing the anticipated $780.1 million. Earnings per share also outperformed forecasts, reaching $0.92 compared to the expected $0.85. Additionally, billings rose to $818 million, significantly exceeding the projected $762.5 million. Following these strong results, RBC Capital raised its price target for DocuSign to $95, maintaining a Sector Perform rating. Similarly, Evercore ISI increased its price target to $92, while keeping an "In Line" rating. DocuSign’s net revenue retention rate improved to 102%, up from 101% in the previous quarter. These developments reflect positive momentum for the company in the recent period.
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